Banking in Bangladesh
These policies, at times, are seen as politically influenced or ineffective, contributing to a banking environment where corruption, money laundering, and illegal financial activities can occur.
[8] Following the partition, branches of the registered banks started shifting to India or close down their operations in East Bengal.
[9] Cooperative credit systems and postal savings offices handled service to small individual and rural accounts.
[9] The new banking system succeeded in establishing reasonably efficient procedures for managing credit and foreign exchange.
[9] The primary function of the credit system throughout the 1970s was to finance trade and the public sector, which together absorbed 75 per cent of total advances.
The government's encouragement during the late 1970s and early 1980s of agricultural development and private industry brought changes in lending strategies.
[9] 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.
[9] 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.
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.
[9] The problem of credit recovery remained a threat to monetary stability, responsible for serious resource misallocation and harsh inequities.
[9] 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.
[9] Foreign exchange reserves at the end of FY 1986 were US$476 million, equivalent to slightly more than two months worth of imports.
[9] This represented a 20-per cent increase of reserves over the previous year, largely the result of higher remittances by Bangladeshi workers abroad.
[9] Because of Bangladesh's status as a least developed country receiving concessional loans, private creditors accounted for only about 6 per cent of outstanding public debt.
[10] "Three lessons stand out from Bangladesh's development experience and can inspire other countries: empowering women and girls, investing in people and connectivity, and moving decisively on climate adaptation and resilience," said the World Bank President.
