Letter of Transmittal

Date: 18 November 2008

To
………………..

Subject: Submission of Report on Banking Industry in Bangladesh

Dear Sir,

Here I am submitting the report on “Banking Industry in Bangladesh” prescribed by

you in your course Industrial Studies. For this Purpose, I have gone through internet,
different books, articles, journals, interview of authorities and employees of the
respective organizations and class lecture sheets for the relevant information of the
assigned topic.

Please call me for any further information at your convenient time and place.

Yours truly,

…………………………….
 Acknowledgement

At first I desire to express my deepest sense of gratitude to almighty Allah.

With profound regard I gratefully acknowledge our respected

…………………………..for his generous help and day to day suggestion during
preparation of the report.

I like to give thanks especially to our friends and many individuals, for their
enthusiastic encouragements and helps during the preparation of this report us
by sharing ideas regarding this subject and for their assistance in typing and proof
reading this manuscript.

Thanking You,
Md. Tanvir Ahmed
Id: 233
BBA: 5
Faculty of BBA
Cambrian Collage
Table of content
 Executive summery

As the world grapples with the continuing pain of the financial crisis, an independent network of
eleven banks will come together in Bangladesh to try to build a viable, sustainable future for the
financial industry. Members of the Global Alliance for Banking on Values (GABV) believe that
they can demonstrate that a brave new future for the banking industry is possible, and that their
members are already delivering it.

The banks, from wealthy and developing countries around the world, intend to grow sustainable
banking globally. They are spending three days near Dhaka, working together to build a capital
raising programme, develop an education programme to develop a new breed of sustainable
bankers to handle the money they raise, and agree how they will have a greater influence on the
mainstream financial industry.

The GABV, which uses finance to deliver sustainable development for unserved people,
communities and the environment, represents seven million customers in 20 countries, with a
combined balance sheet of over $14 billion. It has announced an ambitious commitment to
support the expansion of $2 billion in lending to green projects and underserved communities
around the world. And all this, in a country which many experts believe will be hit hardest and
earliest by the impact of climate change.

The GABV aims to raise $250 million in new capital by pooling the expertise and resources of
its members. "Raising this money will result in $2 billion in new lending, at a time when credit
continues to be scarce," said Peter Blom, Chair and co-founder of the GABV and CEO of
Triodos Bank in the Netherlands. "The stakes are high. If we don't get people to listen, the
potential impact for hundreds of millions of people in this part of the world alone, could be
catastrophic. At the same time the opportunity is colossal. There is an enormous amount of
positive work being done. A safe, sustainable future will only happen if we can develop a better
financial system. Our network is collaborating to make that happen."

The banks operate in countries as diverse as Germany, Mongolia, Peru, and the US, and have
weathered the financial storm with considerable success. According to Katrin Kaeufer, research
fellow at the Massachusetts Institute of Technology (MIT), they share a number of
characteristics that could be adopted more widely to build a sustainable world economy. "Many
of these banks have continued to be successful during the downturn. Before we return to business
as usual it seems sensible to examine why. There's no one secret, but these banks all have
sustainability embedded in everything they do. They are transparent, values-driven institutions
that promise a genuinely different future for banking."
 Introduction

The banking industry in Bangladesh has flourished over the years, making double-digit
profit percentages, sustaining growth and surviving cut-throat competition while
providing attractive returns to shareholders. However, the greed for more without
befitting platform and fundamentals, brings its own challenges and questions in people's
minds. News about bank directors and chairmen's involvement in politics and
underhand deals using banks' goodwill raises question about the banks' independence
in running their operations. It also makes you think whether all the disclosures in the
annual reports and other regulatory paperwork are only the glowing shell over a huge
hollow. At the times of questioning myself whether excessive regulation is the reason
behind the veneer of goodness or whether there are other regulatory malpractices,
disconnects or deficiencies that allow these banks to take advantage of the situation.
The image of the banking industry has many times been tarnished by several stories
regarding the owners in recent media releases. Despite the considerable progress
made, foreign countries are still somehow treating our banking industry activities as
questionable. Countering the image issue is not the only block in the road to developing
a respectable and successful institution, there are also the problems of 2 Ps 3Cs and a
T-- people, product, compliance and ethics, competition, change management and
technology among others. Though someone may differ, competition in Bangladesh
seems to be the deadliest of all. It not only brings in positive developments but also
encourages malpractice. There is competition not only from other banks but also from
non-bank financial institutions (NBFI) and micro finance institutions (MFI). Not only are
the institutions competing, the regulators and customers are also pitting one against the
other, making the situation extremely difficult giving you the feeling of being stuck
between a rock and a hard wall. A customer will often try to make the best out of the
situation by not complying with the regulatory requirement, referring to the service
provided by another bank or banks. The requirement of bankers to meet steep targets
often results in succumbing to the demand of these corporates, resulting in bypassing of
the regulation. One bypass results in another and then another resulting in a whole
network of malpractices, which often becomes the norm. Competition in the banking
industry is also hitting from the capital market end, with the corporates increasingly
going to the equity market to raise funding. This not only hits the banks in the belly by
affecting their core business but also indirectly affects their contribution to market cap
which dropped from 59% in 2007 to less than 25% in June 2010. More importantly it
forces them to risk their position by over exposing them to volatile capital market
through proprietary trading and position taking in order to maintain profitability. All of us
feel that the banking industry badly needs skilled human resources who will not only
service old products but will also create and launch new innovative products. Educating
the market remains the first requirement towards creating new products and developing
skilled human resources. Besides people and product issues, you need to be ever
vigilant about the ever-changing technology and regulatory requirements. The new
offering in the market which has got all banks running are the requirements of BASEL II
& Automated Clearing House. The major challenge with change of regulation is that
often the regulators are in a hurry to implement a sudden decision, rolling out action
plans without proper research or understanding the broad implications and capabilities
of the banks to comply with it. The outcome is delay in implementation, confusion
among stakeholders and new techniques to bypass these regulations. This in its turn
creates a non-level playing field for those who comply with the regulation versus those
cleverly "managing" the situation without having to comply. Too much noise and less
action, at times, creates doubt about the sincerity of the purpose. As a law-abiding
citizen you wonder why it is so easy to "manage" non-compliance? The final question
remains -- who is losing out by this? Ultimately, every citizen of the country, as our
country suffers. The banking sector could be our pride and a major growth engine of the
economy. Regulators are taking appropriate decisions to implement proper regulations
at the right time. An appropriate example is when several financial institutions shifted
towards the riskier capital market to counter the lower growth in their core businesses
using the depositors money, the regulators aptly stepped in to make merchant banks
separate subsidiaries. The regulations are there. The problem is enforcing them in an
honest manner. If the regulators and the legal system were honest then all these
recurring image issues and malpractices could have been avoided. Facing the
challenges head-on in a compliant manner should be our goal towards creating a
sustainable, profitable and forward-looking banking sector. We need to do more and run
faster with clear visibility about the destination. Perhaps, it also has to do a lot with the
overall governance and accountability situation in the country.
 Objectives of the study

There are two types of objectives of this study. Both of them are being described below:

1. Primary Objectives :

The primary objective of this study is to understand tte current scenario in the
garments industry in Bangladesh.

2. Secondary Objectives:

secondary objectives are….

