Banks face pressure as customers withdraw cash before Eid
Banks saw a significant rush of clients withdrawing cash to meet their festival-related expenditures ahead of the three-day Eid-ul-Azha vacation beginning from tomorrow (Friday). Over the last two days, the banks in the metropolis were packed with clients withdrawing money, especially remittances, reports BSS. According to the latest data of Bangladesh Bank, the country has already received USD 1,039.11 million in remittances from expatriate Bangladeshis in the first 25 days of the month. While visiting different bank branches in the capital on Wednesday, it was found that bank officials were facing difficulties in handling large number of clients, who were waiting in queues before the cash counters for transactions.
Four State-owned Commercial Banks (SoCBs) to give over BDT 6.5 billion loans to tanners
Four state-owned commercial banks (SoCBs) are set to provide more than BDT 6.5 billion as loans among tanners to help them purchase rawhides of sacrificial animals during the upcoming Eid-ul-Azha. The SoCBs, in line with their guidelines, will provide such seasonal loans to regular parties only, officials of the banks said. Among the banks, Sonali Bank Limited is set to disburse BDT 700.0 million to their clients for purchasing rawhides during the Eid, said a senior official of the SoCB. Talking to the FE, a senior official of the SoCB said the bank disbursed the same amount of loans to the same parties last year.
Banks purchasing dollars heavily from BB
Bangladesh Bank has increased the sales of US dollars in two months (July-August) of this fiscal year amid an appreciation of the greenback against the local currency, taka, on the money market. The local banks have been facing shortage of the greenbacks in the last few months due to a falling inward remittance and export earnings, a BB official told New Age on Wednesday. The central bank had earlier purchased greenbacks significantly from the banks with a view to stabilising the exchange rate between the dollar and the taka, but the situation has recently changed, he said. The BB sold $10 million to the commercial banks on August 29 and $10 million on August 17. The central bank also sold $43 million to the commercial banks in July.
Private credit growth hits five-year high
Private sector credit growth in July stood at 16.94 percent — the highest in five years and well above the target of 16.2 percent set in the monetary policy for the first half of the fiscal year. The development is all the more salient as the private sector credit growth was 15.66 percent only a month earlier — far below from the monetary target of 16.5 percent. This had compelled the Bangladesh Bank to slash private sector credit target for the first half of fiscal 2017-18 to 16.20 percent from 16.50 percent. The last time the private sector credit growth was as high as in July was way back in November 2012, when it stood at 17.2 percent. After that, it has been on a decline, according to data from the Bangladesh Bank. Bankers attributed the spike to the declining interest rates and rising demand for loans. There was a significant rise in import payments in July, said MA Halim Chowdhury, managing director of Pubali Bank, the largest private bank in terms of branch network. Import payment by way of LC settlement surged 23 percent year-on-year to $4.5 billion in July, central bank data shows. A month earlier, the amount was $3.41 billion. “Also, the demand for loan has increased in recent months,” Chowdhury said, adding that contractors of government-sponsored development works are also taking on loans from banks.
Citibank Bangladesh wins digital banking award
Citibank NA Bangladesh has recently won the Global Finance Magazine country award for excellence in digital banking in corporate and institutional segments of the market for the tenth consecutive year. Citi also swept the country awards for Australia, Hong Kong, India, Indonesia, Kazakhstan, Malaysia, New Zealand, Pakistan, Singapore, South Korea, Sri Lanka, the Philippines, Thailand, and Vietnam. In the category for the world’s best corporate/institutional digital banks in Asia Pacific, Citi won in five regional sub-categories in 2017: the most innovative digital bank, the best online cash management, the best online treasury services, the best in mobile banking and the best mobile banking app. “We are honoured to be recognised by Global Finance for our excellence in digital banking for corporate and institutional clients,” said Rajesh Mehta, Citi’s Asia Pacific head for treasury and trade solutions, in a statement.
Bangladesh is the largest exporter among the LDCs
Bangladesh is the largest merchandise exporter among the Least Developed Countries (LDCs), according to the latest statistics of the World Trade Organisation (WTO). The data showed that the country’s total merchandise exports in 2016 stood at $34.95 billion. Angola is the second largest merchandise exporter among the LDCs as the country’s annual export stood at $25.16 billion in the past year. On the oil front, it is, however, the largest exporter among the LDCs followed by Myanmar and Equatorial Guinea. The combined exports of the LDCs declined by 6 per cent in the last year and reached at $145.44 billion, according to the World Trade Statistical Review 2017 released by the WTO recently. Bangladesh is also the largest importer among the LDCs, as per the WTO report. The country’s annual merchandise import stood at $41.49 billion in 2016.
FDI from USA drops significantly in July-March
Net inflows of Foreign Direct Investment (FDI) from the United States of America (USA) dropped by 58.38 per cent in the first nine months of the past fiscal year (FY17). Central bank statistics, released last week, showed that the country’s FDI net inflows from the USA declined to $169.92 million in July-March period of FY17. The amount was $408.31 million in the same period of FY16, estimation of the central bank showed. Total net inflows of FDI from the US were $449.74 million in that year.
