...The role of Financial Market and Institution in the Economic Development of Bangladesh Financial market Financial market is created to satisfy particular preferences of market participants.Financial markets transfer funds from those who have excess funs to those who needfunds. That is they facilitate the transfer of funds from surplus unit to deficit unit .Because funding needs vary among deficit units, various financial markets have beenestablished. The primary market allows for the issuance of new securities, while thesecondary market allows for the sale of short term securities, while capital marketsfacilitate the sale of long term securities.The main participants of financial market can be classified as households, businesses andgovernment agencies. Those participants who provide funds to the financial markets arecalled surplus unit . Households are the main type of surplus unit. Participants who usefinancial markets to obtain the funds are called the deficit unit . Money market: Money market an integral part of the financial market of a country. It provides a mediumfor the redistribution of short term loan able funds among financial institutions, which perform this function by selling deposits of various types, certificate of deposits anddiscounting of bills, treasury bills etc. The participants in the money market are: thecentral bank, commercial banks, the government, finance companies, contractual savinginstitutions like the pension funds, insurance companies...
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...------------------------------------------------- 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...
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...Development of Non Bank Financial Institutions to Strengthen the Financial System of Bangladesh - MONZUR HOSSAIN∗ -MD. SHAHIDUZZAMAN∗ Abstract Non-bank financial institutions (NBFIs) represent one of the most important parts of a financial system. In Bangladesh, NBFIs are new in the financial system as compared to banking financial institutions (BFIs). Starting from the IPDC in 1981, a total of 25 NBFIs are now working in the country. As on June 30, 2001 the total amount of paid up capital and reserve of 24 NBFIs stood Tk.6901.8 million (BB, 2002). The NBFIs sector in Bangladesh consisting primarily of the development financial institutions, leasing enterprises, investment companies, merchant bankers etc. The financing modes of the NBFIs are long term in nature. Traditionally our banking financial institutions are involved in term lending activities, which are mostly unfamiliar products for them. Inefficiency of BFIs in long-term loan management has already leaded an enormous volume of outstanding loan in our country. At this backdrop, in order to ensure flow of term loans and to meet the credit gap, NBFIs have immense importance in the economy. In addition, non-bank financial sector is important to increase the mobilization of term savings and for the sake of providing support services to the capital market. The focus of this paper is to highlight the necessity and importance of NBFIs to strengthen the financial system for rapid economic development of the country. 1. Introduction...
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...Mission To build Prime Bank Limited into an efficient, market driven, customer focused institution with good corporate governance structure. Continuous improvement in our business policies, procedure and efficiency through integration of technology at all levels. Vision To be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity. Objective For our customers: • To provide the most courteous and efficient service in every aspects of its business • To be innovative in the development of new banking products and services For our employees: • By promoting their well-being through attractive remuneration and fringe benefits. • By promoting good stuff morally through proper staff training and development, and provision of opportunities for career development. For our share holders: • By forging ahead and consolidating its position as a stable and progressive financial institution. • By generating profits and fare return on their investment. For our community: • By assuming our role as a socially responsible corporate citizen in a tangible manner • By adhering closely to national policies and objectives thereby contributing towards the progress of the nation Strategy PBL has consistently remained focused on efficient customer service by providing wide range of product and services. PBL focused on our diverse products and services. Our customer group range...
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...Report On Contribution of Banks on SME Sector in Bangladesh 1 LETTER OF TRANSMITTAL 2 ACKNOWLEDGEMENT 3 Table of contents No: Page: Chapter One Introduction 1.1 Introduction 1 1.2 Background of the study 2 1.3 Problem statement 3 1.4 Objectives of the study 3 1.5 Scope of the study 4 Chapter Two Methodology 2.1 Data requirement 5 2.2 Study area 6 2.3 Sample size selection 6 2.4 Questionnaire development 7 2.5 Literature review 8 2.6 Small enterprise 10 2.7 Medium enterprise 10 2.8 SME financing by Banks in Bangladesh 11 Chapter Three Results 3.1 Contribution of SMEs in the economy 13 3.2 Current status of SME financing by Bangladesh Bank 14 4 3.3 Loan documents needed for SME financing by banks 14 3.4 About the sample banks 15 3.5 Portfolio size of different banks in SME sector 17 3.6 Target given by Bangladesh Bank 19 3.7 Survey analysis 24 3.8 Findings 27 Chapter Four 29 Limitation Chapter Five 30 Conclusions and recommendation Appended Parts Data collection instruments Details of entrepreneurs Bibliography List of Tables 3.1 Portfolio size of Different Banks in SME sector 17 3.2 Distribution of entrepreneurs whether or not they take bank loan 24 to operate their SME business. 3.3 Distribution of entrepreneurs...
