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Introduction
The
Jews in Jerusalem introduced a kind of banking in the form of
money lending before the birth of Christ. The word 'bank' was
probably derived from the word 'bench' as during ancient time
Jews used to do money -lending business sitting on long benches.
First
modern banking was introduced in 1668 in Stockholm as 'Svingss
Pis Bank' which opened up a new era of banking activities
throughout the European Mainland.
In
the South Asian region, early banking system was introduced by
the Afgan traders popularly known as Kabuliwallas. Muslim
businessmen from Kabul, Afganistan came to India and started
money lending business in exchange of interest sometime in 1312
A.D. They were known as 'Kabuliawallas'.
Number
and Types of Banks
The
number of banks in all now stands at 49 in Bangladesh. Out of
the 49 banks, four are Nationalised Commercial Banks (NCBs), 28
local private commercial banks, 12 foreign banks and the rest
five are Development Financial Institutions (DFIs).
Sonali
Bank is the largest among the NCBs while Pubali is leading in
the private ones. Among the 12 foreign banks, Standard Chartered
has become the largest in the country. Besides the scheduled
banks, Samabai (Cooperative) Bank, Ansar-VDP Bank, Karmasansthan
(Employment) Bank and Grameen bank are functioning in the
financial sector.The number of total branches of all scheduled
banks is 6,038 as of June 2000. Of the branches, 39.95 per cent
(2,412) are located in the urban areas and 60.05 per cent
(3,626) in the rural areas. Of the branches NCBs hold 3,616,
private commercial banks 1,214, foreign banks 31 and specialised
banks 1,177.
Bangladesh
Bank (BB) regulates and supervises the activities of all banks.
The BB is now carrying out a reform programme to ensure quality
services by the banks.
Bangladesh
Bank
Bangladesh
Bank (BB) has been working as the central bank since the country's
independence. Its prime jobs include issuing of currency, maintaining
foreign exchange reserve and providing transaction facilities of all
public monetary matters. BB is also responsible for planning the
government's monetary policy and implementing it thereby.
The
BB has a governing body comprising of nine members with the Governor as
its chief. Apart from the head office in Dhaka, it has nine more
branches, of which two in Dhaka and one each in Chittagong, Rajshahi,
Khulna, Bogra, Sylhet, Rangpur and Barisal.
Nationalised
Commercial Banks (NCBs)
1.
Sonali Bank
9550426-34,
8614588
2.
Janata Bank
9560072-80,
9560042-43
3.
Agrani Bank
9566153-54,
9566160-69,9555179-80
4.
Rupali Bank
9551624-25,
9554122, 9552183-4
Private
Commercial Banks (PCBs)
1. Pubali Bank
9569050-2,
9551614-7
2.
Uttara Bank
9566067-9,9551162-63,
9565732
3.
National Bank
Ltd.
9563081-5,
9561201
4.
The City Bank
Ltd.
9565925-34
5.
United Commercial
Bank Ltd.
9560585
6.
Arab Bangladesh
Bank Ltd.
95608878,
9560312-6
7.
IFIC Bank Ltd.
9562062,
9563020-29
8.
Islami bank Bangladesh Ltd.
9552897,-8,
9563040, 9563046-9
9.
Al Baraka Bank
Bangladesh Ltd.
9563768-9,
9565031-2
10.
Eastern Bank Ltd.
9556371,9556361-2
11.
National Credit &
Commerce Bank Ltd.
9561902-4
12.
Prime Bank
Ltd.
9567265-70,
9564677
13.
South East
Bank Ltd.
9550081-5,
9551575, 9557714, 9551411
14.
Dhaka
Bank Ltd.
9556587-10,
9556583,
15.
Al-Arafah Islami Bank Ltd.
16.
Social
Investment
Bank Ltd.
9559014,
9554855
17.
Dutch- Bangla
Bank Ltd.
9568537-39
18.
Mercantile
Bank Ltd.
9559333
19.
Standard
Bank Ltd.
9667224,
9667802
20.
One Bank Ltd.
9564249,
7551799, 9564255-6
21.
EXIM Bank
9553925,
9553872, 9566418
22.Bangladesh
Commerce Bank Ltd.
9559831-32,
9668170
23.
Mutual Trust Bank Ltd.
9569318,
7113239
24.First
Security
Bank Ltd.
9560229,
9564733
25.
The Premier
Bank Ltd.
26. Bank Asia
Ltd.
8117055,
8117066
27.
The Trust Bank Ltd.
9870011
Extn-4191
28.
Shah Jalal Bank Limited (Based on Islamic Shariah)
9556011
Foreign
Banks
1.
American Express
Bank
9561751-52,
9561496-97,
2.
Standard Chartered
Grindlays Bank
9561465,
9550181-90
3.
Habib Bank Ltd.
9551228,
9555091-2, 9563043-5
4.
State Bank Of India
9554251,9553371
5.
Credit Agricole
Indosuez (The
Bank)
8111959
6.