Govt to import 2.5 lakh tonnes of rice
The government is going to import 2.5 lakh tonnes of white rice from Cambodia at a price which is 5.34 percent higher than the rate it paid to Vietnam as it seeks to boost stocks. The cabinet committee on purchase yesterday approved a proposal to bring in 2.5 lakh tonnes of rice from Cambodia under a state-to-state arrangement at $453 per tonne. Earlier in June, the government decided to import 2 lakh tonnes of white rice from Vietnam through state-to-state arrangement at $430 a tonne. Yesterday’s price is also higher than the international market rate this week.
ADB for national green financing vehicles
The Asian Development Bank (ADB), in a report launched on Wednesday, has proposed the creation of national green financing vehicles to catalyse environmentally and financially sustainable infrastructure investments in Asia and the Pacific. The report, titled Catalysing Green Finance: A Concept for Leveraging Blended Finance for Green Development, highlights the constraints for developing a large pipeline of bankable green infrastructure projects and calls for an integrated approach to transforming country’s financial systems, said an ADB press release. The report outlines the concept of a Green Finance Catalysing Facility (GFCF), which would serve as a model for countries to create their own financing vehicles and implementing mechanisms. This would leverage public funds and policies to catalyse a blend of financing from private sources for increasing green infrastructure investments. Mobilising additional funds from the capital markets is a major objective of these vehicles. Public funds would be used as risk mitigators to create bankable projects and crowd in private funds, technology, and efficiency improvements.
JICA to give Tk 461cr for promoting pvt sector, FDI from Japan
The Japan International Cooperation Agency will provide Japanese yen 7,033 million or Tk 461 crore with a view to promoting the country’s private sector and foreign direct investment from Japan. Bangladesh Bank on Wednesday issued a circular to managing directors and chief executive officers of all banks and non-bank financial institutions asking them to sign participation agreement with the central bank by September 25 to utilise the fund. Only the banks and NBFIs, which will sign the participation agreement with the BB, will be allowed to get the loans from the central bank counting five per cent interest rate. The banks and NBFIs will be allowed to disburse the loans to the businesspeople charging maximum 10 per cent rate of interest.
US cos set sight on BD power sector
US companies like the General Electric have evinced interest in investing in the power sector of Bangladesh. It was made known when US Acting Assistant Secretary of State Alice Wells called on Bangladesh premier’s energy adviser Dr. Tawfiq-e-Elahi Chowdhury on Tuesday. The junior US minister appreciated Bangladesh’s achievement in the energy sector and expected the country to be a role model for development and draw enhanced US investments. At the meeting Bangladesh sought Wells’ cooperation so the US Accelerate Energy could complete in time the task of installing a floating station for supplying LNG gas inside the country from offshore. Wells, who is in charge of South and Central Asian Affairs in the State Department, arrived in Dhaka for the first time on Tuesday as part of her visit to the region.
Japan’s Sumitomo wants to bankroll mega projects
Sumitomo Mitsui Banking Corporation, the second largest bank of Japan, has expressed interest in investing billions of dollars in mega projects in Bangladesh. The interest was conveyed in a meeting yesterday with Finance Minister AMA Muhith at his secretariat office by a team led by Sumitomo’s head of investment banking department for the Asia Pacific region, Rajeev Kannan. After the meeting Muhith told reporters that the team came to Bangladesh to explore investment possibilities. He said they are interested to finance if they find good projects here. “I am happy to receive them. We are going to run big mega projects, which needs financiers,” he said, citing the Payra seaport as one of the mega projects. Sumitomo will provide soft finance to those who will implement the mega projects.
Robi Q2 revenue up 8.6%
Robi’s revenue crept up 8.6% to BDT 16.8 billion in the second quarter of 2017 on the back of solid growth in voice and data sales, brought about by the merger with Airtel in some measure. Voice revenue grew 36.5% and data revenue 106.9% in the second quarter from a year earlier, said the country’s second largest mobile operator in a statement yesterday. Operating profit, however, remained flat at BDT 2.7 billion, largely because of hefty investment in network expansion and market activities and a lower margin of Airtel business resulting from the merger. The operator added 3.4 million new customers to take its tally to 39.6 million — enough to secure a 29.2% of the market share. Between the months of April and June, Robi invested BDT 5.4 billion as capital expenditure, up from BDT 4.5 billion in the preceding three months, to expand its nationwide 2.5G and 3.5G network coverage.
Rawhide preservation, smuggling a headache this Eid
This Eid-ul-Azha, more than 30 percent of the rawhide is likely to go to waste as a large number of tanneries are not interested in purchasing the skin of the sacrificial animals due to them being non-operational still following relocation to Savar. The industries ministry recently claimed that 67 of the 155 tanneries started full-fledged operation at the newly constructed leather estate in Savar, but the tanners said only 20 of them are up and running now. The majority of the tanneries could not start operations yet because of a lack of gas connection and incomplete factory structures. But Mohiuddin Ahmed Mahin, president of the Bangladesh Finished Leather, Leathergoods and Footwear Exporters Associa-tion, downplayed the matter. Rather, he is concerned about the spiralling price of salt, critical to preserve rawhide. The prices are expected to rise further in the coming days. “If the salt is applied within six or eight hours of skinning, the rawhides can be preserved for up to two months without tanning. So, the non-operation of a good number of tanneries might not be a concern.”
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