 To know briefly about a some garments companies of Bangladesh

 To identify what factors   are affecting the garments industry in Bangladesh

 To identify the performance of garments industry in Bangladesh

 Limitations of the study:

Since our study is based on both primary and secondary data, there is a possibility of
getting fake information. If the surveyed personnel provide us with any fabricated
information about their opinion of their organization, then the report findings may be
erroneous. Above all, this study is weak in some points. The notable ones are as under:

 The survey was conducted in a very short time so we were not able to collect
more information.
 This survey made on crisis situation of Bangladesh, so it was difficult to collect
more samples.
 Only the big and the reputed Garments Company consider here as sample.
 The questionnaire contains some questions that, if answered properly, might
damage the company’s image. In this type of questions, the respondents might
provide socially acceptable answers. This risk was unavoidable.
 Another limitation of this study is the person’s private information were not
disclosing some, data and information for obvious reasons, which could be very
much useful.
 Lack of experience in this field.
 Lack of proper authority to conduct the interview program.
 Scope of the Study

This study has focused upon the various problems regarding with the garments
company and the prospect of these industries. We have taken 5 garments company to
gather data on the present situation of the garments industries as well as problem
regarding and the future of the industries.
 Background of the Industry

The Pakistani banking system at independence (14 August 1947) consisted of two
branch offices of the former State Bank of Pakistan and seventeen large commercial
banks, two of which were controlled by Bangladeshi interests and three by foreigners
other than West Pakistanis. There were fourteen smaller commercial banks.

Virtually all banking services were concentrated in urban areas. The newly independent
government immediately designated the Dhaka branch of the State Bank of Pakistan as
the central bank and renamed it the Bangladesh Bank. The bank was responsible for
regulating currency, controlling credit and monetary policy, and administering exchange
control and the official foreign exchange reserves. The Bangladesh government initially
nationalized the entire domestic banking system and proceeded to reorganize and
rename the various banks. Foreign-owned banks were permitted to continue doing
business in Bangladesh. The insurance business was also nationalized and became a
source of potential investment funds. Cooperative credit systems and postal savings
offices handled service to small individual and rural accounts. The new banking system
succeeded in establishing reasonably efficient procedures for managing credit and
foreign exchange. The primary function of the credit system throughout the 1970s was
to finance trade and the public sector, which together absorbed 75 percent of total
advances.[1]

The government's encouragement during the late 1970s and early 1980s of agricultural
development and private industry brought changes in lending strategies. Managed by
the Bangladesh Krishi Bank, a specialized agricultural banking institution, lending to
farmers and fishermen dramatically expanded. The number of rural bank branches
doubled between 1977 and 1985, to more than 3,330. Denationalization and private
industrial growth led the Bangladesh Bank and the World Bank to focus their lending on
the emerging private manufacturing sector. Scheduled bank advances to private
agriculture, as a percentage of sectoral GDP, rose from 2 percent in FY 1979 to 11
percent in FY 1987, while advances to private manufacturing rose from 13 percent to 53
percent.[1]

The transformation of finance priorities has brought with it problems in administration.

No sound project-appraisal system was in place to identify viable borrowers and
projects. Lending institutions did not have adequate autonomy to choose borrowers and
projects and were often instructed by the political authorities. In addition, the incentive
system for the banks stressed disbursements rather than recoveries, and the
accounting and debt collection systems were inadequate to deal with the problems of
loan recovery. It became more common for borrowers to default on loans than to repay
them; the lending system was simply disbursing grant assistance to private individuals
who qualified for loans more for political than for economic reasons. The rate of
recovery on agricultural loans was only 27 percent in FY 1986, and the rate on industrial
loans was even worse. As a result of this poor showing, major donors applied pressure
to induce the government and banks to take firmer action to strengthen internal bank
management and credit discipline. As a consequence, recovery rates began to improve
in 1987. The National Commission on Money, Credit, and Banking recommended broad
structural changes in Bangladesh's system of financial intermediation early in 1987,
many of which were built into a three-year compensatory financing facility signed by
Bangladesh with the IMF in February 1987.[1]

One major exception to the management problems of Bangladeshi banks was the
Grameen Bank, begun as a government project in 1976 and established in 1983 as an
independent bank. In the late 1980s, the bank continued to provide financial resources
to the poor on reasonable terms and to generate productive self-employment without
external assistance. Its customers were landless persons who took small loans for all
types of economic activities, including housing. About 70 percent of the borrowers were
women, who were otherwise not much represented in institutional finance. Collective
rural enterprises also could borrow from the Grameen Bank for investments in tube
wells, rice and oil mills, and power looms and for leasing land for joint cultivation. The
average loan by the Grameen Bank in the mid-1980s was around Tk2,000 (US$65),
and the maximum was just Tk18,000 (for construction of a tin-roof house). Repayment
terms were 4 percent for rural housing and 8.5 percent for normal lending operations. [1]

The Grameen Bank extended collateral-free loans to 200,000 landless people in its first
10 years. Most of its customers had never dealt with formal lending institutions before.
The most remarkable accomplishment was the phenomenal recovery rate; amid the
prevailing pattern of bad debts throughout the Bangladeshi banking system, only 4
percent of Grameen Bank loans were overdue. The bank had from the outset applied a
specialized system of intensive credit supervision that set it apart from others. Its
success, though still on a rather small scale, provided hope that it could continue to
grow and that it could be replicated or adapted to other development-related priorities.
The Grameen Bank was expanding rapidly, planning to have 500 branches throughout
the country by the late 1980s.[1]

Beginning in late 1985, the government pursued a tight monetary policy aimed at
limiting the growth of domestic private credit and government borrowing from the
banking system. The policy was largely successful in reducing the growth of the money
supply and total domestic credit. Net credit to the government actually declined in FY
1986. The problem of credit recovery remained a threat to monetary stability,
responsible for serious resource misallocation and harsh inequities. Although the
government had begun effective measures to improve financial discipline, the draconian
contraction of credit availability contained the risk of inadvertently discouraging new
economic activity.[1]

Foreign exchange reserves at the end of FY 1986 were US$476 million, equivalent to
slightly more than two months worth of imports. This represented a 20-percent increase
of reserves over the previous year, largely the result of higher remittances by
Bangladeshi workers abroad. The country also reduced imports by about 10 percent to
US$2.4 billion. Because of Bangladesh's status as a least developed country receiving
concessional loans, private creditors accounted for only about 6 percent of outstanding
public debt. The external public debt was US$6.4 billion, and annual debt service
payments were US$467 million at the end of FY 1986. [1]
 Definition of the industry

A bank is a financial intermediary and appears in several related basic forms:

 a central bank issues money on behalf of a government, and regulates the

money supply
 a commercial bank accepts deposits and channels those deposits into lending
activities, either directly or through capital markets. A bank connects customers
with capital deficits to customers with capital surpluses on the world's open
financial markets.
 a savings bank, also known as a building society in Britain is only allowed to
borrow and save from members of a financial cooperative

Banking is generally a highly regulated industry, and government restrictions on

financial activities by banks have varied over time and location. The current set of global
bank capital standards are called Basel II. In some countries such as Germany, banks
have historically owned major stakes in industrial corporations while in other countries
such as the United States banks are prohibited from owning non-financial companies. In
Japan, banks are usually the nexus of a cross-share holding entity known as the
keiretsu. In Iceland banks had very light regulation prior to the 2008 collapse.

