1. Private Commercial Banks in Bangladesh
Banking is one of the most sensitive businesses all over the world. A bank is a financial
intermediary that accepts deposits and channels those deposits into lending activities,
either directly or through capital markets. It is a highly regulated industry with detailed
and focused regulators. Bank, a service selling institution, plays a significant role in a
contemporary world of money and economy. It influences and facilitates many different
but integrated economic activities such as resource mobilization, poverty elimination,
production, and distribution of public finance. Bangladesh has a well-developed banking
system, which consists of a wide variety of institutions ranging from a central bank to
commercial banks and to specialized agencies to cater special requirements of specific
sectors. The country started without any worthwhile banking network in 1947 but
witnessed phenomenal growth in the first two decades. By 1970, it had acquired a
flourishing banking sector. Since early 1990s, after the open market policy of the
Bangladesh government, this sector has been growing rapidly. Presently, there are 49
public and private banks operating in Dhaka City, of which, 4 banks are in public sector,
30 banks are in private sector, 5 specialized banks, and 10 foreign banks. The good
behavior of the employees of the bank is the key aspect of customer service (National
Commission Report, 1985). It is viewed by the customers that the services provided by
the private banks are better compared to public banks (Mentzer, et al., 1993). Hence, it is
essential to identify the factors responsible for the quality of
the services. This paper deals with the determination of service quality factors of private
commercial banks in Bangladesh. The findings of this study would be useful to the
policymakers of the private commercial banks to improve the service quality to the
List of Commercial banks in Bangladesh
United Commercial Bank Limited
Mutual Trust Bank Limited
BRAC Bank Limited
Eastern Bank Limited
Dutch Bangla Bank Limited
Dhaka Bank Limited
Islami Bank Bangladesh Ltd
Uttara Bank Limited
Pubali Bank Limited
2. IFIC Bank Limited
National Bank Limited
The City Bank Limited
NCC Bank Limited
Prime Bank Limited
Southeast Bank Limited
Al-Arafah Islami Bank Limited
Social Islami Bank Limited
Standard Bank Limited
One Bank Limited
Exim Bank Limited
Bangladesh Commerce Bank Limited
First Security Islami Bank Limited
The Premier Bank Limited
Bank Asia Limited
Trust Bank Limited
Shahjalal Islami Bank Limited
Jamuna Bank Limited
ICB Islami Bank
Marcantile Bank Limited
Functions of Private Commercial Banks in Bangladesh
Functions of Commercial Banks in Bangladesh
Short Term Loans
Medium Term Loans
Long Term Loans
Discounting of Bills
3. Receiving Deposits
This is the main function of commercial banks to collect savings of individuals and firms. They
offer different types of deposits for the facility of the customers.
Current Account or Demand Deposits
This type of deposit account which is usually held by the middle class group. The saving
account carries lower rate of interest.
Amount cannot be withdrawn before the fixed future date in this type of deposit. High
interest is allowed in fixed deposit which is different according to period.
This is the important function of the commercial bank. Credit is given to the people in
There are three types of loans given to borrowers.
i. Short Term Loans:
These loans are advanced for the period of six months to one year. High Interest rate
Is charged on this type of accounts.
ii. Medium Term Loans:
Loans from one to five years are called medium term loans.
iii: Long Term Loans:
Loans which are advanced for the period, more than ten years are long term loans.
4. Bank Overdraft
Banks allows their trustful customers to draw more than the deposit they have in the
Bank. Bank charges interest on overdraft.
Bank also gives credit against immovable property and interest is charged by the bank.
Discount of Bills
This is income source of bank to discount bills of exchange. They charge nominal
Interest and discount only reputed and clear bills of exchange.
Example activities some private banks
United Commercial Bank Limited
UCBL provides all general banking services to its clients through its 110 branches
all over the country. Savings and current accounts, transfer of money, Western
Union Money Transfer are some of the services UCBL presents.
• Deposit Schemes
• Loan and credit services
• Remittance services
• Stock brokerage service
• Innovative Services
• Saturday Banking
AB Bank Limited
AB Bank Limited is the first private sector bank in Bangladesh.
AB Bank provides-
5. • Retail Banking
• Corporate Banking
• SME Banking
• NRB Banking
• Islamic Banking
• Investment Banking
• Merchant Banking
• Project Finance
• Loan Syndication
• Money Transfer
• Custodial Service
• Brokerage Services
Contribution and future impact private Commercial Bank
• Banks promote capital formation
• Investment in new enterprises
• Promotion of trade and industry
• Development of agriculture
• Balanced development of different regions
• Influencing economy activity
• Implementation of Monetary policy
6. • Monetization of the economy
• Export promotion cells
• The commercial banks are now not confined to local banking.
• They are fast changing into global banking i.e., understanding the
global customer, using latest information technology, competing in the
open market with high technology system, changing from domestic
banking to investment banking etc.
• The commercial bank are now considered the nerve system of all
economic development in the country.
On the other hand sometimes some private commercial banks fall in default.
Every bank has offer same kind of type of loan. so there is competition in
the market. Sometimes people get loan from one bank then another bank
come to the same people with same offer , so it is difficult to choose for the
people which bank is more preferable to get loan. there are many banks but
differ with interest rate . So it is very difficult to survive every bank to get
customer in the market. So some bank can’t do operation well in the market.
Bangladesh bank observe those type of bank very carefully also other bank.
Conclusion and recommendation
Banks, over the years, have become a significant institution of an economy. The
commercial banking is the backbone for the growth of an economy. Service
businesses like banks are very much sensitive. Customers value the quality of
the services of the banks to take up services. So, it is important to find out the
factors that contribute the service quality of private commercial banks. This study
was carried out to find out the important factors of service quality for private
commercial banks in Bangladesh.