Flood-hit people may reschedule their loans

Bangladesh Bank (BB) issued Tuesday a fresh policy on rescheduling short-term agriculture, micro-credit and SME loans to help the flood-affected borrowers continue their economic activities. The banks were allowed to reschedule such loans based on ‘banker-client’ relationship through relaxation of down payment requirements. “The policy support is to help the entrepreneurs keep their businesses uninterrupted despite the ongoing floods,” a senior official of the central bank told the FE. The flood-affected farmers and entrepreneurs will be eligible for getting fresh loans without depositing any compromised amount after rescheduling such loans, according to the policy. It said maximum six-month will be treated as a grace period for such rescheduling of loans under the ‘banker-client’ relationship. The banks may reschedule such loans after disposal of the certificate cases through mutual agreements with the clients. Such rescheduled facility will continue until June 30 next year.

Source:
http://www.thefinancialexpress-bd.com/2017/08/23/80484/Flood-hit-people-may-reschedule-their-loans
http://www.thedailystar.net/business/bb-relaxes-loan-rules-flood-hit-farmers-smes-1452562

Shimanto Bank sets sight on ‘unbanked’ border areas

Shimanto Bank Limited (SMBL) is looking to tap the country’s unbanked rural areas, especially those located in the border region as part of its strategy to boost the rural economy, its managing director has said recently. “The up-and-coming financial entity which started its official journey back in September last year is looking to set up at least 10 branches in the remote border regions of the country by 2019,” Muklesur Rahman said in an exclusive interview with the FE. Currently, there are large areas in the border region of Bangladesh which are served by, maybe, just one branch of Krishi Bank, he said. “Farmers in these areas either have to look towards high interest loans coming from NGOs or Krishi Bank loans, which follows a lengthy process”. “These are the areas where we want to bring low cost financial services,” Mr Rahman added. Currently, SMBL has a total of four branches located in Dhanmondi of Dhaka, Agrabad and Satkania of Chittagong as well as Mymensingh. However, it is planning to open new branches in Motijheel area of the capital, Gazipur as well as border areas like Benapole, Kansat, Hili and Teknaf by the end of this year.

Source: http://www.thefinancialexpress-bd.com/2017/08/23/80467/Shimanto-Bank-sets-sight-on-‘unbanked’-border-areas

July imports rise 37.0%

A 229.0% rise in rice imports enhanced country’s overall import growth by over 37.0% or USD 1.2 billion in July, officials said. They said the country had to count such higher trade bills at the outset (first month) of the current fiscal year on account of substantial amount of rice import for crop losses caused by flood onslaughts. Higher back-to-back imports for readymade garment (RMG) products and capital machinery also contributed to the rise in national imports. Settlement of letters of credit (LCs), generally known as actual imports, rose to USD 4.5 billion in July from USD 3.3 billion a month before. It was USD 3.6 billion in July 2016. The opening of fresh LCs, generally known as import orders, increased by over 26.0% or USD 1.1 billion to USD 5.1 billion in July from more than USD 4.0 billion last June. It was USD 3.9 billion in July last year.

Source: http://print.thefinancialexpress-bd.com/2017/08/23/181367

Credit card market still untapped

As of May, there are less than 10 lakh issued credit cards in the country, according to data from the Bangladesh Bank.
Bankers blame the stalemate on the limited purchasing power of consumers and a lack of infrastructure. Some of them said the mandatory requirement of a tax identification number or TIN also hamper the growth of the card. Though per capita income has increased to about $1,600, the actual purchasing power or real disposable income of people in Bangladesh is still very low, said Mashrur Arefin, additional managing director of City Bank. “Bangladesh is still a low income country, where credit card is seen as a credit facility by banks and consumers alike, and not as a lifestyle transaction vehicle. This makes a huge difference in understanding and appreciating the value of credit card.” The credit card market will not achieve its expected level of growth unless the Bangladesh economy graduates to the next level and appreciates cashless transactions, Arefin said. The lack of infrastructure — point-of-sales terminals and automated teller machines — is a big barrier to the expansion of the credit card market in Bangladesh, said Anwar Hossain, head of cards and alternative delivery channels at Mutual Trust Bank. “Credit card requires huge investments, from POS to ATMs and marketing costs. Moreover, it’s a collateral-free product, for which the risk is very high.” Bankers also said issues related to tax act as a fear factor for card users who think that their expenses will be tracked down by the tax administrator. Many people refrain from taking credit cards due to the growing cyber crime, said Ahmed Kamal Khan Chowdhury, managing director of Prime Bank. Chowdhury too said the credit card is not a product for the masses. Brac Bank, Dhaka Bank, United Commercial Bank and Dutch-Bangla Bank are also strengthening their foothold in the market that still has a huge potential.

Source: http://www.thedailystar.net/business/banking/credit-card-market-still-untapped-1452808

Govt to classify SoEs on their eligibility for loan or subsidy

The government will categorise its enterprises under a reform recipe that would determine their eligibility for subsidies or loans. Officials disclosed the move made in the wake of ballooning of DSLs (debt service liabilities) of the state-owned enterprises (SoEs). The government grants loans in favour of the SoEs but a good number of them pray for waiving or turning those into equities. Such conversion is seen as injustice to taxpayers’ money. Government borrows from foreign development partners like the Asian Development Bank and others and hands out the money to the SoEs on certain terms and conditions. And there are many instances where the government sanctioned funds from budgetary allocations to the SoEs as subsidies but the government itself later demanded repayment with profits.

Source: http://www.thefinancialexpress-bd.com/2017/08/23/80485/Govt-to-classify-SoEs-on-their-eligibility-for-loan-or-subsidy

‘Foreign aid inflow in July encouraging’

The foreign aid inflow to Bangladesh during the first month (July) of the current fiscal year was a bit encouraging as the aid disbursement during the last month was $242.3 million higher than the corresponding month of the last fiscal. According to the latest data of the Economic Relations Division (ERD), the overall foreign aid disbursement in July this year (FY18) totalled $368.24 million against $125.94 million in July last fiscal (FY17).O ut of the totalled disbursed amount in this July, the portion of loan was $ 366.89 million while the portion of grant was $ 1.34 million. Of the total disbursed amount of $ 125.94 million aid in July last year, the portion of loan was $ 124.44 million while that of grant was $ 1.50 million, the ERD data showed. Against the disbursement, the overall foreign aid commitment for the month of July in this year was $32.73 million entirely from the grant portion while there was no commitment for loan in July this year.

Source:
http://www.thefinancialexpress-bd.com/2017/08/22/80428/’Foreign-aid-inflow-in-July-encouraging’
http://www.thedailystar.net/business/foreign-aid-surges-july-1452559