Growth of Private Commercial Banks in Bangladesh

Abstract

Now-a-days PCBs have succeeded to occupy a handsome portion of the total banking sector through their 23 years journey. For that matter, the study is done to verify how successfully PCBs have come across to today’s position. After liberation in 1971 all banks except few foreign banks’ branches were nationalized and reorganized. But the step of nationalization is viewed as a discouraging picture of NCBs because of some careless management activities. For that reason, PCBs had appeared in 1982 in the banking sector to improve the NCBs’ performance as well as the overall condition of the banking sector. The whole period has been segmented in to two parts and the growth of PCBs has been tried to find out according to the segments. Firstly, the denationalization and privatization period (1982-1989) and secondly, the financial liberalization period (1990-2004). We have tried to measure the growth of PCBs in the above mentioned time periods. To ascertain the PCBs’ growth we have used their branch expansion, deposit mobilization capability and credit deployment quality. With the help of these three components we can observe whether PCBs share in the total banking sector has been increased. We have also inquired that whether the performance of PCBs is better than that of NCBs. The study also covers NPL problems faced by the banks, and to what extent PCBs have recovered their NPL condition and what should be the further action to restrain the problem. Though PCBs have been playing the leading position, with the largest number of banks (30) in the banking sector, their overall performance is not as much appreciable as it should be. For that reason, PCBs should behold their full concentration to overcome their shortcomings.