BANKING SYSTEM

The Financial and Banking System of Bangladesh

Table of Contents

Country Introduction3

History4

a. Historical Overview6

b. Present Monetary Laws and Regulations7

Monetary situation7

CPI inflation8

c. Types of Financial Institutions operating in the country9

Commercial Banks11

Specialized Banks11

Financial Institutions (FIs)11

d. The Central Bank12

e. Bank Regulation12

f. Banks Operating in the country13

Country's Economic Performance13

Foreign Reserves13

GDP and growth rate15

Fiscal situation15

Current account15

Foreign trade16

External debt16

Foreign investments16

Balance of Payments17

Currency Situation18

Political Risks19

Preventing Money Laundering and Terrorist Financing20

Summary and Conclusion23

Future Outlook24

Lines of Credit for Banks25

References26

Appendices28

The Financial and Banking System of Bangladesh

Country Introduction

Bangladesh is one of the most densely populated and poorest countries in the world. Its predominantly agricultural economy, with over 60 percent of the population employed in the sector, is vulnerable to natural disasters such as flooding and cyclones. Within manufacturing, the textile and garment industry is the most dynamic and fastest growing sector.Bangladesh (officially called the People's Republic of Bangladesh) is a South Asian countries located in the northeast of the Indian subcontinent, bordered on the south by the Bay of Bengal, the country is almost entirely enclosed by the north-east of India and has a short border with Burma. The land area is 147,570 square kilometers, equivalent to about half that of Italy (Orr, 2007). The capital and largest city in the country is Dhaka (about nine million inhabitants in the metropolitan area).

In spite of the poverty prevailing in the country but it is one of the country's rich forests, and forest occupies vast areas of fertile land which is deployed by the farm And fruit trees, rubber plantations, and employs the majority of peasants from the country's population.

Location

Bangladesh is located in South Asia on the Bay of Bengal, between Burma and India, share a greater part of its border with India, where shares in its eastern, northern and western, and participates in the south-eastern borders with Burma, from the south, overlooking the Bay of Bengal.

General information

Area: The area of Bangladesh, 144.000 km 2.

Population: The population of 150,448,339 people.

Capital: Dhaka

Language: The official language is Bengali language in addition to English.

Currency: taka

Religion: Muslims constitute about 83% of the total population and there are a Hindu, and others.

History

Formerly East Pakistan, Bangladesh was formed after the liberation war of 1971. It was under military rule from 1975 to 1990. In 1991, the Constitution was amended to restore the parliamentary system. The Bangladesh Nationalist Party, led by Khaleda Zia and the Awami League, led by Sheikh Hasina, dominate the political landscape and frequent clashes between supporters of these parties are common. The voting system is characterized by universal suffrage for persons above 18 years of age. In December 2008, the Awami League alliance led by Sheikh Hasina won a landslide victory in general elections (Taheruddin, 2005).

The growth in religious extremism and the deteriorating law and order situation are major sources of concern for the government. In addition, corruption allegations against several political leaders and government functionaries have troubled successive governments. Bangladesh is one of the countries are relatively modern in its current form after the split from ...