Financial System of Bangladesh
Financial System of Bangladesh
The Financial System is a set of institutional arrangement through which surplus units transfer their fund to deficit units. At present the financial system in Bangladesh is mainly composed of two types of institutions like banks and non-bank financial institution (NBFIs). The formal financial sector in Bangladesh includes: (a) Bangladesh Bank as the central bank, (b) 48 commercial banks, including 4 Government owned commercial banks, 30 domestic private banks (PCBs) (of which 6 banks are operating under Islamic Shariah), 9 foreign banks (FCBs) (of which 1 bank is operating as Islamic bank); and 5 government-owned specialized banks (DFIs); (c) 28 non-bank financial institutions (NBFIs) – licensed by the Bangladesh Bank); (d) 2 large government- owned insurance companies (life and general) and 60 private owned (17 life and 43 general) insurance companies; (e) 2 stock exchanges and, (f) some co-operative banks. Besides, a good number of semi-formal micro finance institutions (MFIs) also are operating in Bangladesh.
Structure of Financial System:
The main constituents of financial system are :
i) Financial Institutions ii) Financial Instruments, and iii) Financial Markets.
Financial Institutions
The modern name of Financial Institution is Financial Intermediary (FI), because it mediates or stand between ultimate borrowers and ultimate lenders and helps transfer funds from one to another.
The Financial system helps production, capital-accumulation and growth by
i) encouraging savings and ii) allocating them among the alternative uses and users.
Financial Instruments
Financial Instruments are of two types:
i) Primary (or Direct) ii) Secondary (or Indirect)
Financial markets
Financial markets facilitate the flow of funds in order to finance investments by governments, corporations, and individuals. It transfers funds from those who have excess funds (surplus units) to those who need funds(deficit units).
The Financial System is a set of institutional arrangement through which surplus units transfer their fund to deficit units. At present the financial system in Bangladesh is mainly composed of two types of institutions like banks and non-bank financial institution (NBFIs). The formal financial sector in Bangladesh includes: (a) Bangladesh Bank as the central bank, (b) 48 commercial banks, including 4 Government owned commercial banks, 30 domestic private banks (PCBs) (of which 6 banks are operating under Islamic Shariah), 9 foreign banks (FCBs) (of which 1 bank is operating as Islamic bank); and 5 government-owned specialized banks (DFIs); (c) 28 non-bank financial institutions (NBFIs) – licensed by the Bangladesh Bank); (d) 2 large government- owned insurance companies (life and general) and 60 private owned (17 life and 43 general) insurance companies; (e) 2 stock exchanges and, (f) some co-operative banks. Besides, a good number of semi-formal micro finance institutions (MFIs) also are operating in Bangladesh.
Structure of Financial System:
The main constituents of financial system are :
i) Financial Institutions ii) Financial Instruments, and iii) Financial Markets.
Financial Institutions
The modern name of Financial Institution is Financial Intermediary (FI), because it mediates or stand between ultimate borrowers and ultimate lenders and helps transfer funds from one to another.
The Financial system helps production, capital-accumulation and growth by
i) encouraging savings and ii) allocating them among the alternative uses and users.
Financial Instruments
Financial Instruments are of two types:
i) Primary (or Direct) ii) Secondary (or Indirect)
Financial markets
Financial markets facilitate the flow of funds in order to finance investments by governments, corporations, and individuals. It transfers funds from those who have excess funds (surplus units) to those who need funds(deficit units).