Term Paper On Changes In Banking System In Bangladesh Since 1971

Changes of Banking system
Customers of new century are self-motivated, vigilant and informed about the market conditions, further more development of information technology and telecommunication systems created an environment whereby customers demand convenience, reasonably priced better quality financial products and personalized services. Customer demand together with technological advancement created new challenges and opportunities in the banking sector in Bangladesh. Adapting realistic and timely business policies, investments in IT are now prejudice to stay at the edge of this assertive and competitive banking business of the country. Invention of new financial products and services and introduction of new delivery methods are the key concern of staying close to customers.
To cope with the status quo, Central bank welcomed these developments and restructured the commercial banks to meet the challenges in future.As a result, this new business structure supported with the robust banking solution will allow the bank to focus on customers’ needs and provide the best services and products to customer’s doorstep at an attractive price.

In this paper, I have tried to show the main changes & reforms in Banking sector in Bangladesh. Here, I have shown the different policies taken by Bangladesh Bank, the central bank of Bangladesh, to restructure the Banking sector after 9 months liberation war. I have also shown overall changes in Banking sector over last 39 years. Finally, I describe some corrective measures to making the Banking sector more profitable.

In a developing country like Bangladesh the banking systems as a whole play a vital role in the progress of economic development .Smooth and efficient flow of saving-investment process is a prerequisite for the economic development of a country. Bangladesh, being a developing country and with an underdeveloped capital market, mainly depends on the intermediary role of commercial banks for mobilizing internal saving and providing capital to the investor. Thus, it matters greatly how well our financial sector is functioning. Banks, in general, perform three basic functions valued by the overall economy. One of these functions is the centralization of credit evaluation and monitoring, which produces information that cannot be easily made public by the borrower. This centralization exploits cost economies and, together with a diversified loan portfolio, lowers the raise of credit Policies to attain safe and sound banking have traditionally been focused on methods to assure the continuous and efficient functioning of their transactions and payments mechanism.