What do we mean by types of banks?
Every bank does roughly the same core job: taking deposits from people and lending that money out. But ownership, operating rules and purpose can differ. Some are owned by the government, some by local individuals or companies, some are branches of foreign banks, some follow Shariah rules instead of charging interest, and some were set up for a particular sector such as agriculture or migrant workers.
In Bangladesh, banks are regulated by Bangladesh Bank. Banks listed in the schedule of the Bangladesh Bank Order 1972 are called scheduled banks. They follow the Bank Company Act 1991 and can offer the full range of banking services. The banks where most of us open accounts are scheduled banks.
Say Rakib’s village has a branch of a state-owned bank where his father takes farm loans. His salary goes into a private bank next to his office in Dhaka. His sister keeps a mudaraba savings account at a Shariah-based bank. All three are “banks”, but their owners and operating rules differ. This is only an illustrative example.
Why it matters to an investor
- To follow the news: banking news often gives figures by category, such as “bad loans at state-owned banks” or “deposits at foreign banks”. Knowing the categories makes the news clearer.
- To match your own preferences: whether you want an interest-based or a Shariah-based account matters to many people. The way the return is worked out differs between the two.
- To avoid a false shortcut: you cannot judge any single bank’s health just from its category. Every group contains very different banks.
- To understand deposit protection: deposits at scheduled banks are protected by law up to a set limit, whatever the type of bank.
The main groups of scheduled banks
- State-owned commercial banks: fully or mostly owned by the government. They usually have many branches across the country, especially in rural areas, and handle a large share of government transactions.
- Private commercial banks: mostly owned by local individuals or companies. They are the largest group by number. Some are conventional, interest-based banks; others are Islamic Shariah-based.
- Islamic Shariah-based banks: they neither charge nor pay interest, working instead through profit-and-loss sharing (mudaraba, musharaka) or trade-based contracts (murabaha). Many conventional banks also offer these services through separate “Islamic windows” or branches.
- Foreign commercial banks: Bangladeshi branches of banks incorporated abroad. They usually have few branches and focus more on large companies and international trade.
- Specialised banks: set up by the government for a particular sector, such as agricultural development or services for migrant workers.
By the numbers in Bangladesh
According to the list on Bangladesh Bank’s website (viewed October 2026), the country has 63 scheduled banks: 7 state-owned commercial, 3 specialised, 43 private (33 conventional and 10 Islamic Shariah-based), 9 foreign, and 1 digital bank that had not yet been allowed to start full operations.
There are also 5 non-scheduled banks. These were set up under their own separate laws for special purposes, such as microcredit or employment, and cannot do everything a scheduled bank does. Because of mergers and new licences, these numbers change over time; Bangladesh Bank publishes the latest list.
Banks and “bank-like” institutions
- Finance companies (NBFIs) take term deposits and make loans, but they are not banks. They cannot offer cheque books or current accounts, and they operate under a separate law, the Finance Company Act 2023.
- Cooperative societies, NGOs and mobile financial services are not banks. Promising “bank-like but higher returns” does not make anyone a bank; whether they hold a licence is the real question.
Common mistakes
- Assuming “government-owned means safest” or “foreign means better”. A bank’s type tells you nothing certain about that particular bank’s health.
- Treating the “profit” on a Shariah-based account like a fixed interest rate. It is a profit-sharing arrangement, so the rate can change.
- Mistaking a finance company or cooperative for a bank, and assuming deposits there are protected under the same rules as at a bank.
- Trusting a name that contains “bank” or “finance” without checking for a licence.
A bank’s type tells you who owns it and which rules it follows, not how strong any particular bank is.