Tk 342cr deposited in schoolchildren’s accounts in 2017
The total deposits in the bank accounts owned by schoolchildren in the country increased by 33.52 per cent or Tk 342 crore to Tk 1,363 crore as of December 31, 2017 from that of Tk 1,021 crore as of December 31, 2016. The number of school banking accounts also rose by 15.59 per cent to 14.53 lakh at the end of December 31, 2017 compared with that of 1.96 lakh a year ago, Bangladesh Bank data showed. The balance in the schoolchildren’s accounts increased by Tk 262 crore in the last quarter of 2017 against an increase of Tk 80 crore in the first three quarters of the year. Deposits in the school banking accounts increased significantly in the last quarter of the year as banks offered higher interest rates on deposits during the period amid their drives to collect deposits, bank officials said. They said that banks were now trying to open lower-cost savings accounts like students accounts under the school banking programme that resulted in an increase in the number of school banking accounts and the deposits in the accounts.
Bangladesh’s sustainable graduation from LDC: BB chief links it to functioning of FIs
Bangladesh’s sustainable transition from the LDC (least-developed country) status largely depends on effective functioning of the country’s financial institutions (FIs), says the central bank chief. The Bangladesh Bank governor, Fazle Kabir, made the remark Saturday while hailing Bangladesh’s recent fulfillment of threshold criteria for graduation to a developing country by a UN panel’s assessment. He noted that the country would get a gestation time of six years to take necessary preparations to make the economy sustainable in post-LDC regime before final review of the graduation criteria. “The country needs to maintain economic stability in the coming years and banks will have to play an important role by financing huge development works to ensure the sustainability,” Mr. Kabir said while speaking as chief guest at a scholarship-awarding programme arranged by Shahjalal Islami Bank Limited (SJIBL).
PCBs to get half of state entities’ deposits
State enterprises will now be allowed to deposit 50 per cent of their funds with the private commercial banks (PCBs), up from the 25 per cent cap they used to have earlier. The decision to raise the share of PCBs came during a meeting of Finance Minister AMA Muhith with the banking industry leaders in the capital on Friday. “From now on, private banks will be able to get 50 per cent of the government funds instead of 25 per cent”, Chairman of Bangladesh Association of Banks (BAB) Md. Nazrul Islam Mazumder told the media after the meeting. As per the existing the guideline, more than 25 per cent of the government funds cannot be deposited with the private banks. However, private bankers for long have been demanding an increase in the share to meet the growing demand for liquidity in the banking sector. In Friday’s meeting, representatives from Bangladesh Association of Banks formally requested the Finance Minister to increase the share to 50 per cent, to which, Muhith agreed.
Experts oppose banks owners’ demand for cash reserve cut
Banking experts have opposed the demand of the Bangladesh Association of Banks to decrease the cash reserve requirement of banks to 3.5 per cent from the existing 6.5 per cent for the sake of depositors. During a meeting with finance minister AMA Muhith on Friday in a Dhaka hotel BAB, an organisation of private bank owners, made the demand. The association is likely to again press Bangladesh Bank to cut the CRR in a meeting this week. By placing the demand, the banking experts said, the private banks owners wanted to exploit the present government ahead of the national election as the demand goes against the interest of the depositors.
LTR for goods import to be valid for 90-180 days
Bangladesh Bank on Thursday asked all banks to limit validity of a loan product against import named loan against trust receipt or Murabaha trust receipt or Murabaha post import to 90-180 days. The central bank’s banking regulations and policy department issued a circular in this regard with a view to bringing the LTR, MTR and MPI under uniform rules. The scheduled banks have been offering the LTR, MTR and MPI against products post-import. The banks were setting validity of such demand loans on case-to-case basis, creating complexity in finding real picture of banks’ overdue loans, an official of the central bank said. The official also said that some banks were offering such type of credit facility for a period of one year, meaning that the loans were becoming overdue after 15 months of their issuance. Under the new BB circular, the banks would be allowed to issue the LTR, MTR and MPI for highest 90 days against import of consumer goods, meaning that the loans would be overdue after 190 days. Besides, importers of industrial raw materials would get highest 180 days validity for such loans and their loan would be overdue after 270 days after issuance. If the loans are not paid duly by the importers, the banks will have to classify those and will have to keep provision at the rate stipulated under the banking rules, the official of the central bank said. The circular issued to the managing directors and chief executives of all the banks became effective on Thursday.
