Bangladesh banks and insurance companies. Working capital

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Bangladesh has made strong progress over recent years. Progress was underpinned by strong economic growth, with 6 percent plus growth over the decade and reaching to 7.1 percent growth in 2015/2016 (World Bank, The Bangladesh Development Update May, 2017). Banking sector plays a key role for this economic development. Commercial banks as the most important functionary of the financial system play a dynamic role in the economic development of a nation through mobilization of savings and allocation of credit to productive sectors. Bangladesh’s financial sector is dominated by the banking sector. The term banking is defined as “accepting, for lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, and order or otherwise”. The banker is thus an intermediary and deals with money belonging to the public. Without banking, business is impossible to think. Payments, receipts, settlement all things are done through banking. Loans, insurances also are the key activities of banks and insurance companies. Working capital of any business are provided by banks or leasing companies. In Bangladesh, the banking sector has travelled through a journey where the sector has experienced several ups and downs.However, the performance of the banking sector in the recent past has not been satisfactory. At present, key performance indicators of commercial banks in the country reflect the poor health of banks. Most banks have not been able to show significant improvements on indictors such as capital to risk weighted asset, non-performing loans, expenditure-income ratio, return on asset, return on equity, liquid asset and excess liquidity despite several measures taken by the central bank.Bangladesh is a third world country with an under developed banking system, particularly in terms of the services and customer care provided by the government run banks. Recently the private banks are trying to imitate the banking structure of the more developed countries, but this attempt is often foiled by inexpert or politically motivated government policies executed by the central bank of Bangladesh, Bangladesh Bank. The outcome is a banking system fostering corruption and illegal monetary activities/laundering etc. by the politically powerful and criminals.3Banks are mainstream of the financial system of a country. Banking system must be robust, resilient and sound for efficient inter-mediation of financial resources. Lack of any one or all these prerequisites would not bring only disaster for the country also cost the real sector.There are many issues related to legal and ethical, commercial banks need to deal every day. Some issues are important for their customer loyalty and some issues are to sustain in the industry. However, without satisfying the customer they cannot sustain in the sensitive financial market. So law and ethics in their service is a must need. Moreover, without satisfying the employees, banks cannot satisfy its customer. To make the customer satisfy, banks need to ensure job satisfaction of its own employees. Here comes the issue related to the employment and the workplace employees are working.Business laws refer to the law that applies to business entities, such as partnership and corporations. Business law regulates the business and bound it to follow the existing policies of business world. On the other hand, Ethics can be defined as a system of criteria and measures examining the values, norms and rules underlying the individual and social relations on such moral grounds as right and wrong or good and bad. Corruption in the banking sector are frequent. There is implication of law and rules in the banking industry, but some ethical issues are making employees to violet some law and rules. This making the bank too much costly in the end.If commercial banks of Bangladesh can maintain a strict law and train their employees for better ethical issues, case of corruption like money laundering, bank defaulter, fraud, extortion will be reduced. Thus a better environment for employees will be created, so employees will become more loyal and implementation of laws and ethics would be improved, so we may not face HALLMARK SCAM, BISMILLAH SCAM or RESERVE HACKING SCAM like case

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