Commercial Banking in Developing Economy: A Case Study of Ten Private Commercial Banks of Bangladesh

There are many problems in a developing economy like Bangladesh that make the operation of banking business difficult. This study is an attempt to evaluate the performance of private commercial banks considering the impact of the economic environment of Bangladesh on the performance of the banks. Using data on ten randomly selected private commercial banks, this paper evaluates the financial performance of the banks, studies the problems the banks have to deal with and finds out the strategies the banks use to cope with the challenges. The main conclusion is that operating a banking business in the economic environment of a developing country like Bangladesh requires full understanding of the changing economic situations, sound strategy-making for tackling adverse situations, effective short term planning and efficient risk management. The ten selected banks try to follow these strategies, and they have managed to be profitable and reasonably efficient.