Forex reserves cross USD 29.0 billion

Bangladesh’s foreign exchange reserves crossed the USD29-billion mark mainly due to a dearth of investment. The amount stood at USD 29.1 billion yesterday, which is sufficient to meet the country’s import bills for 9.41 months, an official of Bangladesh Bank said the figure is deemed satisfactory if it meets import bills of five to six months, according to new standards. The reserves reached USD28 billion in February the reserves have been hitting new highs every month or two due to a lack of demand for investment, economists said at a pre-budget discussion with the finance minister recently. Faster growth of exports compared to imports is another reason behind the hike in the reserves, the BB official said Exports grew 8.95% year-on-year to USD 24.95 billion in July-March of the current fiscal year, while imports rose 6.44% to USD 25.63 billion in July-February, according to central bank data. The central bank has to purchase dollars from the market every month to keep the exchange rate stable since the demand for the foreign currency is not high right now.

Source:
http://www.thedailystar.net/business/forex-reserves-cross-29b-1214647
http://print.thefinancialexpress-bd.com/2016/04/26/140026

Restructured large loans come under Bangladesh Bank watch

Amid latest developments in the banking sector, restructured unpaid large loans are coming under a close monitoring by the central bank under a bid to get accounts straight. The Bangladesh Bank (BB) has sought latest updates on such credits from 22 banks by May 05, official sources said. The central bank of Bangladesh has taken the latest measure to know whether various directives relating to large loan restructuring, were carried out or not by the bank concerned. Under the move, the BB has already sent two questionnaires to the banks, seeking different pieces of information on such loans within the stipulated timeframe, according to the central bank officials. Besides, the banks will have to submit their quarterly report in this connection to the central bank regularly in line with its instructions, issued on January 29, 2016.

Source: http://print.thefinancialexpress-bd.com/2016/04/26/140035

Banks, financials help foster SME growth

Lending by banks and non-banks has helped small and medium enterprises (SMEs) achieve considerable growth in the last five years, industry-insiders said. But to realize the sector’s full potential it requires “flexibility” in terms of interest rate, lending conditions and other issues, they said. The SME and Special Programs Department of Bangladesh Bank (BB), in a statement, revealed that in 2015 for all of the banks and Non-Bank Financial Institutions (NBFIs), the BB had set annual SME loan disbursement target at BDT 1,045.86 billion, which banks and NBFIs exceeded well by disbursing BDT 1158.70 billion. The disbursement was more than 11% of the target. Even three years back, the target and disbursement amount was almost half the amount in 2015. In 2013 and 2014, the loan disbursement target was BDT 741.87 billion and BDT 890.31 billion respectively, up from BDT 590.12 billion in 2012. In terms of disbursement, Islami Bank Bangladesh Limited (IBBL) tops the list, followed by Social Islami Bank Limited (SIBL) and Al-Arafa-Islami Bank. Islami Bank against their target of BDT 250 billion disbursed 264.68 billion, which is 5.88 higher than the target, according to the central bank data.

Source: http://print.thefinancialexpress-bd.com/2016/04/26/139981

FDI picture mixed

Investment by the existing foreign companies picked up in Bangladesh in 2015 but new FDI slipped despite the relative political calm. Overall, foreign direct investment rose 31% year-on-year to USD 2.7 billion last year, according to data on gross FDI from the central bank. Foreign investment is split into three categories: equity, reinvestment of earnings and intra-company loan. Equity or new investment declined 1.17% from a year earlier to USD 758 million in 2015, while reinvestment of earnings increased 15% to USD1.14 billion. Intra-company loans more than doubled year-on-year to USD795 million in 2015, showed Bangladesh Bank figures. Although existing companies are making investment, fresh FDI is not coming as fast as the government is expecting. Economists blamed the perennial infrastructural bottlenecks and administrative barriers for the fall in fresh FDI. Zahid Hussain, lead economist of the World Bank’s Dhaka office, said new investment in the form of equity is not coming. The problems with roads and highways, ports and land have remained the same. Hussain said foreign investors take into account what the World Economic Forum, the International Finance Corporation’s Ease of Doing Business and the Logistics Performance Index are saying about Bangladesh.

