Lending rate may start to come down in 6 months: bank CEOs

Depending on deposit collection situation, the interest rate on bank loans may start to come down in six months when the reduced cash reserve ratio becomes effective, chief executives of a number of banks said on Sunday. The government and the Bangladesh Bank took a number of initiatives in an unprecedented manner in March this year with a view to cutting lending rate following pressures from bank owners. The policy relaxation to bring banks’ lending rate down to single digit to facilitate business growth includes cutting CRR to 5.5 per cent from 6.5 per cent, allowing state-owned entities deposit up to 50 per cent of their funds in private banks and non-bank financial institutions and extending time to adjust ADR till March 31, 2019.

Source: http://www.newagebd.net/article/39080/lending-rate-may-start-to-come-down-in-6-months-bank-ceos

BB eases use of ERQ for import payments

Bangladesh Bank on Sunday said the exporters would be allowed to pay the import payments of their subsidiaries or sister concerns from their export retention quota accounts. The BB issued a circular to authorised dealer branches of all banks saying that from now on an exporter would be allowed to retain export proceeds in foreign currency for a period of 30 days to settle import payments of exporters’ subsidiaries within this time subject to observance of the instructions contained in paragraph 28(A)(ii) chapter 13 of Guidelines for Foreign Exchange Transactions. The provision of the GFET instructed that ADs shall be satisfied that the fund will be used only for imports and repayment of foreign loan of the exporters or their subsidiaries or sister concerns by other ADs and the fund is unencumbered. It also said that transfer will be executed through Foreign Demand Draft to be settled through BB clearing accounts of ADs and this instruction shall not be applicable for fund transfer and receipt in the same AD.

Source: http://www.newagebd.net/article/39082/bb-eases-use-of-erq-for-import-payments

Unchanged in FY ’17, but likely to worsen this fiscal

Bangladesh’s terms of trade (ToT) remained unchanged in the past financial year (2016-17) showing the economy avoided shock in prices in the year under review. The ToT, representing a ratio between export prices and import prices, remained the same means there was no price shock in both import and export prices. The central bank of Bangladesh showed the ToT was 87.11 index points in fiscal year 2017, exactly the same of FY 2016, as the import prices index was 237.36 and export prices index at 206.71. However, people familiar with the development told the FE that the ToT may worsen in the current financial year on the back of global inflationary pressure as it may make the import prices costlier. They however said that Bangladesh failed to capitalise the falling trends of import prices in the last financial year for lack of collective efforts in raising export prices.

Source: http://today.thefinancialexpress.com.bd/first-page/unchanged-in-fy-17-but-likely-to-worsen-this-fiscal-1523814729

Soaring import payments widen trade gap further

The country’s overall trade deficit widened further in the first eight months of the current fiscal year (FY) 2017-18 mainly due to higher import payments against lower export receipts, officials said. The deficit rose by nearly 93 per cent or $ 5.64 billion to $ 11.73 billion in the July-February period of FY 18 from $ 6.09 billion during the same period of the previous fiscal, according to the latest central bank’s statistics released on Sunday. “Higher import payment obligations, particularly for rise in fuel oils and industrial raw materials, pushed up the overall trade deficit significantly during the period under review,” a senior official of the Bangladesh Bank (BB) told the FE while explaining the main reason behind widening the trade deficit. The overall import jumped by 26.22 per cent to $ 35.82 billion in the period under review of FY 18 from $ 28.38 billion during the same period of the previous fiscal, the BB data showed.

Source:
http://today.thefinancialexpress.com.bd/first-page/soaring-import-payments-widen-trade-gap-further-1523814563
https://businessnews-bd.net/higher-imports-widen-trade-deficit/

Subsidiaries also can keep export proceeds in forex

The subsidiaries or sister concerns of exporters also will, from now on, be able to retain export proceeds in foreign currency for a period of 30 days to settle their import payments due within the time. The Bangladesh Bank (BB) issued a circular to this effect on Sunday. “To bring further ease in utilisation of the fund retained for 30 days, it has been decided that unencumbered balances held in the pool shall, at the request of exporters within the stipulated time, be useable to meet import payments of exporters’ subsidiaries/sister concerns,” said the BB circular. Earlier, the exporters were allowed to avail such a facility under the Guidelines for Foreign Exchange Transactions (GFET) 2018, Vol-1.

