Bangladesh Bank on Wednesday revised ceiling on banks’ investment in bonds and debentures in line with Bank Company Act (amended) 2013. The BB issued a circular to managing directors and chief executive officers of all banks saying that they (banks) would be allowed to invest maximum five per cent of the combined value of paid-up capital, statutory reserve, share premium and retained earnings in bonds and debentures. Previously, the banks were allowed to invest maximum 10 per cent of their total capital, which is calculated on the basis of the banks’ risk-weighted assets, in bonds and debentures. The new calculation method, however, will not be applicable for the existing bonds and debentures till their maturity period. They will have to adjust the limit as per the new method after the end of the maturity period of the instruments. The business entities as well as banks usually issue the bonds and debentures for long-term to collect their capital. The banks will be allowed to invest in the bonds and debentures which will be approved by the Bangladesh Securities and Exchange Commission, the BB circular said.
The Global Human Development Report suggests Bangladesh set up a remittance bank for easy and transparent inflow of the foreign wage earnings into the country. “Remittance banks can be set up in countries where the remittance flows are large, such as Bangladesh, Jordan and the Philippines,” according to the report. The report was released in Dhaka yesterday to present the country’s position in the Human Development Index. Bangladesh moved three notches up and ranked 139th out of 188 countries in the Global Human Development Index. “Easy and transparent legal remittance-sending mechanisms can be instituted in consultation with host countries. And digital remittance transfers can be modelled after M-Pesa and BKash,” the report said. BKash, a mobile banking system in Bangladesh, has changed the way poor people transfer money, including remittances by garment workers, bill payments and the purchase of daily necessities, according to the report. Selim Jahan, director of the Human Development Report Office of the UN and the lead author of the HDR 2016, presented the key findings of the report at a programme at the planning ministry.
Country’s export earnings rebounded in March of the current financial year 2016-17 overcoming the negative earnings growth of the month of February and slow growth in previous couple of months. Export earnings in March grew by 9.83 per cent to $3.11 billion from $2.83 billion in the same month of last year, according to Export Promotion Bureau data released on Wednesday. Country’s export earnings in the July-March period of FY 17 increased by 3.97 per cent to $25.94 billion from $24.95 billion in the same period of FY 16, the EPB data showed. According to the EPB data, export earnings in the first nine months of FY 17 fell by 4.30 per cent from its target $27.11 billion which was set by the government. Exporters said that earnings in the month of March increased a little bit but challenges still remained in the international market as the competitor countries started to beat Bangladesh. They said that country’s overall export earnings growth was not satisfactory and so there was no reason to be complacent with the growth of only one month (March). The EPB data showed that earnings from readymade garment exports in the July-March period of FY17 grew by 2.39 per cent to $20.92 billion from $20.44 billion in the same period of FY16. The earnings from RMG export were 5.98 per cent lower than the target of $22.25 billion set by the government for the July-March period of FY17.
The country’s trade deficit soared by 45.39 per cent to $6.08 billion in the first eight months of the current financial year 2016-17 compared with that of $4.18 billion in the corresponding period of the FY16 as import payment growth is outpacing export earning growth by a long margin this FY. According to the latest Bangladesh Bank data, the export earning growth dropped to 3.31 per cent in the July-February period of the FY17 compared with that of 7.81-per cent growth in the same period a financial year ago. The import payment growth, however, rose to 9.52 per cent in the July-February period of the FY17 compared with that of 6.98 per cent growth in the same period of the FY16. The export earnings stood at $22.29 billion in the first eight months of the FY17 while the earnings were $21.57 billion in the same period of the FY16. The export earnings stood at $20.01 billion in the July-February period of the FY15. The import payments stood at $28.38 billion in the first eight months of the FY17 while it was $25.76 billion in the corresponding period of the FY16. The import payments stood at $24.08 billion in the first eight months of the FY15.
The government on Wednesday signed a $113 million financing agreement with the World Bank to modernise the country’s meteorological and hydrological information system, including weather forecasting, early warning systems, and delivery of weather and climate services. The Bangladesh Weather and Climate Services Regional Project (BWCSRP) will help strengthen the weather, water, disaster risk and climate information services in Bangladesh. The project will also pilot a community-level early warning system for flash floods, thunderstorms and droughts in four districts – Netrakona, Sunamganj, Rajshahi and Naogaon. The pilots will benefit more than 1 million people, said a press release. The project will set up an Agrometeorological Information System portal, agromet information kiosks in 487 upazilas and agromet display boards at 4,051 unions. This will enable more than 30,000 farmer households to gain access to weather and water related information, and enable them to make better planning and decisions to deal with climate uncertainties.
