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TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

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TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

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Rate last updated: 02/01/2014 11:15:04 AM

Important Business News Extracts – May 14, 2017

Bangladesh Bank issues guidelines on banks’ credit card operation

Bangladesh Bank has asked the scheduled banks not to impose rate of interest on credit cards more than 5.0% on the highest rate of interest they (banks) offer for other consumer loans. For example, if a bank offers consumer loans at highest 9.0% rate of interest, the rate for credit card must not be more than 14.0%. The directive came as the central bank on Thursday issued its guidelines on banks’ credit card operation. Interest or profit will be charged on the unpaid amount due for payment, the guidelines said. Many banks are now charging 30.0% to 36.0% rate of interest on credit cards while they impose 9.0% to 10.0% rate of interest on their other consumer loan products, a BB official told New Age on Thursday. According to the guidelines, cardholders who wish to surrender a card due to any change in terms, rates or charges to his or her disadvantage will be permitted to do so without being levied any extra charge for such closure. The banks will have to specify a period of validity for the card, not exceeding five years from the date of issuance or renewal, taking into consideration the usage purposes and repayment capability of the cardholder.

Source:
http://www.newagebd.net/article/15434/bb-issues-guidelines-on-banks-credit-card-operation
http://www.thedailystar.net/business/bb-caps-interest-rate-credit-cards-1404817

Islami Bank Bangladesh Limited (IBBL) board gives nod to share sales by Islamic Development Bank IDB

The board of directors of Islami Bank Bangladesh on Saturday approved an Islamic Development Bank proposal to sell off majority of its stakes in IBBL. IDB, the Saudi Arabia-based sponsor of the IBBL, will sell around 5% of total shares of IBBL out of 7.5 % it holds. IBBL chairman Arastoo Khan told New Age that the board approved the IDB’s proposal to reduce its stake in the IBBL up to the level by which it could hold a director post in the bank. IDB submitted a proposal before the board of directors to sell off its majority stakes as the government has recently conducted massive restructuring in the IBBL’s board and management, said officials of the bank. Areef Suleman, IDB representative of IBBL, formally placed the proposal at the bank’s board meeting held on March 30 when other directors of the bank requested him not to sell the share. According to the IBBL data, IDB is now holding 12.78 crore share worth around Tk 400 crore considering the existing market price. The foreign shareholders are now controlling 52.16 per cent stake in the bank of which IDB is holding 7.5 per cent share of the IBBL. IDB will be allowed to sell the share after receiving the permission from Bangladesh Securities and Exchange Commission.

Source:
http://www.newagebd.net/article/15508/ibbl-board-gives-nod-to-share-sales-by-idb
http://www.thedailystar.net/business/islami-bank-directors-call-security-after-threats-1404811
http://www.dhakatribune.com/business/banks/2017/05/12/islami-bank-governing-body-turmoil/
http://www.newagebd.net/article/15436/ibbl-vice-chair-claims-facing-pressure-to-resign

Islami Bank directors call for security after threats

The directors of Islami Bank Bangladesh yesterday demanded security after one of the directors received a threat to quit from the bank’s board. “Though it is not a big issue we took it seriously and urged our chairman to take precautionary measures,” said Abdul Matin, chairman of the bank’s executive committee. The bank will also request the central bank to ensure security for IBBL directors, he said. The directors voiced their concern at a board meeting. Earlier on Thursday, Syed Ahsanul Alam, vice-chairman of IBBL, posted on his Facebook page that he is under pressure from some groups to resign from the bank. He hinted that some high officials of the bank are corrupt and still bear the anti-liberation spirit. At the board meeting, Alam described how he was threatened without disclosing any name. In response, several directors expressed their concern and urged the chairman to take necessary measures. A major reshuffle, including changing of chairman, vice chairman and managing director, was made to the bank’s board on January 5 this year. Since then, the board recruited some high- and mid-level officials without posting any job advertisements. The bank declared 10 percent cash dividend for 2016, down from 20 percent cash it had offered in 2015.

Source: http://www.thedailystar.net/business/islami-bank-directors-call-security-after-threats-1404811

Two banks, RMG co to get IFC loans

International Finance Corporation (IFC) agreed this month to provide loans to three Bangladeshi business organization, two banks and a clothing firm. Bank Asia Ltd, Prime Bank Ltd and Ananta Apparels Ltd will get the loans. IFC is extending a short-term working capital loan of up to USD 40.0 million to Dhaka-headquartered Bank Asia Ltd to support the foreign currency needs of small and medium enterprises (SMEs). The IFC also agreed to provide a loan of up to USD 50.0 million to Dhaka-headquartered Prime Bank Ltd to support the foreign currency needs of small and medium enterprises (SMEs) in Bangladesh. This is the second investment commitment by IFC in a Dhaka-based bank this month. Ananta Apparels Ltd (AAL), a Bangladesh-based clothing firm, will raise up to USD 6.0 million as a long-term debt from IFC, it said in the disclosure. AAL is setting up a washing plant in its readymade garments factory located at Adamjee Export Processing Zone of Bangladesh.