Source: http://today.thefinancialexpress.com.bd/first-page/news-watch-16-04-2018-1523814858

Current account deficit hits fresh record at $6.32b

Deficit in the country’s current account increased to $6.32 billion in the first eight months of the current fiscal year 2017-2018 setting a fresh record due to sharp increase in import payments against moderate growths in export earnings and remittance inflow. On the other hand, the country’s trade deficit also hit all time high of $ 11.732 billion in July-February of FY 18, rising by 92.67 per cent from $ 6.089 billion in the same period in the fiscal year 2016-17. The current account deficit in July-February of the last fiscal year 2016-2017was $963 million while the previous highest deficit was recorded in FY2010-2011 with $1.68 billion. The annual current account balance — the gap between export receipts and net earnings, including remittances, and import payments and profit repatriation by multinational companies and local people — turned negative in FY16-17 with $1.48 billion after registering its all-time high surplus at $4.26 billion in the previous fiscal year of 2015-16. Current account deficit was $ 5.347 billion in July-January of the year 2017-2018. Bangladesh Bank in the monetary policy for the second half of the fiscal 2017-18 planned to limit current account deficit within $ 4.7 billion.

Source: http://www.newagebd.net/article/39079/current-account-deficit-hits-fresh-record-at-632b

Saving private banks

The governmental policy support given to the private commercial banks facing a liquidity crunch was a mere temporary solution to the crisis, as those involved in the sector (owners and bankers) have to adopt a sustainable plan in order to avoid such problems in the future. Economists, bankers, experts, and policymakers say the government has given all-out support to save the sector, and that now those concerned with the sector need to work for its revival by making the best use of government policies. Private banks in Bangladesh have been facing a severe liquidity crisis since the beginning of this year, which is affecting the country’s businesses. Due to the crisis, interest rates on bank loans went above 10%, affecting the country’s industrial growth by making it more difficult to take a loan. Following the crisis, the central bank and the government have come up with a series of bailout policies to save private banks.

Source: https://www.dhakatribune.com/business/2018/04/16/saving-private-banks/

Banks donate Tk 163cr to PM’s relief fund

The Bangladesh Association of Banks, a forum of private banks’ directors, has donated Tk 163 crore to the Prime Minister’s Relief and Welfare Fund. The chairmen and managing directors of all private banks handed over cheques separately to Prime Minister Sheikh Hasina at an event on Friday, according to chief executives of a number of banks.

Source: https://www.thedailystar.net/business/banking/banks-donate-tk-163cr-pms-relief-fund-1562911

Prime Bank plans to double its retail, SME financing by 2021

Prime Bank Limited (PBL) has planned to double its financing in retail as well as small and medium enterprises (SMEs) sectors for minimising risks and diversifying portfolios by 2021. Under the new plans, the investment in retail and SMEs would reach 40 per cent of its total loans and advances within the next four years from the existing level of 20 per cent. “We’ll double our investment in retail and SMEs as part of our vision for 2021,” Rahel Ahmed, managing director (MD) and chief executive officer (CEO) of the PBL, told The FE in an exclusive interview recently. After taking responsibility of the bank just four months ago on December 14 last year, Mr Ahmed shared the plan ahead of the bank’s 23rd anniversary to boost the financial health of the leading private commercial bank (PCB).

Source:
http://today.thefinancialexpress.com.bd/stock-corporate/prime-bank-plans-to-double-its-retail-sme-financing-by-2021-1523805919
https://www.dhakatribune.com/business/2018/04/16/secret-success-simple-transparency/

MTB launches student banking services: Banks ‘must lower interest rates to borrowers’

An eminent banker of the country ruled out Sunday any liquidity crisis in banks, saying the problem lies with the distribution of fund. Managing director of Mutual Trust Bank Ltd (MTB) Anis A. Khan said the banks must offer lower interest rates to borrowers by introducing special products for savings as 75 per cent funds are stuck up in public banks. The MTB CEO expressed his hope that the cash reserve ratio (CRR) circular effective from Sunday would ease the money market pressure and help contribute towards reducing the interest rates. His comments came during the launch of the MTB Student Banking services at the Samson H. Chowdhury Auditorium of the MTB Tower in the city.

Source:
http://today.thefinancialexpress.com.bd/trade-market/banks-must-lower-interest-rates-to-borrowers-1523813646
http://www.newagebd.net/article/39085/mtb-launches-student-banking-products
https://www.thedailystar.net/business/banking/banks-have-no-deposit-crisis-1562914