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...Introduction: The development of economy of any country depends mostly on the establishment of sound, effective and efficient financial system in that country. A well-developed financial system plays an important role in accelerating economic growth by mobilizing savings and facilitating investment in an efficient manner (Mu, 2007). Financial market is composed of different markets- Money Market, Capital Market, Derivative Market etc. All the markets play an interactive role for the development of economy by formation of capital through mobilizing funds, industrialization of economy through supplying adequate funds, providing services, linking investors to the industrial entrepreneurs etc. Besides, this requires sound regulatory framework, sound and investment sensitive administrative infrastructure, fiscal supports for making their role effective for economic development. Bond market in Bangladesh: The financial sector of Bangladesh is characterized by the dominating presence of commercial banks, especially the Nationalized Commercial Banks (NCBs). Although, a paradigm shift in the degree of dominance has been observed of late with the emergence of private commercial banks-traditional and shariah based banking. Banking sector accounted for about 75 percent of the total financial system. Most of the available funds go to the NCBs in the form of deposits and channeled into lending. However, the NCBs had substantial nonperforming loan (NPL) portfolios. Both insurance...
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...Company of Bangladesh Limited.) this industry has shown so much prospect as well as progress. Sharing some common characteristics of Banks & some of its own it brought diversification in the financial market. In the same time it witnessed impressive growth during the last years. In our country like most other industries financial institutions are also big city especially Dhaka concentrated. Financial institutions rarely spread their branches outside divisional cities let alone the urban areas. So the fierce competition among as well as across the group is strengthening. So the market segmentation, expansion and product diversification may be some key tools to get out of the situation for the FIs. But currently the industry seems to become matured with so many competitors. The recent inclusion of another two new financial institutions (Bangladesh Infrastructure Finance Fund Limited (BIFFL) & Agrani SME Financing Company Limited) in the market has increased the number of competitors at 31. From the research & provided data it is very clear that the companies are trying to strengthen their position in the market as the investment n fixed asset seems to on the rise. Besides following the stock market crash in 2010 and recent rise in the dollar price, the cost of fund has also significantly jumped. Altogether these factors are provoking the decline in the growth in income for the companies. As per Section 7 of the Banking Companies Act 1991, commercial banks also started...
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...INTRODUCTION ECONOMIC HISTORY SHOWS THAT DEVELOPMENT HAS STARTED EVERYWHERE WITH THE BANKING SYSTEM AND ITS CONTRIBUTION TOWARDS FINANCIAL DEVELOPMENT OF A COUNTRY IS HIGHEST IN THE INITIAL STAGE. MODERN BANKS PLAY AN IMPORTANT PART IN PROMOTING ECONOMIC DEVELOPMENT OF A COUNTRY. BANKS PROVIDE NECESSARY FUNDS FOR EXECUTING VARIOUS PROGRAMMERS UNDERWAY IN THE PROCESS OF ECONOMIC DEVELOPMENT. THEY COLLECT SAVINGS OF LARGE MASSES OF PEOPLE SCATTERED THROUGHOUT THE COUNTRY, WHICH IN THE ABSENCE OF THE BANKS WOULD HAVE REMAINED IDEAL AND UNPRODUCTIVE. THESE SCATTERED AMOUNTS ARE COLLECTED, POOLED TOGETHER AND MADE AVAILABLE TO COMMERCE AND INDUSTRY FOR MEETING THE REQUIREMENTS. ECONOMY OF BANGLADESH IS IN THE GROUP OF WORLD’S MOST UNDERDEVELOPED ECONOMIES. ONE OF THE REASONS MAY BE ITS UNDERDEVELOPED BANKING SYSTEM. GOVERNMENT AS WELL AS DIFFERENT INTERNATIONAL ORGANIZATIONS HAVE ALSO IDENTIFIED THAT UNDERDEVELOPED BANKING SYSTEM CAUSES SOME OBSTACLES TO THE PROCESS OF ECONOMIC DEVELOPMENT. SO THEY HAVE HIGHLY RECOMMENDED FOR REFORMING FINANCIAL SECTOR. SINCE 1990, BANGLADESH GOVERNMENT HAS TAKEN A LOT OF FINANCIAL SECTOR MORE TRANSPARENT, AND FORMULATION AND IMPLEMENTATIONS OF THESE REFORM ACTIVITIES HAS ALSO BEEN PARTICIPATED BY DIFFERENT INTERNATIONAL ORGANIZATIONS LIKE WORLD BANK, IMF, ETC. IN 1996, WORLD BANK PUBLISHED ‘BANGLADESH: AGENDA FOR ACTION’ IN WHICH IT HAS SUGGESTED A LOT OF RECOMMENDATIONS FOR ECONOMIC DEVELOPMENT OF OUR COUNTRY. THESE RECOMMENDATIONS INCLUDE SPECIAL...