State lenders to give Tk 7.15b lifeline
Four state-owned commercial banks (SoCB) and a financial institution will inject Tk 7.15 billion as equity into the troubled Farmers Bank Limited in an attempt to salvage it. Managing directors and chief executive officers of the Sonali, Janata, Agrani and Rupali banks and Investment Corporation of Bangladesh (ICB) discussed the issue at a meeting at the central bank in Dhaka on Thursday evening, with Bangladesh Bank (BB) Governor Fazle Kabir in the chair. In light of the decision taken earlier by the government, each state bank will provide Tk 1.65 billion as equity to the Farmers, while the ICB will inject Tk 550 million into the fourth-generation private commercial bank.
Importers seek BB freight charge payment permission from Sylhet
Local trade body leaders have urged Bangladesh Bank (BB) officials to take necessary steps to issue permission to importers for payment of their freight charge at the central bank’s local office instead of the present system of getting clearance for the same from the bank’s head office in the capital. They also demanded of the authority to set up money exchange booths at Sylhet MAG Osmani International Airport which has direct air connection with world’s important cities and business hubs, including London, Kuwait, Jeddah and Dubai. They made the call at an exchange of views meeting with BB officials at Sylhet Chamber of Commerce and Industry (SCCI) conference room in Sylhet city on Thursday afternoon.
Poor governance hurts financial sector: analysts
The failure of governance in the financial sector is increasingly becoming a threat for sustaining the growth at the time of Bangladesh’s graduation from the least developed country’s category, analysts said yesterday. The existing financial crisis can take a toll on the country’s economy, Abul Hasan Chowdhury, former state minister for foreign affairs, said while addressing a discussion on “Bangladesh’s development trend: financial priority”. Ghashful, a nongovernmental organisation, organised the discussion at The Daily Star Centre in Dhaka.
SCB appoints new head of Financial Markets
Muhit Rahman has recently been appointed as Head of Financial Markets (FM) of Standard Chartered Bank Bangladesh, according to a statement. He has more than 23 years of corporate & institutional banking experience, and has been with the bank since 2005 in various leadership positions. In his last role as the Head of Financial Institutions (“FI”), he successfully led the FI business by leveraging the global network of the bank to maintain its leading position in the market. Muhit has been involved in pioneering various Financial Markets and Transaction Banking initiatives for the FI business; including Tier-2 capital raising for banks, Zero Coupon Bonds for non-banking FIs, International Debt Syndication for Micro Finance Institutions, Structured Foreign Currency Funding and FI trade loans for banks. He has also played a very important role for strengthening Correspondent Banking Financial Crime Compliance and Anti-money Laundering related areas of the local banking industry.
Bangladesh to enjoy least developed country (LDC) trade benefits for nine years
Even after formally being graduated from the Least Developed Country (LDC) category in 2024, Bangladesh will be able to enjoy the existing trade benefits for another three years or up to 2027. Thus the country is eligible to enjoy the current trade-related benefits, tariff-free market access to be precise, for next nine years from now on. Bangladesh is currently enjoying tariff-free market access to 50 developed and advance developing countries. The benefit will continue up to 2027. An estimate by the Centre for Policy Dialogue, however, showed that once trade benefits ended after the graduation, Bangladeshi products have to face additional 6.7% tariff on average and this will lead to annul export losses of USD 2.7 billion. In the European Union market alone, Bangladeshi products have to face additional 8.7% tariff unless there are some negotiations for a fresh preferential treatment. The country, as a LDC, is also enjoying low-cost finance like climate finance and development finance as well as aid-for-trade. It is also benefiting from the flexibility in the intellectual property rights and availing low-cost medicine and cheaper software.