The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena,
Italy, and has been operating continuously since 1472. [1]

The definition of a bank varies from country to country. See the relevant country page
(below) for more information.

Under English common law, a banker is defined as a person who carries on the
business of banking, which is specified as:[6]

 conducting current accounts for his customers

 paying cheques drawn on him, and
 collecting cheques for his customers.
In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in
relation to negotiable instruments, including cheques, and this Act contains a statutory
definition of the term banker: banker includes a body of persons, whether incorporated
or not, who carry on the business of banking' (Section 2, Interpretation). Although this
definition seems circular, it is actually functional, because it ensures that the legal basis
for bank transactions such as cheques does not depend on how the bank is organised
or regulated.

The business of banking is in many English common law countries not defined by
statute but by common law, the definition above. In other English common law
jurisdictions there are statutory definitions of the business of banking or banking
business. When looking at these definitions it is important to keep in mind that they are
defining the business of banking for the purposes of the legislation, and not necessarily
in general. In particular, most of the definitions are from legislation that has the
purposes of entry regulating and supervising banks rather than regulating the actual
business of banking. However, in many cases the statutory definition closely mirrors the
common law one. Examples of statutory definitions:

 "banking business" means the business of receiving money on current or deposit

account, paying and collecting cheques drawn by or paid in by customers, the
making of advances to customers, and includes such other business as the
Authority may prescribe for the purposes of this Act; (Banking Act (Singapore),
Section 2, Interpretation).

 "banking business" means the business of either or both of the following:

1. receiving from the general public money on current, deposit, savings or other
similar account repayable on demand or within less than [3 months] ... or with a
period of call or notice of less than that period;
2. paying or collecting cheques drawn by or paid in by customers [7]

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit,
direct debit and internet banking, the cheque has lost its primacy in most banking
systems as a payment instrument. This has led legal theorists to suggest that the
cheque based definition should be broadened to include financial institutions that
conduct current accounts for customers and enable customers to pay and be paid by
third parties, even if they do not pay and collect cheques. [8]
 Nature of the Industry

Banks safeguard money and provide loans, credit, and payment services such as
checking accounts, debit cards, and cashier's checks. Banks also may offer investment
and insurance products. As a variety of models for cooperation and integration among
finance industries have emerged, some of the traditional distinctions between banks,
insurance companies, and securities firms have diminished. In spite of these changes,
banks continue to maintain and perform their primary role—accepting deposits and
lending money.

Goods and services. Banking comprises two parts: Monetary Authorities—Central Bank,
and Depository Credit Intermediation. The U.S. Federal Reserve System is the central
bank of the United States and manages the Nation's money supply and international
reserves, holds reserve deposits of other domestic banks and the central banks of other
countries, and issues the dollars we use. The credit intermediation and related services
industry provides banking services to consumers and businesses. It secures the money
of depositors, provides checking and debit card services, and lends money to
consumers and businesses through credit cards, mortgages, car loans, investment
loans, and lines of credit.

Industry organization. There are three basic types of banks: commercial banks, savings
and loan associations, and credit unions. Although some of the differences between
these types of banks have lessened, there are key distinctions. Commercial banks,
which dominate this industry, offer a full range of services for individuals, businesses,
and governments. Commercial banks come in a wide range of sizes, from large global
banks to mid-size regional and small community banks. In addition to typical banking
services, global banks lend internationally and trade foreign currencies. Regional banks
have numerous branches and automated teller machine (ATM) locations throughout a
multi-state area and provide banking services to individuals and local businesses.
Community banks are based locally and have fewer branches than regional or global
banks. In recent years, online banks—which provide financial services entirely over the
Internet—have entered the market, with some success. However, even in Internet
banking distinctions have lessened as traditional banks also offer online banking, and
some formerly Internet-only banks have opened branches.

Savings banks and savings and loan associations, sometimes called thrift institutions,
are the second largest group of depository institutions. They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of consumers. Over time, distinctions
between savings banks and commercial banks have largely disappeared.

Credit unions are another kind of depository institution. Credit unions are formed by
people with a common bond, such as those who work for the same company, belong to
the same labor union, or live in the same county. Only people who have the common
bond are allowed to become members. Loans and savings accounts are restricted to
members. Credit unions are nonprofit organizations that are governed by a board
elected by the depositors (members).

Federal Reserve banks are Federal Government agencies that perform many financial
services. Their chief responsibilities are to regulate the banking industry and to create
and implement the Nation's monetary policy by controlling the money supply—the total
quantity of dollars in the country, including cash and bank deposits. The Federal
Reserve uses monetary policy to promote economic growth while limiting inflation.
During periods of slower economic activity, the Federal Reserve may increase the
money supply by purchasing government securities and other assets. The Federal
Reserve also promotes economic growth by lowering the interest rate it charges banks
for loans. Increasing the money supply and lowering the interest rate charged to banks
that borrow money gives banks more money to lend and, hopefully, grows the economy.
The Federal Reserve may attempt to fight inflation by selling its government securities
or raising the interest rate it charges banks, thus reducing the amount of money banks
can lend. Federal Reserve banks also perform a variety of services for other banks,
including processing checks that are drawn and paid out by different banks.

Interest on loans is the principal source of revenue for most banks, making their various
lending departments critical to their success. The commercial lending department loans
money to companies; the consumer lending department handles student loans, credit
cards, personal loans, and car loans; and the mortgage lending department loans
money to individuals and businesses to purchase real estate.

The money banks lend comes primarily from consumer and business deposits in
checking, money market, and savings accounts and certificates of deposit. These
deposits often earn interest for their owners, and provide owners with payment
methods, such as online bill payments, checks, and wire transfers. Deposits in many
banks are insured and regulated by a US Government agency, the Federal Deposit
Insurance Corporation (FDIC), which guarantees that depositors will get their money
back, up to a stated limit, if a bank should fail. Deposits in savings and loan associations
and credit unions are insured and regulated by other US government agencies.
Recent developments. Declining home prices were one cause of the recent financial
crisis. As home values declined, many borrowers stopped paying (defaulted) on their
home loans (mortgages.) With prices of houses declining and increasing rates of
default, banks suffered large losses. Some banks suffered larger losses than other
banks because they made riskier mortgage loans or owned mortgages concentrated in
areas of the country with the largest housing price declines. Many banks with large
losses were bought by other, stronger banks, or were taken over by the FDIC.

The financial crisis accelerated an ongoing fundamental change in the banking industry
as banks diversify their services to become more competitive. The financial crisis has
allowed stronger banks to buy other banks and companies that provide other financial
services at lower prices than before the crisis. Some other financial services that many
banks offer their customers include: financial planning and asset management services,
brokerage services, and insurance services. Banks purchase companies that offer
these services and still offer them through a subsidiary or a third party. The financial
crisis also helped commercial banks increase their share of the investment banking
industry. Investment banks help companies and governments raise money through the
issuance of stocks and bonds. As banks respond to regulatory changes and other
changes driven by the financial crisis, the nature of the banking industry will continue to
undergo significant change.

