Interest rates on savings tools may go down

Finance Minister AMA Muhith yesterday hinted at lowering the interest rates on savings instruments as the returns from these tools are very high compared to other rates prevailing in the market. Steps in this regard may be taken in the next budget session, he said after a meeting with the leaders of Dhaka Chamber of Commerce and Industry (DCCI) at his secretariat office. At present, the commercial banks offer hardly 7.0% for deposits, whereas the rates for savings instruments are over 11.0%. The high returns on savings tools are also pushing the government’s interest liability up every year. For example, the government set a target to raise BDT 190.0 billion from the sale of its savings schemes, but the sale was doubled to nearly BDT 380.0 billion in the first nine months till March this fiscal year. The sale from these tools more than doubled to nearly BDT 340.0 billion against a target of BDT 150.0 billion last fiscal year. The interest rate on the five-year family savings certificate is 11.52% and it 11.76% for the five-year pensioner savings schemes. The return on the three-year post office savings certificates stands at 11.28%. Economists and bankers said if the trend continues, money will flow out of bank deposits and end up in savings schemes, meaning the government’s interest liability will go up further.

Source:
http://www.thedailystar.net/business/interest-rates-savings-tools-may-go-down-1408786
http://www.thefinancialexpress-bd.com/2017/05/22/71160/Minister-hints-at-savings-tools-rate-cut-after-budget

Banks can receive repayment cheques fulfilling conditions

Country’s commercial banks can now receive repayment cheques against disbursed loans from their clients by maintaining three procedures, under revised rules. The central bank revised its prudential guidelines for consumer financing and small-enterprise financing by adding a new regulation related to procedures of loan repayment. Firstly, the banks will have to take authority for debiting money from their clients’ accounts as per loan agreement. Under the second procedural condition, a memorandum of deposit of cheque (MDC) has to be taken from the clients concerned. Lastly, fully prepared and valid signed postdated cheques have to be taken for each installment by stipulating amount and date as per repayment schedule. The Bangladesh Bank (BB) has already issued a notification to this effect, asking the chief executive officers (CEOs) and managing directors (MDs) of all scheduled banks to incorporate the new regulation into loan agreements with the clients.

Source: http://print.thefinancialexpress-bd.com/2017/05/22/173142

98pc of annual farm loan target amount disbursed in 10 months

Country’s banks distributed 98.26 per cent of their annual farm loan disbursement target amount in 10 months (July-April) of this fiscal year of 2016-17 as they have been focusing on the area of loan disbursement for quite some time due to a lower credit demand from the industrial sector. The banks disbursed Tk 17,244.69 crore in July-April, while the annual disbursement target is Tk 17,550 crore, according to the latest Bangladesh Bank data. A BB official told New Age on Sunday that the banks would easily surpass their annual farm loan disbursement target this fiscal year as the rate of interest on farm loans was now 10 per cent while the rates for many of the consumer loan products of the banks were between 8 per cent and 9 per cent.
The banks have been lowering the interest rates for their almost all products for last few years as they are grappling with surplus liquidity amid dull business situation in the country. The BB data showed that farm loan disbursement also posted a 22.05-per cent growth in the 10 months of this fiscal year compared with that in the same period of FY16.

Source: http://www.newagebd.net/article/16041/98pc-of-annual-farm-loan-target-amount-disbursed-in-10-months

Sonali’s UK arm spent money violating rules

A Bangladesh Bank inspection team has found that Sonali Bank UK Ltd paid Tk 2.41 crore (£0.23 million) to a company which was assigned to prepare its (bank) core banking solution system but failed to accomplish the job. The SBUK, a subsidiary company of Sonali Bank, appointed the outsourcing company named Sonali Polarish Financial Technology Ltd without any competitive bidding process in 2010 to prepare its core banking solution system. The bank cancelled the agreement with the firm in 2016 due to its failure to set up the system although the bank paid 85 per cent of the agreed amount for the job to the company.
A three-member inspection team of the central bank conducted the inspection between November 28 and December 12 of 2016 after the SBUK was fined £3.25 million by UK’s Financial Conduct Authority and Prudential Regulatory Authority for violating prevention of money laundering act. The inspection team unearthed that the SBUK had improperly spent Tk 2.10 crore for training its staff and distributing the manpower between 2014 and 2016.

Source: http://www.newagebd.net/article/16045/sonalis-uk-arm-spent-money-violating-rules

No plans to interfere with Islami Bank’s affairs

Finance Minister AMA Muhith yesterday said the government has no plans to meddle into the affairs of Islami Bank, which has plunged into a bout of infighting. “We will intervene if we get any complaint from the Islamic Development Bank,” Muhith told reporters at his secretariat office. The Jeddah-based multilateral development financing institution holds more than 7.5 percent stakes in IBBL. Quoting his recent meeting with IDB officials in Saudi Arabia, the finance minister said: “IDB is least interested in IBBL.” Muhith, however, said he has no idea what is happening at Islami Bank in recent days.

Source: http://www.thedailystar.net/business/no-plans-interfere-islami-banks-affairs-muhith-1408759

NRB Global Bank gets new DMD

Mohammad Shamsul Islam has recently joined NRB Global Bank Ltd as deputy managing director, said the lender in a statement. Prior to joining NRB Global Bank, Islam was the executive vice-president of AB Bank. Islam started his banking career in 1989 with AB Bank as a probationary officer. He obtained his MBA degree on banking from Dhaka University.

Source: http://www.thedailystar.net/business/nrb-global-bank-gets-new-dmd-1408732

BSEC eases capital base for market maker

The Bangladesh Securities and Exchange Commission has eased a number of conditions including the minimum capital requirement for becoming a market maker for listed securities in the finalized market maker rules. In the finalized rules, the minimum capital requirement for becoming a market maker has been lowered to BDT 100.0 million from BDT 500.0 million proposed in the draft rules. The commission finalized the rules titled Bangladesh Securities and Exchange Commission (Market Maker) Rules, 2017 at the latest commission meeting held on May 9, a BSEC official told New Age on Sunday. Market makers are entitled to keep prices of shares within a certain range through buying and selling based on fundamentals of companies depending on market situation. As per the finalized rules, stockbrokers and stock dealers would only be entitled to act as market maker. A market marker with a paid-up capital of just BDT 100.0 million, however, would be allowed to act for the service for only one listed securities. To be market maker for more than one listed securities, stockbrokers or stock dealers will have to increase their paid-up capital proportionately.

Source: http://www.newagebd.net/article/16040/bsec-eases-capital-base-for-market-maker#sthash.OXMDT6RM.dpuf

Businesses import large quantity of Ramadan goods

A substantial quantity of essential goods including gram, date, pea, sugar, edible oil and lentil has been imported through Chittagong Port ahead of the Ramadan. Among consumer goods, these items have very high demand during the month of fasting. So the business houses keep huge stocks of the items ready to meet the demand, sources said. The sources said the prices of the Ramadan consumer items are very likely to remain static or near normal if the local administration strengthens monitoring on prices to protect the consumers from the clutches of the so-called syndicates of dishonest importers, traders and hoarders.

Source: http://www.thefinancialexpress-bd.com/2017/05/22/71157/Businesses-import-large-quantity-of-Ramadan-goods