Govt to bring uniformity in VAT rates in some sectors
The government would bring uniformity in Value Added Tax (VAT) rates in some sectors in the upcoming budget for the fiscal year 2018-19, said the revenue board chief on Thursday. “We would not go beyond the VAT law-1991, but bring uniformity in VAT rates in some sectors,” said Md Mosharraf Hossain Bhuiyan, Senior Secretary of the Internal Resources Division (IRD) and Chairman of National Board of Revenue (NBR). While speaking as the chief guest at an institutional dialogue organized by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on its premises, he also preferred multiple VAT rates to uniform one for all businesses. The uniform VAT rate was one of the major reasons for deferment of the new VAT law by two years until 2019.
Shield business competition for higher GPP growth
Experts at a seminar on Thursday said that the government should ensure effective environment for business competition in the country for achieving higher growth of gross domestic product. At a seminar titled ‘Ensuring Competition in Business: Role of the Competition Commission of Bangladesh’ held at the CIRDAP auditorium in the city, they said competition drives innovation and new ideas in the market, improve entrepreneurs’ performance and efficacy. ‘GDP growth is two per cent to three per cent higher in the countries that have competition legislation than those without,’ said Dhaka University professor Shibli Rubayat Ul Islam citing a global study. He presented the keynote paper in the seminar organised by newly established Competition Commission of Bangladesh under the commerce ministry. Shibli, in the keynote paper, said that competition was important for the market but presence of cartel, market collusion, monopoly and oligopoly were the difficulties in ensuring an effective competitive environment.
GDP to grow 7.8pc next fiscal year
Bangladesh will be able to attain 7.8 percent economic growth in the next fiscal year, said Finance Minister AMA Muhith yesterday. The government has set a target of 7.4 percent GDP growth for the current fiscal year of 2017-18. “But we hope it would be 7.5 percent,” said Muhith. The minister made the comments while opening the Meghna Economic Zone and the Meghna Industrial Economic Zone in Sonargaon upazila of Narayanganj. The Meghna Economic Zone that received the first licence from the Bangladesh Economic Zones Authority as a private economic zone housed five new industrial plants. The factories are Meghna Pulp and Paper Mills, Meghna Edible Oils Refinery, MPP Power Plant, Sonargaon Flour and Dal Mills, and Tasnim Chemical Complex Unit-2.
BPC, four oil cos to get NBR blessing
The National Board of Revenue has decided to adjust the outstanding value-added tax worth Tk 3,564 crore from Bangladesh Petroleum Corporation and its four oil marketing companies through book adjustment method being failed to realise the amount from the state-owned entity. The revenue board in a meeting held on March 13 at its conference room instructed the Chittagong Customs Excise and VAT Commissionerate to place a proposal to the tax authority in this connection. VAT officials said that they made the decision to meet the revenue collection target for the current fiscal year 2017-2018 as the NBR was facing huge shortfall in collection target.
BD, WB set to ink $65m loan agreement soon
Bangladesh and the World Bank (WB) are set to sign a US$ 65 million loan agreement in the coming weeks to enhance the capacity of the insurance regulator and state-owned insurance corporations, according to the global lender. The project named ‘Insurance Sector Development project’ is likely to be launched in September next and be completed in February 2023, a source concerned said. “The WB will give loan to the project, but the deal has not been finalized yet. In this connection, a WB mission visited Bangladesh from March 5-8 last,” an additional secretary of Economic Relations Division (ERD) told the FE. The project was already approved by the National Evaluation Committee (ECNEC) chaired by the prime minister in February 2018 and the project was approved by the board of directors of WB in March 20, 2017.
WB to provide $100m loan for public financial mgt reform
The World Bank has agreed to provide US$ 100 million in low-cost loan to help the government carry out reform in public financial management. The Washington lender’s assurance came after the Economic Relations Division recently sought the support for carrying out the financial management reform needed to achieve the national goals. “We are pleased to inform you that the World Bank stands ready to support government of Bangladesh in its implementation of the public financial management reform strategy 2016-2021 and action plan,” the bank’s acting country director Rajashree S Paralkar said in a letter to the ERD. She also wrote that the global lender is agreeable to providing the loan from the International Development Association, the bank’s soft-lending arm.