Working Conditions

Hours. The average workweek for nonsupervisory workers in depository credit

intermediation was 36.2 hours in 2008. About 8 percent of employees in 2008, mostly
tellers, worked part time.

Employees in a typical branch work weekdays, some evenings if the bank is open late,
and Saturday mornings. However, banks are increasingly expanding the hours that their
branches are open and opening branches in nontraditional locations. For example,
hours may be longer for workers in bank branches located in grocery stores, which are
open most evenings and weekends. To improve customer service and provide greater
access to bank personnel, banks have phone centers, staffed by customer service
representatives. Employees of phone centers spend most of their time answering phone
calls from customers and often work evening and weekend shifts.

Administrative support employees normally work in large processing facilities in the

banks' headquarters or other administrative offices. Most support staff work a standard
40-hour week; some may work overtime. Those support staff located in the processing
facilities may work evening shifts.
Work environment. Branch office jobs, particularly teller positions, require continual
communication with customers, repetitive tasks, and a high level of attention to security.
Tellers also work for long periods in a confined space.

Commercial and mortgage loan officers often work out of the office, visiting clients,
checking loan applications, and soliciting new business. Loan officers may travel to
meet clients, or work evenings if that is the only time at which a client can meet.
Financial service-sales representatives also may visit clients in the evenings and on
weekends to go over the client's financial needs.

The remaining employees located primarily at the headquarters or other administrative

offices usually work in comfortable surroundings and put in a standard workweek. In
general, banks are relatively safe places to work.

Employment

The banking industry employed about 1.8 million wage and salary workers in 2008.
About 74 percent of jobs were in commercial banks; the remainder were concentrated in
savings institutions and credit unions (table 1).

Table 1. Percent distribution of employment and establishments in banking by detailed

industry sector, 2008
Industry segment Employment Establishments
Total 100.0 100.0
 
Monetary authorities - central bank 1.2 0.4
 
Depository credit intermediation 98.8 99.6
Commercial banking 73.8 71.7
Credit unions 12.6 13.8
Savings institutions 11.4 13.1
Other depository credit intermediation 1.0 1.0
SOURCE: BLS Quarterly Census of Employment and Wages, 2008.

In 2008, about 85 percent of establishments in banking employed fewer than 20

workers. However, these small establishments, mostly bank branch offices, employed
38 percent of all employees. Banks are found everywhere in the United States, but most
bank employees work in heavily populated States such as New York, California, Illinois,
North Carolina, Pennsylvania, and Texas.

Occupations in the Industry

Banks employ various types of financial and customer service occupations. Office and
administrative support occupations make up the largest portion of jobs in the industry,
while management, business, and financial occupations also employ a significant
number of employees in the banking industry.

Office and administrative support occupations. These occupations account for 64

percent of jobs in the banking industry (table 2). Bank tellers, the largest occupation,
provide routine financial services to the public. They handle customers' deposits and
withdrawals, change money, sell money orders and traveler's checks, and accept
payment for loans. Tellers also sell bank services to customers. New accounts clerks
and customer service representatives answer questions from customers, and help them
open and close accounts and apply for banking services. They are knowledgeable
about a broad array of bank services and must be able to sell those services to potential
clients. Some customer service representatives work in a call or customer contact
center environment, taking phone calls and answering emails from customers. In
addition to responding to inquiries, these workers also help customers over the phone
with routine banking transactions, and handle and resolve problems or complaints.

Loan and credit clerks assemble and prepare paperwork, process applications, and
complete the documentation after a loan or line of credit has been approved. They also
verify applications for completeness. Bill and account collectors attempt to collect
payments on overdue loans. Many general office clerks and bookkeeping, accounting,
and auditing clerks are employed to maintain financial records, enter data, and process
the thousands of deposit slips, checks, and other documents that banks handle daily.
Banks also employ many secretaries, data entry and information processing workers,
receptionists, and other office and administrative support workers. Office and
administrative support worker supervisors and managers oversee the activities and
training of workers in the various administrative support occupations.

Management, business, and financial occupations. These occupations account for

about 25 percent of employment in the banking industry. Financial managers direct
bank branches and departments, resolve customers' problems, ensure that standards of
service are maintained, and administer the institutions' operations and investments.
Loan officers evaluate loan applications, determine an applicant's ability to repay a loan,
and recommend approval of loans. They usually specialize in commercial, consumer, or
mortgage lending. When loans become delinquent, loan officers, or loan counselors,
may advise borrowers on the management of their finances or take action to collect
outstanding amounts. Loan officers also play a major role in bringing in new business
and spend much of their time developing relationships with potential customers. Trust
officers manage a variety of assets that were placed in trust with the bank for other
people or organizations; these assets can include pension funds, school endowments,
or a company's profit-sharing plan. Sometimes, trust officers act as executors of estates
upon a person's death. They also may work as accountants, lawyers, and investment
managers.

Securities, commodities, and financial services sales agents, who make up the majority
of sales positions in banks, sell banking and investing services. They contact potential
customers to explain their services and to ascertain the customer's banking and other
financial needs. They also may discuss services, such as deposit accounts, lines of
credit, sales or inventory financing, certificates of deposit, cash management, stock
investments, or investment services. These sales agents also solicit businesses to
participate in consumer credit card programs. At most small and medium-size banks,
however, branch managers and commercial loan officers are responsible for marketing
the bank's financial services. This has become a more important task in recent years.

Other occupations. Occupations used widely by banks to maintain financial records and
ensure the bank's compliance with Federal and State regulations are accountants and
auditors, and lawyers. In addition, computer specialists maintain and upgrade the
bank's computer systems.

Table 2. Employment of wage and salary workers in banking, 2008 and projected
change, 2008-2018.
(Employment in thousands)
Employment,
Percent Change,
Occupation 2008
2008-18
Number Percent
All Occupations 1,841.7 100.0 7.9
 
Management, business, and financial occupations 464.4 25.2 11.4
General and operations managers 31.0 1.7 -2.3
Financial managers 76.5 4.2 -2.2
Financial analysts 17.7 1.0 20.0
Loan counselors and officers 138.8 7.5 13.6
 
Professional and related occupations 75.1 4.1 11.5
Computer specialists 58.1 3.2 10.0
 
Office and administrative support occupations 1,187.1 64.5 5.8
Bookkeeping, accounting, and auditing clerks 58.7 3.2 9.1
Customer service representatives 117.0 6.4 8.7
Table 2. Employment of wage and salary workers in banking, 2008 and projected
change, 2008-2018.
(Employment in thousands)
Employment,
Percent Change,
Occupation 2008
2008-18
Number Percent
Loan interviewers and clerks 79.5 4.3 9.3
Secretaries and administrative assistants 43.7 2.4 6.1
NOTE: Columns may not add to total due to omission of occupations with small
employment.
SOURCE: BLS National Employment Matrix, 2008-18.

Training and Advancement

A high school education is usually the minimum required education for most office and
administrative occupations, while management, business, and financial occupations
usually employ workers with at least a college degree. Good communication and
customer service skills are necessary for all occupations in the banking industry. Since
bank employees have access to large amounts of money and confidential financial
information, most positions require a background check.

