Banking Sector Discipline Deficit In Bangladesh

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INTRODUCTION
The problem of development is a continuing one. No country, be it developed or developing, can regard itself as having reached the peak of its growth effort. Attainment of the desired level of economic development is targeted by the developing economies for a number of reasons such as growing population, scarce resources, tall level of unemployment, backdated technology, low level of the standard of living, etc. The process of economic development needs capital formation besides other structural changes like improvement in skill and efficiency of manpower, better organization, health and education system, etc. Capital development is deemed as the most noteworthy variable of economic development. A proficient and
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According to Alam (2012), if there is a proper implementation of banking regulations and supervision structures, definitely, banking efficiency and profitability would follow.

FRAMEWORK OF THE FINANCIAL SYSTEM OF BANGLADESH
The financial system in Bangladesh is mainly composed of two types of institutions: banks and non-bank financial institutions (NBFIs). The banking sector is supervised and regulated by the Bangladesh Bank (henceforth as BB), the central Bank of Bangladesh .(Figure 1) The banking sector alone accounts for a substantial share of financial sector assets, with 48 banks accounting for about 95 per cent of the sector’s total assets as of the end of December 2011. Since 2002, the domination of the banking system by the state-owned commercial banks (SCBs) has been declining while private commercial banks (PCBs) and foreign commercial banks (FCBs) have been gaining market share in both deposits and bank loans and advances (Bhattacharya and Chowdhury 2003), reflecting an increased competition in the banking industry. The market share of the SCBs declined substantially to 28.75 per cent of the total industry assets in 2011 as against 54.4 per cent in 1990, while PCBs' share rose to 65.24 per cent in 2011 as against 22.6 per cent in 1990. Similarly, FCBs have also shown slight
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