Dhaka, Bangladesh (BBN) – The new banks would help improve the quality of banking service by increasing a competition in the banking sector, the central bank of Bangladesh said.
The Bangladesh Bank (BB), the country’s central bank, sees that the new banks would also be able to meet the unfulfilled credit demand of the private sector, which is growing in line with the fast-expanding economy. 
With the new banks, the ratio of opening rural and urban branches will be 1:1, which will increase bank branches in rural areas and improve financial inclusion, the central bank said.
“Since bank licences were last issued in 2000-01, there have been many significant developments in the Bangladesh economy,” the central bank said in a statement, explaining the economic context and rationale behind issuing new bank licences.
The economy has grown and the banking system has become more competitive but there are still a large number of under-banked people in Bangladesh, it noted.
Recent estimates from a survey conducted by the Institute of Microfinance found that only 45 percent of the nearly 9000 households surveyed do have access to banks and micro-finance institutions (MFIs) for loans.
The population per branch (21065) and the ratio of loan accounts per 1000 adults (42) suggest that the outreach of the formal financial sector in Bangladesh is lower than that in India (14485 and 124 respectively) and Pakistan (20340 population per branch and 47 loan accounts per 1000), according to the statement.
 
BBN/SSR/AD-09Apr12-9:50 am (BST)