The country’s scheduled banks in June cut their rates of interest on lending further against the backdrop of the businesses’ persistent reluctance to borrow from banks due to a sluggish business situation worsened by political uncertainties and vulnerable law and order situation, said Bangladesh Bank officials. According to the latest BB data, the weighted average interest rate on lending in the banking sector declined to 10.39% in June from 10.57% in May of 2016. The weighted average rate on lending was 10.64% in April, 10.78% in March, 10.91% in February and 11.05% in January of this year. The weighted average interest rate on lending had declined throughout last year. From 12.32% in January 2015, it dropped to 12.23% in February, to 11.93% in March, to 11.88% in April, to 11.82% in May, to 11.67% in June, to 11.57% in July, to 11.51% in August, to 11.48% in September, to 11.35% in October, to 11.27% in November, and to 11.18% in December 2015. The banking sector was forced to lower the lending rates due to a sluggish credit demand from the businesspeople amid political uncertainties and fragile law and order situation, a BB official told New Age on Thursday. The BB data showed that the weighted average interest rate on deposit of the banks also decreased to 5.54% in June from 5.67% in May.
Bangladesh Infrastructure Finance Fund Ltd (BIFFL), meant for funding big ventures, got sidetracked into investing in unsecured short-term debt instrument like commercial paper (CP). The state-owned non-bank financial institution (NBFI), formed by the finance ministry, has already invested Tk 700 million in CPs issued by two companies namely Max Infrastructure (Tk 400 million) and Bangla Track Ltd (Tk 300 million) while it is planning to make another investment worth Tk 750 million in CPs to be issued by the Energypac Engineering (Tk 500 million) and Computer Source (Tk 250 million). City Bank Capital has arranged the money for Max Infrastructure while IDLC Finance for Bangla Track, NDB Capital for Energy Pack and IIDFC Ltd for Computer Source.
BSEC yet to publish MF rules’ draft amendments in 8 months
Even after eight months of the finalization of amendments to the mutual fund rules, the Bangladesh Securities and Exchange Commission has yet to publish the draft of the changes which were intended for barring MF trustees from issuing re-investment units or stock dividend. Publishing draft rules in newspapers seeking opinions from stakeholders is mandatory before issuing those as gazette notification. The stock market regulator at a meeting on December 7, 2015 finalized the draft Securities and Exchange Commission (Mutual Fund) Rules, 2001. Before an Appellate Division verdict regarding a BSEC directive on setting the tenure of closed-end mutual funds at highest ten years, commission officials had said that the commission would publish the rules after the court verdict. On June 1, 2016 the Appellate Division in its verdict upheld the BSEC directive on the issue. The BSEC, however, is yet to publish the rules. The BSEC in an amendment to the mutual fund rules in 2013 allowed mutual funds to issue re-investment units besides cash dividend. In 2015, the commission initiated a move to amend the rules mainly to close the scope for issuing re-investment units or stock dividend by the mutual funds as issuance of such dividend caused heavy losses for investors.
Philippine central bank fines Rizal Bank $21m on BB cyber heist
The Philippine central bank said on Friday it will fine Rizal Commercial Banking Corp (RCBC) 1 billion pesos ($21.33 million) in relation to the Bangladesh Bank cyber heist. The central bank said in a statement that it was the largest amount it has ever approved “as part of its supervisory enforcement actions” on a bank. RCBC said separately that it will pay the fine over a one-year period. RCBC was used as a conduit by cyber criminals to steal $81 million from the Bangladesh central bank’s account at the Federal Reserve Bank of New York.
Dhaka to negotiate with London on trade benefits continuation after Brexit: Commerce Minister
Commerce Minister Tofail Ahmed said Thursday that the government will negotiate with the United Kingdom (UK) so that it continues to offer trade benefits even after Britain’s exit from the European Union (EU). So far, Bangladesh has enjoyed generalized system of preferences (GSP) from the EU member countries, including the UK. But following the Brexit, Bangladesh needs to negotiate with the UK to enjoy the same facilities. He said that the UK has expressed its interests to develop railway links and development of Pyra Port. Tofail said that the expression of British interest is now being considered by the railway ministry and the ministry of shipping. The British High Commissioner said that the existing travel alert for British citizens or businessmen to visit Bangladesh does not mean discouraging them not to visit Bangladesh. Regarding Brexit, she said the governments of the two countries need to negotiate for the issue of GSP to Bangladesh as the country enjoyed the facilities from the UK. Regarding trade and investments between the two countries she said, “Bangladesh is open for business. The United Kingdom is also open for business.
Uncertainty has gripped the country’s telecom sector in recent times amid a possibility of reduction in the number of companies due to merger and closure, frequent job cuts and lack of investment in an unpredictable regulatory regime, said industry insiders. They said the overall scenario of the sector indicates a major reduction in competition after two mobile phone companies declared a merger and one company is about to be shut down following a government move that might affect the end users. Currently, there are one state-run operator and five private operators with majority foreign investment operating in the country. The employment scenario of the sector also became volatile after some recent job cuts following lack of investment and constantly changing technology landscape, they added. The latest blow came last week when the Bangladesh Telecommunication Regulatory Commission advised the subscribers of country’s oldest mobile company Citycell to find alternative service provider by August 16 as the government may anytime close the operation of the company for BDT 477.51 crore dues.
