BB receives 73 proposals worth $435m for long-term financing
Bangladesh Bank has so far received 73 project proposals involving USD 435 million from export-oriented companies to facilitate long-term financing under the World Bank-funded Financial Sector Support Project. The Central Bank has already sanctioned 27 proposals with USD 109.77 million, of which USD 50.79 million of 18 proposals has been disbursed, the rest of the sanctioned amount is under the process of disbursement said a senior BB official. Out of the total sanctioned funds, some have been disbursed partially and some others are under the process as the amounts will be disbursed through opening letter of credit for importing machinery, he added. Out of the total applications received through commercial banks, the central bank is processing 27 proposals while 13 have been sent to the World Bank for consideration, the BB official said. He also said the BB has also rejected six proposals with USD 31.71 million for various reasons.
The access to and use of formal banking services at the upazila level improved substantially between 2010 and 2015, according to a recent study that highlighted the government’s efforts to take financial services closer to the people. The General Economics Division of the Planning Commission carried out the study with support from the statistics department of the central bank. The findings of the study titled ‘Banking Atlas’ will be published in Dhaka tomorrow. According to the report, Bangladesh has shown a steady upward trend in all eight major banking variables at the upazila level, giving a boost to the government’s financial inclusion efforts. Banking Atlas consists of 48 maps on the eight major banking variables from 2010 to 2015 at the sub-district level. The number of branches of all banks increased at the upazila level during the time. The branch density, the average number of branches of all banks per square kilometre, rose to 0.86 from 0.71. The average number of branches per 100,000 adults went up to 11.34 in 2015 from 9.25 in 2010. The average size of deposits and loans also witnessed a significant rise. An adult’s bank deposit nearly trebled to BDT 118,050 in 2010 from BDT 44,500 five years ago. The loan per account increased to BDT 24,970 from BDT 17,170.
Foreign-aid flow into Bangladesh dropped 11.0% in the first three quarters of this fiscal, mainly for two reasons cited by officials. One is slower project execution and the other lower fund disbursement by a few donors, including security-shaky Japan. The bilateral and multilateral foreign financiers disbursed USD 2.3 billion worth of concessional loans and grants in the July-March period of the current fiscal year (FY), 2016-17. The receipt is USD 289 million lower than that of the corresponding period in the last FY2016, official data showed. The Economic Relations Division (ERD) data, however, showed the foreign- aid commitment, except the USD 11.4 billion Russian state credit for Rooppur Nuclear Power Plant project, increased to USD 3.9 billion in the past three quarters. In the corresponding period (July-March) of last FY2016, the commitment of external assistance had amounted to USD 3.8 billion. Early this fiscal, the government signed on a single USD 11.4 billion worth of loan with the Russian government for setting up the 1200MW Rooppur power plant at Iswardi in Pabna.
Bangladesh Bank (BB) will review the guidelines on mobile financial services (MFS) to help create a more competitive market in the country, said a central bank senior official. Bangladesh Institute of Development Studies (BIDS) organized the discussion titled “Future Role of Mobile Financial Services” at a city hotel as part of its two-day annual event called BIDS Critical Conversations 2017 with the theme Lila Rashid said MFS is not competitive in the country. The regulator will have to create a competitive environment for all MFS. Everybody should have an equal opportunity to grow. The regulator will not allow any monopoly in the MFS market, she said raising a question about how bKash, the leading MFS provider, fixed the transaction fees which it is charging now. Ms. Lila Rashid ruled out any option of mobile operator-led financial services in the country. She said the central bank is encouraging subsidiary model mobile financial services of banks like bKash.
New top brass for SWIFT Member & User Group of Bangladesh
Md Arfan Ali, president and managing director of Bank Asia, has recently been elected as the chairperson of SWIFT Member and User Group of Bangladesh, according to a statement. The election took place at an annual general meeting of the group, at the corporate office of Social Islami Bank on April 24. The group also elected AMM Farhad, additional managing director of Social Islami Bank, as the secretary general of the group.
NBR revenue target to increase by BDT 120.0 billion
The government is going to raise the NBR revenue earning target by BDT 120.0 billion from its earlier estimate to keep budget deficit within the limit of 5.0% of GDP, officials familiar with the budget process said. The rise is feared to put extra burden on the poor section of the people. Finance Minister AMA Muhith asked the officials involved with the budget preparation for the next fiscal year to keep budget deficit within 5.0% of the gross domestic product. Finance Division officials said the revenue collection target of the National Board of Revenue (NBR) was earlier fixed at BDT 2.4 trillion in the financial year 2017-18. But now the figure is re-fixed at BDT 2.5 trillion. According to Finance Division data, the non-NBR revenue will be increased to BDT 320.0 billion from the proposed BDT 270.0 billion. The current budget deficit is BDT 1.1 trillion and is estimated to increase to BDT 1.3 trillion in the new budget, according to the budget outline of the FY2017-18. A copy of the outline was obtained by the Dhaka Tribune. NBR Chairman Nojibul Rahman hoped that the next fiscal year’s revenue earning will increase because of value-added tax and budget deficit will be narrowed significantly. After a fiscal coordination council meeting, finance minister said the next fiscal year’s budget deficit will be 5.8% of the GDP.
