Weak taka cheers up remitters
Remittance income rose 27.64 percent year-on-year to $1.21 billion in November, as the depreciation of the taka against the American dollar made sending money to Bangladesh more lucrative, according to data from the central bank. November’s inflows was also 4.47 percent higher than that of October when migrant workers sent home $1.16 billion, and took the total receipts to $5.76 billion so far in the current fiscal year, up 10.76 percent in the same period from a year earlier. Bankers say the depreciating taka against the dollar has helped Bangladesh receive more remittances in November. The local currency has been depreciating heavily against the American greenback over the last few months, prompting Bangladeshis living abroad to remit more money through banking channel, they said. The inter-bank exchange rate was Tk 82.30 on November 30, up 1.85 percent from Tk 80.80 on October 2, according to the central bank.
Foreign credit use to rise for financing budget deficit
A top official in Dhaka has said that the government wants to increase the use of foreign credit in offsetting the budget deficit. Economic Relations Division (ERD) Secretary Kazi Shafiqul Azam on Sunday said there is 05 per cent deficit in the current budget and the government meets up this deficit by taking 3.5 per cent credit from domestic sources and 1.5 per cent from foreign sources. “But we want to increase the foreign part from 2 to 2.5 per cent because of lower interest rate,” said the ERD Secretary while speaking at a press conference to inform journalists about Bangladesh’s participation in the South-South and Triangular Cooperation held recently in Brazil.
Foreign exchange reserves drop in November
Bangladesh’s foreign exchange reserves fell in November, although it rose by four per cent than that of previous year. November’s foreign exchange reserve fell to US$32.60 billion from the previous month’s $33.45 billion, according to data by the central bank. A Reuters report on Sunday citing comments by a senior central bank official said that the monthly drop was fuelled by a rise in imports. But the reserves were sufficient to cover about 10 months’ worth of imports, he added. Steady garment exports and remittances from Bangladeshi expatriates, the key drivers of more than $250 billion economy, have helped the country’s foreign exchange reserves grow steadily in recent years. Economic growth hit a record 7.28 per cent in the financial year ending June 2017, up from 7.11 per cent the previous year.
Capital shortfall plagues 9 banks
Nine out of 57 banks have failed to meet minimum capital needs, indicating that they require further recapitalisation through the use of taxpayers’ money. Latest Bangladesh Bank data showed that these nine banks, including trouble-hit Farmers Bank, faced a capital shortfall of Tk 17,700 crore as of September this year, up by over Tk 5,000 crore a quarter ago. State-owned banks usually face capital shortfalls in Bangladesh but this time a private one, Farmers Bank, got listed for four years of lacklustre performance since its inception. Eight state banks had a capital shortfall of Tk 12,683 crore at the end of June this year despite the government’s injection of Tk 2,000 crore this fiscal year. Economists underscored that the BB should take immediate measures to address the problem as such a situation sent a negative message to the international community and local businesspeople that the banking sector was deteriorating.
Bad debt grows faster than credit in Bangladesh!
Only 20 per cent of the loans written off by banks in Bangladesh have been recovered in the last 12 years, says a new report. The study by LR Global Bangladesh says the country has the highest share of non-performing loans or NPL and lowest capital adequacy ratio or CAR, compared to its peer economies. Bad debt grew faster than credit in the last five years, according to the asset management firm, an affiliate of New York-based LR Management Investments. The aggregate credit grew at a compound annual growth rate of 13 per cent between 2012 and 2016, mostly in tandem with the nominal GDP growth. By the end of 2016, non-performing, restructured and rescheduled loans stood at 17 per cent of total outstanding loans, according to the report. The high loan defaults mean that the financial sector lacks the funds to absorb any sudden deterioration of asset quality, the report says. It says non-performing loans grew at a faster pace in private banks than in the state-owned lenders in the last five years.
House Building’s rural home loan scheme fares well
The rural housing loan scheme, introduced by Bangladesh House Building Finance Corporation (BHBFC) in July, got off to a flying start due to the huge demand for high-rise residential buildings in the face of economic development. In the four months since its introduction, loans amounting to Tk 72.36 crore were sanctioned, which is 60.50 percent of the total home loans approved by the BHBFC during the period. The demand for loans was particularly high in the northern region of the country. Some Tk 9.14 crore was disbursed in the Rangpur zone, which is the highest, followed by Rajshahi at Tk 5.66 crore. The BHBFC is offering a comparatively lower interest rate for rural clients to encourage them to take loans. The interest rate for rural areas is 8.5 percent in contrast to 9.5 percent for the Dhaka and Chittagong metropolitan areas. The loan ceiling for rural borrowers is Tk 60 lakh. “The remittance inflow has boosted the rural economy, prompting the village people to build their houses by taking loans,” said Debasish Chakrabarty, managing director of BHBFC.The low interest rate is also a great attraction to the rural people, he said. The huge demand for housing loans from remote areas has prompted BHBFC to take house building finance from the Islamic Development Bank.
Bangladesh launches banking info app
The central bank of Bangladesh has launched a mobile application –Banking Information –which will help clients to get information about all banking services. The app is now available for downloading and using at Google Play Store for android users.
Local ceramics getting popular globally
Ceramic and porcelain wares made in Bangladesh are gaining popularity in international markets for their superior quality and affordable prices, stakeholders said on Saturday. They said all major Bangladeshi ceramic companies have been expanding their plants and operations, propelled by increasing demand both at domestic and international markets. The observations came at the closing ceremony of the country’s first three-day ceramics expo organised by the Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA) at International Convention City Bashundhara. Around 4,500 visitors thronged the event that saw some 60 participants with over 100 brands. Besides, four seminars for professionals were also conducted by university teachers.
Cheers for young innovators
In the second season of Crown Cement and The Daily Star export idea contest ‘Rise High Bangladesh’, Dhaka University’s team Sept of Baelor became the champion for their innovative idea of producing an organic polymer derived from shells of shrimps for use in biodegradable plastics, pharmaceuticals, cosmetics, food products and water purification. Team Third Dimension of the Bangladesh University of Professionals (BUP) became the runner up in the second season of the export idea contest, for their idea of developing a source of natural protein for animals using black soldier flies and waste. The team proposed turning the city’s waste into marketable protein products as animal feed. Green Bees, a team from the University of Rajshahi, came third in the competition for its export idea of producing fine quality yarn from pineapple leaf fibre, to produce an anti-allergic garment which has high demand in the western world.
Uber gets off to a flying start
Global ride hailing company Uber sees a promising market in Bangladesh, with two lakh people in Dhaka taking 15 lakh rides in November alone, a top official said yesterday. On November 22 last year, Uber started its operations in Bangladesh and now it has 9,500 registered drivers for cars, said Pradeep Parameswaran, head of central operation at Uber India and South Asia. “We are now adding more than 100 drivers to our network every day,” Parameswaran said at a programme to celebrate Uber’s first anniversary of operations in the country, at Sonargaon Hotel in Dhaka. “Dhaka is a very important city for us and we will soon add new features to Uber’s services here.” Dhaka is the most densely populated among the 600 cities across the world where Uber has operations, he said. The company is working to establish a well-planned network to attract more customers, Parameswaran said.
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