The banking industry in Bangladesh started its journey with 6 Nationalized commercialized banks, 2 State-owned Specialized banks, and 3 Foreign Banks after achieving independence in 1971. In the 1980s banking industry achieved significant expansion with the entrance of private banks in Bangladesh. Now, banks in Bangladesh are primarily of two types:

Scheduled Banks: The bank that gets a license to operate under the Bank Company Act, 1991 (Amended in 2003) is termed, Scheduled Banks. State-owned commercial banks, private commercial banks, Islamic commercial banks, foreign commercial banks, and some specialized banks are Scheduled Banks in Bangladesh. Fifty-three scheduled banks in Bangladesh operate under full control and supervision of Bangladesh Bank, which is empowered to do so through Bangladesh Bank Order, 1972 and Bank Company Act, 1991. Scheduled Banks are classified into the following types:

• State-Owned Commercial Banks (SOCBs): State-owned banks function as nationalists, and these kinds of banks are known as Public Banks in Bangladesh. There are 9 SOCBs that the Government of Bangladesh fully or majorly owns.
• Specialized Banks (SDBs): Banks were established for specific objectives like agricultural or industrial development. Three specialized banks are now operating for specific objectives like agricultural or industrial development. All SDBs banks are also fully or majorly owned by the Government of Bangladesh.
• Private Commercial Banks (PCBs): Private Banks are the highest growth sector due to the dismal performances of government banks. They tend to offer better service and products. Private entities majorly own 37 local private commercial banks. PCBs can be categorized into two groups:
  • Conventional PCBs: 29 conventional PCBs are now operating in the industry in Bangladesh. They conventionally perform the banking functions, i.e., interest-based operations.
  • Islami Shariah Based PCBs: There are 8 Islami Shariah-based PCBs in Bangladesh, and they execute banking activities according to Islami Shariah-based principles, i.e., Profit-Loss Sharing (PLS) model.
• Foreign Commercial Banks (FCBs): Some Foreign Commercial Banks are currently operating in Bangladesh. 7 famous FCBs are now operating as the branches of the banks incorporated abroad.

Non-Scheduled Banks: The banks established for particular and definite objectives and operate under the acts enacted for meeting those objectives are termed Non-Scheduled Banks. These banks cannot perform all functions of scheduled banks. Ansar VDP Unnayan Bank, Karmashangosthan Bank, Probashi Kollyan Bank, and Jubilee Bank are the only 4 Non-Scheduled Banks in Bangladesh.