National Bank of
Pakistan
9560248-9
7.
Muslim Commercial
Bank Ltd.
9563649,
9563650
8.
City Bank NA
9550063-64
9.
Hanvit Bank Ltd.
8813270-73
10.
HSBC Ltd.
11.Shamil
Islami Bank Of
Bahrain EC
9666701-5
12.
Standard Chartered Bank
9561465,
881718-9
Development
Banks
1. Bangladesh Krishi Bank
9560021-5,
9560031-35
2.RajshahiKrishiUnnayan
Bank
3.
Bangladesh Shilpa
Bank
9555150-9,
9566114
4.
Bangladesh Shilpa
Rin Sangstha
9565818,9565046
5.Bank
of Small Industries &
Commerce Bangladesh
Ltd.
9564830,
9658190
Other
1. Ansar VDP Unnayan Bank
8313198,
8322181
2.
Bangladesh Samabai
Bank Ltd. (BSBL)
3.
Grameen Bank
8015755-8
4.Karmasansthan
Bank
9563311
Services
Accounts,
Current, FDR, PDS, Deposit Scheme
Current
Account: Generally this sort of account opens for business purpose.
Customers can withdraw money once or more against their deposit. No
interest can be paid to the customers in this account. If the amount of
deposit is below taka 1,000 on an average the bank has authority to cut
taka 50 from each account as incidental charge after every six months.
Against this account loan facility can be ensured. Usually one can open
this account with taka 500. One can open this sort of account through
cash or check/bill. All the banks follow almost the same rules for
opening current account.
Savings
Bank Account
Usually
customers open this sort of account at a low interest for only security.
This is also an initiative to create people's savings tendency.
Generally, this account is to be opened at taka 100. Interest is to be
paid in June and December after every six months. If money is withdrawn
twice a week or more than taka 10,000 is withdrawn (if 25% more compared
to total deposit) then interest is not paid. This account guarantees
loan. Almost all the banks follow the same rules in the field of savings
account, except foreign banks for varying deposit. On an average, all
the banks give around six percent interest.
Special
Services
Some
Banks render special services to the customers attracting other banks.
Internet
Banking
Customers
need an Internet access service. As an Internet Banking customer, he
will be given a specific user ID and a confident password. The customer
can then view his account balances online. It is the industry-standard
method used to protect communications over the Internet.
To
ensure that customers' personal data cannot be accessed by anyone but
them, all reporting information has been secured using Version and
Secure Sockets Layer (SSL).
Home
Banking
Home
banking frees customers of visiting branches and most transactions will
be automated to enable them to check their account activities transfer
fund and to open L/C sitting in their own desk with the help of a PC and
a telephone.
Electronic
Banking Services for Windows (EBSW)
Electronic
Banking Service for Windows (EBSW) provides a full range of reporting
capabilities, and a comprehensive range of transaction initiation
options.
The
customers will be able to process all payments as well as initiate L/Cs
and amendments, through EBSW. They will be able to view the balances of
all accounts, whether with Standard Chartered or with any other banks
using SWIFT. Additionally, transactions may be approved by remote
authorization even if the approver is out of station.
Automated
Teller Machine (ATM)
Automated
Teller Machine (ATM), a new concept in modern banking, has already been
introduced to facilitate subscribers 24 hour cash access through a
plastic card. The network of ATM installations will be adequately
extended to enable customers to non-branch banking beyond banking.
Tele
Banking
Tele
Banking allows customers to get access into their respective banking
information 24 hours a day. Subscribers can update themselves by making
a phone call. They can transfer any amount of deposit to other accounts
irrespective of location either from home or office.
SWIFT
SWIFT
is a bank owned non-profit co-operative based in Belgium servicing the
financial community worldwide. It ensures secure messaging having a
global reach of 6,495 Banks and Financial Institutions in 178 countries,
24 hours a day. SWIFT global network carries an average 4 million
message daily and estimated average value of payment messages is USD 2
trillion.
SWIFT
is a highly secured messaging network enables Banks to send and receive
Fund Transfer, L/C related and other free format messages to and from
any banks active in the network.
Having
SWIFT facility, Bank will be able to serve its customers more profitable
by providing L/C, Payment and other messages efficiently and with utmost
security. Especially it will be of great help for our clients dealing
with Imports, Exports and Remittances etc.
Bangladesh
: Money and Banking sector review
MONETARY
& CREDIT POLICY:
The
monetary and credit policy for the financial year that ended
in June,2000 was formulated with the objective of full
utilization of domestic resources
and rapid economic growth through priorities for agriculture, industry,
export, and expansion and strengthening of the private sector, at the
same time keeping inflation within tolerable limits. A modern
expansionary monetary and credit policy was adopted in order to make
good the losses to agriculture, industry, and infrastructure by the
devastating floods of 1998. After the flood the economy remained
sluggish in the first quarter of 1999-2000 and the private sector demand
for credit shrank. In view of this, the Annual Development Programme
(ADP) was expanded and development activities in the private sector were
geared up. As a result, the public sector absorbed credit at an
accelerated rate. Though credit to the private sector picked up towards
the end of the year, the overall annual growth was smaller than
programmed, although gross domestic credit expanded a little faster than
projected. Money supply increased by 15.3% in 1999-2000 compared to the
expansion of 8.6% in the preceding year.
