Privatization of Banking in Bangladesh

Since its inception, Bangladesh Bank is engaged in financial management and monitoring of the banks and financial institutions of the country. Intending of issuing notes, up-keeping foreign exchange reserve and government all transaction. The Bangladesh Bank is responsible for making the exchange policy and to implement is close cooperation with the government. The main objectives of exchange policy are (1) economic development (2) stabilization of the internal and external value of money (3) to keep the price level stable at a reasonable standard (4) undertaking required measures for increasing production capacity and employment of  the country in the long-run. Instead of undertaking necessary measures for development of banks and financial institutions of the country, Bangladesh Bank takes time-baiting steps to develop and deepen to exchange market.

Banks are the pillars of modern economic activities in any country. Banking, modern business and industry go hand. A commercial bank is an institution that operates of course for profits. But after a decade-long experience of public banking system following the nationalization of all banks, the government has taken steps to set up commercial banks in the private sector. Besides this, the government has denationalized some nationalized Bank. At present government has decided to denationalized rest of the commercial banks.

The banking system in the territory of Bangladesh grew slowly during the British and Pakistan periods. There were only 25 Banks branches in 1901 and the number grew to 668 in 1946. creation of Pakistan was a deterrent in the sector as was evidenced by the closure of bank branches, which came down to 148 in 1950. in 1965, the number increased again to 5445. subsequent years, however, showed dramatic changes in the situation and the number of bank branches increased to 1025 in 1970. the banking system in Bangladesh started functioning with 1130 branches of 12banks inherited from Pakistan. Subsequently, these banks were nationalized and renamed after being merged into six banks. The new names of  the banks were the Sonali Bank (The National Bank of Pakistan, The Bank of Bawalpur, the Premier Bank), Agrani Bank (Habib Bank, Commercial Bank), Janata Bank (United Bank, Union Bank), Rupali Bank (Muslim Commercial Bank, Sandard Bank), Pubali Bank (Australasia Bank, Eastern Mercantile Bank) and Uyyara Bank (Eastern Banking Corporation). The country had six nationalized commercial banks until 1983.