The government yesterday took a number of major decisions for the country’s energy security — including setting up rental power plants to produce 787 megawatt of electricity and importing 60MW from the Indian state of Tripura. The process of importing 60MW power will be inaugurated by the prime ministers of Bangladesh and India through a video conference on April 8 in New Delhi. The proposal was approved yesterday by the cabinet committee on purchase. The tariff rate for the import will be Tk 6.31 per kilowatt/hour (kWh) in the first year, after which the rate will increase by 5 percent a year. The import will be for four years. The country has already imported 100MW of electricity from Tripura since March 2016 at a rate of Tk 6.40/kWh. The purchase committee also approved proposals for setting up seven quick rental power plants in different places around the country with 15-year tenure. The plants will produce 787MW of electricity and the price will be Tk 7.92 to Tk 8.40/kWh. A 115MW rental power plant will be set up in Chandpur by a consortium of Doreen Power Generation & Systems and Doreen Power House & Tech. The per unit price of electricity from the furnace oil-based power plant will be Tk 7.93/kWh.
India, Bangladesh hold 97 per cent renewable energy market
Five countries, including India and Bangladesh, lead the world in solar home lighting systems and the two south Asian nations together account for 97 per cent of the renewable energy market in the region, says an international body, reports IANS via The Economic Times. The other three leading countries are Kenya, Tanzania and Ethiopia — all in Africa. Quoting cumulative sales data compiled by the Global Off-Grid Lighting Association and Bangladesh’s Infrastructure Development Company Ltd, the report — entitled “Decentralised Renewables: From Promise to Progress” and released on Tuesday by ‘Power for All’ — said India and Bangladesh account for 97 per cent of solar home system and pico-PV adoption in South Asia. Kenya, Tanzania and Ethiopia account for 67 per cent of adoption in sub-Saharan Africa.
Prices of some products are set to rise following enforcement of a new VAT law from July with a uniform rate of the tax at 15 per cent. An impact analysis by the National Board of Revenue (NBR) on the new Value Added Tax (VAT) set in the law finds out that particularly prices of those products which enjoy pared-down VAT rate under minimal tariff value may go up. New VAT law may fuel product prices “We have conducted an impact assessment of the new law and found one or two areas may be affected,” said Barrister Jahangir Hossain, VAT policy member of the National Board of Revenue (NBR). For example, MS product is selling on the market at Tk 45,000-50,000 per tonne but now tax is being paid on Tk 5,000 on the basis of fixed tariff value, he told the economic reporters in response to a query. “When the product will come under standard VAT, its price may slightly go up. But, there is some weakness in management of customs point. We believe the situation will be tackled if the weakness can be addressed properly,” he said.
Mobile internet has been gaining popularity since the launch of high-speed 3G
network in 2013, leading to the sector’s emergence as a solid revenue generator for mobile operators. Internet users in the country have increased rapidly, most of them are youth and smart phone data users, according to the Bangladesh Telecommunication Regulatory Commission (BTRC). At the end of 2016, the number of mobile internet connections was more than 6.3 crore, up from 5.15 crore at the end of 2015. Following installation of the 3G network by the mobile operators, the number of cell phone data users jumped to two crore. Inspired by such a success, the regulator recently has finalised its licensing guideline for 4G services for the government’s approval. The BTRC in its proposal kept 15 percent revenue sharing with the operators from fourth generation (4G) services. Mobile operators are currently sharing 5.5 percent of their gross revenue from 2G and 3G services with the BTRC, in addition to 1 percent as contribution to the social obligation fund.
Major Currencies Exchange Rates Movement in Last Seven Days
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.
ABOUT DHAKA BANK
Dhaka Bank has truly cherished and brought into focus the heritage and history of Dhaka and Bangladesh from Mughal outpost to modern metropolis. Most of its presentation, publications, brand initiatives, delivery channels, calendars and financial manifestations bear Bank’s commitment to this attachment.