BB to announce H2 monetary policy on Jan 29

Bangladesh Bank is likely to announce on January 29 the monetary policy for the second half (January-June) of the current fiscal year 2017-2018 keeping ‘unchanged’ the private sector credit growth target set out for the period in the MPS for the first half of the year. BB officials said the central bank was still working on setting the credit growth targets and to ascertain whether to incorporate a provision to cut advance deposit ratio for banks, given the sensitivity surrounding the issues in an election year. They said the central bank would try to strike a balance between controlling money supply for reining in inflation and possible increase in election-centric expenses. Officials said that although in the MPS for the first half BB had set the private sector credit growth target at 16.2 for July-December, the actual credit growth in private sector shot up to around 20 per cent in December, gradually rising every month since July. They said the fast increase in private sector credit growth was a matter of concern as the rate of inflation was on an upward trend hovering around 5.83-6 per cent in last few months against the target of 5.8 per cent. Officials said that BB might keep the private sector credit target of 16.3 per cent unchanged for January-June which was set in the MPS for June-December.

Source:
http://www.newagebd.net/article/33346/bb-to-announce-h2-monetary-policy-on-jan-29
https://businessnews-bd.net/monetary-policy-5/

Private credit growth finally hits the brakes

After being on an ascent for the best part of 2017, private sector credit growth slowed down in December thanks to an increase in interest rate for lending and high deposit collection. At the end of last month, private sector credit growth stood at 18.13 percent, down from 19.06 percent the previous month, which was the highest in 2017. The Bangladesh Bank had targeted to keep the private sector credit growth within 16.2 percent in the first half of fiscal 2017-18. Subsequently, in the monetary policy for the second half of the fiscal year that will be unveiled on January 29, the private sector credit ceiling will be increased slightly, said a senior BB official.

Source: http://www.thedailystar.net/business/private-credit-growth-finally-hits-the-brakes-1524856

BB asked Eight banks to cut spread

The Bangladesh Bank has instructed eight private banks to bring down their interest rate spread to less than 5 percent — a directive the banks deem to be unfair on them. The interest rate spread is the gap between the interest rates on credit and deposit. The banks are: Standard Chartered, State Bank of India, Woori Bank, Citibank, HSBC, Dutch-Bangla, Brac and Uttara Bank. The BB does not take into cognisance the operating costs when calculating the interest spread and in so doing leaves out a big chunk of the banks’ expenses, said Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank. “We do ATM, mobile and agent banking extensively in order to provide services to our more than 60 lakh customers and this costs money. But the central bank does not take this into account.” Dutch-Bangla’s spread is high because of higher operating costs. The spread should be calculated by deducting the cost of funds and the operating costs from the lending rate. “If the BB continues to pressurise us we will have to cut down our services in order to reduce the operating costs,” he added. In the letter to the eight banks on January 16, the central bank gave them a timeframe to bring down their spread. The BB gave the order after calculating the banks’ spread in September. The sector’s average spread that month was 4.45 percent.

Source: http://www.thedailystar.net/business/eight-banks-asked-cut-spread-1524859

Loan defaults rise to 65,602 crore

Finance Minister AMA Muhith acknowledged in parliament last night that there were many weaknesses in the banking sector, saying it would not be easy to fix the problem. In the last 10 years, bank and non-bank financial institution disbursed loans worth Tk 6,06,503 crore to only 8,791 individuals and organisations, each of them getting Tk 10 crore and more, he said while placing a list in parliament.

Source: http://www.thedailystar.net/backpage/loan-defaults-rise-65602-crore-1524886

NBR for instant upload of import papers to stop data tampering

The customs wing of the revenue board has requested the central bank to upload relevant import documents on the web platform instantly to keep dishonest importers from evading tax through tampered documents. The wing made the request after its primary investigation found some evidences of manipulation of import documents for duty evasion. Md Lutfor Rahman, a customs policy member of the National Board of Revenue (NBR), recently sent a letter to Bangladesh Bank (BB) governor Fazle Kabir seeking his help in collecting proper revenue while expediting release of goods. In the letter, the customs wing requested the central bank to take steps for real-time uploads of detailed packing list, proforma invoice and commercial invoice. Detailed packing list, proforma invoice and commercial invoice are crucial import documents for quick customs valuation and collection of the government’s estimated revenue, the letter said. The BB needs to instruct the authorised dealer (AD) branches of all commercial banks to take necessary steps so that customs officials can check the documents online instantly, said the letter of the NBR.

Source: http://today.thefinancialexpress.com.bd/first-page/nbr-for-instant-upload-of-import-papers-to-stop-data-tampering-1516815484

Board, executive management need to work in unison

The top brass are to blame for the prevailing risk culture in Bangladesh’s banking entities, say experts and suggest a top-down restructuring. Boards and top managements are an integral part of the existing risk cultures in the banks, they opined, saying “sustained change in the risk culture needs to start at the top”. Their views came during a workshop on risk culture of the banks held at the Bangladesh Institute of Bank Management (BIBM) in the capital recently. Chief Risk Officers and relevant officials from different banks of the country participated in the event on academic exercises on banking. “Successful change in the risk culture of a bank ultimately requires awareness that the board itself, and the executive management, are an integral part of the existing risk culture,” said Sajib Azad, Senior Adviser of BIBM who delivered the keynote presentation at the workshop. “Sustained change in the risk culture needs to start at the top and may require a reappraisal of approaches consistent with bringing greater diversity of thinking into the boardroom,” he added. The BIBM focus on Risk Culture comes at a time when the banking sector of the country is growingly becoming embroiled with a number of sensitive issues. Rising amounts of non-performing loans (NPLs) and loan forgeries are on top of it all.

Source: http://today.thefinancialexpress.com.bd/first-page/board-executive-management-need-to-work-in-unison-1516815427

City Bank signs deal to implement VEEFIN for Supply Chain Finance

City Bank signed an agreement with Infini Systems to implement VEEFIN, a solution for Supply Chain Finance, recently, said a press release. VEEFIN will enable City Bank to facilitate easy and instant finance to the suppliers and distributors of large corporate, through seamless supply chain finance transactions. Under this agreement, City Bank will invite large corporate and commercial clients to join the VEEFIN Supply Chain Finance platform and connect their suppliers and distributors. The selected suppliers and distributors will be able to raise financing requests from their computer or mobile phone applications without having to visit the bank’s branches. They simply need to forward their supply and purchase requests to City Bank and will receive the money in their accounts. Mashrur Arefin, Additional Managing Director of City Bank, and Jigar Shah, Chief Operating Officer of Infini Systems, signed the agreement on behalf of their respective organisations.

Source: http://today.thefinancialexpress.com.bd/stock-corporate/city-bank-signs-deal-to-implement-veefin-for-supply-chain-finance-1516811469