For starting

 A healthy financial sector is crucial for economic growth especially for economies like Bangladesh. Because growth in Bangladesh must come largely from exports and its enterprises must therefore be internationally competitive. But unfortunately Bangladesh has a financial system which borrowers fail to repay loans foreclosure is almost unheard of and the government and receives periodic capital transfusions to keep themselves going. Thus commercial banks are at the heart of the problem in Bangladesh financial sector. The problems in the financial sector in Bangladesh are many. Specific mention of these problems is a difficult job. However the crucial problem of our financial sector may be identified as under. Small domestic private banks are hardly better off. They offer no serious competition to nationalized banks. Better examination is revealing imprudent insider lending and capital shortfalls in several instances. Estimates based on unaided financial statements suggest that at the end of 1994 the private banks needed more than 13 billion just to meet current regulations on capital adequacy. Inadequate prudential regulation and weak suppression is a recipe for banking problems. Poor enforcement capacity robs weak suppression of what little effect it might have. Both provisioning and capital adequacy requirements have been well below international standards. Poor prudential regulation and suppression are made all the worse by an inadequate legal framework for loan recovery foreclosure and liquidation. Bangladesh lacks such a framework. Banks are mot the problem in the financial sector of Bangladesh. Capital markets are small and do not offer a competitive alternative to band borrowing. Stock market capitalization relative to gdp is some 25 to 75 times smaller than in neighboring south Asian countries.

Improving effeciency

.  Improving the efficiency and trans Arden of trading on the stock exchange. Developing specialized institutions for credit rating, reconsidering the role of the state owned investment corporation of Bangladesh. Strategy for deepening the financial system must give special attention to development finance institutions the traditional but now ineffective source of term finance to help industry respond to the growing economic liberalization to the economic environment of the country. The government should examine ways of strengthening non depository contractual saving institution through action to strengthen the office of the controller of insurance. Review and strengthen the regulatory framework for insurance companies and work out a strategy for privatization of two state owned companies. Strengthen the management collection and funding performance of state owned pension funds. Provide best practice examples for section up private pension fund. Above discussion showed that the financial sector of Bangladesh is non functioning well and it needs lot of reforms and reappraisals. For this government should come with crash programs which must be implemented promptly with courage and passion. Otherwise all the programs and efforts will go to astray.

Risk involvement in a share: This is a very important factor you believe in risk when you want to invest in the share market. There is no guarantee of what percentage of capital gain you can get, where and when the share price stops in up end or low end and how long it takes to get the profits. It is true no company or institute can guarantee. However you can measure the risk in various ways. That's why it is essential to do some home work on a company before you invest. The home work should be calculating earnings per share, total debt, relative price strength, profits margins, volumes, industry leader and so on. You can also reduce the risk by diversifying the correlation between a share and a market index. A less risk taker has options to invest in board or a company that provides dividends at the end of year. So we should also take care of this market.

About commercial

Privatizing nationalized commercial banks the government should appoint a financial advisor with comprehensive terms of reference for selling the first bank. Develop a strategy for dealing with the privatization program for state enterprises. Commence introduce pre privatization bank restructuring if necessary with the of completing the first privatization with six to nine months. Required audits to trace suspected insider loans. Initiate a study of financial statements to bring them in line with international standards of financial statements to bring them in line with international standards of accounting and financial disclosure. Bangladesh banks regulatory functions would be easier to manage with computerization and real time data communication links with the commercial banks it regulates greater automation of the clearing house would be the next priority to improve check clearing services a boon to both consumers and the payment system. Professionalizing the banking business will generate large long term payoffs in the form of a more efficient banking system apart from functional and technology related training required at Bangladesh band and the commercial bands consideration should be given to starting a master of bank management program at bibm. The government should take steps to increase the ability of capital markets to efficiently provide long term funds through debt and equity financing. Thus the reforms should include strengthening prudential regulation in the stock market makers. Creating the enabling environment to foster the market for corporate bonds and commercial paper for secularization of assets and for venture capital. Strengthening the securities and exchange commission .  Improving the efficiency and trans Arden of trading on the stock exchange.

Measures for cure

Curing the financial sector will not be easy enough financially or politically. It needs comprehensive programmers both short term and long term for marketing the financial sector viable and competitive. for this following measures may be considered: the government needs to undertake comprehensive measures for loan recovery. So government should amend the financial loan court act to strengthen the loan courts giving the powers to execute their decrees and staffing them adequately. Increase the number of loan courts especially in Dhaka Chittagong and Khulna to clear backlog of cases. Breakdown the problem of loan recovery into specific impediments and find solutions. Strictly enforce all laws against white collar crimes. Tighter regulations should be phased in to avoid shocks to the health of banking system. For this the government and Bangladesh bank should: tighten regulations on bank capital loan classification and provisioning and ownership. Define and enforce penalties for insider lending. Examine that Bangladesh banks autonomy legal status organizational structure which needs actions to. Strengthen Bangladesh bank’s supervisory inspection treasury and risk management functions. Introduce changes to the Bangladesh bank act to provide greater autonomy for the bank. Establish twining arrangements with central bank. In the medium term upgrade technology strengthen monetary management.  To deal with troubled private banks Bangladesh bank should develop criteria for selecting banks for restructuring. Sign restructuring contracts with the selected banks specifying the steps needed to restore viability and capital adequacy. Clarify the incentives for bank owners to comply and to operate profitably in a competitive environment. Closely supervise banks in accordance with prudential norms.

In banking sector

Use of ict can make our banking sector speedier transparent and service oriented. It will improve the customer services reduce the cost of transactions’ and Improve the delivery capacity of its facilities. By computerizing the entire traffic management system we can bring discipline on the street and earn good amount of revenues from the vehicle owners even to manage the traffic police  and maintain the roads can dealers and the traffic police department under a common server in which and updated record and profile of each vehicle and driver can be maintained.  The ict may be used in our manufacturing sector. It may provide us with higher productivity and lower cost and effective international marketing in the garments jute leather frozen fish and package food sector. This inventive capacity enables a nation to develop assimilate and adopt new knowledge for innovative use and development of it for wealth creation. Such capacity includes academic research facilities national laboratories and industrial centers. Bangladesh should look into the development of such capacity by forming partnership with industry and academia within a academia within a well thought out strategy plan. Innovation capacity should be created to apply new knowledge in the form of new products services. Mechanism should be created for financing protecting intellectual property transferring new knowledge  to industry managing in innovation capacity innovation and doing marketing research. For entrepreneurial capacity building support should be made available in the form of managerial knowledge risk capital business.