Deposit interest shouldn’t go below inflation rate: BB
Bangladesh Bank (BB) yesterday asked banks not to set interest rates on fixed term deposits below the inflation rate as it yields negative returns for savers. The weighted average interest rate on deposits stood at 4.13 per cent in June while the average inflation rate was 5.56 per cent, showed data from Bangladesh Bank and the Bangladesh Bureau of Statistics (BBS).Currently most banks offer an interest rate of 2 per cent to 4 per cent on fixed deposit receipts (FDRs), which result in a negative real interest rate of 2 per cent to 3 per cent for savers. The plight of the savers who have kept their money in the savings accounts is more severe than that of the depositors who opened FDRs as many banks provide less than 2 per cent interest on the former products.If the interest rate declines to a very low level, there might be a negative impact on the flow of deposits to banks in the future, which may result in an asset-liability mismatch.
Dhaka Bank signs MoU with BRAC
Dhaka Bank Limited has signed a Memorandum of Understanding (MoU) recently with BRAC for operating special CSR activity to mitigate the countrywide crisis due to COVID 19 pandemic. The CSR fund from Dhaka Bank will contribute to two initiatives of BRAC; ‘Dakchhe Abar Desh’ and ‘Community Fort for Resisting Covid-19 (CFRC)’. ‘Dakchhe Abar Desh’ is an initiative from BRAC, calling all to stand by the people who lost their earnings amid the community transmission of the delta variant of Coronavirus and eventual lockdown. Under this initiative, from Dhaka Bank contribution BRAC will provide food assistance to 13,530 families in high-risk districts.
Al-Arafah MD re-appointed
Prominent banker Mr. Farman R Chowdhury has been re-appointed as the MD & CEO of Al-ArafahIslami Bank Limited for the 2nd term from 01 October 2021 for the next 4 years. He has been serving as the MD and CEO of the Bank since 1 October 2018. Prior to his joining he was the MD & CEO of ShahjalalIslami Bank Limited and ONE Bank Limited and served there for 5 and 6 years respectively. Mr. Chowdhury, an MBA from IBA, Dhaka University, started his banking career in October 1986 as a Management Trainee in American Express Bank and served there for 12 years in various capacities.
H1 RMG exports to US tick up
The country’s apparel exports to the United States recorded nearly 26.81 per cent growth to US$ 3.13 billion during the first half of 2021. Bangladesh fetched $ 2.46 billion from readymade garment exports to its single largest destination during the January-June period of last year, according to OTEXA, an affiliate of the US Department of Commerce. During the first half of 2021, Bangladesh’s main competitors China and Vietnam recorded 26.77 per cent and 20.45 per cent growth respectively.During the first six months of 2021, Bangladesh shipped 1.22 billion square metres of apparel items, up 37.14 per cent from 890 million square metres of the same period of last year. Only in June 2021, Bangladesh shipped 192.77 million square metres of apparel items, up from 82.57 million square meters or 133 per cent. The RMG exports to the USA stood at $5.22 billion in 2020, down from $5.92 billion in 2019, according to the data. The overall apparel imports of USA from across the world during the period under review also increased by 26.92 per cent to US$ 35.37 billion from $27.87 billion during the same period of 2020, data showed. During the first half of 2021, the US imported apparels worth $ 7.31 billion from China and $ 6.81 billion from Vietnam.The surging sourcing costs still remained a significant concern to US fashion companies in 2021 and the US-China tariff war exacerbated the sourcing cost pressures and financial challenges facing US fashion companies during the pandemic.
Brac Bank named for UN fund
Brac Bank has been named as one of the 10 recipients of a Women Enterprise Recovery Fund in the Asia-Pacific region recently. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Capital Development Fund (UNCDF) with partners FMO, Visa and the government of Canada have announced the winners of the fund every year.The winners include technology providers, fintechs and commercial banks and will receive financial and technical support over the next 12 months to pilot and test their innovations. Brac Bank proposed its SME Bondhu product for funding. It will pilot a one-stop digital solution for micro, small and medium enterprises in Bangladesh for the seamless set-up of online stores, including access to digital tools for their businesses, such as an integrated logistics facility and payment gateway solutions.