Office and administrative support occupations. Bank tellers and other clerks usually
need only a high school education. Banks seek people who have good basic math and
communication skills, enjoy public contact, and feel comfortable handling large amounts
of money. Through a combination of formal classroom instruction and on-the-job
training under the guidance of an experienced worker, tellers learn the procedures,
rules, and regulations that govern their jobs. Banks are offering more products and
spending more on reaching out to their customers. As a result, banks will need more
creative and talented people in their tellers’ windows to compete in the consumer
market place. Banks encourage upward mobility by providing access to higher
education and other sources of additional training.

Some banks have their own training programs which result in teller certification.
Experienced tellers qualify for certification by taking required courses and passing
examinations. Experienced tellers and clerks may advance to head teller, new accounts
clerk, or customer service representative. Outstanding tellers who have had some
college or specialized training may be promoted to managerial positions.

Management, business, and financial occupations. Workers in management, business,

and financial occupations usually have at least a college degree. A bachelor's degree in
business administration or a liberal arts degree with business administration courses is
suitable preparation, as is a bachelor's degree in any field followed by a master's
degree in business administration (MBA). Many management positions are filled by
promoting experienced, technically skilled professional personnel—for example,
accountants, auditors, budget analysts, credit analysts, or financial analysts—or
accounting or related department supervisors in large banks.

Various banking-related associations and privately-operated schools offer courses and

programs for students interested in lending, as well as for experienced loan officers who
want to keep their skills current. Completion of these courses and programs generally
enhances the individual's employment and advancement opportunities. The Banking
Administration Institute offers the Loan Review Certificate program for persons who
review and approve loans. The Mortgage Bankers Association (MBA) offers the
Certified Mortgage Banker (CMB) program. A candidate who earns the CMB exhibits a
deep understanding of the mortgage business. To obtain the CMB, one must have at
least 3 years of experience, earn educational credits, and pass an exam.

Financial services sales agents usually need a college degree; a major or courses in
finance, accounting, economics, marketing, or related fields serve as excellent
preparation. Experience in sales also is very helpful. These workers learn on the job
under the supervision of bank officers. Sales agents selling securities need to be
licensed by the National Association of Securities Dealers, and agents selling insurance
also must obtain an appropriate license.

Additional training may improve workers’ chances of advancing to higher level

executive, administrative, managerial, and professional positions. Banks often provide
opportunities and encourage employees to take classes offered by banking and
financial management affiliated organizations, or other educational institutions. Classes
often deal with one of the different aspects of finance and banking, such as accounting
management, budget management, corporate cash management, financial analysis,
international banking, and data processing systems procedures and management.
Employers also sponsor seminars and conferences, and provide textbooks and other
educational materials. Many employers pay for educational courses.

Since the banking industry depends on technology, an understanding of banking

computer systems and software can greatly improve one's skills and advancement
opportunities.

Outlook
Employment growth will be driven by increases in Americans’ wealth and investments
and a growing number of local branches.

Employment change. Wage and salary employment in banking is projected to grow 8

percent between 2008 and 2018, compared with the 11 percent growth projected for
wage and salary employment across all industries.

Banks compete strongly to attract new customers. Because convenience of local

branches is one of the most important factors for customers selecting a bank, the
number of local branches will continue to increase. New branches frequently will be
located in nontraditional locations, such as inside grocery stores. A growing number of
branches will increase employment of branch managers and tellers.

Deregulation of the industry allows banks to offer a variety of financial and insurance
products that they were once prohibited from selling. Managing and selling these
services will spur demand for financial analysts and personal financial advisors.
Demand for "personal bankers" to advise and manage the assets of wealthy clients, as
well as the aging baby-boom generation, also will grow. However, banks will continue to
face considerable competition in financial services from nonbank establishments, such
as insurance companies and independent financial advisor firms.

The increasing number of retired baby boomers should have a beneficial effect on total
employment in the banking industry. They are more likely than younger age groups to
hold bank deposits and visit branches to do their banking. Many also need help in
retirement planning and investing which increases demand for financial managers and
personal financial advisors.

Job prospects. Job opportunities should be favorable for office and administrative
support workers because they make up a large proportion of bank employees and many
individuals leave these positions for other jobs that offer higher pay or greater
responsibilities. The need for skilled workers will create good job opportunities for
individuals with financial services backgrounds.

Earnings
Industry earnings. Earnings of nonsupervisory bank employees involved in depository
credit intermediation averaged $605 a week in 2008, compared with $798 for workers in
finance and insurance industries, and $608 for workers throughout the private sector.
Relatively low pay in the banking industry reflects the high proportion of low-paying
administrative support jobs.

Greater responsibilities generally result in a higher salary. Experience, length of service,

and, especially, the location and size of the bank also are important. Wages in the
banking industry also vary significantly by occupation. Wages in the largest occupations
in banking appear in table 3.

Table 3. Median hourly wages of the largest occupations in depository credit

intermediation, May 2008
Depository creditAll
Occupation
intermediation industries
General and operations managers $42.98 $44.02
Financial managers 37.15 47.76
Loan officers 25.72 26.30
Executive secretaries and administrative
19.72 19.24
assistants
Loan interviewers and clerks 15.23 15.61
Customer service representatives 14.56 14.36
New accounts clerks 14.47 14.53
Bookkeeping, accounting, and auditing clerks 14.43 15.63
Office clerks, general 12.76 12.17
Tellers 11.35 11.35
SOURCE: BLS Occupational Employment Statistics, May 2008.

Benefits and union membership. In addition to common benefits offered by many

industries, equity sharing and performance-based pay increasingly are part of
compensation packages for some bank employees. As banks encourage employees to
become more sales-oriented, incentives are increasingly tied to meeting sales goals,
and some workers may even receive commissions for sales or referrals. As in other
industries, part-time workers do not enjoy the same benefits that full-time workers do.

Very few workers in the banking industry are unionized—only 1 percent are union
members or are covered by union contracts, compared with 14 percent of workers
across all industries.

Number and Types of Banks

 
The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four
are Nationalised Commercial Banks (NCBs), 28 local private commercial banks, 12
foreign banks and the rest five are Development Financial Institutions (DFIs).
 
Sonali Bank is the largest among the NCBs while Pubali is leading in the private ones.
Among the 12 foreign banks, Standard Chartered has become the largest in the
country. Besides the scheduled banks, Samabai (Cooperative) Bank, Ansar-VDP
Bank, Karmasansthan (Employment) Bank and Grameen bank are functioning in the
financial sector.The number of total branches of all scheduled banks is 6,038 as of
June 2000. Of the branches, 39.95 per cent (2,412) are located in the urban areas and
60.05 per cent (3,626) in the rural areas. Of the branches NCBs hold 3,616, private
commercial banks 1,214, foreign banks 31 and specialised banks 1,177.
 
Bangladesh Bank (BB) regulates and supervises the activities of all banks. The BB is
now carrying out a reform programme to ensure quality services by the banks.   

Bangladesh Bank
 
Bangladesh Bank (BB) has been working as the central bank since the country's
independence. Its prime jobs include issuing of currency, maintaining foreign
exchange reserve and providing transaction facilities of all public monetary matters.
BB is also responsible for planning the government's monetary policy and
implementing it thereby.
 
The BB has a governing body comprising of nine members with the Governor as its
chief. Apart from the head office in Dhaka, it has nine more branches, of which two in
Dhaka and one each in Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Rangpur and
Barisal.
 

