Measuring Performance of Commercial Banks in Bangladesh Using Financial Inclusion Index

Md. Main Uddin Ahammed
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Md. Main Uddin Ahammed: Finance and Banking, Hajee Mohammad Danesh Science and Technology University, Dinajpur, Bangladesh.

International Journal of Science and Business, 2021, vol. 5, issue 9, 51-59

Abstract: The target of the study was to measure the performance of commercial banks using an index of financial inclusion (FII). Time series data about eight indicators of commercial banks have been used for the desired purpose. The study used both indicators indices (d1, d2, d3, d4, d5, d6, d7, d8), and dimensions indices (D1, D2, D3) to form the financial inclusion index (FII). The variables used are deposit accounts, loan accounts, branches of banks, ATMs, outstanding deposits as % of GDP, and outstanding loan as % of GDP. Performance of commercial banks is increasing over time as a whole based on all indicators, except in outstanding deposits as % of GDP (d7) which has downward trend since 2015. Based on the index of financial inclusion of commercial banks, Bangladesh entered into medium level of financial inclusion in 2010 and high level of financial inclusion in 2015. Rather establishing new banks in the economy, Bangladesh needed to expand banking services to people through establishment of new branches of existing banks, ATMs, and agent banking outlets to ensure the financial inclusion of unbanked people.

Keywords: Measurement; Performance; Commercial banks; Financial inclusion; Financial inclusion index (search for similar items in EconPapers)
Date: 2021
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