Banking Sector in Bangladesh After the independence of Bangladesh, the banking sector was restructured following the war of liberation. Banking grew primarily in the public sector, with emphasis placed primarily on the development needs of the war-ravaged economy. With the gradual liberalization that took place in the following years, there was an increasingly widespread feeling that banks should be allowed to boost the development process on the basis of private initiative in the private sector. In the 1980s it was first allowed to some private sector banks. Subsequently, in the mid-1990s, other private sector banks began operating. In 1999, the third generation of private sector banks were granted permission to operate. Finally in 2001 the fourth generation of private sector banks began operations. As a result, while the financial sector was dominated by public sector banks until the 1980s, private sector banks have acquired more responsibility over time. The share of deposits of nationalized commercial banks (NCBs) in total deposits, which was 89% in 1980, gradually declined over the years until it reached the level of 55% in 2000. At the same time, banks private commercial companies (PCBs), which were responsible for only 18%. of deposits in 1985, this share gradually increased over the years to constitute one-third of the country's total deposits by the end of the millennium. But the market share of FCB deposits has not changed much over the past two decades. In the early 1980s the share was 6% and by the end of the century it was 7%, with a relatively small branch network in the country. Similarly, the share of NCBs in the country's total advances gradually fell from 80% in 1980 to reach the level of 47% by the end of 2000. At the same time, the share of PCB advances has increased since 14% to 31% in the same period. A breakdown of deposits and advances indicates that the share of rural branches contributes higher share of deposits than the share of advances. Rural deposits make up just over a fifth of banks' total deposits. On the other hand, rural advances constitute about 17% of the total advances in the banking sector. This scenario leads some analysts to conclude that there has been a continuous transfer of resources from rural to urban areas. While on the surface this may seem like a cause for serious concern, the real picture is slightly different if you do an in-depth analysis.