Banks of Bangladesh at a glance

 
NCBs
 
Name Number of Deposits Special Services
branches (As of June, 2000)

1. Sonali Bank 1299 Taka 168,187 million Industrial, Agri loan,

Ltd. Poverty alleviation,
etc.
2. Janata Bank 898 Taka 96,000 million Industrial & agri loan,
Ltd. Poverty alleviation,
etc.
3. Agrani Bank  903 Taka 100,000 million Industrial & agri loan,
Ltd. poverty alleviation,
etc.
4. Rupali Bank 513 Taka 42,485 million Industrial & Agri loan,
Ltd. etc.

Private Banks

350 Taka 27,000 million Industrial & agri loan,

1. Pubali Bank etc.
2. Uttara Bank 198 Taka 21,979 million Industrial & agri loan,
etc.
3. National     Bank 66 Taka 20,850 million Industrial & agri loan,
Ltd. etc.
4. The City     Bank 76 Taka 13,750 million Industrial & agri loan,
Ltd. etc.
5. United     79 Taka 10,000 Million Industrial & agri loan,
Commercial     etc.
Bank Ltd.
6.  Arab     61(60+1) Taka 13,206 million Industrial & agri loan,
Bangladesh Bank etc.
Ltd.
7.  IFIC Bank        60(58+2) Taka 17,032 million Industrial & agri loan,
Ltd. etc.
8.  Islami bank       110 Taka 27,750 million Industrial & agri loan,
Bangladesh Ltd. etc.
9.   Al Baraka        34 Taka 9,000 million Industrial & agri loan,
Bank   Bangladesh  etc.
Ltd.
10. Eastern Bank  21 Taka 12,600 million Industrial & agri loan,
Ltd. etc.
11. National  Credit 30 Taka 9,700 million Industrial & agri loan,
&  Commerce        etc.
Bank Ltd.
12. Prime Bank      23 Taka 8,550 million Industrial & agri loan,
Ltd. etc.
13. Southeast      12 Taka 7,140 million Industrial & agri loan,
Bank Ltd. etc.
14. Dhaka        12 Taka 7,290 million Industrial & agri loan,
Bank Ltd. etc.
15. Al-Arafah Islami 35 TK.7400 Industrial & agri loan,
Bank Ltd. Million etc.
16. Social        65 Taka 5,250 million Industrial & agri loan,
Investment        etc.
Bank Ltd.
17. Dutch-      8 Taka 4,715 million Industrial & agri loan,
Bangla Bank Ltd. etc.
18. Mercantile      12 Taka 4,300million Industrial & agri loan,
Bank Ltd. etc.
19. Standard       8 Taka 1,739million Industrial & agri loan,
Bank Ltd. etc.
20. One Bank     4 Taka 2,200million Industrial & agri loan,
Ltd. etc.
21. EXIM Bank      5 Taka 2,600 million Industrial loan, etc.
22.Bangladesh      24 Taka 400 million Industrial & agri loan,
Commerce       etc.
Bank Ltd.
23. Mutual  Trust 3 Taka 700 million Industrial & agri loan,
Bank Ltd. etc.
24.First Security       4 Taka 1,200million Industrial & agri loan,
Bank Ltd. etc.
25. The Premier      6 Taka 1,500million Industrial & agri loan,
Bank Ltd. etc.
26. Bank Asia      4 Taka 625 million Industrial loan, etc.
Ltd.
27. The Trust  Bank 10 Taka 980 million Industrial loan, etc.
Ltd.
28. Shah Jalal      
Bank Limited
(Based on Islamic
Shariah)

Foreign Banks 

3 Taka 7,080million Industrial loan, etc.

1.  American    
Express  Bank     
2. Standard    6 Taka 11,329 million Industrial loan, etc.
Chartered     
Grindlays  Bank
3.  Habib Bank      2 Taka 1,041million Industrial loan, etc.
Ltd.
4. State Bank  Of 1 Taka 805 million Industrial loan, etc.
India
5. Credit  2 Taka 6,750 million Industrial loan, etc.
Agricole 
Indosuez    (The
Bank)
6. National  Bank 1 Taka 165 million Industrial loan, etc.
of   Pakistan  
7. Muslim    2 Taka 870 million Industrial loan, etc.
Commercial Bank
Ltd.
8. City Bank   NA 1 Taka 2,447 million Industrial loan, etc.
9. Hanvit  Bank 1 Taka 368 million Industrial loan, etc.
Ltd.
10. HSBC Ltd. 2 Taka 2,400 million Industrial loan, etc.
11. Shamil Bank 1 Taka 1,000million Industrial loan, etc.
of Bahrain E.C.
(Islami Banker)
12. Standard 5 branches Taka 10,961 million (as TT free of charges,
Chartered  Bank and 1 booth of May, 2000) ATM, Money Link,
Tele Banking,
Electronic Banking

Development Banks

1. Bangladesh    Krishi 850 Taka 29,890 million Industrial & agri

 Bank loan, etc.
2.RajshahiKrishiUnnayan   301 Taka 4,800 million Industrial & agri
Bank loan, etc.
3. Bangladesh    Shilpa 15 Taka 646 million Industrial & agri
Bank loan, etc.
4. Bangladesh    Shilpa 5 Taka 150 million Industrial & agri
Rin    Sangstha  loan, etc.
5.Bank of  Small 25 Taka 6,466 million Small Industrial &
Industries &    agri loan, etc.
Commerce   Bangladesh
Ltd.

Other

1. Ansar VDP   100 Taka 18 million Small Industrial &

Unnayan  Bank  agri loan, etc.
2. Bangladesh    *** Taka 22 million Small Industrial &
Samabai   Bank agri loan, etc.
Ltd.   (BSBL) 
3. Grameen   1148 Taka 5,655 million Small Industrial &
Bank  agri loan, etc.
4.Karmasansthan    32 Taka 18 million Small Industrial &
Bank  agri loan, etc
 

Services of the Banks

 
Accounts, Current, FDR, PDS, Deposit scheme
Current Account: Generally this sort of account opens for business purpose.
Customers can withdraw money once or more against their deposit. No interest can be
paid to the customers in this account. If the amount of deposit is below taka 1,000 on
an average the bank has authority to cut taka 50 from each account as incidental
charge after every six months. Against this account loan facility can be ensured.
Usually one can open this account with taka 500. One can open this sort of account
through cash or check/bill. All the banks follow almost the same rules for opening
current account.
 
Savings Bank Account 
Usually customers open this sort of account at a low interest for only security. This is
also an initiative to create people's savings tendency. Generally, this account is to be
opened at taka 100. Interest is to be paid in June and December after every six
months. If money is withdrawn twice a week or more than taka 10,000 is withdrawn (if
25% more compared to total deposit) then interest is not paid. This account
guarantees loan. Almost all the banks follow the same rules in the field of savings
account, except foreign banks for varying deposit. On an average, all the banks give
around six percent interest.
 
Special Services
Some Banks render special services to the customers attracting other banks.
 
Internet Banking
 
Customers need an Internet access service. As an Internet Banking customer, he will
be given a specific user ID and a confident password. The customer can then view his
account balances online. It is the industry-standard method used to protect
communications over the Internet.
 
