CHAPTER- 2
LITERATURE REVIEW
2.1 Historical Background of Banking
Banks and other financial institutions play a vital role in fostering the economic and social condition of a country. They help to develop a conducive climate for capital formation through three stages such as, savings, financing and investment and the role of banks is instrumental in all these stages. Banks in Bangladesh now constitute the core of the country’s organized financial system. They mobilize the savings of people and channel the resources towards different sector of the economy.
The objectives of this paper are to trace (i) how banks evolved over periods, (ii) what were the factors that shaped the modes of credit and other services (iii) how was the policy framework evolved, and (iv) Who looks after control and regulations of banking institutions.
In order to fulfill the objectives, basically historical method of research has been applied. The available book, research works, articles, publications of Bangladesh Bank were reviewed. The required items of information were developed, searched, noted from sources without bias, and organized into an appropriate order.
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