BD to get $560m IDA credit for power, microenterprises
The World Bank (WB) has approved $560 million for two projects in the power and microenterprises sub-sectors. The projects will help make the supply of power more reliable and the microenterprises environmentally sustainable. The $450 million Enhancement and Strengthening of Power Transmission Network in Eastern Region Project will expand the electricity transmission network in the eastern region, covering the greater Comilla and Noakhali and part of the greater Chittagong, the WB said in a statement, issued from Washington on Thursday. It will provide new electricity connections to 275,000 households and 16,000 agricultural consumers and reduce the incidence of power interruptions, according to the statement. “The project will expand the existing grid network by building 13 new substations and rehabilitating an existing one,” the WB explained. It will also construct 290 kilometre new and rehabilitate 157 kilometre existing transmission lines, the statement added.
European Investment Bank looks to dole out € 110m loan for Railway
The European Investment Bank (EIB) intends to provide € 110 million in loan to help Bangladesh purchase new rolling stock for the Railway. The total cost of the project is € 270 million and consists of the purchase of about 200 rail passenger carriages and about 40 locomotives for regional and intercity services. They will be deployed on the 1,230-km long broad/dual-gauge network across Bangladesh as well as international services to India, an international railway communication platform said Saturday. Contacted, a senior official of the state-run Bangladesh Railway told the FE Saturday while a discussion was going on between the bank and the Economic Relations Division, the railway authority was yet to get any official correspondence. The project consists of the partial replacement of obsolete vehicles and a partial expansion of the fleet to better meet the growing demand. The project is a part of the 20 Year Railway Development Plan.
Japan pledges $1.83b more for dev projects
Japan has offered some US$1.83 billion in assistance for bankrolling Bangladesh’s six major development projects on communications infrastructures, power and port. Ministry of Finance (MoF) officials said Friday Japanese Ambassador in Bangladesh Mr Hiroyasu Izumi met Economic Relations Division (ERD) secretary Kazi Shofiqul Azam Thursday in Dhaka and pledged the development assistance. A senior MoF official said a deal on the $1.83-billion loan under the 39th Official Development Assistance (ODA) package is expected to be signed by June this year.
Govt okays $2.67b Chinese hard loan
The construction work of Padma Bridge railway link is going to start this year, as the government approved US$ 2.67 billion Chinese hard loan for the project on Thursday, officials said. Economic Relations Division (ERD) officials said the non-concessional loan committee, headed by Finance Minister A M A Muhith, approved the loan that will be utilised to construct the railway line. “The committee approved the loan on Thursday, and the loan deal is expected to be signed by next month (April). The construction work will begin shortly,” ERD Additional Secretary Farida Nasreen told the FE.
IDB to bankroll housing projects, € 95m loan deal tomorrow
The government is set to sign its long-awaited 94.75 million Euros loan deal with the Islamic Development Bank (IDB) next week, which would be used for the financing of rural and peri-urban housing in the country. The loan deal will be signed during the upcoming annual meeting of IDB, opens in Tunisia on Sunday. Under the scheme, loans would be allocated to construct some 4,050 units of houses in rural areas, 2,825 units in peri-urban areas and 1,101 units for non-resident Bangladeshis, officials of the Economic Relations Division told FE.
Bangladesh’s unexplored prospects in trade with Tripura
Bangladesh will earn massive profits on the condition that they directly invest in Tripura by setting up its industrial units in the Northeast Indian state itself. Strong connectivity in Tripura built up by the Indian government as part of its “Act East Policy” justifies this thought. Moti Lal Debnath, president of Tripura Chamber of Industry and Commerce, said: “The only problem that persists in trade between Tripura and Bangladesh is meeting labour costs. The traders from Bangladesh perceive that Indian labour costs are quite steep. However, it is not outlandish because according to an Indo-Bangla pact that enabled the establishment of integrated check posts, all are bound to make their due payments.” When asked about the problems faced by land ports and Customs office, he said: “There are six land ports in Tripura. The one functioning along the opposite side of River Khowai is facing some inconveniences. It is waterlogged during monsoon. Goods then are imported from Bangladesh through waterways. During dry seasons, goods are brought over here by head-loading. And these systems are neither efficient nor practical.” Debnath added that owing to a short distance between Tripura and Bangladesh, there are lots of commercial prospects between them.
