Foreign Banks Pros and Cons Essay

Today with the blessings of terrific development in the communication technology, relationship and interdependence among the countries have been growing rapidly which signifies globalization as an ongoing process. Globalization helps the world(prenominal) business- that is engaging in cross border expansion of sales, acquiring resources and diversifying risk. reckon that benefiting the inappropriate banks in Bangladesh Bangladesh is a developing country with a huge population.From the beginning of Bangladesh as an free-living country it has been a desiring place for doing business for business organizations operating globally. This circumstance is existed in banking and other monetary service orbits. There are some factors that benefitting the contrasted banks operating in Bangladesh.1. Extended sales in an enormously populated country with a low competition Bangladesh is a country with a sizeable population, so this place is a big market for the banks in a single boundary w ith a simple set of legislations.So the conflicting banks operating in Bangladesh mint serve a voluminous group of customers with a single marketing policy. As now a day the business transactions are taken place through banks and house hold savings are kept in banks so the foreign banks do not have to be concerned about the demand. The topical anaesthetic anesthetic banks can not give a big competition as well.2. Minimizing risk As usual the multinational banks like other multinational corporations minimize risk by operating in Bangladesh.That means if the banking sector collapses in a country the multinational banks will not loose everything and it is a risk diversifying method. 3. start outting resources The foreign banks operating in Bangladesh can acquire Bangladeshi capitals, information and human resources slowly. The local expertise is keen to work in MLCs. So the foreign banks can acquire the local human resources easily at a very cheap rate compare to the global c ondition. Having the benefits in Bangladesh 10 local banks have established their operation in our country and working comfortably for years after years.Influences of foreign banks in Bangladesh Benefits 1. A boast in banking sector Local banks are expected to react as the foreign banks enter to the country. The local banks here have changed their police in a positive modal value caused by healthy competition. 2. Bringing ne management and advertising techniques foreign banks typically bring newer and much modernized management and advertising techniques in our banking sectors. The local banks can learn the modern techniques to cope up with the changing economic environment and globalization.3. Introducing new modernized technology In Bangladesh most of the modern monetary technology such as ATM, different types of cards, off balance sheet accounting and the latest computing technology brought by foreign banks and spread out in whole banking sectors. 4. Helping in international t rade Aiding in the development of trade and foreign direct investment are presented by foreign banks. Such as opening an L/C in a multinational bank whitethorn be more helpful for the merchants. Problems1). Foreign domination the established foreign banks have far great brand value and economic capability than the local banks. So they can easily dominate by attracting customers. They also are being magnets for local human resources, so the local banks do not get the local expertises which also pull the local banks behind the multinational banks.2). Lack of local commitment the foreign banks lack commitment towards the country for some reasons not meeting some social responsibilities.3.)Cream glide behavior though there is not much data available to prove this fact many people think that the foreign banks cream skim the market- taking disproportionate share of best local business away from domestic banks.4). Unhealthy completion introduction of foreign banks has added pressure to t he local banks by increasing competition which results in risk taking of local banks. So the foreign banks of Bangladesh have a great influence in our economy in the form of pros and cons which are effectively altering our banking sector, with their operation.