Financial system in Bangladesh: Overview of Financial system of Bangladesh. The financial system of Bangladesh is comprised of three broad fragmented sectors:
1. Formal Sector,
2. Semi-Formal Sector,
3. Informal Sector.
The sectors have been categorized in accordance with their degree of regulation.
The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions (FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant Banks etc.; Micro Finance Institutions (MFIs). There are two types Formal Sector of Financial system in Bangladesh:
1. Financial Market &
2. Regulators & Institutions.
1. Financial Market
a) Money Market: (Banks, NBFIs,Primary Dealers)
b) Capital Market: (Investment banks, Stock Exchanges, Credit Rating Companies etc.)
c) Foreign Exchange Market: (Authorized Dealers).
2. Regulators & Institutions
a) Bangladesh Bank: (Central Bank)
i) Banks: 60 scheduled & 5 non-scheduled banks
ii) NBFIs: 34 NBFIs
b) Insurance Development & Regulatory Authority: (Insurance Authority)
i) Insurance Companies: 18 Life and 44 Non-Life Insurance Companies
c) Securities & Exchange Commission: (Regulatory of capital market Intermediaries)
i) Stock Exchanges, Stock Dealers & Brokers, Merchants Banks, AMC s, Credit Rating Agencies etc.
d) Microcredit Regulatory Authority: (MFI Authority)
i) Micro Finance Institutions: 599 MFIs.
Semi Formal Sector
The semi formal sector includes those institutions which are regulated otherwise but do not fall under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange Commission or any other enacted financial regulator. This sector is mainly represented by Specialized Financial Institutions like-
a) House Building Finance Corporation (HBFC)
b) Palli Karma Sahayak Foundation (PKSF)
c) Samabay Bank, Grameen Bank etc.
d) Non Governmental Organizations (NGOs and
e) Discrete government programs.
The informal sector includes private intermediaries which are completely unregulated.