57 firms seek allocation in RMG Park in Mirsarai SEZ
Some 57 export-oriented readymade garment companies have so far filed applications with booking money with the Bangladesh Garment Manufacturers and Exporters Association for getting allocation of about 400 acres of land in the proposed RMG Park under Mirsarai Special Economic Zone in Chittagong. The BGMEA and the Bangladesh Economic Zone Authority recently signed a memorandum of understanding to allocate 500 acres of land to the garment exporters for setting up a well-planned readymade garment factory park in the SEZ. The BGMEA on Wednesday issued a further notice to its members for filling applications with the trade body by April 5 for the remaining 100 acres of land in the zone. According to the BGMEA circular, the area of each plot will be 1 acre and the lease money for the plot will be Tk 1 crore. Interested RMG factory owners will have to pay 26 per cent of the total lease money, including 1 per cent earnest money, as non-refundable booking money and then they will get instalment facility to pay the rest of the amount.
Deals with Swiss, Omani firms likely to bump up LNG import
The government has moved to sign two more agreements with the LNG suppliers to ensure the import of 2.25 million tonnes of liquefied natural gas ahead of the arrival of the floating unit. Energy and mineral resources division under the ministry of power, energy and mineral resources will place a proposal to the cabinet committee on government purchase next week to win a formal approval for signing the sales and purchase agreements, said a senior official. The suppliers are Switzerland-based privately-owned AOT Energy AG and Oman’s state-run Oman Trading International.
Regulator weighing pleas for doubling gas price
State energy regulator now weighs the proposals submitted by the gas- distribution companies for nearly doubling its tariffs, with an obvious motive of adjusting the prices with that of expensive LNG. As planned, the hike in gas tariffs will be applicable to all consumers save households. “We shall invite public hearing over the tariff-hike proposals after holding a commission meeting soon,” said a senior official of the Bangladesh Energy Regulatory Commission (BERC). The Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMER) is seeking a verdict from the BERC before the first LNG imports land in the country. But the BERC official said the tariff-hike decision might not come before two months time as certain procedures must be followed before the commission’s all-clear. The government expects to commission the maiden supply of re-gasified liquefied natural gas or LNG on April 25 and start the marketing of the fuel on May 1.
Minerals, cardamom imports from Bhutan soar
The country’s imports of minerals and cardamom from Bhutan marked a surge in the last calendar year (2017), comparing to the corresponding period. The amount of minerals imported by Bangladesh rose by 255.39 per cent to US$ 37.60 million in the year, from $10.58 million in 2016, a Bhutanese newspaper – Kuensel – reported on Friday. According to it, the neighbouring country exported 2.12 million tonnes of minerals to Bangladesh in 2017, which was 0.423 million tonnes in the previous year. Quoting Tshering Yeshi, general secretary of Bhutan Exporters Association (BEA), the report said the quantity increased due to rise in export of stone chips and boulders. “Stone boulders and stone chips are in huge demand in Bangladesh,” he was quoted as saying.
Ministry plans to import 1.75m tonnes of fertiliser
The Ministry of Agriculture plans to import 1.75 million tonnes of MOP and DAP fertilisers to meet the demand for the upcoming fiscal year 2018-19, reports UNB. According to a government document obtained by the news agency, the requirement was determined through a countrywide survey, conducted by the Department of Agricultural Extension (DAE) under the ministry. Of the demand, 850,000 tonnes will be met with MOP (Muriate of Potash) fertiliser while the remaining 900,000 tonnes with DAP (Diammonium phosphate) fertiliser. The document also reveals that the entire demand for MOP and DAP will be met through import from foreign sources, both in public and private sectors. Of this, the ministry’s marketing outfit, Bangladesh Agricultural Development Corporation (BADC), will import about half of the total MOP and DAP fertilisers from state-owned companies of different countries. In this case, Morocco, Russia, Belarus, Canada and Saudi Arabia will be the main suppliers of such chemical fertilisers from which Bangladesh have been importing MOP and DAP for the last several years under government-to-government agreements.
