Banking industry in Bangladesh started its journey with 6 Nationalized commercialized banks, 2 State owned Specialized banks and 3 Foreign Banks after achieving the independence in 1971. In the 1980’s banking industry achieved significant expansion with the entrance of private banks in Bangladesh. Now, banks in Bangladesh are primarily of two types:

Scheduled Banks: The bank which gets license to operate under Bank Company Act, 1991 (Amended in 2003) are termed as Scheduled Banks. State-owned commercial banks, private commercial banks, Islamic commercial banks, foreign commercial banks and some specialized banks are Scheduled Banks in Bangladesh. There are 61 scheduled banks in Bangladesh who operate under full control and supervision of Bangladesh Bank which is empowered to do so through Bangladesh Bank Order, 1972 and Bank Company Act, 1991. Scheduled Banks are classified into following types:

• State Owned Commercial Banks (SOCBs): State owned banks are functioning as nationalist and these kinds of banks are known as Public Banks in Bangladesh. There are 6 SOCBs which are fully or majorly owned by the Government of Bangladesh.
• Specialized Banks (SDBs): Specialized banks were established for specific objectives like agricultural or industrial development. These banks are also fully or majorly owned by the Government of Bangladesh. There are 3 specialized banks are now operating which were established for specific objectives like agricultural or industrial development. These banks are also fully or majorly owned by the Government of Bangladesh.
• Private Commercial Banks (PCBs): Private Banks are the highest growth sector due to the dismal performances of government banks. They tend to offer better service and products. There are 43 local private commercial banks which are majorly owned by the private entities. PCBs can be categorized into two groups:
  • Conventional PCBs: 33 conventional PCBs are now operating in the industry in Bangladesh. They perform the banking functions in conventional fashion i.e interest based operations.
  • Islami Shariah Based PCBs: There are 10 Islami Shariah based PCBs in Bangladesh and they execute banking activities according to Islami Shariah based principles i.e. Profit-Loss Sharing (PLS) mode.
• Foreign Commercial Banks (FCBs): There are some Foreign Commercial Banks are currently operating in Bangladesh. 9 famous FCBs are now operating as the branches of the banks which are incorporated in abroad.

Non-Scheduled Banks: The banks which are established for special and definite objective and operate under the acts that are enacted for meeting up those objectives, are termed as Non-Scheduled Banks. These banks cannot perform all functions of scheduled banks. Right now, following 5 non-scheduled banks are serving in Bangladesh:

• Ansar VDP Unnayan Bank
• Karmashangosthan Bank
• Grameen Bank
• Jubilee Bank
• Palli Sanchay Bank