Fostering innovation a key challenge: BB governor
The challenge for regulators is to find ways for fostering innovation while safeguarding consumer protection and enhancing stability of the financial sector, Bangladesh Bank Governor Fazle Kabir said. He spoke at the 10th G-24/AFI High Level Roundtable held in Washington DC on April 18. Over 100 senior policymakers, led by 30 central bank governors from emerging and developing countries, attended the event where the different aspects of financial technology or fintech were discussed. “The main concerns of policymakers and industry arise not from the technology itself but from the question of who is applying technology to finance along with the speed of development,” Professor Douglas Arner from the University of Hong Kong said in a presentation. Given that innovations go together with risks, practical solutions for solving key financial inclusion challenges such as access and usage of high quality financial services need to be put in place, the participants said. Thus, technology can be used to achieve financial inclusion objectives and create efficiencies in the market in terms of costs, transparency, trust in institutions and provide stronger consumer protection regimes, they added.
Bangladesh Bank assessing forex market situation
The central bank of Bangladesh has intensified its monitoring and supervision to assess the real situation in the country’s foreign-exchange market through scrutinising banks’ statements. As part of the latest moves, the Bangladesh Bank (BB), the country’s central bank, started scrutinising the foreign-exchange inflow and outflow statements of each bank on Thursday, according to officials. The BB’s Forex Reserve and Treasury Management Department (FRTMD) sat with senior officials of five commercial banks to get to know their statements, submitted to the central bank earlier. Talking to the BBN, an executive director of the BB said the central bank has started scrutiny of such statements to get to know the utilisation of funds by the bank concerned. The executive director also expects that such scrutiny of the statements will be completed by the next week.
FDI drops by 8.42pc in 2017
Net inflows of foreign direct investment in the country declined by 8.42 per cent to $2.15 billion in 2017 from $2.33 billion a year ago, according to the final calculation of the Bangladesh Bank released on Thursday. Equity investment, which is considered as fresh investment directly from abroad, declined by more than 69 per cent to $538.90 million in the year from $911.38 million in 2016, the report showed. Reinvested earnings and intra-company loans, however, increased to $1.28 billion and $333.24 million respectively in 2017, which were $1.22 billion and $205.95 million a year ago. Earlier, provisional data of the central bank in February showed the FDI at $2.02 billion for 2017. According to the World Investment Report 2016 of the United Nations Conference on Trade and Development, the net FDI inflow in Bangladesh was $2.33 billion in 2016 which was the highest in the history of the country.
Bangladesh Bank sells $11m to six banks
The central bank of Bangladesh has sold US$11 million more to six commercial banks to meet the growing demand for the greenback in the market. “We’ve sold the foreign currency to the banks on Thursday at market rate to settle import payment bills, according to a senior official of the Bangladesh Bank (BB). He also said the BB may continue providing such foreign currency support to the banks in line with the market requirement.
Two banks to act as authorised dealers: Gold policy at final stage
The country’s much-awaited maiden gold policy is now at final stage, keeping a number of provisions including introduction of a new system for gold bar imports, officials said. As part of the move to create a favourable climate in import, purchase and export of gold and gold products, the commerce ministry has already prepared a draft of the gold policy which officials believe will be finalised soon in consultation with the stakeholders. After years of demand from various quarters, the government finally put the country’s first-ever gold policy on table to bring transparency and accountability in the growing gold market, they mentioned. According to the draft, a new system could be introduced through authorised dealer (AD) to meet the local demand for jewellery. Initially, two commercial banks could be declared as authorised dealer banks.
HSBC to stop financing coal power, except for Bangladesh, two others
HSBC has ruled out funding new coal-fired power stations all around the world with the exception of three countries – Bangladesh, Indonesia and Vietnam where funding may continue until 2023. Europe’s biggest bank announces intention to halt financing for coal-fired power plants as part of low-carbon drive – but lists Bangladesh, Indonesia and Vietnam as exceptions, according to a report published on www.businessgreen.com and https://ibsintelligence.com. HSBC, the biggest bank in Europe, has Friday announced it will stop financing coal-fired power stations, oil sands and Arctic offshore drilling projects in a move to support the low-carbon economy.
BKB collects Tk 474.35cr from borrowers on Halkhata
Bangladesh Krishi Bank (BKB) collected Tk 474.35 crore from its borrowers as part of a centuries-old “Halkhata” tradition, which is the opening of new accounts on arears being cleared marking the beginning of a Bangla calendar year. The bank arranged the event at all of its 1,031 branches on April 12, when 1,29,581 borrowers paid the amount, the bank said in a statement. New loans amounting to Tk 390 crore were disbursed among 26,470 borrowers the same day.