Govt forms committee to create Tk 100b fund for jute sector
The government has set up an inter-ministerial committee aiming to create a low-interest fund of Tk 100 billion to help boost the jute sector. The six-member committee will fix the source of fund and its operational method and make related policy for the proposed fund. It will submit a report to the government within next 30 days and put forward recommendations for creating the soft-loan fund. Once the government launches the fund, jute producers and exporters will get loans at 2.0 per cent interest rate. The committee has been formed with representatives from the finance and commerce ministries, Bangladesh Bank (BB), Bangladesh Jute Mills Corporation (BJMC) and Department of Jute. The ministry of textile and jute (MoTJ) has issued an office order in this regard. The committee will also review the proposals made by the finance and commerce ministries and the central bank in this regard.
Construction material prices shoot up
Construction costs will go up by 22% due to the recent increase in the prices of key construction materials such as rebar and cement in the country. The prices of rebar and cement sharply increased this week compared to the last few weeks. It has already impacted the construction industry. A press conference organized by the Bangladesh Association of Construction Industries (BACI) discussed the increased price of construction materials in the country and the causes behind the sudden price hike.
Take steps to rein in rod prices or face strike
The Bangladesh Association of Construction Industry (BACI) yesterday threatened to suspend work in all development projects from April 15 if the government does not take steps to contain the spiralling prices of construction materials. “If the prices of rod and cement do not come down immediately, we will have to count huge losses,” said Munir Uddin Ahmed, president of the platform of contractors and engineers. In the last seven months, prices of billet—the key raw material for rod production—fell 6.25 percent to $525 a tonne, but a syndicate of manufacturers increased prices of 60-grade rod by 50 percent to Tk 72,000 a tonne, he said. Ahmed was speaking at a press meet at Dhaka Reporters’ Unity in the capital.
Stylecraft to expand capacity by 23%
The board of directors of Stylecraft, a 100% export-oriented readymade garment manufacturer, has decided to increase production capacity by 23% to fulfil the existing buyers’ demand. For this, the board has decided to add machinery for six more lines to increase the production capacity. The board decided to apply for a term loan of BDT 52 million with five years tenure to open letter of credit for importing brand new capital machinery to Pubali Bank Limited. The company’s earnings per share for October-December, 2017 stood at 6.43 as against BDT 5.75 for October-December, 2016. In six months for July-December, its earnings per share stood at BDT 12.37 as against BDT 14.96 for the same period a year ago. The company’s paid-up capital is BDT 9.90 million and authorized capital is BDT 10 million while the total number of securities is 990,000. The sponsor-directors own 53.43% stake in the company while the institutional investors 6.56%, and the general public 40.01% as on February 28, 2018.
ACI now plans home plant to feed US drug market
Local conglomerate ACI is setting up a state-of-the-art pharmaceutical plant at Sonargaon near the capital city of Dhaka to churn out high quality medicine with the US market in sight. “The plant will be ready within a year and will be geared for exporting pharmaceuticals to the US market”, ACI Chairman M Anis Ud Dowla said in an exclusive interview with the FE recently. “The plant will be compliant with the standard set by the Food and Drug Administration of the USA and it will take up 60 thousand square feet of floor space”, Mr Dowla said. Currently the ACI is producing pharmaceutical products like pain killers for the US market from its plant located in India. However, the same products will be manufactured from Bangladesh, once the plant is ready and approved by the FDA. The total cost of building this avant-garde facility will be around Tk 4.5 billion (450 crore), the ACI Chairman said.
Mobile networks hit by nor’wester
Mobile subscribers are experiencing network problems in different parts of the country as operators are facing severe power shortage over the last few days brought about by the nor’wester. In most of the cases, the power department officials had switched off the supply before storm for safety but they did not switch it back on for a few hours after the nor’wester had passed. It is these extra hours that the operators could not handle with their back-up power supply, said top executives of different carriers. Until yesterday, about 60 percent of the towers of the top operators did not have power from the national grid for hours and of them about 15 to 20 percent saw their backup power system run down as well, said top officials of the mobile operators.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$ 64.94||↑0.56||↑0.87%|
|Crude Oil (Brent)||$ 69.34||↑0.58||↑0.84%|
|Gold Spot||$ 1,325.47||↓0.03||↓0.00%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.22|
|GBP 1||BDT 116.63|
|EUR 1||BDT 102.56|
|INR 1||BDT 1.28|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.