The Bangladesh Bank (BB) has sought a budgetary allocation of Tk 6.0 billion for implementation of agro-based projects under the Equity and Entrepreneurship Fund (EEF) in the next fiscal year (FY) 2017-18, officials said. The Bank and Financial Institutions Division (BFID) has sent a letter to the Finance Division, asking them to take necessary steps in this regard, they added. “The fund for agro-processing and its different sub-sectors is insufficient,” a high official of the Investment Corporation of Bangladesh (ICB) told the FE, preferring anonymity.
The four state-owned commercial banks rescheduled 43 percent less loans in 2016 than a year earlier thanks to their cautious approach and a strict stance by the central bank. Sonali, Janata, Agrani and Rupali banks regularised loans amounting to Tk 2,582 crore last year, in contrast to Tk 4,544 crore in 2015, according to data from the Bangladesh Bank. Sonali, the largest state-owned bank, rescheduled loans amounting to Tk 475 crore in 2016 — 72 percent less than in the previous year. Janata rescheduled 34 percent less loans last year and Rupali 32 percent. Agrani Bank, however, rescheduled more or less the same amount as in the previous year. It rescheduled Tk 540 crore in 2016 in contrast to Tk 512.89 crore a year earlier. “The rescheduling declined as the banks classified fewer loans,” said Rupali Managing Director Ataur Rahman Prodhan. Most of the bad loans were rescheduled in the last two years and banks are now putting in more effort to recover cash against those loans.
Banks are charging their clients higher interest rates — between 30 per cent and 36 per cent — for loans they (clients) get through credit cards, although the overall weighted average interest on lending dropped to 9.77 per cent in February because of slumping deposit rates. Bangladesh Bank officials said the higher interest rates charged by banks was not logical as the overall interest rate both for deposit and lending continued falling in last two years. Banks did not lower the rates of interest on their credit-card products in last two years, although they cut the rates of interest on their other consumer-loan products in the period. For example, the rate of interest on personal loans came down to 10 per cent from around 16 per cent in last two years. The weighted average interest rate for deposit also decreased to 5.08 per cent in February this year from around 9 per cent two years back. Due to the higher interest rate, a large number of eligible clients are reluctant to get credit-card service from banks, they said. According to the latest BB data, 30 banks issued 9.46 lakh credit cards as of January, 2017 with The City Bank leading the way.
The finance ministry has taken a decision to borrow only Tk 2,000 crore through treasury bills and bonds that carry low interest rates from the banking sector in April as it borrowed Tk 33,283 crore through national savings tools at high interest rates in the first eight months of this financial year. In the first seven months of FY 2016-17, the government made a net repayment of Tk 21,696.40 crore against low-interest loans it received from banks through selling T-bills and bonds to them. Bangladesh Bank officials said that the government would have to count a huge amount of money as loan interest to manage its budget deficit as the rates of interest on savings certificates and bonds was much higher than that of the treasury bills and bonds through which the government takes loans from banks. ‘The government now has surplus cash in its account due to huge sales of national saving certificates and bonds,’ said an official.
A gang of robbers have looted more than Tk 2.4 million (Tk 20.47 lakh) from a Janata Bank branch in Lakshmipur’s Ramganj Upazila town on Saturday. The Branch manager of the Ramganj branch of the state-owned Janata Bank said the bandits entered the bank around 3am and looted the money breaking the vault. They also beat up the security man (night guard), Mobarak Hossain, as he tried to resist them, said Bank Manager Emran Hossain Patwari. On Saturday morning, another guard Shahjahan found Mobarak lying unconscious on the bank floor and informed the bank officials, he added.
The reported move to increase the size of the block allocation ‘significantly’ in the national budget for the next fiscal year (FY), 2017-18, is likely to intensify further the concern over the proper use of funds coming under it. Finance Minister AMA Muhith during his recent meeting with the heads of the parliamentary standing committees made a strong hint at raising the volume of block allocation in the next budget, underlining the need for such an increase. The block allocation in the budget for the current fiscal is Tk. 7.19 billion. The size of the same, according to the finance minister, would go up manifold in the next budget and the money, as he explained, would be spent on meeting the development needs at the local level and ’empowering’ the local governments. The practice of keeping aside a sum of public fund under the head of ‘block allocation’ in the national budget is not unique by itself. This should, ideally, be done mainly for meeting financial exigencies on the part of the government.
The World Bank has approved a $507 million fund for two projects in Bangladesh to provide long-term financing to private sector-led infrastructure projects and modernisation of land ports. On Wednesday, the World Bank Board approved the Investment Promotion and Financing Facility (IPFF) II Project, which is built on the success of a predecessor project IPFF. The project will help participating local financial institutions to extend long-term credits for building infrastructure beyond the usual lending period of five to seven years, the World Bank said in a statement. The infrastructure would be built for waste management, water treatment, energy saving equipment, container terminals, land ports and bridges, the multilateral lender said. The projects will be funded by the World Bank’s concessionary arm, International Development Association. The Regional Connectivity Project 1 will receive $150 million zero-interest IDA credits with a 38-year term, including a six-year grace period, and a service charge of 0.75 percent.
