Budget spending falls 10.58pc in first half
Total budgetary spending in the first six months of the current fiscal shrank 10.58 per cent year-on-year to Tk 141,514 crore due to the ongoing Covid-19 pandemic, according to a report from the finance ministry.However, steps have been taken to increase expenditure in the days to come. The expenditure target for the current fiscal year was set at Tk 567,999 crore or 17.91 per cent of the country’s gross domestic product (GDP). Of this amount, just 29.75 per cent has been spent in the first half of the ongoing fiscal year.During the same period in fiscal 2019-20, total budgetary expenditure stood at Tk 158,260 crore, a 16.51 per cent increase from the previous year. Non-development expenditure in the six months till December was Tk 107,947 crore, or 29.75 per cent of the total allocation. This is 5.37 per cent lower than spending in the corresponding period in fiscal 2019-20, when it was Tk 114,076 crore. Expenditure through the Annual Development Programme (ADP) in this period was Tk 33,300 crore or 16.23 per cent of the allocation. This was 24.63 per cent lower compared to the same period of fiscal 2019-20.Of the 10 ministries and government divisions that got a majority of the allocation, power division faced the steepest decline of 63.59 per cent. Spending in the defence service division fell 30.66 per cent while it was 24.26 per cent for the rural government division and 8 per cent for the secondary and higher education division. However, spending in the health service division witnessed the most growth with 11.51 per cent, followed by the science and technology ministry 10.89 per cent, primary and mass education division 5.72 per cent and railway ministry 5 per cent.
Bankers worried over a lack of transport
Bankers are considered the frontline workers given their role in keeping the wheels of the economy moving, but they are now afraid of performing their job amidst the strict restrictions on movement imposed by the government. A good number of employees working in the different government and private organisations can feel a bit relaxed during the restrictions on movement as they may not have to go to their work stations to some extent.Although the central bank has asked banks to introduce alternate duty rosters to operate their financial services, a majority of bankers will have to go to offices every day in the interest of the economy. A good number of bankers yesterday said they were in panic to do their job during the restrictions on movements given the previous experiences of lockdown imposed by the government spanning from the last week of March to May last year.Clients will be allowed to settle financial transactions from 10:00am to 12:30pm on regular working days during the restriction on movement, according to a central bank notice. Banks will have to close their branches and head offices within 2:00pm after completing their relevant banking activities. The central bank also asked banks to keep adequate cash in ATM booths and run internet banking round the clock.
Time to gear up alternate banking
Bangladesh has seen a significant rise in consumer banking or retail offering by banks or a few non-bank financial institutions (NBFIs) in recent days. During the coronavirus pandemic, banks and NBFIs are often being seen advising their clients to transact online or through alternate channels instead of visiting the branches. Reportedly much of the personal banking or retail transactions are being handled online from home or mobile internet. Though there are identified issues of cybersecurity breaches and control lapses, this rise is likely to gain momentum due to the creation of more and more wealthy clients with diversified product demand with improvement in telecommunications and internet services. Even before the pandemic, we have seen fewer and fewer clients were willing to come to the banks.The alternate channel is coming out to be the best way to serve the emerging client needs. Credit cards, debit cards, ATM (automated teller machine), SMS or mobile banking, and internet banking have come out as proven tools. Even in Bangladesh, banks are focusing more on establishing or nourishing alternate channels and allocating increased resources. As of December, banks reportedly had 10,000 plus ATMs distributed throughout the country, with Dutch-Bangla Bank alone owning almost 48 per cent of the facilities. Q cash, another network, has reportedly put up around 1,000 ATMs. There are two more ATM networks that are respectively driven by Brac Bank’s OMNIBUS and AB Bank’s Cash link. With the spur of online banking, the point of sales (POS) is also on the rise, and the country has more than 60,000 POS machines as of today.The country reportedly has about 21.61 million debit and credit cards. The number of debit cards stands at more than 19.99 million, with Dutch-Bangla Bank leading the league. The credit cards in circulation are estimated to be around 1.62 million. City Bank Ltd owns almost 35 per cent market share in the credit card segment, closely followed by Standard Chartered Bank, Eastern Bank, Brac Bank and Prime Bank. More than Tk 40 crore was transacted daily on average against the issued cards as of July 2020.