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...Sonali Bank Limited a state-owned leading commercial bank in Bangladesh. It is the largest bank of the country. Sonali Bank, the largest & leading commercial bank of the country, came into being in 1972 immediately after the emergence of Bangladesh as an independent state. A fully state-owned enterprise, the bank has been discharging its nation-building responsibilities by undertaking government entrusted different socio-economic schemes as well as money market activities of its own volition, covering all spheres of the economy. Sonali Bank singularly enjoys the prestige of being the agent of the Central Bank of Bangladesh in such places where the guardian of the money market has chosen not to act by itself.Sonali Bank is governed by a Board of Directors consisting of 7(seven) members headed by a Chairman, who is a renowned economist and a former Vice Chancellor of a reputed University. The other members are distinguished representatives from both private and public sectors.The Bank is headed by the Managing Director (Chief Executive), who is a well-known Banker and a reputed professional. The head office of the bank along with its corporate structure is located at Motijheel, Dhaka, the main commercial center of the capital Introduction: After the end of Second World-war in fact to say the world is involved in another war called the trade war of achieving superiority over other countries through implementing the strategies of free market economy. The conference of GATT...
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...Report On Green Management perspective In Bangladesh SOUTH EAST UNIVERSITY Submitted To Farzana Ferdoushi Faculty, School of Business of SEU Submitted By Mohammad Azmir hossain ID: 2010010000004 Department: B.B.A. Date of Submission March 8, 2014 Introduction Bangladesh is a country suffering from immense social, political, economic and environmental issues and these issues need to be addressed for the overall development of this country. However, we all know that the peoples of the whole world are concerned about the environmental degradation, especially the rising of global temperature and thereby melting of glaciers and ice-berg in the polar region and consequently rising of sea level, which will directly affect the low lying countries of the world like Bangladesh. The world conscious people are also concerned about the increase of Green House Gases and Chlorofluorocarbons (CFCs) and thereby depletion of Ozone layer. As such, every person and especially the professionals must have greater role to check the environmental degradation. The contribution of the banking sector is playing significant role to save the environment through their CSR, investment or other activities. To save the environment, Green Management is the great initiative which is taken by bank all over the world. The word „Green Banking‟ is very common concept in the world. Global warming is a great issue in protection...
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...What do you mean by Bank? There is no unanimous opinion as to when and how the word “Bank” was derived. But it is assumed that this word derived from the ancient Latin words “Banco”, “Bangk”, “Bancus” and “Banque”. Meaning of these words is long bench. Once a class of people used to sit in the bench particularly in Lombardy street of Italy for taking deposit and lending money as a banking business. Definition of Bank: ➢ Different authors have defined the “Bank” in different ways with a common principle to accept deposit from the public and lending the same to the borrowers. ➢ Some important definitions are: ➢ “A bank is an establishment which trades in money, and establishment for deposit custody and issue of money, and also for granting loan and discounting bills and facilitating transmission of remittances from one place top another” …... from Imperial Dictionary. ➢ “An organization through which funds in the form of money or claim to money are assembled and transferred from those individuals and firms having a surplus of economic goods(as represented by such funds) to other individuals & firm whose needs for funds exceed their existing supply”..... from Rollin G. Thomas. ➢ “Banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or otherwise. ……………. from The Bank Company Act, 1991. Banker: ...
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...Role of Banks for developing the Economy of Bangladesh Role of Banks for developing the Economy of Bangladesh Introduction Banks over the years, have become a significant aspect of an economy. With the on going financial depression, the position of banks have become all the more important in the course of working of the money market and hence the economy of a nation. The banking sector forming a portion of the financial sector primarily works as a financial intermediary generating money supply. From the different macro economic models , banks have been found to be a part of the supply side of the economy . However, over time banks have transformed from merely money generating organizations to a multi tasking entity. In this paper, we shall deal with the role of banks in the context of the world economy as well as the Bangladesh economy . The first section will illustrate the functions of a bank along with its classification. In the second section, we shall discuss the role of a banks as a major component of the service sector rendering to the economy as a whole. In the third section, we would like to empirically validate our hypothesis with a comprehensive data analysis. The recession in the US market and the global meltdown termed as Global recession have engulfed complete world economy with a varying degree of recessional impact. World over the impact has diversified and its impact can be observed from the very fact of falling Stock market, recession in jobs availability...
