The financial system of Bangladesh can be categorized into three main sectors:

* Formal Sector: This sector is heavily regulated and includes institutions like:
* Banks (commercial, specialized, and foreign)
* Non-bank financial institutions (NBFIs)
* Insurance companies
* Capital market intermediaries (brokerage houses, merchant banks)
* Microfinance institutions (MFIs)
* Semi-Formal Sector: This sector includes institutions that are regulated in some way but don't
fall under the direct supervision of the central bank or other major financial regulators. Examples
include:
* Specialized financial institutions (e.g., House Building Finance Corporation)
* Some NGOs involved in microfinance
* Cooperatives
* Informal Sector: This sector operates outside of formal regulatory frameworks and includes:
* Private moneylenders
* Informal savings groups
* Other unregulated financial activities
Key Components of the Formal Financial System
* Bangladesh Bank: The central bank of Bangladesh, responsible for monetary policy,
regulating banks, and overseeing the overall financial system.
* Banks: The banking sector is the largest part of the formal financial system, comprising
various types of banks:
* State-owned commercial banks
* Specialized banks (for agriculture, industry, etc.)
* Domestic private commercial banks
* Foreign commercial banks
* Capital Market: The capital market, though still developing, plays a crucial role in mobilizing
long-term funds. It includes:
* Dhaka Stock Exchange (DSE)
* Chittagong Stock Exchange (CSE)
* Securities and Exchange Commission (SEC) - the regulatory body for the capital market
* Insurance: The insurance sector provides risk management and financial security. It consists
of:
* Life insurance companies
* General insurance companies
* Microfinance: Microfinance institutions provide small loans and other financial services to
low-income individuals and communities.
Challenges and Issues
* Financial Inclusion: Expanding access to financial services for a large segment of the
population that remains unbanked or underbanked.
* Non-Performing Loans (NPLs): High levels of NPLs in the banking sector pose a threat to
financial stability.
* Capital Market Development: Further developing the capital market to provide diverse
financing options for businesses and investors.
* Regulatory Framework: Strengthening the regulatory framework to ensure effective oversight
and promote financial stability.
 * Cybersecurity: Addressing the growing risks of cyber threats to the financial system.
Overall, the financial system of Bangladesh is evolving and playing a vital role in supporting
economic growth and development.

https://www.bb.org.bd/en/index.php/financialactivity/index

The banking system of Bangladesh has undergone significant development since the country's
independence in 1971. The sector plays a pivotal role in the nation's economic growth and
development, serving as a key intermediary between savers and investors. Here is an overview of
the banking system in Bangladesh:
Structure of the Banking System:
Central Bank:
Bangladesh Bank (BB):Bangladesh Bank, Established in 1971, the central bank of Bangladesh,
regulates and supervises the country's monetary and financial system. It formulates and
implements monetary policy, issues currency and overviews the banking sector's stability.
Commercial Banks:
Bangladesh has a mix of local and foreign commercial banks, providing a wide range of
financial services. Prominent local banks are The City Bank, Islami Bank Bangladesh PLC
and Dutch Bangla Bank PLC and so on. Foreign banks such as Standard Chartered, HSBC and
CitiBank are also serving in the country.
Specialized Banks:
Krishi Bank (Agricultural Bank): Bangladesh Krishi Bank focuses on providing credit facilities
to the agricultural sector supporting farmers and agribusinesses.
Rajshahi Krishi Unnayan Bank (RAKUB): RAKUB is another specialized bank contributing to
agricultural development primarily in the Rajshahi and Rangpur division.
Development Financial Institutions (DFIs):
DFIs like Bangladesh Development Bank Limited (BDBL) and Bangladesh Infrastructure
Finance Fund Limited (BIFFL) aim to finance long-term development projects contributing to
the country's economic growth.
Microfinance Institutions (MFIs):
Grameen Bank, founded by Nobel laureate Dr. Muhammad Yunus, is the pioneer of
microfinance in Bangladesh. MFIs play a crucial role in providing financial services to the non-
banked population promoting financial inclusion.
Key Features of the Banking System:
Islamic Banking:
Bangladesh has embraced with Islamic banking principles with several Islamic banks operating
alongside conventional banks. Islamic Bank Bangladesh PLC, established in 1983, was the
country's first Islamic bank.
Financial Inclusion:
Efforts have been made to promote financial inclusion with a focus on reaching the non-banked
population. Mobile banking services have played a significant role in expanding financial access
especially in rural areas.
Regulatory Framework:
Bangladesh Bank has implemented regulatory measures to ensure the stability and integrity
of the financial system. Regular inspections, capital adequacy requirements, and risk
management guidelines contribute to the sector's resilience.
Technology and Digital Banking:
Technological advancements have led to the adoption of digital banking services. Mobile
banking, online transactions, and electronic fund transfers have become integral parts of the
banking experience enhancing efficiency and convenience.
Challenges and Opportunities:
Non-Performing Loans (NPLs):
The banking sector faces challenges related to Non-Performing Loans. Strict measures and
effective risk management practices are essential to overcome this issue.
Cybersecurity:
With the increasing reliance on digital services, ensuring robust cybersecurity measures is
essential to protect customer data and maintain trust in the banking system.
Financial Education:
Promoting financial literacy and education remains is needed to enhance public awareness
and understanding of banking products and services.
Sustainable Finance:
The banking sector has an opportunity to contribute to sustainable development by promoting
environmentally friendly and socially responsible financing practices.
In conclusion, the banking system in Bangladesh has evolved and expanded over the years
contributing significantly to the country's economic development. Continuous efforts to address
challenges and embrace opportunities will further strengthen the sector and support Bangladesh's
journey towards a robust and inclusive financial system.