General Banking, Credit, and Foreign Exchange

Operations with Special Reference to BRAC Bank

PLC

Introduction

BRAC Bank PLC, established in 2001, is a leading private commercial bank in Bangladesh,
renowned for its focus on small and medium enterprises (SMEs) and innovative banking
solutions. As a subsidiary of BRAC, the world’s largest non-governmental organization,
the bank has played a pivotal role in promoting financial inclusion and economic devel-
opment. General banking, credit, and foreign exchange operations form the backbone
of its services, catering to a diverse clientele ranging from individuals to corporations.
This assignment explores BRAC Bank’s operations in these core areas, highlighting its
strategies, products, and contributions to Bangladesh’s financial sector. By examining
recent developments and challenges, the paper aims to provide a comprehensive analysis
of BRAC Bank’s role in shaping modern banking practices.

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 Content

General Banking Operations

General banking at BRAC Bank encompasses a wide range of services designed to meet
the daily financial needs of customers. These include deposit accounts, remittance ser-
vices, digital banking, and agent banking. With over 190 branches, 457 SME unit offices,
and 329 ATMs as of 2022, BRAC Bank ensures accessibility across urban and rural areas
[1]. The bank’s digital platforms, such as the Shubidha app and internet banking, allow
customers to perform transactions seamlessly, reflecting its commitment to technological
innovation.

BRAC Bank offers various deposit accounts, including savings, current, and fixed deposit
accounts. The Probashi Savings Account targets non-resident Bangladeshis (NRBs), of-
fering interest-bearing accounts in local currency with flexible repatriation options [3].
The Freedom Fixed Deposit provides quarterly interest payouts, appealing to customers
seeking regular income. These products are tailored to diverse customer segments, en-
suring inclusivity and convenience.

Agent banking is a cornerstone of BRAC Bank’s strategy to reach unbanked populations.

By February 2023, the bank had opened its 1000th agent banking outlet, providing ser-
vices like cash deposits, withdrawals, and bill payments in remote areas [1]. This initiative
aligns with the bank’s mission to facilitate financial inclusion, particularly for SMEs and
rural communities.

Credit Operations

BRAC Bank is a pioneer in SME financing, offering tailored credit products to support
small and medium enterprises, which are vital to Bangladesh’s economy. The bank’s
credit portfolio includes personal loans, auto loans, home loans, and SME loans, with
competitive interest rates aligned with Bangladesh Bank guidelines [4]. The Shubidha
digital loan app, launched in 2022, enables customers to apply for loans remotely, stream-

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lining the borrowing process [1].

A longitudinal study conducted by BRAC Bank between 2011 and 2013 demonstrated
the positive impact of its SME credit program. Repeat borrowers experienced growth in
business size, sales, profitability, and reduced debt burdens, alongside social and envi-
ronmental benefits [2]. The bank’s focus on SMEs has earned it recognition as a leader
in this sector, with a dedicated SME Division led by experienced professionals like Syed
Abdul Momen, Additional Managing Director [6].

Effective credit risk management is integral to BRAC Bank’s operations. The appoint-
ment of Chowdhury Akhtar Asif as Chief Risk Officer in 2017 strengthened the bank’s risk
management framework [6]. Tools like automated credit scoring and portfolio monitor-
ing ensure prudent lending practices, minimizing non-performing loans and maintaining
financial stability.

Foreign Exchange Operations

BRAC Bank’s foreign exchange operations facilitate international trade, remittances,

and foreign currency management. The bank offers services such as letters of credit, for-
eign currency accounts, and offshore banking units (OBUs). In 2022, Bangladesh Bank
directed BRAC Bank to allocate 50% of its foreign exchange trading profits to corpo-
rate social responsibility due to concerns over unethical practices, highlighting regulatory
oversight in this area [1].

The Offshore Banking Unit (OBU) enhances foreign exchange liquidity, supporting cost-
effective trade financing. Customers can open OBU fixed deposits in USD, GBP, or
EUR with a minimum of $500, enjoying tax exemptions and repatriation flexibility [7].
Selim RF Hussain, Managing Director, emphasized that OBUs attract foreign currency
deposits, bolstering Bangladesh’s reserves and facilitating international transactions [7].

BRAC Bank’s remittance services, facilitated through BRAC Saajan Exchange Limited,
cater to NRBs. The bank collaborates with exchange houses to transfer funds to bKash

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accounts or BRAC Bank accounts without fees, except for standard cash-out charges [3].
These services are critical for Bangladesh, where remittances contribute significantly to
GDP.

To ensure compliance with the Money Laundering Prevention Act 2002, BRAC Bank
has robust anti-money laundering (AML) policies. Branch and Chief AML Compliance
Officers monitor transactions, with system-generated reports flagging cash transactions
above BDT 3 lakh or deviations from estimated transaction profiles [2]. These measures
reflect the bank’s commitment to governance and transparency.

Challenges and Opportunities

BRAC Bank faces challenges such as regulatory compliance, cybersecurity risks, and
competition in the digital banking space. The 2022 Bangladesh Bank directive on foreign
exchange profits underscores the need for ethical practices [1]. Additionally, ensuring
cybersecurity for digital platforms like Shubidha is critical, as emphasized by Selim RF
Hussain [7].

Opportunities abound in expanding digital and agent banking networks, particularly in

rural areas. The bank’s high credit ratings and competitive OBU interest rates position it
to attract more foreign currency deposits [7]. Partnerships, such as the employee banking
agreement with Zara Zaman Technology in 2025, enhance BRAC Bank’s market reach
and customer base [5].

Conclusion

BRAC Bank PLC has established itself as a trailblazer in Bangladesh’s banking sector,
excelling in general banking, credit, and foreign exchange operations. Its focus on SMEs,
innovative digital solutions like the Shubidha app, and extensive agent banking network
demonstrate its commitment to financial inclusion. The bank’s robust credit risk man-
agement and AML frameworks ensure sustainable growth, while its offshore banking and

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remittance services support international trade and economic development. Despite chal-
lenges like regulatory scrutiny and cybersecurity risks, BRAC Bank is well-positioned to
capitalize on opportunities in digital banking and global finance. By continuing to pri-
oritize governance, innovation, and customer-centricity, BRAC Bank will remain a key
driver of Bangladesh’s financial landscape.

References

[1] BRAC Bank, “Wikipedia Entry on BRAC Bank PLC,” 2024. https://en.wikipedia.
org/wiki/BRAC_Bank [? ? ? ]

[2] BRAC Bank, “Reports Statements: SME Credit Impact Study,” 2023. https://www.
bracbank.com [? ]

[3] BRAC Bank, “Foreign Remittance and Probashi Accounts,” 2024. https://www.
bracbank.com [? ]

[4] BRAC Bank, “Digital Loan and Retail Banking Services,” 2024. https://www.
bracbank.com [? ]

[5] BRAC Bank, “Learning Luminaries and Partnerships,” 2024. https://www.bracbank.

com [? ]

[6] BRAC Bank, “Leadership Profiles,” 2025. https://www.bracbank.com [? ]

[7] New Age, “Offshore Banking Boosts Trade Efficiency: BRAC Bank MD,” 2024. https:
//www.newagebd.net [? ]