The revenue authority yesterday said the prices of goods will not rise in general once the new VAT law comes into effect in July 1 The National Board of Revenue’s assurance comes amid concerns that the prices of many goods and services will soar, while various local industries will face increased competition with imported goods once the new VAT and Supplementary Duty law is implemented. It said the net VAT burden under the new law will be 13.04 percent because of the scope to get rebate and inclusion of VAT in the selling prices of an item.
Businesses favor keeping VAT rate at 7-10% initially
Speakers at a programme on Tuesday urged the authorities concerned to assess new VAT law’s impact on consumers first, apart from holding talks with members of the business community only. They also said the VAT rate should be kept within 7.0% to 10% initially which can be increased gradually in future considering consumers’ affordability. They came up with their suggestions at a discussion on ‘Implementation of Value Added Tax (VAT) and Supplementary Duty Act, 2012’ organised by the National Board of Revenue (NBR) at the Institution Of Diploma Engineers, Bangladesh (IDEB) in the city’s Kakrail. The discussion programme was attended by Law, Justice and Parliamentary Affairs Minister Anisul Huq as chief guest, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Abdul Matlub Ahmad as special guest, Dhaka Chamber of Commerce & Industry (DCCI) Acting President Kamrul Islam, Institute of Chartered Accountants of Bangladesh (ICAB) Executive Committee member Md Humayun Kabir and NBR Member (VAT Policy) Barrister Jahangir Hossain with NBR Chairman Md Nojibur Rahman in the chair. Stating that imposition of 15% VAT will fuel inflation in the country, the DCCI Acting President said VAT% should be kept within 7.0% to 10% considering the pressure on the consumers. The VAT rate can be gradually increased in future, he added.
Prime Minister asks Teletalk to find foreign partner
Prime Minister Sheikh Hasina yesterday expressed dissatisfaction over the service quality and business performance of state owned mobile carrier Teletalk, asking it to seek a suitable foreign company for probable merger. A network expansion project proposal for Teletalk was placed before Hasina, who is also the telecom minister, at a meeting of the Executive Committee of the National Economic Council (ECNEC). However, she came down heavily upon the operator’s passive attitude on becoming a competitive player. The prime minister directed the management of Teletalk to find ways of becoming a profitable venture. The premier also directed the operator to improve service quality and offer better services to customers, he added. The meeting held at the NEC conference room at Sher-e-Bangla Nagar with the prime minister in the chair approved a project of Teletalk for network expansion at a cost of BDT 6.8 billion. Teletalk will get the money from the government as equity, which the company will return from its earnings, said the planning minister. Earlier, Telecom State Minister Tarana Halim sought investment for Teletalk from the Malaysian government as well as Indian giant Tata Communications, as a part of efforts to turn the state-run operator into a vibrant company. Tarana was present at yesterday’s meeting. However, she was not available for comment later.
The government approved the establishment of 12 IT and hi-tech parks in different districts at a cost of Tk 1,796.40 crore, to move closer to a digital economy. In a meeting yesterday, the Executive Committee of the National Economic Council (Ecnec) approved the project, where Tk 1,544 crore will come in the form of credit from India and the government will bear the rest of the amount. Prime Minister Sheikh Hasina presided over the meeting at the NEC conference room at Sher-e-Bangla Nagar.
The construction of the 600-metre long Patenga container terminal, which is expected to take the pressure off the Chittagong port, will be complete by the end of 2019, the chairman of the Chittagong Port Authority said yesterday. “A new jetty is a must to cope with the ever increasing growth in cargo, container as well as vessel traffic,” CPA Chairman M Khaled Iqbal said at a meeting with journalists on the eve of 130th Chittagong Port Day. The Chittagong port has been experiencing 16 to 17 percent growth in cargo and container handling in the last few years, according to Iqbal. “If the new jetty is not ready by 2019, this growth rate would come down and that would have the ultimate cascading effect on overall economy.” A number of projects have been undertaken in the last one year to enhance the capacity and efficiency of the port, he said. Emphasis is being given on the Patenga terminal, which would have three jetties, yards and rail link, as the other three big projects — Karnaphuli container terminal, Laldia multipurpose terminal and bay terminal — can only be partially completed before 2021.
Green Field Tea Industry opens its tea processing factory in Thakurgaon yesterday that is capable of producing 10,000 kg of processed tea every day. Located in Shahbazpur village under Baliadangi upazila, this is the first tea processing factory in the district. The factory will purchase tea leaves from the local growers, who have to travel 65 kilometre to sell their produce in Panchagarh district, said Fayjul Islam Hiru, managing director of Green Field Tea Industry.
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