NARROW
MONEY:
Narrow
Money increased by Tk. 2,631.90 crores or 15.3% to Tk.19,881.30 crores
in 1999-2000. Of the components of Narrow Money, currency outside banks
went up by Tk.1,489.40 crores or 17.2% to Tk.10,176.00 crores, and
demand deposits went up by Tk.1,142.50 crores or 13.3% to Tk.9,705.30
crores.
BROAD
MONEY:
Broad
Money increased by Tk.11,735.70 crores or 18.6% to Tk. 74,762.40 crores
in 1999-2000 compared to the increase of
12.8% in the preceding year. Of the components of Broad Money,
Narrow Money increased by 15.3% and time deposits rose by 19.9% compared
to the increase of 8.6% in Narrow Money and 14.5% in time deposits in
the preceding year. The shares of currency outside banks, demand
deposits and time deposits in Broad Money stood at 13.6%, 13.0%, and
73.4% respectively on 30th June,2000 compared to 13.8%, 13.6% and 72.6%
respectively on 30th June,1999.Expansion of credit to the private
sector, government sector (net), public sector, and other assets (net),
along with a surplus in net
foreign assets contributed to the expansion of Broad Money.
RESERVE
MONEY:
Reserve
Money increased by Tk.2,321.80 crores or 15.7% to Tk.17,064.50 crores in
1999-2000 compared to the increase of 8.3% during the preceding year. Of
the components of Reserve Money, currency outside banks increased by
Tk.1,489.40 crores or 17.1% compared to the increase of Tk.533.30 crores
or 6.5% during the preceding year.
Scheduled banks balances with the Bangladesh Bank increased by Tk.770.90
crores or 15.3% in 1999-2000 compared to the increase of Tk.488.20
crores or 10.8% in the preceding year. Their cash in tills increased by
Tk.61.50 crores or 6.0% as against the increase of Tk.103.60 crores or
11.2% in the preceding year. The increase in Bangladesh Bank's credit to
the government (net) by
Tk.1,738.10 crores and net surplus in the foreign sector by Tk.1,262.40
crores played the main role in exerting expansionary influence on the
Reserve Money. However the decline of Tk.333.60 crores and Tk.44.90
crores in the borrowings by the scheduled banks and other financial
institutions respectively along with the fall of Tk.300.20 crores in
other assets (net) partly offset the expansionary impact of those
sectors.
DOMESTIC
CREDIT:
Total
domestic credit increased by Tk.8,581.20 crores or 13.6% to Tk.
71,489.00 crores ( including adjustment of bonds issued by the
government) in 1999-2000 as compared to the increase of Tk.7,267.60
crores or 13.1% in the preceding year. Expansion of credit to the
government, private, and public sectors to the extent of Tk.3,524.30
crores (31.3%), Tk.4,906.10 crores (10.7%), and Tk.150.80 crores (2.5%)
respectively contributed to the expansion in total domestic credit in
1999-2000. Credit to the government and private sector had increased by
21.3% and 13.8% respectively, while credit to the public sector declined
by 3.7% in the preceding year.
BANK
CREDIT:
The
outstanding level of bank credit (excluding foreign bills and inter-bank
items) increased by Tk.5,123.30 crores or 10.3% to Tk.54,646.10 crores
in 1999-2000 as compared to the increase of 12.4% in the
preceding year. Of the components of bank credit, advances
increased by Tk.4,892.70 crores or 10.3% and the bills purchased and
discounted went up by Tk.230.60 crores or 11.3%.
BANK
DEPOSITS:
Bank
deposits ( excluding inter-bank items) increased by Tk.11,044.70 crores
or 18.6% to Tk.70,278.70 crores in 1999-2000 compared to the increase of
14.2% in the preceding year. Of this increase , time deposits went up by
Tk.9,103.80 crores or 19.9% to Tk.54,881.10 crores, government deposits
by Tk.723.60 crores or 14.8% to Tk.5,615.20 crores and demand deposits
by Tk. 1,142.50 crores or 13.3% to Tk.9,705.30 crores. On the other
hand, restricted deposits increased by Tk.74.80 crores in 1999-2000.
CASH
RESERVE REQUIREMENTS (CRR):
Statutory
CRR with Bangladesh Bank was lowered for the scheduled banks to 4.0% of
their liabilities (demand plus time deposits ) (excluding inter-bank
deposits) from 5% with effect from 1st October,1999.
BANK
RATE:
The
Bank Rate was lowered from 8.0% to 7.0% on 29th August,1999 and remained
unchanged through 30th June,2000.
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