Source: http://print.thefinancialexpress-bd.com/2017/05/13/172283

Government suspends auction for T-bills, bonds for May

The government has been forced to suspend all auctions for T-bills and bonds again for banks this month (May) as it is now inundated with the sales of huge amount of national savings certificates and bonds, said officials of Bangladesh Bank. The finance ministry suspended all auctions for Treasury bills and bonds in March for the first time in the recent history as the government decided not to borrow any fund from the banking sector. The government, however, made a limited-scale borrowing from the banking sector in April as it has been enjoying a robust cash surplus with the government account for the sake of huge net investment in the NSCs. According to the latest National Directorate of Savings data, the net investment in the NSCs broke the yearly record within the first nine months of the fiscal year 2016-17 hitting BDT 37,6.5 billion. In the budget for FY17, the government has set an annual borrowing target of BDT 196.1 billion from the NSCs. The net investment in the national savings instruments earlier registered a record at BDT 33,6.9 billion in FY16.

Source: http://www.newagebd.net/article/15513/govt-suspends-auction-for-t-bills-bonds-for-may

No cost for sending remittance: Finance Minister

Bangladeshi expatriates will not have to bear any cost for sending remittances to the country, Finance Minister AMA Muhith said today. “The government is taking measures in this regard so that they (expatriates) can send their remittances without any charge,” the minister said at a pre-budget discussion with the Economic Reporters’ Forum at his ministry office at the Secretariat. “An allocation will be added to the next budget in this regard,” Muhith said. The initiatives are being taken to increase the remittance flow, the minister said, adding, “We urge the expatriates to send their remittances through proper channels”. The government has decided to take the initiatives as per the direction of Prime Minister Sheikh Hasina, he said.

Source:
http://www.thedailystar.net/business/fiscal-year-2017-18-bangladesh-budget-no-cost-for-sending-remittance-muhith-1404592
http://www.dhakatribune.com/business/2017/05/13/expats-need-not-pay-remittance-fee/
http://www.newagebd.net/article/15506/nrbs-to-get-respite-from-paying-remittance-charges-muhith

Tax receipts from DSE jump 83.0% in July-Apr

The government revenue earnings from the Dhaka bourse jumped 83.0% in 10 months for July-April period of the current fiscal year (FY) compared to the same period of the previous FY as trading volume was on the rise. Market insiders said the government earnings from the Dhaka Stock Exchange (DSE) rose as trading volume increased substantially in January-March period of 2017, which helped higher tax collection, as earnings is related to trading volume. The government bagged tax worth about BDT 2,393.0 million in July-April period of the current FY, against BDT 1,304.0 million in the same period of the previous FY, according to statistics available with the DSE.

Source: http://print.thefinancialexpress-bd.com/2017/05/14/172347

Banks balk at obligatory green financing

Banks’ ‘direct green financing’ remained negligible despite a recent directive for them to channel 5 per cent of total credits into such schemes for a gradual shift in development paradigm. Bangladesh Bank in a circular issued in 2014 had instructed all the banks and financial institutions to disburse 5 per cent of their total loans for direct green financing of schemes from January 2016. The move was expected to gear the necessary bank financing for eco- friendly businesses and schemes in the country by setting a specific target for all the banks and financial institutions. However, as the latest central bank data show, most banks and FIs have failed to meet that target as the percentage of direct green financing compared to their total lending during the four quarters of last year never went beyond 0.69 percent. Even there was no visible improvement in the portion of direct green financing from the previous year either as the quarterly percentage of direct green financing in 2015 ranged between 0.43 per cent and 0.63 per cent. Overall, green financing by the country’s banks is on an upturn, though. The banks and FIs in total invested around Tk 522.804 billion in green-financing schemes in 2016, up from Tk 440.19 billion in 2015.

Source: http://www.thefinancialexpress-bd.com/2017/05/12/70147/Banks-balk-at-obligatory-green-financing

Incentives add new bait to lure investment

The government is rearranging the incentive packages offered to attract investments into various economic zones and export-oriented sectors, with some new bait. Officials said the move has been made to adjust differences and inconsistencies among the facilities extended to raise both local and foreign investments into the country. At this stage, the Prime Minister’s Office (PMO) recently formed an inter-ministerial committee to prepare a list of the investment-pulling facilities. The committee has been asked to make a coordinated list of incentives offered in export- processing zones, economic zones, hi-tech park, export-oriented and other sectors. It has to submit a report within a month through incorporating recommendations, if any, based on comparative assessment of incentive recipes.

Source: http://www.thefinancialexpress-bd.com/2017/05/13/70257/Incentives-add-new-bait-to-lure-investment

Essentials to be kept out of VAT net

Essential commodities, agricultural products and life-saving drugs are going to be exempted from value-added tax under the new VAT law that takes effect in July. A list of VAT-free products would be made public and hung in front of shops so that unscrupulous traders can’t charge higher prices for commodities on the excuse of imposition of a uniform 15-percent VAT. A number of top revenue officials shared this at a roundtable titled “The New VAT Law: Implication on the Economy and Consumers” organised by The Daily Star yesterday. There are concerns about price spiral of many goods and services due to introduction of the new VAT system. At the roundtable at The Daily Star Centre, most of the participants voiced worries, saying the uniform VAT would push up living costs.

