Insurance Development and

Regulatory Authority (IDRA)

 Insurance is a risk transfer mechanism by which a
company or state undertakes to provide a guarantee of
full or partial financial compensation for the specified
loss , damage or death in return for a payment of a
specified premium
 On January 26, 2011 it was inaugurated under the
Insurance Development and Regulatory Act, 2010.
 Formerly, known as “Chief Controller of
Insurance”.
 It is operated under Ministry of Finance with a 4
member executive body.
 Insurance Development and
Regulatory Authority (IDRA)
Background:
• After independence, with only 2 Nationalized (Bangladesh
Jiban Bima Corporation and Bangladesh Sadharan Bima
Corporation) and 1 Foreign insurance company the insurance
sector initiated its journey.
 In mid 80s, private insurance companies started to enter in the
industry.

Currently, there are 78 companies operating under the Insurance

Act of 2010. Amongst them:
 32 Life Insurance Companies (including 1 state-owned and 1
foreign company)
 46 General Insurance Companies (including 1 state-owned)
 Insurance Development and
Regulatory Authority (IDRA)
Services provided by
the Insurance Companies:
Life Insurance (Bangladesh Jiban Bima Corporation)
General Insurance (Bangladesh Sadharan Bima
Corporation)
Re-Insurance ( Reliance Insurance limited)
Micro-Insurance ( Guardian life insurance limited)
Islami Insurance (Takaful Islami Insurance Limited)
 Microcredit Regulatory Authority (MRA)
 Microcredit is an extremely small loan given to
impoverished people to help them become self-employed.
 On August 27, 2006 it was inaugurated under the
Microcredit Regulatory Authority Act, 2006.

Background:

 The growth in the MFI sector was phenomenal during the

1990s and it continues till today.
 Currently, 599 institutions (as of October 10 2011) have
been licensed by MRA to operate Micro Credit Programs.
 However, 10 large MFIs and Grameen Bank represent 87% of total
savings of the sector and 81% of total outstanding loan of the
sector.
Microcredit Regulatory Authority (MRA)

Background:

• Grameen Bank is out of the jurisdiction of MRA

as it is operated under a distinct legislation-
Grameen Bank Ordinance, 1983.

 Around 30 million poor people are directly benefited from

microcredit programs.
 Microcredit Regulatory Authority (MRA)

Goals of MRA:
 Formulating and Implementing the policies to ensure good
governance and transparent financial systems of MFIs.
 Conducting in-depth research on critical micro-finance issues
and provide policy inputs to the government.
 Providing training to NGO-MFIs and linking them with the
broader financial market.
 Identifying the priorities in the micro-finance sector for policy
guidance and disseminate information.
 Microcredit Regulatory Authority (MRA)

Primary Functions of MRA:

Providing license to MFIs with explicit legal powers.
Supervising MFIs to ensure that they continue to
comply with the licensing requirements.
Enforcing sanctions in the event of any MFI failing to
meet the licensing and ongoing supervisory
requirements.
 Microcredit Regulatory Authority (MRA)

Services provided by these sector:

 Micro-credit for small-scale self-employment activities
Microcredit Regulatory Authority (MRA)
 Micro-enterprise Loans
Microcredit Regulatory Authority (MRA)

 Agricultural Loans (Borgachashi Unayyon Project and

Crop Diversification Project by BRAC)
Microcredit Regulatory Authority (MRA)

 Seasonal Loans
Microcredit Regulatory Authority (MRA)

 Loans for Disaster Management

 Findings

 Do we need more Sate owned commercial

banks in Bangladesh?

 No . The important thing is who is enjoying

the ownership? 60% of the shares should be
owned by the AGM to ensure dynamic
situation .
 Findings
 Do we need more Private Commercial Banks?

 No. In 2013 eight banks were approved and in 2018 were

planning to approve three more new banks , a decision
justified by our then finance minister saying, since many
people of the country are still unbanked, the country needs
more banks in order to include them. In Bangladesh most of
the unbanked people live in rural areas. In the city areas,
unbanked people are mostly slum dwellers or other poor
people who have no savings as they live below poverty line.
These unbanked people are undoubtedly not able to offer any
business to banks. (The Financial express)
 Findings

 Furthermore the challenge is to increase the number

of new customers but the existing PCBs are too busy
to take away competitors clients .

 Do we need more Foreign Commercial banks?

 FCBs brings new ways of providing services so

letting them enter our country will ensure an
enhanced learning curve. So If they can bring new
ideas and services to rural areas then it is a good idea
to let them in.