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Classification of bank on the basis of non-banking financial institutions

There are various kinds of non-bank financial institutions operating in Bangladesh. The leading of those banks are as follows-
1. Merchant banking companies: Merchant banking companies help business house or the government corporation in raising capital from the open market through share capital, debenture, and long-term deposits. They act as middlemen between businessman and the investors. They underwrite issue of share and provide consultancy services to the clients. In Bangladesh, separate merchant banking companies are yet to seen. These jobs are partly done by some of the commercial banks. Some leasing companies also do merchant banking.
2. Housing development finance companies: These are the companies which extend medium and long term finance to build houses and apartment buildings in the private sector. Examples of such companies are Bangladesh house Building Finance Corporation (HBFC) in the government sector, Delta-BRAC housing finance corporation and national housing finance and investment company ltd.
3. Stock exchange: Stock exchange is the institutions where shares and stocks can be bought and sold at market prices by the shareholders through stock brokers. Stock exchange sits everyday to effect purchase and sale of shares and stocks. Purchase and sale of shares and stocks are governed by the rules and regulations framed by the Securities and Exchange Commission (SEC). At present there are two stock exchanges in the country. These are Dhaka stock exchange (DSE) and Chittagong stock exchange.
4. Insurance companies: The insurance companies are generally two types, a) general insurance companies- general insurance companies do general insurance business providing coverage for goods and properties against loss or damage. Example- Sadharan Bima corporation b) Life insurance companies- life insurance companies provide coverage against life assurance. Example- Jiban Bima Corporation.
5. Investment and finance companies: Investment and finance companies are not banking institutions. Banks can accept deposits and use cheques. But investment and finance companies can not accept deposits withdrawal on demand by cheques or drafts. But they can raise their fund; in addition to their own paid up capital. They usually offer financial services including providing medium or long term loans to business and industry.
6. Leasing companies: There has been an impressive growth in leasing business in Bangladesh during the last decade. The leasing companies are engaged in leasing activities in the areas like industrial machineries, medical equipments, office equipments, construction machineries, electronic goods and house hold appliance etc. Some leasing companies are also engaged in financing house building and apartment building. Industrial development Leasing companies (IDLC) and Phoenix leasing company ltd are the two examples of leasing companies in the private sectors. There are no leasing companies in the nationalized sector.