Banking Industry in Bangladesh: Its Contribution and Performance

Topics: Bank, Economy, Economics / Pages: 15 (3671 words) / Published: Dec 1st, 2012
Journal of Business Research, vol. 3, 2001
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Banking Sector in Bangladesh: Its Contribution and
Sharif Rayhan Siddique*
A F M Mafizul Islam**
Abstract: The paper attempted to highlight the prospects and opportunities of banking sector in
Bangladesh. Like other economic sector in the country, Banking is one of major sectors which contribute to the national economy. The study tried to furnish the overview of the performances of banking sector and also find out the comparison among the various categories of banks with respect to the Profitability.
Finally, the paper tried to establish the linear relationship among the various variables and net profit of the banking sector.

1. Introduction
Banking sector of Bangladesh is one of the major sectors, which contributes significantly to the national economy. The sector comprises a number of banks in various categories.
Considering ownership the sector can be classified in to four major categories - such as
Nationalized Commercial Banks (NCBs), Specialized Banks (SPBs), Private Commercial
Banks (PCBs), and Trans-National Banks (TNBs). The list of banks under different categories is furnished in the appendix - A.
The study has been initiated to analyze the contribution of this sector and its profitability.
This paper attempts to provide an overview of the contribution of the sector in national economy. The paper also analyzes the profitability of different categories of banks. Finally a regression analysis has been done to examine the relationship between the profitability and other variables.
2. Contribution of the Banking sector in National Economy
Economic development - of the country is executed by the contribution of various economic sectors. Like agriculture, industries, power, transport, trade service, etc., banking sector also has a contribution to the economic growth. In mid 80s Banking and Insurance contributed 1.69% of GDP

References: Mohammad Moqbul Hossain Bhuiyan. (1995). Managerial Effectiveness of Private Commercial Banks : A Comparative Study Sujit Ranjan Saha. (1996). Ancillary Business and Profitability of Banks : Trends and Prospects. Bank Parikrama Taufic Ahmad Choudhury and others. (1994). Comparative Characteristics of Profit Earning and Loss Incurring Rural Bank Branches in Bangladesh Abdul Ghafar Ismail. (1993). Deregulation and Bank Behaviour in Mixed markets. The Asian Economic Review Dipendra Sinha. (1996). Savings and Economic Growth in India. The Asian Economic Review. Vol. Amar Chand Kaushik. (1996). Impact Study of Regional Rural Bank 's Credit on Income Generation an d Poverty Alleviation in Rural Haryana David Lynch. (1996). Measuring Financial Sector Development : A Study of Selected Asia-Pacific Countries Schiller, Bradley R. (1994). The Macro Economy Today. Sixth Edition. McGrawHill Inc., New York, USA. McConnell, Campbell R. and Brue, Stanley L. (1993). Macro Economics. Twelfth Edition. McGraw-Hill Inc., New York, USA. 10. Fischer, Stanley., Dornbusch, Rudiger. And other. (1988). Introduction to Macroeconomics. 2nd Edition 11. Department of Statistics. (1997). Monthly Economic Trends. Bangladesh Bank. December. 12. Bangladesh Bureau of Statistics. (1997). Statistical Yearbook of Bangladesh 1996. Seventeenth Edition. J ournal of Business Research, Vol. 3, 2001 10

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