Capital shortfall of state banks alarming
Eight state banks had a capital shortfall of Tk 12,683 crore at the end of June even though they got a handsome amount of fund from the government exchequer. In other words, the banks are a long way off from maintaining capital as per international standards. Their private and foreign counterparts though are successfully maintaining their stipulated capital adequacy ratio, as per a report of the finance ministry, which was presented in a workshop on Sunday. As the eight banks’ default loans swelled so did their provisioning requirement, due to which their capital bases have come under immense pressure. At the end of March this year, the banks’ capital shortfall was Tk 13,987 crore, meaning the situation improved the following three months due to injection of fresh money but it is still worrying.
Circular published to recruit 3,463 officers in seven state-run banks
The government will appoint a total of 3,463 officers (general grade) in seven state-run banking institutions in the country. The Bangladesh Bank floated a circular on Tuesday in this regard. The circular is available on the central bank website. The state-run institutions, which are members of the Bankers Selection Committee, include Sonali Bank Limited, Janata Bank Limited, Rupali Bank Limited, Bangladesh Development Bank Limited, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, and Investment Corporation of Bangladesh (ICB).
Green Delta Ins, BASIS ink deal
Runner Motors Ltd with technical support from VE Commercial Vehicles Ltd (VECV) of India will set up a completely knocked down Green Delta Insurance and Bangladesh Association of Software and Information Services (BASIS) Monday signed a Memorandum of Understanding in the city. Under this MoU, the member organizations of BASIS will get a tailored health insurance product for their employees. Ms. Farzana Chowdhury ACII (UK), Chartered Insurer, Managing Director & CEO of Green Delta Insurance and Mr. Mustafa Jabbar, President of BASIS signed the MoU on behalf of the respective organizations. Nazim Tazik Chowdhury, Additional Managing Director and CFO, Green Delta Insurance, Wafi S M Khan, Deputy Managing Director, Green Delta Insurance, Mostafizur Rahaman Sohel, Director, BASIS & Delwar Hossain Faruk, Chairman, Standing Committee on Members’ Welfare along with other high officials from both the entities were also present at the ceremony, said a statement.
WB fears sizeable revenue deficit this fiscal year
The government’s revenue shortfall during the current financial year (FY) might range between Tk 400 billion and Tk 450 billion, according to a World Bank (WB) projection. The government, however, fears a revenue shortfall of Tk 200 billion in FY 2017-18 due to non-enforcement of the new VAT law. The WB has recently made available a recipe to the government detailing ways to offset the effect of possible big revenue shortfall. The multilateral lender felt that the government’s financing burden could be eased by taking recourse to fiscal discipline without risking impact on the development budget. The Bank feared that the budget deficit could range between 5.4 per cent and 5.7 per cent of gross domestic product (GDP) if 80 per cent of the annual development programme (ADP) is implemented. Most of this deficit will have to be financed from domestic sources. “If non-bank borrowings remain at the same level as of last year, then bank borrowing will have to rise to between 2.4 per cent and 2.7 per cent of GDP. This could create upward pressure on interest rates, risking significant crowding-out of credit to the private sector and enhance inflation risk, particularly if deficit is monetised,” it said. The Bank, however, felt that the budget deficit can be managed by some expenditure adjustments and reform measures.
Bangladesh on board UN paperless trade
Bangladesh yesterday signed an agreement on adopting paperless trade, an initiative of the United Nations to make export and import easier by reducing bureaucratic tangles through the use of technology. Commerce Minister Tofail Ahmed signed the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific on behalf of Bangladesh at the headquarters of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in Bangkok. The full implementation of the agreement will not only reduce the cost of doing business but also the time, as the formalities for import and export activities at the airports, sea ports and land ports would be done digitally. The agreement has the potential to harness the development dividends at the nexus of technology and trade, two key means of implementation for the 2030 Agenda for Sustainable Development, said Shamshad Akhtar, executive secretary of UNESCAP, in a statement. Cambodia and China also signed the agreement, while several other countries present at the signing ceremony also expressed commitment to sign the treaty during the September 2017 session of the United Nations General Assembly in New York.
