SME

CHAPTER ONE
INTRODUCTION

1.1 Background of the study:

Banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. Bank is an old institution that is contributing toward the development of any economy and is treated as an important service industry in the modern world. Economic history shows that development has started everywhere with the banking system and its contribution towards financial development of a country is the highest in the initial stage. Modern Banks play an important part in promoting economic development of a country Bank provides necessary funds for executing various programs in the process of economic development. They collect savings from large masses of people scattered throughout the country, which in the absence of banks would have remained ideal and unproductive. These scattered amounts are collected. Pooled together and made available to commerce and industry for meeting the financial requirements.

Bank plays a vital role in the economy by providing means of payment and in mobilizing resources. Bank is the most important financial institution in the economy. The economic development of a country depends on the development of banking sector. Today’s modern banks ate not only providing traditional banking but also expanding the many financial services. In today’ world the lice of the people directly or indirectly are within the field of banking whether conventional or Islamic banking although Islamic bank is not a newer concept in Bangladesh as it has started its operation since 1983, very few people are aware about its operation But things are changing . Islamic Banking is also getting popularity in the country.

1.2 Rationality of the study:

Economy of Bangladesh is