The overall remittance inflow has dropped by nearly 17 per cent or US$ 1.86 billion in the first nine months of this fiscal year (FY), 2016-17, against the same period of the previous fiscal. The remittance receipts came down to $9.19 billion during the July-March period of the FY, from $11.06 billion in the corresponding period of the last fiscal, according to the central bank’s latest statistics. The remittance inflow was estimated at $1.08 billion in March 2017, up by $136.69 million from that of the previous month. In February 2017, the amount stood at $940.75 million. It was $1.28 billion in March 2016. Talking to the FE, a senior official of the Bangladesh Bank (BB) said the inward remittance flow has dropped significantly in the recent months.
Bangladesh Bank on Sunday said that the banks would be allowed to disburse loan more than Tk 10 lakh to new entrepreneurs of cottage, micro and small sector by taking credit under the refinance schemes operated by the central bank. The BB issued a circular to managing directors and chief executive officers of all banks saying that the banks would disburse the loan under the bank-customer relationship. The entrepreneurs will enjoy the loan without placing any collateral securities, but will have to give personal guarantee to enjoy the loan, the BB circular said.
The four state-owned banks’ loss-making branches more than doubled in 2016, much to the worries of Bangladesh Bank and the finance ministry. At the end of 2016, Sonali, Janata, Agrani and Rupali’s loss-making branches stood at 446 in contrast to 186 at the end of 2015. The reason for the sharp rise in the number of loss-making branches is that they were previously shown to be breaking even or in the black artificially on the back of their interest income from head office against deposits. “But that was a wrong concept,” said Mohammad Shams-Ul Islam, managing director of Agrani Bank, whose number of loss-making branches shot up to 78 last year from 16. The practice masked the true performance of the branches, he said.
The government has moved to modernise the state-owned banks to improve their efficiency and cyber security on the back of a slide in their performances. A total of 11 state-owned banks will see upgrade under the ‘Modernisation of State-owned Financial Institutions’ scheme, which will be implemented at a cost of Tk 1,580 crore, Planning Commission sources said.The scheme will help the state-owned banks enhance their efficiency in the area of risk management, financial transaction, internal control and audit, automation, and credit monitoring and management. At the same time, the project will focus on ICT skills and capabilities to rein in cyber risks at the banks. The Bank and Financial institutions Division (BFID) of the finance ministry will implement the scheme in all branches of the state-run banks across the country by 2021. With the initiative, the government seeks to ensure good governance in all activities of these banks, improve their institutional skills and strengthen BFID’s oversight system.
The state-owned banks that often hit the newspaper headlines, generally for wrong reasons, are victims of backlog of cases instituted with the Money Loan Courts (MLCs). A few statistics are enough to show the enormity of the problem being encountered by the public sector banks. According to a recent report of the central bank, the number of cases, filed with the MLCs by the four state-owned commercial banks stood at 17,888 as of 30th June last year. And the amount of default-loan involved in these cases was estimated at about Tk 280 billion. The banks are deeply frustrated by the slow disposal of cases by the MLCs. They have valid reasons to be so. It takes years to dispose of cases by the MLCs, mainly because of huge backlog of cases and tactics adopted by the borrowers concerned to delay the litigation process.
Govt turns down Ansar-VDP Bank’s plea for loan guarantee
The government has declined to issue a $100 million guarantee to Ansar-VDP Unnayan Bank for taking out foreign loan from a German company, officials said. The state-owned specialised bank has recently sought a loan guarantee from the finance ministry, but the ministry rejected its proposal on different grounds. “We did not find any accurate evidence on and address of ObwaGmBH, a German private lender. Even Bangladesh Bank (BB) and Bangladesh embassy in Germany did not certify the proposed loan. As a result, the government can’t issue guarantee against the loan,” an official of the ministry told the FE.
ICT firms to be allowed to remit abroad $30,000 a year
Bangladesh Bank on Thursday said that the owners of ICT and software firms, who are members of Bangladesh Association of Software and Information Services (BASIS), will be allowed to remit abroad $30,000 in a calendar year from the earlier ceiling of $25,000 to meet their business purpose. Within the limit of $30,000, the owners of ICT and software firms will be allowed to refill $6,000 at a time from the earlier limit of $2,500. The facility is not linked with the export retention quota (ERQ) of the ICT businesspeople and it is remittable through wire transfer or international credit card within the limit. The BB issued four circulars to banks to relax the foreign exchange rules for the ICT sector so that the inward remittance will increase through the sector in the days to come. The exporters of the ICT sector will also be allowed to keep their 70 per cent export earnings with their ERQ accounts. Both members and non-members of BASIS will enjoy the facility.