Source: http://www.thedailystar.net/business/fdi-picture-mixed-1214653

FICCI: Cut corporate tax to woo foreign investors

Foreign Investors’ Chamber of Commerce and Industry yesterday urged the government to reduce corporate tax in the next fiscal year’s budget to attract more foreign investment into the country. A delegation of FICCI, led by its president Rupali Chowdhury, placed their budgetary proposals at a pre-budget meeting with the National Board of Revenue in the city yesterday. The corporate tax for the non-listed companies should be reduced by 10% to 15% to minimize the gaps between marginal tax rate and effective tax rate, according to the FICCI proposal. Currently, the corporate tax rate for the non-listed firms is 35% in the country. The effective tax rate becomes 45% to 50% for the companies because of high dis-allowances on royalty fee and excess perquisites, it argued. “The corporate tax rate is very high compared to the other countries including India where the rate is 25%,” said Rupali Chowdhury.

Source:
http://www.dhakatribune.com/business/2016/apr/26/ficci-cut-corporate-tax-woo-foreign-investors#sthash.Y56LZqcg.dpuf
http://print.thefinancialexpress-bd.com/2016/04/26/140039

Beverage makers call for a cut in tax

Beverage companies have urged the government to cut supplementary duties on drinks from 25% to 15% next fiscal year so the sector can contribute more to the economy. A cut in tax rate will help the sector strengthen its foundation, reduce import reliance and save foreign currency, said Bangladesh Beverage Manufacturers Associa-tion (BBMA). Bangladesh has one of the highest tax rates on beverages in South Asia. Supplementary duties and value added taxes together account for 43.75%, making beverage products expensive in Bangladesh. The rate is 35.3% in India, 29.2% in Sri Lanka, 24.2% in Nepal and 30% in Bhutan. The high tax rates are discouraging investment in the sector, the association said. The association said there is no supplementary duty at local level on ice cream, cakes, chocolates, biscuits, sweets and yoghurt, which seems logical. At the same time, there should not be any supplementary duty on soft drinks as it is also a food item. At least, there should not be any higher supplementary duty, according to the association.

Source: http://www.thedailystar.net/business/beverage-makers-call-cut-tax-1214644

WB reminds government to return USD 85 million over breach of rules

The World Bank (WB) reminded the government to return its USD 85 million that it provided for a number of development projects, due to alleged fund misappropriation and breach of procurement rules, officials said. The Washington-based lender recently sent a letter to the Economic Relations Division (ERD) secretary asking for necessary action in connection with refunding the money on an urgent basis, they said. The WB has found violation of procurement rules in the tender process involving 20 projects, for which it had earlier confirmed funding, they added. However, a senior official at the Ministry of Finance (MoF) said. He said the government’s project implementing agencies allegedly resorted to corruption in the procurement process for some 20 projects. Twenty refund request letters were issued by the International Development Association (IDA) on account of declaration of ineligible expenditures in case of projects under implementation, the letter said.

Source: http://print.thefinancialexpress-bd.com/2016/04/26/140028

Bangladesh looks for AIIB funds for power projects

With the China-led Asian Infrastructure Investment Bank (AIIB) operating for over three months, Bangladesh is looking to the new lending institution for funding some of its power projects. The government has asked its top officials to approach the AIIB for loans for some of its power projects, which is much needed for Bangladesh as it plans to supply uninterrupted electricity to residences by 2021, sources said. The Ministry of Finance has accordingly asked the Economic Relations Division of the Ministry of Planning and Power Division to prepare proposals to seek loans from the new lender. Among the other existing lenders like AIIB, Bangladesh receives the largest amounts of loans from the US-led World Bank and Japan-led Asian Development Bank. The move comes after the parliament in February ratified the AIIB Bill 2016, paving the way for the bank membership.

Source: http://www.dhakatribune.com/business/2016/apr/26/bangladesh-looks-aiib-funds-power-projects#sthash.kRS9xkk9.dpuf

Banglalink against allowing 4G in 2100MHz band

Mobile phone operator Banglalink has requested Bangladesh Telecommunication Regulatory Commission not to allow launching 4G in 2100MHz band spectrum after another operator, Robi, recently sought clarification from the BTRC on this issu Banglalink in a letter to the telecom regulator on April 19 said, after the proposed merger of Robi and Airtel, the joint entity will have 10MHz spectrum in 2100MHz band ‘It is clear that the merger would provide Robi and Airtel with an unfair advantage, enabling them to free up spectrum for introduction of the 4G technology. The other operators would be constrained by the lack of spectrum. This would destabilize the market and create an absolutely unequal competitive situation,’ claimed the letter. The mobile phone operator Robi, currently in a process of merger with Airtel, in a letter to the BTRC recently sought clarification about whether the existing 3G cellular licence is good enough for telecom operators to launch 4G data services.

Source: http://newagebd.net/224799/banglalink-against-allowing-4g-in-2100mhz-band/

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