Roles of Commercial Bank

Here a brief discussion on different roles of commercial banks.

Contribution to economic development:
The commercial banks are described now a day by many agents of economic development and social change. Their functions and roll are undergoing revolutionary changes client coverage and extended beyond imagination.

While many people believe that banks play only narrow roll in the economy taking deposit and making loans the modern banks has bad to adopt new roles to remain competitive and responsive to public needs. Baking’s principal roles today are as follows:

The intermediary role:
Transforming saving received primarily from household into credit for business firm and others in order to make investment in new building, equipment and other goods.
The payment role:
Carrying out payment for good and services on behalf of their customers.
The guarantor role:
Standing behind their customers to pay off customer debts, when those customers are unable to pay.
The risk management role:
Assisting customer in preparing financially for the risk of lost to property and persons.
The saving / investment advisers role: Aiding customers in fulfilling their long rang goals for a better life by building, managing, and protecting savings.
The safekeeping/certification of value role:
Safeguarding a customer’s valuables and appraising and certifying their true market value.
The agency role:
Acting on behalf of customers to manage and protect their property or issue and redeem their securities.
The policy role:
Saving as a conduit for govt. policy in attempting to regulate the growth of the economy and pursue social goals.
Other indirect roles:
Bank deposit is increased by Tk. 8610 crore (5.9%) to Tk.. 154423 crore during October to December, 2005 compared to increased of Tk. 3194 crore (2.2%) and Tk. 7421 crore (6%) respectively. During the previous quarter and corresponding of the preceding year.
Employment generator:

Types of Bank No. of branches Total Employee 
Year 2003 2004 2003 2004 
NCBs 3397 3388 58630 57588 
DFI 1314 1328 16420 15877 
PCBs 1510 1550 31905 34343 
Foreign 32 37 1502 1582 
Total 6253 6303 108457 109390 
Source: Bangladesh Bank Annual Report, 2005, Page: 36
For export growth:
Growth of the bank credit up to 2005 in crore PCBs 

Year Advances Import and Export Total Bank Credit 
1994-95 32327 1121 33448 
1995-96 36758 1233 37991 
1996-97 40792 1682 42474 
1997-98 46257 2005 48262 
1998-99 52380 2040 54420 
1999-00 57474 2271 59745 
2000-01 66365 3524 69889 
2001-02 75000 3639 78639 
2002-03 83446 4223 87669 
2003-04 92221 7060 99281 
2004-05 108860 8295 117155 
Source: Bangladesh Bank Bulletin Volume: XXXIII Nuber 4 Oct-Dec, 2005 page106.

Total export receipt up to 2005: (in crore)

Year Cash 
2000-01 31419 
2001-02 30936 
2002-03 33243 
2003-04 40581 
2004-05 50731 
Source: Bangladesh Bank Bulletin Volume: XXXIII Nuber 4 Oct-Dec, 2005 page.258


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