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Non-Banking Financial Institutions: Are they substitute or complement of commercial Banks in Bangladesh? Give justifications.

Non-Banking Financial Institutions: Are they substitute or complement of commercial Banks in Bangladesh? Give justifications.

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Expert Solution

Non banking Financial institutions are complementary to the banking system in Bangladesh. These non bankingFinancial institutions are providing a supporting role to the main banking of the country because banking business is spread all over the Bangladesh and they are accounting for almost majority of the shares of the credit which available to the economy so non banking Financial institutions are providing loans but they are not yet able to establish themselves as a substitute to the banking system.

Financial institutions in Bangladesh general take the loans from banking institutions and they are providing the loans to the general public and they are trying to earn commission on those loans, so it can be said that these Non- Financial institutions are dependent upon the banks in Bangladesh and banking business is the main contributor to the growth of the economy and these non banking financial institutions are just acting as a support system to the the primary banking system.

jeff jeffy answered 2 years ago
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