To ensure that customers' personal data cannot be accessed by anyone but them, all
reporting information has been secured using Version and Secure Sockets Layer
(SSL).
 
Home Banking
 
Home banking frees customers of visiting branches and most transactions will be
automated to enable them to check their account activities transfer fund and to open
L/C sitting in their own desk with the help of a PC and a telephone.
 
Electronic Banking Services for Windows (EBSW)
 
Electronic Banking Service for Windows (EBSW) provides a full range of reporting
capabilities, and a comprehensive range of transaction initiation options.
 
The customers will be able to process all payments as well as initiate L/Cs and
amendments, through EBSW. They will be able to view the balances of all accounts,
whether with Standard Chartered or with any other banks using SWIFT. Additionally,
transactions may be approved by remote authorization even if the approver is out of
station.
 
Automated Teller Machine (ATM)
 
Automated Teller Machine (ATM), a new concept in modern banking, has already
been introduced to facilitate subscribers 24 hour cash access through a plastic card.
The network of ATM installations will be adequately extended to enable customers to
non-branch banking beyond banking.
 
Tele Banking
 
Tele Banking allows customers to get access into their respective banking information
24 hours a day. Subscribers can update themselves by making a phone call. They can
transfer any amount of deposit to other accounts irrespective of location either from
home or office.
 
SWIFT
 
SWIFT is a bank owned non-profit co-operative based in Belgium servicing the
financial community worldwide. It ensures secure messaging having a global reach of
6,495 Banks and Financial Institutions in 178 countries, 24 hours a day. SWIFT global
network carries an average 4 million message daily and estimated average value of
payment messages is USD 2 trillion.
 
SWIFT is a highly secured messaging network enables Banks to send and receive
Fund Transfer, L/C related and other free format messages to and from any banks
active in the network.
 
Having SWIFT facility, Bank will be able to serve its customers more profitable by
providing L/C, Payment and other messages efficiently and with utmost security.
Especially it will be of great help for our clients dealing with Imports, Exports and
Remittances etc.
  
MONETARY & CREDIT POLICY: 
The monetary and credit policy for the financial year that ended  in June,2000 was
formulated with the objective of full utilization of domestic  resources and rapid
economic growth through priorities for agriculture, industry, export, and expansion and
strengthening of the private sector, at the same time keeping inflation within tolerable
limits. A modern expansionary monetary and credit policy was adopted in order to
make good the losses to agriculture, industry, and infrastructure by the devastating
floods of 1998. After the flood the economy remained sluggish in the first quarter of
1999-2000 and the private sector demand for credit shrank. In view of this, the Annual
Development Programme (ADP) was expanded and development activities in the
private sector were geared up. As a result, the public sector absorbed credit at an
accelerated rate. Though credit to the private sector picked up towards the end of the
year, the overall annual growth was smaller than programmed, although gross
domestic credit expanded a little faster than projected. Money supply increased by
15.3% in 1999-2000 compared to the expansion of 8.6% in the preceding year.
 
 NARROW MONEY:
Narrow Money increased by Tk. 2,631.90 crores or 15.3% to Tk.19,881.30 crores in
1999-2000. Of the components of Narrow Money, currency outside banks went up by
Tk.1,489.40 crores or 17.2% to Tk.10,176.00 crores, and demand deposits went up by
Tk.1,142.50 crores or 13.3% to Tk.9,705.30 crores. 
 

 BROAD MONEY: 
Broad Money increased by Tk.11,735.70 crores or 18.6% to Tk. 74,762.40 crores in
1999-2000 compared to the increase of  12.8% in the preceding year. Of the
components of Broad Money, Narrow Money increased by 15.3% and time deposits
rose by 19.9% compared to the increase of 8.6% in Narrow Money and 14.5% in time
deposits in the preceding year. The shares of currency outside banks, demand
deposits and time deposits in Broad Money stood at 13.6%, 13.0%, and 73.4%
respectively on 30th June,2000 compared to 13.8%, 13.6% and 72.6% respectively on
30th June,1999.Expansion of credit to the private sector, government sector (net),
public sector, and other assets (net), along with a  surplus in net foreign assets
contributed to the expansion of Broad Money.
 
 RESERVE MONEY: 
Reserve Money increased by Tk.2,321.80 crores or 15.7% to Tk.17,064.50 crores in
1999-2000 compared to the increase of 8.3% during the preceding year. Of the
components of Reserve Money, currency outside banks increased by Tk.1,489.40
crores or 17.1% compared to the increase of Tk.533.30 crores or 6.5% during the
preceding  year. Scheduled banks balances with the Bangladesh Bank increased by
Tk.770.90 crores or 15.3% in 1999-2000 compared to the increase of Tk.488.20 crores
or 10.8% in the preceding year. Their cash in tills increased by Tk.61.50 crores or
6.0% as against the increase of Tk.103.60 crores or 11.2% in the preceding year. The
increase in Bangladesh Bank's credit to the  government (net) by Tk.1,738.10 crores
and net surplus in the foreign sector by Tk.1,262.40 crores played the main role in
exerting expansionary influence on the Reserve Money. However the decline of
Tk.333.60 crores and Tk.44.90 crores in the borrowings by the scheduled banks and
other financial institutions respectively along with the fall of Tk.300.20 crores in other
assets (net) partly offset the expansionary impact of those sectors.
 
 
DOMESTIC CREDIT:
Total domestic credit increased by Tk.8,581.20 crores or 13.6% to Tk. 71,489.00
crores ( including adjustment of bonds issued by the government) in 1999-2000 as
compared to the increase of Tk.7,267.60 crores or 13.1% in the preceding year.
Expansion of credit to the government, private, and public sectors to the extent of
Tk.3,524.30 crores (31.3%), Tk.4,906.10 crores (10.7%), and Tk.150.80 crores (2.5%)
respectively contributed to the expansion in total domestic credit in 1999-2000. Credit
to the government and private sector had increased by 21.3% and 13.8% respectively,
while credit to the public sector declined by 3.7% in the preceding year.
 
 
BANK CREDIT: 
The outstanding level of bank credit (excluding foreign bills and inter-bank items)
increased by Tk.5,123.30 crores or 10.3% to Tk.54,646.10 crores in 1999-2000 as
compared to the increase of 12.4% in the  preceding year. Of the components of bank
credit, advances increased by Tk.4,892.70 crores or 10.3% and the bills purchased
and discounted went up by Tk.230.60 crores or 11.3%. 
 
 
BANK DEPOSITS: 
Bank deposits ( excluding inter-bank items) increased by Tk.11,044.70 crores or
18.6% to Tk.70,278.70 crores in 1999-2000 compared to the increase of 14.2% in the
preceding year. Of this increase , time deposits went up by Tk.9,103.80 crores or
19.9% to Tk.54,881.10 crores, government deposits by Tk.723.60 crores or 14.8% to
Tk.5,615.20 crores and demand deposits by Tk. 1,142.50 crores or 13.3% to
Tk.9,705.30 crores. On the other hand, restricted deposits increased by Tk.74.80
crores in 1999-2000.
 
 
CASH RESERVE REQUIREMENTS (CRR): 
Statutory CRR with Bangladesh Bank was lowered for the scheduled banks to 4.0% of
their liabilities (demand plus time deposits ) (excluding inter-bank deposits) from 5%
with effect from 1st October,1999.
  
