Investment

Bangladesh Banking Sector 2021: Financial Market Structure and Korean Bank Presence

Banking Sector Overview

Bangladesh's banking sector comprises 61 commercial banks: 6 state-owned, 43 private, 9 foreign, and 3 specialized development banks. Total sector assets reached approximately $230 billion in 2021, representing 110% of GDP. Islamic banking accounts for roughly 25% of total deposits, while mobile financial services (bKash, Nagad) continue to expand financial inclusion. Korean banks — Woori Bank and Hana Bank — operate Dhaka branches to support trade finance needs of Korean companies operating in the market.

61
Number of Banks
Commercial banks
$230B
Total Assets
2021
7.9%
NPL Ratio
Non-performing loans
25%
Islamic Finance
Share of total deposits
9
Foreign Banks
Including 2 Korean banks
100M+
MFS Accounts
Mobile financial services

Banking Sector by Institution Type

Bangladesh Banking Institutions by Type (2021)
TypeCountAsset ShareKey InstitutionsNPL
State-Owned Commercial Banks625%Sonali, Janata, Agrani20%+
Private Commercial Banks4355%Islami Bank, BRAC, etc.5–7%
Foreign Banks98%HSBC, Standard Chartered, Woori3–5%
Specialized Development Banks35%BASIC, BDBL (development)15%+
Islamic Banking Windows8 (dual)25%Shariah-based operations4–6%

State-owned bank NPL ratios exceeding 20% represent a systemic risk factor for the sector. Private and foreign banks maintain NPL ratios around 5%, reflecting comparatively healthier balance sheets. For Korean companies conducting transactions in Bangladesh, private or foreign banks are the recommended counterparties.

Korean Banks vs. Global Banks

Korean Banks (Woori and Hana)
Core ServiceTrade finance for Korean companies
L/CL/C confirmation for Korean exporters
LanguageKorean-language advisory available
NetworkDirect linkage to Korean head offices
Global Banks (HSBC and SC)
Core ServiceComprehensive investment and trade finance
L/CGlobal network L/C capabilities
StrengthsExtensive local regulatory experience
LimitationsNo Korean-language support
01
Korean Bank Dhaka Branch Services
(1) Woori Bank Dhaka Branch: established 2013, located in Gulshan. (2) Hana Bank Dhaka Branch: established 2016, located in Gulshan. (3) Core services: L/C issuance and confirmation, export negotiation, trade finance, international remittance. (4) Target clientele: Korean-invested companies, local subsidiaries, and joint ventures. (5) Key differentiators: Korean-language advisory, KRW settlement linkage with Korean head offices, K-SURE insurance integration. (6) Facility limits: trade finance limits set following per-company credit assessment. (7) Fee structure: L/C confirmation 0.1–0.5%, negotiation 0.1–0.25%. (8) Practical tip: consult with the Korean head office before arriving in Dhaka to pre-arrange branch linkage.
02
Lending and Interest Rate Structure
(1) Lending rate cap: 9% ceiling imposed since April 2020 (Bangladesh Bank policy). (2) Deposit rates: 4–6% (fixed-term deposits). (3) Loan categories: industrial loans (manufacturing), trade finance (import/export), consumer loans. (4) Trade finance instruments: L/C margin, pre-shipment export advances, export receivable discounting. (5) Foreign currency lending: SOFR + spread, available to EPZ-based companies. (6) Collateral requirements: real estate, machinery, or inventory (LTV 60–80%). (7) Korean company advantage: Korea Eximbank Two-Step Loans available through local bank intermediaries at below-market rates.
03
Islamic Banking
(1) Market share: 25% of total deposits — one of the world's largest Islamic finance markets by absolute volume. (2) Core principles: prohibition of Riba (interest), real asset-based transactions, profit-and-loss sharing. (3) Key institutions: Islami Bank Bangladesh (largest), Al-Arafah, EXIM Bank. (4) Products: Mudaraba (investment), Musharaka (partnership), Murabaha (cost-plus sale), Ijara (leasing). (5) Korean company relevance: Murabaha structure applied when opening L/Cs through Islamic banks. (6) Growth trajectory: 15–20% annual growth, with lower NPL ratios compared to conventional banks.
04
Regulatory Framework and Investment Opportunities
(1) Bangladesh Bank: central bank responsible for financial supervision and monetary policy. (2) Foreign bank entry: branch format only permitted — separately incorporated subsidiaries are not allowed. (3) Minimum capital: Tk. 4 billion (~$47M) for foreign bank branches. (4) MFS licensing: bank subsidiary or bank-fintech joint venture structure required. (5) Fintech ecosystem: payments (bKash), lending (ShopUp), insurance (Praava) all showing strong growth. (6) Investment opportunities: fintech equity investment, MFS technology, credit scoring systems, and digital banking platforms. (7) Korean linkage: Korean fintech companies (Toss, Kakao Pay) have viable technology export pathways.

Korean Company Financial Services Utilization Flow

Korean HQ
Pre-arrival consultation
Dhaka Branch
Woori or Hana Bank
Account Opening
Local and foreign currency
Trade Finance
L/C and negotiation
Investment Finance
Project finance
Risk Management
K-SURE integration
Bangladesh Telecommunications Investment 2021Mobile and data center investment landscape
Bangladesh L/C Procedures 2020Letter of credit payment guide for trade transactions

Bangladesh's banking market — comprising 61 banks with $230 billion in assets — is characterized by Islamic finance and mobile banking as structural differentiators. Korean companies can leverage Woori Bank and Hana Bank Dhaka branches to efficiently process trade finance and international remittances, while also exploring technology export opportunities in the growing fintech sector.

BankingFinanceIslamic FinanceMobile Banking2021
Bangladesh Banking Sector 2021: Financial Market Structure and Korean Bank Presence | Dhaka Trade Portal