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