Cash payment deprives RMG workers of banking benefits
Majority of the readymade garment workers are out of the formal banking system and deprived of wage digitisation due to payment of their wages in cash, said speakers at a discussion on Thursday. They also recommended pragmatic and commercially viable projects that would identify the risks and challenges ahead of bringing workers under formal banking system. They came up with the observations at a panel discussion titled ‘Financial Inclusion in the RMG Sector in Bangladesh: Building the Ecosystem’ in a Dhaka hotel. As a sideline to the discussion, state minister for ministry of planning and ministry of finance MA Mannan launched a project, Sarathi—progress through financial inclusion, funded by Swisscontact and Metlife Foundation.
Dividend worry creeps in: Number of firms offering cash dividends shrinks
The number of listed companies offering cash dividend in 2017 declined from a year earlier, indicating a greater number of firms are falling into a liquidity crunch. Cash dividend is a payment made by a company out of its earnings to investors in the form of cash. This transfers economic value from the company to the shareholders instead of the company using the money for operations. In 2017, 185 listed companies announced cash dividend for the year, down from 192 in 2016.
Meghna Bank gets new CEO
Adil Islam has recently been appointed as managing director and CEO of Meghna Bank. Prior to the appointment, Islam was the additional managing director of City Bank, Meghna Bank said in a press release yesterday. Having more than 27 years of banking and business leadership experience, he served as business and functional head positions both in Bangladesh and in overseas locations for companies such as HSBC, ANZ, American Express, Mashreq Bank and other international banks.
Green Delta Ins reelects chair, vice-chair
The Board of Directors of Green Delta Insurance Company Limited has recently reelected Md Abdul Karim as its chairman and Kamran Idris Chowdhury as vice-chairman. Md Abdul Karim, former principal secretary to the government, is the Managing Director of Palli Karma-Sahayak Foundation (PKSF). Kamran Idris Chowdhury is a fellow member (FCA) of the Institute of Chartered Accountants in England and Wales (ICAEW) and the Institute of Chartered Accountants of Bangladesh (ICAB).
New CEO of Republic Insurance
Recently Mr. Sahid-ul-Hasan joined as CEO of Republic Insurance Company Limited (RICL). Before his joining he was engaged in this Company as Additional Managing Director.
StanChart honours leading corporate houses
A total of 10 leading business houses of the country have received the “Standard Chartered Bangladesh Trade Award 2017”. The awards were formally handed over to the winning entities at a function held at a city hotel on Saturday. The awards were accorded in two categories- textile and garments and non-textile and garments. Winning groups in the textile and garments category were- Epic Group, YKK Bangladesh, Youngone Corporation, Ha-Meem group, Square Group. Winners in the non-textile and garments were: Bangladesh Petroleum Corporation, TK Group of Industries, Akij Group, City Group and Meghna Group of Industries.
IMF: Bangladesh’s economic growth is promising
The International Monetary Fund (IMF) said on Friday that the organization is hopeful about the economic growth of Bangladesh. IMF made the comment during a press conference at the 2018 Spring Meeting of the IMF and World Bank Group in Washington DC. Deputy Director of IMF, Asia and Pacific Department Kenneth H Kang said that due to the extraordinary growth of consumption and investment in the private sector, the economic growth of Bangladesh is promising right now. Answering a question about Bangladesh, he said that according to their calculations, the deficit rate might be 2% and the inflation rate might be around to 6%. He stressed that the country should work towards building a favourable environment for private banks to make profits as well as look into the defaulting loan system of the public banks. This would contribute to strengthening the banking sector of the country.
Economy faces ‘twin deficit’
A sharp rise in current account deficit is aggravating the country’s ‘twin deficit’ phenomenon that surfaced after many years. An economy is said to have a twin deficit, if it has a current account deficit along with a fiscal deficit. Many international think-tanks earlier predicted the situation for Bangladesh’s economy this year. The country has both fiscal or budget deficit and current account deficit amounting to over US$ 6.3 billion, more than 300 per cent higher in a year. The government has a deficit target of 5.0 per cent of the gross domestic product (GDP) to meet the budget funding. Traditional macro-economists predict that persistent double deficit in a country leads to currency devaluation or depreciation that can be severe and sudden.
249,000 workers go abroad, Bangladesh receives $4,530m remittance till April
Bangladesh has sent 2,49,528 workers overseas and received $4,530.46 million as remittance till April 13 this year, something that contributed significantly in the socioeconomic advancement of the nation. “The trend of overseas employment is gradually increasing due to the government’s sincere efforts,” Expatriates’ Welfare and Overseas Employment Minister Nurul Islam BSc told BSS in Dhaka on Thursday. He said the overall manpower export from Bangladesh is expected to witness a robust growth this year as the officials say as many as 10,08,525 workers have got overseas jobs, sending $13,526.84 million last year.