Bangladesh and India signed six agreements and 16 memoranda of understanding yesterday on the second day of Prime Minister Sheikh Hasina’s four-day state visit to India. AGREEMENTS 1. On “Cooperation in Peaceful uses of Nuclear Energy” between the governments of Bangladesh and India. 2. For the “Exchange of Technical Information and Co-operation in the Regulation of Nuclear Safety and Radiation Protection” — between Bangladesh Atomic Energy Regulatory Authority (BAERA) and Atomic Energy Regulatory Board (AERB) of India. 3. On “Cooperation regarding Nuclear Power Plant Projects in Bangladesh” between Bangladesh Atomic Energy Commission (BAEC) and Global Centre for Nuclear Energy Partnership (GCNEP), India. 4. On “Audio-visual Co-production” between the governments of Bangladesh and India. 5. For the “Regulation of Motor Vehicle Passenger Traffic” (Khulna-Kolkata route) and SOP of the agreement between Bangladesh and India. 6. For the construction of 36 community clinics in Bangladesh — a financial agreement between the governments of Bangladesh and India.
India has announced a $5.0 billion line of credit (LoC) to Bangladesh during Prime Minister Sheikh Hasina’s New Delhi visit. Prime Minister Narendra Modi made the announcement during the joint media briefing at the Hyderabad House after his one-one-meeting with Hasina and the bilateral talks. Indian Ministry of External Affairs spokesperson Gopal Baglay tweeted that latest $4.5 billion line of credit, for projects in priority sectors, brings India’s resources allocation to $8.0 billion in eight years. The country has also extended a $500 million line of credit under a memorandum of understanding (MoU) on defence cooperation to procure arms and military technology from the country.
Delhi to review antidumping duty on jute exports: Hasina
A review of antidumping duties imposed by India on jute shipments from Bangladesh has been discussed, said Prime Minister Sheikh Hasina. Her statement came Saturday during a joint media briefing at Hyderabad House in New Delhi after her one-on-one tete-a-tete with Modi and the bilateral talks. Hasina said she discussed the issue with Indian Prime Minister Narendra Modi and they had “resolved the issue.” Modi also assured Bangladesh of “concrete steps” to address the growing trade deficit, Hasina said. “We both reiterated our strong commitment to make our borders peaceful and free from criminal activities. We also pledged zero tolerance against terrorism and extremism.”
FICCI proposes forming joint task force with FBCCI
Aiming to strengthen bilateral relations between India and Bangladesh, industry chamber FICCI has proposed a joint task force to promote investments in areas like infrastructure, education, health, power and tourism. The Federation of Indian Chambers of Commerce and Industry (FICCI) Saturday proposed working on six major initiatives as an agenda for the next year to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). “We would like to propose the establishment of a joint task force to promote investments in Bangladesh in the focus areas of infrastructure, education, health, power and tourism,” FICCI director general Ambika Sharma said in New Delhi.
Two economic zones in private sector start operation
Seven industrial units in the newly established two private economic zones in Narayanganj have started production initially that is expected to expedite the industrial growth and job creation in the country. “Two of the three certified economic zones in private sector–Meghna and Aman–have started operation. Cement, packaging and shipbuilding industrial units have started production in a limited scale,” said executive chairman of Bangladesh Economic Zones Authority (BEZA) Paban Chowdhury. Talking to BSS, he said another private zone–Abdul Momen–has already stated allocation of plot to investors for setting up industries. He said the seven industrial units having an estimated total investment of US$1.0 billion will be able to go for large scale production in the next year. BEZA has been working to establish 100 economic zones in 2030 across the country and as part of this move, 15 organizations in private sector have already been given pre-qualification certificate. Of the 15 organizations three have been given final clearance for beginning operations, said Chowdhury.
Bangladesh RMG export to China shining, India in tatters
Readymade garment export to China witnessed more than 27 per cent increase while that to India suffered nearly 8 per cent decrease in the July-March period of the current financial year 2016-17. Exporters and experts said in view of potentiality, China would be the big market for Bangladesh in future while various technical barriers imposed by the Indian authorities were holding back Bangladesh’s exports to the market. Country’s exports to China in the nine months of FY17 fetched $736.92 million, which is 32.06 per cent higher than the earnings of $558.01 million in the same period of FY16, according to the Export Promotion Bureau data. RMG export to China in the July-March period of FY17 grew by 27.11 per cent to $285.07 million from $224.26 million in the same period of FY16. Data showed that leather and leather products export to China increased by 27.19 per cent to $214.23 million from $ 168.43 million.
Leaders of the country’s apparel sector demanded Thursday withdrawal of source tax and a five-year long policy to help businesses make plans prior to investment and create more employment. “The country’s readymade garment industry is passing through a very tough time due to declining trend in global demand. The international demand for apparel declined by 7.50 per cent while it is 6.0 per cent in the current year,” said Md Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The average growth of the sector was 13 per cent during the last 10 years while it stood at less than three per cent this year, he said while speaking at a pre-budget discussion of 2017-18 fiscal year held at the National Board of Revenue (NBR) office in the city.
Biman borrows $ 66.5m to pay dues against two new aircraft
Biman Bangladesh Airlines has taken US$ 66.50 million loan from Sonali Bank Limited to adjust pre-delivery payment (PDP) dues for two more Boeing aircraft. The country’s largest state-owned commercial bank (SoCB) had arranged the loan for the national flag carrier by taking deposit from the central bank’s foreign exchange reserve, officials said. Bangladesh Bank (BB), the country’s central bank, has already deposited the fund with Sonali Bank UK Limited as short-term investment. The government holds 51 per cent stake of the bank in London and Sonali Bank Ltd the rest 49 per cent.
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