To raise and strengthen capital base, commercial banks are finding bond market as a lucrative destination. A number of private banks are planning to raise capitals from bond market to meet their capital adequacy. A bond is normally a fixed interest-bearing loan instrument, meaning that the borrower will pay the fixed interest on predetermined time schedules but the principal will be repaid at the end of maturity. Meanwhile, one private commercial bank has already raised capital worth TK 6 billion and another bank has submitted proposal for Tk 5 billion to the government’s concerned departments. Brac and Islami Bank Bangladesh Limited have enlisted themselves in the Dhaka Stock Exchange (DSE) and the authority has already issued convertible supplement debt bonds worth Tk6 billion, a DSE official said. Some more proposals are now pending with the Securities and Exchange Commission (BSEC) for necessary vetting and assessment, he added.
The government is set to revise down this fiscal year’s budget by 7.4 percent, with the non-development sector taking the hit mostly. The revised budget, which will be disclosed in June, will be of Tk 315,400 crore, according to the finance ministry’s documents. The non-development budget will be truncated about 11 percent to Tk 204,700 crore, despite an increase in government expenditure caused by salary hike of public servants. The development budget will not be cut; it will remain at Tk 110,700 crore. However, for the Annual Development Programme the government will make available Tk 7,000 crore more of its own funds, while slashing the foreign fund component by the same amount.
International Fund for Agricultural Development (IFAD) will invest $129 million in two projects to support small farmers and develop a community-based flood information system in the country. Agriculture ministry and Local Government and Engineering Department will implement the projects under the current Country Strategy Opportunity Paper (COSOP 2012-2018), said a news release. IFAD has already started project designing with the concerned ministries and departments of the government. The Aide Memoire of both the projects has been endorsed at separate meetings at the Economic Relations Division last week. The Climate Resilient Community Development Project will cover 25 flood-prone Upazilas under six districts—Kurigram, Gaibandha, Jamalpur, Rangpur, Nilphamari and Lalmonirhat— in northern region where climate resilient rural roads and community shelters will be constructed and off-farm employment opportunities will be created for local people.
WFP launches $201m plan to help BD achieve zero hunger
The World Food Programme (WFP) has launched a four-year Country Strategic Plan (CSP) to support Bangladesh in achieving zero hunger by 2030 – one of the Sustainable Development Goals (SDGs). The CSP 2017-20 has been designed involving an estimated cost of US$ 201.6 million. The CSP was developed through extensive consultations with the government and development partners, and responses to recommendations resulting from the independent Strategic Review of Food Security and Nutrition in Bangladesh, a study conducted by a team of national experts under the leadership of Professor SR Osmani of Ulster University in 2016. The CSP was approved by WFP’s executive board in Rome in February last and came into effect from April 1, said a release Sunday.
Workplace safety and worker rights issues would be high on the agenda for the 3rd meeting of Bangladesh-United States Trade and Investment Cooperation Forum Agreement to be held on May 17 in Dhaka, commerce ministry officials said. According to senior officials of the commerce ministry, Bangladesh would brief the US authorities about the progresses it has made in line with the action plan provided by the United States Trade Representative in 2013 for the restoration of the generalised system of preferences. The US has suspended Bangladesh’s GSP facility in its market since June 2013. In the presentation, Bangladesh would make an appeal for restoring the GSP benefits, the officials said. They said labour rights issues would get priority in the TICFA meeting as the review meeting of Sustainability Compact which includes the European Union, the Bangladesh government, the US government and the International LabourOrganisation would be held at the same time in Dhaka to assess the progresses of labour issues since the Rana Plaza building collapse. Source:http://www.newagebd.net/article/12596/labour-issues-to-be-top-on-ticfa-meeting-agenda
Two dozen deals likely to bolster BD-Russia ties
Dhaka moves fast to strike two dozen deals with Moscow to bolster the bilateral ties, officials said, in a latest development on the diplomatic front. The ministry of foreign affairs (MoFA) in a recent meeting asked the ministries and departments concerned to finalise drafts of the agreements forthwith, they added. And some of those pacts are likely to be inked during Bangladesh foreign minister’s trip to Russia this month (April) and top-level visit to Dhaka from the other direction. “…Hon’ble Prime Minister has instructed to strengthen the relations with Russia to take the relationship to a different level,” foreign secretary ShahidulHaque said in the meeting while requesting the authorities concerned to finalise pending issues on priority.