Power Division seeks 21pc higher ADP fund for FY ‘19
The Power Division has sought 21 per cent higher allocation in the next development budget as it has taken up massive transmission upgradation programme across the country, officials said Thursday. Power Division officials said they had sought Tk 296.67 billion in the Annual Development Programme (ADP) for the next fiscal year (FY) 2018-19. The government allocated Tk 245.30 billion in the revised ADP for the current FY 2018. “We have sought the fund as some larger projects especially on the transmission sub-sector are being implemented to bridge the gap between supply and demand for electricity,” said a Power Division official. Besides, a handsome amount of funds will be required to execute some ongoing big power plant projects in the next FY 2019, he added.
Revenue collection slows in July-March
Revenue collection slowed in the first nine months of 2017-18, making it harder for the National Board of Revenue to hit its full fiscal year’s goal. Taxmen logged in 14 percent year-on-year revenue growth to Tk 144,311 crore in the July-March period. The growth was 20 percent in the same nine-month period in 2016-17, according to data of the NBR. The revenue generation was Tk 23,001 crore shy of the target of Tk 167,318 crore in July-March, according to the tax administration. Now, the NBR will have to collect Tk 103,879 crore in the final quarter ending in June or post 72 percent growth to reach the full-year target of Tk 248,190 crore. The tax data came at a time when the finance ministry is revising down the mobilisation target for the fiscal year.
Tax on raw material import to be reduced: NBR
The Chairman of the National Board of Revenue (NBR) and secretary of the Internal Resources Division Mosharraf Hossain Bhuiyan yesterday (Saturday) said facilities would be given to import raw materials for products that could be made in the country. He said the tax on importing raw materials would be reduced in the next national budget to promote local industries. That would increase employment and make the country’s economic base strong. However, it was necessary to consider the supply of domestic products as well, said the NBR chairman while addressing in a pre-budget view-exchange programme at the Chittagong Metropolitan Chamber Commerce and Industry (CMCI) conference hall.
Owners of CNG auto-rickshaws to be taxed
The owners of CNG-run auto-rickshaws will be brought under the tax net in the upcoming fiscal year, said National Board of Revenue Chairman Md Mosharraf Hossain Bhuiyan yesterday. The owners will have to have taxpayers’ identification number (TIN), he told a meeting with the representatives of the automobile and transport sectors at the NBR. The revenue board organised the meeting to hear the views and proposals of the sectors before framing tax measures for 2018-19. The suggestion to make it mandatory for owners to have a trade licence and TIN came from the Four Stroke CNG Auto Rickshaw and Three Wheelers Motorbike Owners Association of Bangladesh. The association also demanded that the NBR attach a condition for the owners to become its members.
Govt to set up national window for trade facilitation
The government will establish a national single window to facilitate trade, said Md Mosharraf Hossain Bhuiyan, chairman of the National Board of Revenue. He said the NBR will act as the lead agency of the window. He spoke at a roundtable on trade facilitation co-organised by International Chamber of Commerce-Bangladesh, ICC Paris and Global Alliance for Trade Facilitation in Dhaka on Wednesday. Bhuiyan said the NBR has undertaken a number of projects to implement the Trade Facilitation Agreement (TFA). At present, the ICC Paris in association with the Global Alliance is running a number of projects on trade facilitation in Vietnam, Colombia, Ghana, Kenya, Sri Lanka and Morocco. It plans to add 15 more countries, including Bangladesh, to the project. The roundtable was part of the plan to identify a suitable project for Bangladesh, said the ICCB in a statement.
CHOGM adopts connectivity agenda for trade
In response to the risks to growth presented by rising protectionism, leaders at the Commonwealth Heads of Government Meeting (CHOGM) expressed on Saturday their strong support for the multilateral trading system. They adopted a six-point connectivity agenda to boost trade and investment links across the Commonwealth, reports BSS. Leaders committed themselves to the vision of increasing intra-Commonwealth trade to US$2.0 trillion by 2030, and expanding intra-Commonwealth investment. This is to be achieved through the Commonwealth Connectivity Agenda for Trade and Investment, said a media release.