WB gives $55m more for e-GP
The World Bank is going to give Bangladesh another $55 million to help the country bring electronic government procurement (e-GP) system to all public sector organisations. An agreement was signed in this regard yesterday by Kazi Shofiqul Azam, Economic Relations Division (ERD) secretary, and Qimiao Fan, WB country director for Bangladesh, Bhutan and Nepal, at a programme in Dhaka. The Digitising Implementation Monitoring and Public Procurement Project would also help improve capacity to monitor implementation of development projects and programmes using digital technology. “The government of Bangladesh has made notable progress in improving public procurement performance, which is a key to increasing efficiency of public spending,” said Fan. “This project is a testament to the government’s commitment to expand digitisation to all public procurement entities as well as to monitor development programmes and projects,” he said.
FDI from India stands at $72.3 million in July-March
Net inflow of Foreign Direct Investment (FDI) from India stood at $72.3 million in the first nine months of the past fiscal year (FY17), according to the latest statistics of the central bank. It also showed that net inflow of FDI from India was $66.78 million in July-March period of FY16. Thus, the net inflow of FDI from India increased by 8.26 per cent during the period under review. Central bank is yet to disclose the country-wise annual data of FDI for FY17. Annual FDI from India was $88 million in FY16.
Export to Russia crosses $300m mark in seven months
Bangladesh’s export to Russian Federation crossed $300 million mark during January-July period of the current calendar year. Latest statistics, available with the Export Promotion Bureau (EPB), showed that merchandise export to Russia stood at $309.95 million in the first seven months of 2017. Russia provides duty-free market access to around 39 per cent of the products keeping major exportable ready-made garments (RMG) out of the benefit. Bangladesh, however, is thinking to negotiate a trade deal with Eurasian Economic Union (EEU) to get tariff-free market access to Russia along with Armenia, Belarus, Kazakhstan, and Kyrgyzstan. The annual export to Russia stood at $464.62 million in the past fiscal year (FY17).
Navana CNG to transfer net assets worth BDT 681.48 million
The board of directors of Navana CNG has decided to transfer net assets worth above BDT 681.48 million from its LPG Unit to its subsidiary company for ‘ease’ of operation of LPG business. As per the board’s decision, LPG Unit of Navana CNG has assets aggregating worth above BDT 3.0 billion and liabilities worth above BDT 2.31 billion. As a result, the amount of net assets of LPG Unit has stood at above BDT 861.48 million which will be transferred to Navana LPG Limited, a subsidiary company of the Navana CNG Limited. According to DSE information, the company’s sponsor-directors hold 42.49% shares, institutes 22.07% and general public 35.44%.
Huawei considers smartphone assembly line in Bangladesh
Huawei mulls over assembling smartphones in Bangladesh after the government this fiscal year slashed the customs duty for mobile parts for assembling locally. At present, the customs duty for mobile parts for local assembling is 1 percent, down from 20-25 percent previously. At the same time, the government doubled the customs duty on handset import to 10 percent. “I am well aware of this recent development,” said Zhou Jianjun, vice-president of carrier network business (emerging market) at Huawei Technologies. “We may not set up a manufacturing plant directly, but we can engage with partners who will do it. We can give them technical and knowledge support,” he said on the sidelines of the Asia Pacific Emerging Market Summit 2017, held at Shangri-La hotel in Bangkok yesterday. Huawei with the National Broadcasting and Telecommunications Commission of Thailand organised the event themed ‘Emerging Markets, Emerging Opportunities’. About 200 experts, operators and industry partners from Bangladesh, India, Nepal, Thailand, Malaysia, Indonesia, Myanmar¸ Sri Lanka, Cambodia, Vietnam and Hong Kong attended the event..
Local and Global Stock Indices
|Index Name||Close Value||Value Change||Percentage Change|
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$ 46.32||↓0.12||↓0.26%|
|Crude Oil (Brent)*||$ 51.85||↓0.15||↓0.29%|
|Gold Spot*||$ 1,312.76||↑3.53||↑0.27%|
Major Currencies Exchange Rates Movement in Last Seven Days
|USD 1||BDT 81.23*|
|GBP 1||BDT 105.00*|
|EUR 1||BDT 97.28*|
|INR 1||BDT 1.27*|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.