Financial System of Bangladesh
The financial system of Bangladesh is comprised of three broad, fragmented sectors, categorized in accordance with their degree of regulation.
Three Broad Sectors
Each sector is defined by who oversees it. The degree of regulation — from full supervision by the central bank and securities regulator, to partial oversight, to none at all — forms the spine of the country's financial architecture.
Formal Sector
Includes all regulated institutions like Banks, Non-Bank Financial Institutions (FIs), Insurance Companies, and Capital Market Intermediaries such as Brokerage Houses and Merchant Banks.
Semi-Formal Sector
Includes institutions that are regulated but not under the purview of the central bank, insurance authority, securities regulator or other financial regulators (e.g., specialized financial and development institutions, NGOs and discrete government programmes).
Informal Sector
Includes private intermediaries which are completely unregulated, including Micro Finance Institutions (MFIs) operating outside formal supervision.
A Spectrum of Oversight
What separates one sector from the next is not the nature of the services offered but the intensity of supervision behind them. Reading the system through this lens makes it clear where investor protections are strongest and where capital moves with the least formal safeguard.
Fully Regulated
Banks, Non-Bank Financial Institutions, insurers and capital market intermediaries sit under the direct purview of Bangladesh Bank, the insurance authority and the securities regulator (BSEC), with brokerage houses and merchant banks active across the DSE and CSE.
Partially Regulated
Specialized financial and development institutions, NGOs and discrete government programmes are regulated, but fall outside the central bank, insurance authority and securities regulator.
Unregulated
Private intermediaries — including Micro Finance Institutions (MFIs) operating outside formal supervision — function entirely beyond the reach of financial regulators.