Easy taxation to help draw Thai investment
Thai businessmen will be interested in investing in Bangladesh if the government makes the taxation system easier and improves infrastructure especially in the transport sector, said a diplomat of Thailand yesterday. Suebsak Dangboonrueng, minister counsellor (commercial) of the Thai Embassy in Dhaka, said the policies and the intention of the government of Bangladesh aimed at attracting investment from Thailand were good, but there were some obstacles. “I think the government of Bangladesh should improve infrastructure and the transport sector to attract more foreign investors as there is a high potential for foreign investment,” he told The Daily Star in an interview at Pan Pacific Sonargaon Dhaka. He said Thai investors were keen to invest particularly in the food processing sector as Thai food products were very popular here. Thai food and cosmetic exporters have to pay 90 to 100 percent in customs duty, and Dangboonrueng described the high duty as a challenge for Thailand to boost exports to Bangladesh. Still, Thai exporters continue doing business with Bangladesh as there is a huge business potential in the country.
BD-Thai business dialogue on May 3
The country’s apex trade body will pursue Thai entrepreneurs to make more investments here during the upcoming Bangladesh-Thailand business dialogue early next month in Dhaka, sources said. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) will organise the dialogue scheduled to be held on May 3. A high-powered Thai delegation, led by minister attached to the Prime Minister’s Office of the Royal Thai government Kobsak Pootrakool, will arrive in Dhaka on May 2. Besides, officials of the board of investment of Thailand, department of trade negotiations (DTN), port authority of Thailand and private sector representatives will attend the dialogue.
RoK shows interest to deepen trade ties
Korean entrepreneurs expressed their interest to lift trade with Bangladesh as part of strengthening bilateral economic relations. The interest was shown at a meeting between the Korea Chamber of Commerce and Industry (KCCI) and Bangladesh embassy officials in Seoul recently. Executive vice-chairman of the Korean chamber Jundong Kim at meeting with Bangladesh ambassador in Seoul said that the KCCI is ready to update the existing memorandums of understanding (MoUs) with the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
$2.5b investment round the corner: Joint venture to set up petrochemical complex, LPG terminal in Moheshkhali
Super Petrochemical Pvt Ltd (SPPL), a concern of TK Group, and SK Group of South Korea plan to invest $2.5 billion jointly to establish a petrochemical complex and an LPG terminal in Moheshkhali. “We are planning to implement the project in phases,” said Mohammad Mustafa Haider, managing director of Super Petrochemical Pvt Ltd. “However, we intend to implement the LPG terminal project by 2021,” he told The Daily Star. Under the joint venture, a full-fledged petrochemical, chemical storage facilities and liquefied petroleum gas (LPG) terminal will be set up in the island.
Move to set up 800 MW power plant in Khulna
The government has taken a move to set up an 800 MW combined cycle power plant on the abandoned land of Khulna Newsprint Mills Limited to meet the growing demand for power in the country. “The Power Division has already prepared a draft project titled ‘Construction of Roopsa 800 MW combined cycle power plant’ and sent it to the Planning Commission for its consideration,” a senior official told BSS. He said the North West Power Generation Company Limited (NWPGCL) under the Power Division has been assigned to implement the project by June 2022 at a cost of Tk 88.16 billion. The Asian Development Bank (ADB) and the Islamic Development Bank (IDB) are expected to provide Tk 62.38 billion as project assistance while the remaining amount will come from the state exchequer, said the official of the Planning Commission.
Bangla Trac Power Unit-2 adds 100MW
Bangla Trac Power has started to supply 100 megawatts of electricity to the national grid from its plant in Noapara, Jessore, according to Bangladesh Power Development Board. Another 200MW power plant of the company located in Daudkandi, Comilla is expected to start supplying electricity to the grid soon.
Dhaka-Mawa four-lane project cost to swell 70pc
The ongoing Dhaka-Mawa 4-lane road project is going to be the costliest one as the Road Transport and Bridges Ministry has brought significant changes in the design of the highways, officials said Wednesday. Officials said since the state-run Roads and Highways Department (RHD) and the Bangladesh Army — the implementing agencies — have brought changes in the design of the road project, it will require 69 per cent hike in cost than the originally estimated at Tk 62.52 billion.
Huge market in Europe for Bangladeshi leather goods
A new avenue of opportunity for Bangladeshi leather and leather goods can open up in European markets as China is losing its market share, said a top official of Messe Frankfurt, a mega trade fair organising company based in Germany. Michael Scherpe, president of Messe Frankfurt France, said Europe is a market of tens of billions of euros and China is still one of the largest leather and leather goods suppliers to the continent. But China’s exports are decreasing because of the rising wages and domestic demand in the country, he said. “It creates good opportunities for factories in other countries, including Bangladesh, which are capable of manufacturing the same products,” he told a press conference at the Westin Hotel in Dhaka yesterday. Scherpe also shed light on the upcoming fair in Paris that is solely focused on the leather sector. The four-day exposition starts on September 17 this year.