BANK RATE:
The Bank Rate was lowered from 8.0% to 7.0% on 29th August,1999 and remained
unchanged through 30th June,2000.           

Bank-wise interest rate on deposit and advances (loans)

Private Banks
Interest  
Rates On
  Dhak South BCBL Prime Dutch Al- Merca One EXIM
a East Bank Bangla Arafa ntile Bank
Bank Bank Limite h
Limite d
d
Rates 01.08
01.04 16.09 01.11 01.01.2 01.01 02.06. 14.07 03.07
Effective .97.97 .00 .99 000 .98 99 .99 .99
From
DEPOSIT RATES

Savings Rates
Rural - - - - - - - - -
Urban 8.50 8.00 7.75 8.00 8.00 7.98 8.00 8.00- 8.50
8.50
Fixed                  
Deposit
Rates
Three 9.25 8.25- 8.75 9.00 9.00- 9.35 8.50 9.00- 9.00-
months 9.00 9.50 9.75 9.50
and
above
but less
than six
months
Six 9.50 8.50- 9.00 9.25 9.25- 9.77 9.00 9.25- 9.50-
months 9.50 9.75 10.00 10.00
and but
less than
one year
One year 9.75 9.00- 9.25 9.50 9.50- 10.20 9.50 9.50- 10.00
and 10.00 10.00 10.25 -
above 10.50
but less
than two
years
Two 9.75 9.50- 9.50 10.00 9.75- 10.40 10.00 9.75- 10.50
years 10.50 10.25 10.50 -
and 11.50
above
but less
than
three
years
Three 9.75 10.50 10-12 10.50 10.00- 10.62 10.50 - -
years - 10.50
and 11.00
above
Lending                  
Rates

Agricultur 10.00 10.00 - 12.00 11.50- - 15.00 - 12.00

e - 15.00
14.00
 Large                  
and
Medium
Scale
Lending( 12.00 13.00 13.50 16.00 16.00 - 15.00 15-16 16.00
Term - -
Loan) 15.00 15.50
Working 11-15 14.00 14.50 16.00 15.50 - 16.00 12-16 16.00
Capital -
15.50
Exports 9-10 10.00 - 10.00 10.00 - 10.00 8-10 10.00
Other Foreign15.00
11-16 13.00 Banks 16.50 16.00 - 16.00 16.00 16.00
Interest
CommerOn - Societe Hanvit H.S.B.C Faysal Bank
cial Generale
15.50 Bank
Rates
Lendings Effective 01.10.99 01.02.97 14.08.00 01.07.99
From
Small 11.00 12.00 - 15.00 16.00 - 15.00 16.00 16.00
Deposit
Industry Rates        
Savings
Others Rates 13-16 13.00
  14-15   16.00 14-16   - 15-18
  14-16 16.00
Rural -- - -16.5 - -
Urban 6.75-7.25
16.00 6.50 5.25-6.25 7.50
Fixed Deposit        
Rates
Three months and 7.25-8.25 7.50 6.25-7.25 8.5-10.00
above but less than
six months
Six months and but 7.50-8.75 8.00 6.75-7.50 9-10.50
Challenges within the banking industry
less than one year
One year and - 8.50 7.25-8.00 9.5-11.5
above but less than
two years
, Two
the banking
years industry
and - is a highly9.00 regulated- industry with detailed
10-12 and focused
regulators.
above but lessAll banks
than with FDIC-insured deposits have the FDIC as a regulator;
however,
three years for examinations,[clarification needed] the Federal Reserve is the primary federal
regulator
Three yearsfor Fed-member
and - state banks; 9.00the Office- of the Comptroller of the Currency
10.5-12.5
(“OCC”)
above is the primary federal regulator for national banks; and the Office of Thrift
Supervision,
Lending Rates or OTS,  is the primary   federal regulator
  for thrifts.
  State non-member
banks are examined by
Agriculture the state agencies
10-12 10-12 as well as the FDIC.10-14
12.50-14.00 National banks have
Large
one and Medium
primary  
regulator—the OCC. Qualified   
Intermediaries  
& Exchange Accommodators
Scale
are regulated by MAIC.
Lending(Term 10.50-15 10.50- 13-18 13-18
Loan)regulatory agency has their own
Each 12.50
set of rules and regulations to which banks and
Working Capital
thrifts must adhere. 9.75-14.50 10-12 12-18 12-17
Exports 8-10 10.00 9-10 10.00
Other Commercial 16-18 14.00 12-18 12-18
Lendings
Small Industry 12.25-14.25 11.00 10-12 10-12
Others 14.25-16.25 12-14 9-18 10-16
The Federal Financial Institutions Examination Council (FFIEC) was established in 1979
as a formal interagency body empowered to prescribe uniform principles, standards,
and report forms for the federal examination of financial institutions. Although the FFIEC
has resulted in a greater degree of regulatory consistency between the agencies, the
rules and regulations are constantly changing.

In addition to changing regulations, changes in the industry have led to consolidations

within the Federal Reserve, FDIC, OTS, MAIC and OCC. Offices have been closed,
supervisory regions have been merged, staff levels have been reduced and budgets
have been cut. The remaining regulators face an increased burden with increased
workload and more banks per regulator. While banks struggle to keep up with the
changes in the regulatory environment, regulators struggle to manage their workload
and effectively regulate their banks. The impact of these changes is that banks are
receiving less hands-on assessment by the regulators, less time spent with each
institution, and the potential for more problems slipping through the cracks, potentially
resulting in an overall increase in bank failures across the United States.

The changing economic environment has a significant impact on banks and thrifts as
they struggle to effectively manage their interest rate spread in the face of low rates on
loans, rate competition for deposits and the general market changes, industry trends
and economic fluctuations. It has been a challenge for banks to effectively set their
growth strategies with the recent economic market. A rising interest rate environment
may seem to help financial institutions, but the effect of the changes on consumers and
businesses is not predictable and the challenge remains for banks to grow and
effectively manage the spread to generate a return to their shareholders.

The management of the banks’ asset portfolios also remains a challenge in today’s
economic environment. Loans are a bank’s primary asset category and when loan
quality becomes suspect, the foundation of a bank is shaken to the core. While always
an issue for banks, declining asset quality has become a big problem for financial
institutions. There are several reasons for this, one of which is the lax attitude some
banks have adopted because of the years of “good times.” The potential for this is
exacerbated by the reduction in the regulatory oversight of banks and in some cases
depth of management. Problems are more likely to go undetected, resulting in a
significant impact on the bank when they are recognized. In addition, banks, like any
business, struggle to cut costs and have consequently eliminated certain expenses,
such as adequate employee training programs.

Banks also face a host of other challenges such as aging ownership groups. Across the
country, many banks’ management teams and board of directors are aging. Banks also
face ongoing pressure by shareholders, both public and private, to achieve earnings
and growth projections. Regulators place added pressure on banks to manage the
various categories of risk. Banking is also an extremely competitive industry. Competing
in the financial services industry has become tougher with the entrance of such players
as insurance agencies, credit unions, check cashing services, credit card companies,
etc.

As a reaction, banks have developed their activities in financial instruments, through

financial market operations such as brokerage and MAIC trust & Securities Clearing
services trading and become big players in such activities.

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