Call money rate falls to record low amid tepid demand
The call money rate has plummeted to a record low, indicating the market is flush with liquidity with hardly any demand for credit. Data shows the weighted average call money rate was 8.16% in 1997, which came down to 7.37% in 2007. The rate fell to 3.5% in July this year. The call money rate is the rate at which banks lend overnight money to each other to fill the asset liability mismatch or to meet sudden demand for funds. The market was introduced in the country in the early 1980s. The demand and supply of liquidity affect the call money rate: a tight liquidity condition leads to an increase in the call money rate and excess funds push the rate down. Heavy government borrowing from the public via savings instruments, which are much higher yielding schemes, is a major reason for the banking sector’s excess liquidity, said Anis A Khan, managing director of Mutual Trust Bank. Also, a substantial inflow of foreign funds has lessened local borrowings by large corporate bodies, said Khan, also the chairman of Association of Bankers Bangladesh.
Bangladesh Bank has asked scheduled banks to display the audio-visual presentation on the security features of genuine bank notes at their branches’ television monitors till Eid-ul-Azha to create awareness among the clients so that they can detect the genuine notes and counterfeit notes. The BB issued a circular to managing directors of all banks on Tuesday asking them to take required measures in this regard ahead of Eid as counterfeiters usually remain active during the period. The central bank also issued a letter to senior secretary of home ministry on August 16 requesting him to take initiative to prevent the counterfeiters.
BB, Fed, Swift to gear up efforts to recover $81m theft fund
Bangladesh Bank on Wednesday said that New York Federal Reserve Bank, BB and SWIFT would work together to gear up efforts for recovering the US$ 81 million fund stolen from the BB’s Fed Reserve account that was laundered into the Philippines. The BB issued a press statement saying that senior representatives of the New York Federal Reserve, BB and SWIFT met in New York on Tuesday to continue discussions on the cyber fraud committed in early February. The three parties discussed certain technical details of the February event to enhance their mutual understanding of how the fraud occurred, and further discussed steps that have been and will be taken to remediate the event, according to the statement. The participants remain concerned about this event and recommitted to working together to recover the entire proceeds of the fraud as expeditiously as possible, bring the perpetrators to justice in cooperation with law enforcement agencies from other jurisdictions, and lend support to multilateral international efforts to further protect the global financial system from these types of attacks in the future, it said.
Limestone flux import hits snag for HS code mismatch
Importers could not import limestone flux (solid form) from Bhutan since February for higher duty charged on the industrial raw material for mismatched HS code of the item, industry-insiders said. Limestone import was enjoying duty-free facility under HS code 2521.00.00. But the customs authority last February declared the duty-free facility for feed-grade limestone under HS code 2517.49.00. Change in the HS code of the product threw the importers into a quandary as they were subjected to paying 25% duty on import of the previous category of limestone. Customs officials said the zero-rated duty has been provided for the feed- grade limestone for the poultry industry. However, the importers of limestone flux argued that feed-grade limestone cannot be defined as limestone. The HS code 25.21 is for import of limestone flux (a category of limestone and other calcareous stone used for the manufactures of lime or cement). Limestone flux is used in the iron and steel industry for increasing fluidity and eradicating impurities. The industry sources said due to the suspension of import of the raw material under the given circumstances, the industries concerned are in problem. The industries are procuring the limestone flux at higher prices from other sources.
The Expatriates’ Welfare Ministry said Wednesday it remained “in the dark” about whether Malaysia would hire Bangladeshis or not. “We are in the dark about the opening of the Malaysian market. We don’t know when it opens,” expatriates’ welfare and overseas employment minister Nurul Islam told reporters. The minister said the Malaysian authority did not inform Bangladesh anything about the possible recruitment. He made the government’s position clear after speculation of market opening deepened more than a month ago. He also urged overseas job seekers not to give money to any recruiting agency for jobs to Malaysia as the market is not ‘open’ yet. Source:http://www.thefinancialexpress-bd.com/2016/08/17/42499/Govt-in-the-‘dark’-about-KL-job-mkt-opening
Four gas companies stop paying VAT again
Four major state-owned gas distribution companies have again stopped paying value-added tax and supplementary duty collected by them from their consumers on the prices of gas after paying the taxes for few months in 2015 though the companies have dues of BDT 132.8 billion to the National Board of Revenue, officials said. They said that the companies paid BDT 26.2 billion as VAT and SD for the period between April 2015 and October 2015 and after that they refrained from paying the taxes. In addition to BDT 132.8 billion in dues for the period of July 2009 to March 2014, the companies — Titas, Karnaphuli, Bakhrabad and Jalalabad gas transmission and distribution companies —did not pay another BDT 68.2 billion for the period between April 2014 and March 2015, and from November 2015 to June 2016, according to the NBR data. In this situation, the large taxpayers unit (value-added tax) of the revenue board sought NBR intervention in realizing the dues and regular taxes from the companies. Of the amount, the four companies collected BDT 132.8 billion as SD and VAT and the remaining amount of BDT 63.2 billion as interest amount on the taxes. Of the principal amount, Titas Gas dodged the highest amount — BDT 109.9 billion in VAT and SD — followed by Karnaphuli Gas BDT 12.7 billion, Bakhrabad Gas BDT 6.7 billion and Jalalabad Gas BDT 3.5 billion.
Annual servicing forces Emerald Oil to close production
The production of Emerald Oil Industries has been closed for more than one month due to ‘annual servicing’ of the machineries and equipment, according to Dhaka Stock Exchange (DSE). The company’s production has come to a halt after one year and six months of listing with both the bourses. “In response to a DSE query in connection with closure of production, the company has informed that due to annual servicing of the machineries and equipment, the production of the company has been closed since June 27, 2016,” said a DSE disclosure Wednesday. The company, however, has expressed its optimism of starting the production August 20, 2016. The company has also mentioned that they require 35-40 days for overall repairs and maintenance of the machineries and equipments.
The first hearing of a winding up petition filed by China Development Bank to realise its dues of $36.63 million from Citycell was held yesterday, amid a government move to cancel the licence of the mobile operator. Winding up is the process of selling all the assets of a business, paying off creditors, distributing any remaining assets to the partners or shareholders and then dissolving the business. The government has set in motion the process to revoke Citycell’s licence after the operator failed to pay Tk 477.51 crore it owes the government. The operator owes more than Tk 4,000 crore to banks, vendors, tax authorities, regulator and other operators, according to insiders.
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