Danish retailers pay highest for apparel
Danish retailers pay the highest among the 28 European nations when it comes to garment items and the British ones the lowest, according to a survey by the International Apparel Federation. The retailers from Denmark pay on average 9.56 euros per unit, followed by Italy at 9.15 euros and Germany at 8.63 euros. The UK retailers pay the lowest of 5.42 euros. The IAF, the global federation of the apparel industry with presence in more than 60 countries, conducted the survey based on the average price of a pair of trousers imported by the European retailers in 2016. The survey result was published last December.
BCIC fears Tk 19b loss in next FY
The Bangladesh Chemical Industries Corporation (BCIC) is likely to incur a loss of around Tk 19 billion for selling urea fertiliser at much lower price than the production cost in the next fiscal year, officials said. Amid such a situation, the corporation has requested the government to provide subsidy against the loss and include it in the subsidy policy.
Salt production may fall short of target this year
The country is unlikely to achieve the target of salt production this season as output in the salt beds is not satisfactory. Due to failure to meet the production target in last few years, the government may have to import salt in future, experts said. Production of salt, one of the oldest and most ubiquitous food seasonings, and a key ingredient of food preservation in Cox’s Bazar coastal areas is going on in full swing as the season is nearing end. Bangladesh Small and Cottage Industries Corporation (BSCIC) has fixed the salt production target at 1.8 million tonnes for the current fiscal year against the country’s demand for 1.62 million tonnes.
High price, low quality hold back solar energy in Bangladesh
The installation of more than four million Solar Home Systems (SHS) in the last two decades has made Bangladesh one of the biggest markets for SHS in the world. But these numbers, often held up as a renewable energy success story, actually mask a grim reality. Many of the solar systems are of a poor quality, contributing little to the solarization of the country, say experts. High prices charged for inferior systems have emptied the pockets of consumers, but have not had a lasting impact on the overall scenario of energy generation. According to Engineer Mahbub Sumon, a renewable energy expert, the average home solar system installed in Bangladesh in the last decade merely had a generation capacity of 20-50 watt, which is good enough for lighting only a few bulbs and fans. While modern solar panels used globally have energy efficiency of up to 22%, the Bangladesh market is still stuck with 10-12% panel efficiency. As a result, even after two decades of successful SHS dissemination throughout the country, the share of renewable energy in total electricity generation in Bangladesh is only 0.07%.
Foreign e-commerce entities to get conditional entry
Foreign e-commerce ventures are unlikely to be allowed to operate in Bangladesh without forming joint venture (JV) with local firms, as per the national e-commerce policy. The policy is now at the final stage of formulation. The stakeholders concerned said the provision is incorporated to protect the interest of numerous local e-commerce entities that have flourished in the country in recent years. Information and Communication Technology (ICT) Division has formulated the policy in collaboration with the relevant trade-bodies and the government entities, and it is now waiting to be sent to the cabinet for final approval.
Bangladesh lowest internet using country in Asia Pacific: study
Bangladesh, along with Pakistan, has the lowest level of mobile internet penetration in the Asia Pacific region, according to a report of GSMA, the global trade body of mobile operators. Only 21 percent of the population of both Bangladesh and Pakistan have mobile internet connection — the lowest among regional peers. In 2017, one in five Bangladeshis subscribed to mobile internet services despite 3G networks covering in excess of 90 percent of the population. Even countries like Nepal and Myanmar, both of which have lower GDP per capita than Bangladesh, have higher mobile internet penetration: 28 percent and 35 percent respectively. The majority of subscribers in Bangladesh primarily use their phones for basic voice and SMS services, the report said.
New rules on cards to fine telcos for noncompliance
The BTRC is finalising a new set of regulations under which the telecom and internet service providers will have to pay the penalty for non-compliance with the service standards set by the regulator. In the regulation, Bangladesh Telecommunication Regulatory Commission (BTRC) has declared a minimum 7Mbps internet speed for fourth generation (4G) data service as the standard. The maximum rate for call drop has been set at 2 percent while the call setup success rate should remain above 97 percent, according to the new parameter. Maintaining 160 kilobyte per second for 2G service and 2Mbps for 3G service will be a must for the operators and uploading speed should reach 40Kbps for 2G and 128Kbps for 3G services. It also mentioned that the broadband internet services would have to maintain on average minimum 5Mbps download and 1Mbps upload speed. Besides, the broadband service providers will have to maintain on average less than 7 second download time for a web page, the regulation reads.
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