Source: http://www.thedailystar.net/frontpage/essentials-be-kept-out-vat-net-1404814

BDT 1.53 trillion ADP likely for FY ‘18

The Annual Development Program (ADP) for the next fiscal year (FY) is likely to be of BDT 1.5 trillion, with transport infrastructure, education, power, rural development, health, and water sectors getting highest priority, report agencies. The National Economic Council (NEC) is expected to consider and approve the ADP for 2017-18 at its meeting at the NEC conference room in the capital today (Sunday). NEC Chairperson and Prime Minister Sheikh Hasina is scheduled to chair the meeting, official said. According to sources, the actual size of the development expenditure would increase by 38.0% or BDT 420.0 billion from around BDT 1.1 trillion of the current FY. Of the total outlay, BDT 963.3 billion would come from the national exchequer and the remaining BDT 570.0 billion from project assistance.

Source:
http://print.thefinancialexpress-bd.com/2017/05/14/172408
http://www.thedailystar.net/business/development-budget-be-39pc-higher-1404766

Safety net schemes to get a boost

Expenditure under the social safety net programs, including allowance for the elderly and widows, will be increased substantially in the next fiscal year to give more benefits to the ultra-poor. At a meeting on April 30 with Finance Minister AMA Muhith in chair, it was decided that the number of beneficiaries and the amount of money under the programs will be increased. Of the schemes, the biggest is the one for the elderly, whose count of beneficiaries will be raised to 3.5 million people in the next budget that will be announced on June 1 by Muhith. At present, the total number of beneficiaries for old-age allowance is 31.50 lakh. Each beneficiary gets BDT 500.0 per month and from next fiscal year they will get BDT 600.0. The government has already prepared a national social security strategy with the aim of bringing all vulnerable citizens under the social safety net. More than 10 million people will qualify for old-age allowance if all poor people above 60 years of age were to be brought under the social safety net scheme as per the plan.

Source: http://www.thedailystar.net/business/safety-net-schemes-get-boost-1403896

RMG linkage up for compliance too

Western retailers’ platform Accord now moves to bring the garment-linkage industries, too, under its extended inspection purview to look into labor-right and safety issues. Industry sources said the expansion of the scope of clean-up drive over entire spectrum of Bangladesh’s export-oriented clothing industry comes in conjunction with the consumer-side coalition’s plan for pronging its tenure for additional five years. The backward-and forward-linkage industries up for compliance search are textile mills, spinning mills, leather and tanneries, factories making sheets, towels and other household textiles, and apparel-washing facilities.

Source: http://print.thefinancialexpress-bd.com/2017/05/13/172313

‘Undisclosed’ money investment to help check capital flight: REHAB

Real estate agents on Saturday presented a 12-point proposal including a reduction of VAT to 1.5% and BDT 200.0 billion loan fund to the government for consideration in the upcoming national budget. The proposals also include investment opportunity for legally-earned undisclosed earnings in the real estate sector without question to check capital flight and slash in apartments’ registration fees from existing 14% to 7.0%. The Real Estate and Housing Association of Bangladesh (REHAB) made the proposals at a press conference in the capital’s CIRDAP auditorium.

Source:
http://print.thefinancialexpress-bd.com/2017/05/14/172363
http://www.dhakatribune.com/business/2017/05/13/realtors-10-year-indemnity-invest-black-money/
http://www.newagebd.net/article/15507/realtors-for-undisclosed-money-investment-without-questioning

ADB, IDB to provide USD 800.0 million for first LNG-based power plant

Multilateral donor agencies have committed to providing financial assistance worth USD 800.0 million loan to set up a single power plant based on imported LNG. This will be the country’s first power plant which will run on re-gasified imported LNG, said officials. Of the total lending, ADB will provide $600 million and Islamic Development Bank (IDB) USD 200.0 million to implement the 800 megawatt (MW) combined cycle power plant at Rupsha in the country’s southern Khulna region, they said. The power plant will have two gas-fired units, each having 400 MW capacity to run on imported liquefied natural gas (LNG).

Source: http://print.thefinancialexpress-bd.com/2017/05/14/172402

Local and Global Stock Indices

Index Name Close Value Value Change Percentage Change
DSEX 5,496.21 ↓14.85 ↓0.27%
DJIA 20,869.61 ↓22.81 ↓0.11%
FTSE100 7,435.39 ↑48.76 ↑0.66%
Nikkei 225 19,883.90 ↓77.65 ↓0.39%

World Commodities

Commodity Close Value Value Change Percentage Change
Crude Oil (WTI)* $47.84 ↑0.01 ↑0.02%
Crude Oil (Brent)* $50.84 ↑0.07 ↑0.14%
Gold Spot* $1,228.43 ↑3.39 ↑0.28%

Major Currencies Exchange Rates Movement in Last Seven Days