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...SME Financing in Bangladesh: Problems and Prospects SME Financing in Bangladesh: Problems and Prospects Prepared for Arafat Rahman Assistant Professor Institute of Business Administration Jahangirnagar University Prepared by Tanjila Sharmin 201301029 Md. Mourshed Uddin 201303006 Naim Ahmad 201403020 Sayeed Ishtiaque Ahmed 201403027 Md. Sazzad Hossain 201403034 Course Participant BUS 501: Managerial Communication (Section-02) WMBA Program Institute of Business Administration Jahangirnagar University December 20, 2014 Letter of authorization November 23, 2014 Course Participant BUS 501: Managerial Communication The purpose of this report is to familiarize you with the basic techniques and principles associated with writing a formal business report so that you can build and enhance this specific written communication skill. This formal report will be coordinated with a formal presentation session on the topic of the report. At a minimum, your report should include information related to the following issues: Introduction to the Industry/Sector/Area – What is the industry/sector/Area? What is the background of the industry/sector/Area in Bangladesh? Who are the major participants? You may show how the industry/sector/area is contributing to the economic development of the country. In this case, you must use industry-related data for the past three years (at least). In case of export-oriented industries...
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...0709 Non-Bank Financial Institutions in Bangladesh: An Analytical Review Md. Nehal Ahmed Mainul Islam Chowdhury March 2007 Policy Analysis Unit (PAU) Research Department, Bangladesh Bank Head Office, Dhaka, Bangladesh (www.bangladeshbank.org.bd) (www.bangladesh-bank.org) Policy Analysis Unit* (PAU) Working Paper Series: WP 0709 Non-Bank Financial Institutions in Bangladesh: An Analytical Review Md. Nehal Ahmed Mainul Islam Chowdhury Research Economist Policy Analysis Unit Research Department Bangladesh Bank March 2007 Copyright © 2007 by Bangladesh Bank * In an attempt to upgrade the capacity for research and policy analysis at Bangladesh Bank (BB), PAU prepares and publishes several Working Papers on macroeconomic research every quarter. These papers reflect research in progress, and as such comments are most welcome. It is anticipated that a majority of these papers will eventually be published in learned journals after the due review process. Neither the Board of Directors nor the management of BB or any agency of the Government of Bangladesh, however, necessarily endorses any or all of the views expressed in these Papers. The latter reflect views based on professional analysis carried out by the research staff of Bangladesh Bank, and hence the usual caveat as to the veracity of research reports applies. [An electronic version of this paper is available at www.bangladeshbank.org.bd] Non-Bank Financial Institutions in Bangladesh: An Analytical...
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...International Journal of Islamic Financial Services Vol. 2 No.1 REGULATION OF ISLAMIC BANKING IN BANGLADESH : ROLE OF BANGLADESH BANK Abdul Awwal Sarker As regards the supervision and inspection of the banks in Bangladesh, an equal treatment is being followed for all banks including the Islamic ones by the Bangladesh Bank. In some cases, Bangladesh Bank has given some special provision for the Islamic banks. Yet, for the smooth development and operation of the Islamic banking, Bangladesh Bank should devise the separate regulatory and supervisory guidelines for the Islamic banks and non-bank Islamic financial institutions. 1. Banking System of Bangladesh The banking system of Bangladesh is composed of a variety of banks working as Nationalized Commercial Banks (NCBs), Private Banks, Foreign Banks, Specialised Banks and Development Banks. However, 28 out of 50 banks in Bangladesh are private, of which only 5, namely Islami Bank Bangladesh Limited, Al-Baraka Bank Bangladesh Limited, Al-Arafah Islami Bank Limited, Social Investment Bank Limited, and Faysal Islamic Bank of Bahrain E.C. have been operating as Islamic banks. Besides these full-fledged Islamic banks, two conventional banks in the private sector namely the Prime Bank Limited and Dhaka Bank Limited, have opened two full-fledged Islamic banking branches and Islamic Banking Counter respectively to deal with the Islamic banking business parallel to their conventional operations. The operations and accounts of these...
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