Air cargo ban not going so soon: A lot needs to be done: UK envoy
Security at Hazrat Shahjalal International Airport has improved a lot, but a lot needs to be done to get the ban on Dhaka-London direct air cargo withdrawn, British High Commissioner Alison Blake said yesterday. Blake spoke at a press conference after a meeting with Commerce Minister Tofail Ahmed at his secretariat in Dhaka. The government hired a British company on March 22 for screening export goods at the airport. Blake said many exporters and manufacturers may face difficulty due to the ban, but the price of taking any wrong decision is very high. The UK imposed the ban on March 8 as the airport in Dhaka failed to meet some international security standards. Only Biman Bangladesh Airlines had the right to carry cargo directly to the UK in its four weekly passenger flights. Each flight used to carry an average of 25 tons of cargo — mostly apparel items, vegetables and agricultural products. Now cargoes from Bangladesh are bound to be rescreened in any third country like Dubai, Qatar or Thailand. Bangladesh has been enjoying a duty-free benefit for exporting its goods to the UK under the EU’s Everything But Arms scheme since 1971.The high commissioner, however, did not clearly say whether the UK will continue providing the benefit to Bangladesh after Brexit.
Bangladesh to become largest cotton importer by 2020
Bangladesh will overtake China as the world’s largest importer of cotton within four years, reported fibre2fashion.com on Thursday quoting Australian Trade and Investment Commission (Austrade), an Australian government body. Only 0.1 million bales of cotton is locally produced in Bangladesh and the country currently imports more than 6 million bales annually. This figure is projected to double within four years and see Bangladesh overtake China as the world’s largest cotton importer, said Tim Martin, Austrade’s New Delhi-based trade commissioner and Bangladesh country manager. As the second largest cotton importer in the world, Bangladesh is a significant cotton export market for Australia, the world’s fourth largest exporter, which has “earned a reputation as a reliable supplier of high-quality cotton which has almost zero contamination,” said Martin. While Australia’s cotton industry competes against a highly globalized market, short shipping times from Australian ports, in Brisbane, Sydney and Melbourne, to Asian markets provide added advantages.
Cotton prices rose 24.2% to 77 cents per pound in the international markets due to a fall in supplies by China and India, two major cotton producers and consumers, according to industry insiders. Cotton was traded at 77 cents yesterday in the international markets, up from 62 cents three months ago. Six months ago the price was below 60 cents. “It is a short-term hike. I hope the price will start declining from November when new crops will be available in markets,” said Hissam Khandker, director of Delcot Enterprise Ltd, a leading cotton importer of Bangladesh. The demand for cotton in China also increased due to higher consumption by mills; the country also stopped selling the fibre from its stock, he said. On the other hand, the largest cotton supplier, India, has been importing cotton from other countries, he added. Currently, China has 60 million bales of cotton in its stock, which is nearly half the global demand (One bale weighs 480 pounds, or 218 kilograms). China uses 30 million bales of cotton a year, making it the biggest consumer of the natural fibre in the world. However, the prices of yarn did not increase in Bangladesh, the largest importer of cotton, in line with the price hike of cotton globally, Hissam said. The production forecast of cotton is also not good, according to United States Department of Agriculture (USDA). The USDA in a report last month said cotton production declined to 97.9 million bales globally from 98.1 million bales in 2015-16 (Cotton year begins on August 1). The report also said production of cotton will decline to 102.5 million bales in 2016-17 from predicted 103.2 million. The mill use of the fibre increased to 110.2 million bales in 2015-16 from 108.8 million bales a year ago.
Tea output set to beat last year’s record: Weather on gardeners’ side
Tea gardeners in the country’s north-eastern region look to beat last year’s record of production this year pinning their hopes on favorable weather conditions, officials and industry sources said. In view of adequate rainfall and favorable weather in the region gardeners say both quantity and quality of tea will improve. There has been no major pest attack this year. Tea is considered a very sensitive crop, which needs uniform rainfall and sunshine, especially during the period from March to October, the officials concerned said. Officials at the tea estate management cell of Bangladesh Tea Board also echoed them by saying that the weather has been very good this year since the very beginning of the season in March. Besides, pest attack is also negligible. According to official sources, the country’s tea production stood at 25.38 million kilograms until June 30 this year against 16.22 million kilograms during the same period last year.
Major Currencies Exchange Rates Movement in Last Seven Days
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.
ABOUT DHAKA BANK
Dhaka Bank has truly cherished and brought into focus the heritage and history of Dhaka and Bangladesh from Mughal outpost to modern metropolis. Most of its presentation, publications, brand initiatives, delivery channels, calendars and financial manifestations bear Bank’s commitment to this attachment.