The National Board of Revenue has prepared a massive expansion plan, particularly for its income tax wing, to manage the increasing number of taxpayers and provide them with better services in coming years. Under the plan, the revenue board will create a total of 17 new income tax zones in next five years. Of which, some zones will be created soon, may be in the next fiscal year, officials of the revenue board said. Similarly, customs wing will also see substantial expansion activities to deal with increased import and export activities in the country. Currently, income tax wing has 39 zones across the country and one academy. Of the offices, 33 directly deal with income tax collection. Officials said that it became impossible for the field level tax offices to provide the taxpayers with better and organised services as the number of taxpayers has remarkably increased over the last few years and continued to increase. The number of electronic taxpayers’ identification number (e-TIN) holders reached to around 28 lakh in March from 19 lakh a year ago, they said.
Dialogues to help garment sector solve crisis: expert
Bangladesh needs to hold effective dialogues with the union leaders and senior officials from the European Union and the International LabourOrganisation to resolve the crisis of the garment sector and improve relations with the EU, an expert said. “The dialogues will help resolve the crisis in the garment sector as all the stakeholders will have equal rights to express their opinions,” said Christian Ewert, director-general of the Foreign Trade Association (FTA), a Brussels-based organisation. The FTA comprises nearly 2,000 retailers and brands, transacting 1.1 trillion euros in 2016. During the dialogues, Bangladesh should highlight the progress in workplace safety after the Rana Plaza industrial disaster, Ewert suggested.
Leather sector fears loss of BDT 11.0 billion export orders
As the saga of tannery relocation continues, industry people fear that the country may suffer a loss of over BDT 10.0 billion export orders of leather goods. “The tanneries at Hazaribagh are going to be closed from April 6 as per the Supreme Court order. But Savar is not ready yet to start operation of tanneries though the people related with process placed false information before the court,” said Mohiuddin Mahmud Mahin, president of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLFEA). The tanners’ demands included providing immediate connection of gas and electricity to Savar Tannery Estate, giving plots to those who has not got plot yet in the Estate, quick completion of ownership deed registration of the plots, withdrawal of embargo on passing design plan at the tanners’ land in Hazaribagh and immediate completion of the relocation process to Savar providing all facilities and revealing “truth” to the people against “BSCIC’s misinformation.”
The government has taken steps to develop the country’s dairy sector that did not receive adequate attention from policymakers in the past decades, said stakeholders. The fisheries and livestock ministry is drafting a law to set up a dairy development board. The ministry is also working to finalise the National Dairy Development Policy that was drafted earlier, said officials. “We are working on both for development of the dairy sector,” said MdNazrul Anwar, additional secretary of the ministry. Of the two, the ministry is currently giving more importance to framing the law, under which the organisation will be set up. The body is expected to operate autonomously and steer growth of the sector, he said. The move comes a decade after the government shared plans of establishing a Dairy Development Board in its National Livestock Development Policy in 2007.
Demand for octane has increased following the rise in price of CNG, prompting the government to move for importing the high-value petroleum on an emergency basis, in view of reductions in local production as well, reports UNB. According to official sources, the state-owned Bangladesh Petroleum Corporation recently had to import 15,000 metric tons of octane from Indonesia after a two-year break. The government didn’t have to import octane from abroad in the last two years, with domestic production enough to meet the local demand. But recently, it was found that the demand for octane was growing at a fast pace and the BPC had to resort to importing octane on emergency basis to keep the local supply normal. This was revealed in the Energy Division`s proposal seeking the Cabinet Purchase Committee`s approval for the import of the 15,000 metric tons of octane from Indonesia. The BPC officials submitted that the recent hike in CNG prices has prompted some car owners to use octane instead of CNG, which ultimately led to the rise in demand for octane.
Bangladesh’s biggest seaport fails to keep pace with growing containerised cargoes as its holding capacity and other transportation logistics did not expand proportionately. Official sources said the capacity of Chittagong port has expanded around 8000 Twenty-foot-Equivalent Units (TEUs) in five years while the number of cargo-handling equipment remained almost the same. In a marked contrast, the container traffic increased by nearly 1.0 million TEUs to 2.3 million TEUs over a period of five years, starting from January 2012. Port-insiders said the seaport has an annual capacity of holding 1.7 million TEUs. This mismatch might cause disruption to supply chains, leading to rise in consumer goods prices. The economy as a whole may also suffer.
Banglalink wants to sell its towers to a third party as it plans to use the proceeds to invest in spectrum and improve service quality. The operator has recently sent a letter to Bangladesh Telecommunication Regulatory Commission (BTRC), saying that it could invest more in spectrum if towers are sold. The government is currently planning to hold spectrum auction for 2G, 3G and 4G services. The regulator plans to fix the floor price of spectrum at more than $25 million per megahertz (MHz).
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