| ID | 097133 |
| Title Proper | Bank rent approach to understanding the development of the banking system in Bangladesh |
| Language | ENG |
| Author | Suzuki, Yasushi ; Adhikary, Bishnu Kumar |
| Publication | 2010. |
| Summary / Abstract (Note) | This paper applies the 'bank rent' approach to understanding the development of the banking system in Bangladesh since its independence. The paper uses the financial restraint model as an analytical framework and argues that there still remains room for creating bank rents in order to change the current dreary performance of the banking system. The paper unearths a varied level of high nominal lending rates, high nominal spreads and too low or negative real spreads as per different clusters of banks both in the pre-liberalized and liberalized regime, and concludes that this persistent varied performance is largely the outcome of a high amount of non-performing loans, inefficiencies in managing credit risks, and fragmentation and distorted competition in the banking system. This varied level of performance of the banking clusters also results from the government's intervention in the activities of nationalized commercial banks and specialized banks for mediating credits to priority sectors at a subsidized rate. The paper suggests that a more coordinated use of monetary and fiscal policies is required with a view to creating appropriate rents for banks for redressing their current dismal performance. |
| `In' analytical Note | Contemporary South Asia Vol. 18, No. 2; Jun 2010: p.155 - 173 |
| Journal Source | Contemporary South Asia Vol. 18, No. 2; Jun 2010: p.155 - 173 |
| Key Words | Bank Rent ; Bangladesh ; Banking System ; Banking Development ; Non - Performing Loans |