Overall interest rate spread in the country’s banking sector fell further slightly in October, as the commercial banks slashed their interest rates on lending more than on deposits, officials said. The weighted average spread between lending and deposit rates, offered by the commercial banks, came down to 4.7% in October 2016 from 4.76% in the previous month. The spread was 4.80% in August 2016, according to the central bank’s statistics. The Bangladesh Bank (BB) is now working to bring down the spread to nearly 4.0% in the near future from the existing level, according to officials. The weighted average rates on deposits came down to 5.33% in October from 5.39% in the previous month, while interests on lending dropped to 10.03% from 10.15%, the central bank’s data showed. The spread being maintained by at least 15 commercial banks, out of 56, still ranges as high as between more than 5.0% and 8.93%. Average spread with the six state-owned commercial banks (SoCBs) is 3.9%, private commercial banks (PCBs) 4.82%, foreign commercial banks (FCBs) 6.66%, and specialized banks (SBs) 2.6%.
November remittance hits 5-year low to USD 951.0 million
Monthly inward remittance registered a five-year low to USD 951.4 million in November as many expatriate Bangladeshis are now preferring illegal channel to bank while sending money to their relatives, said officials of Bangladesh Bank. The amount of inward remittance was USD 908.8 million in November 2011, according to Bangladesh Bank statistics. According to a BB paper, the inflow of remittances decreased in recent months as many expatriate Bangladeshis opt to sending their money to the country through illegal channels like hundi because of a lower rate of the dollar against the taka in the banking sector. The NRBs in the Gulf countries are now sending their hard-earned money through the hundi channel, but the local agents of the hundi system disburse the money to the relatives of the expatriate Bangladeshis through mobile banking, the paper said. Inward remittance dropped by 15.7% to USD 5.2 billion in the first five months of the current financial year 2016-17 compared with that of USD 6.2 billion in the same period of last fiscal year as its inflow dropped for the five consecutive months till November. The inflow of remittance in November also decreased by 16.72% to USD 951.4 million from USD 1.1 billion in the same month a year ago, the BB data showed.
Transaction value of electronic commerce or e-commerce, based on debit and credit cards, increased by around 67 per cent in the first nine months of the current calendar year (2016) over the same period of previous year (2015).Statistic available with Bangladesh Bank showed that value of e-commerce stood at Tk 3.59 billion in January-September period of 2016 which was Tk 2.16 billion in the same period of 2015. Of the total transaction, some Tk 2.65 billion was based on credit card while Tk 0.93 billion on debit card. E-commerce is generally known as business transactions, buying and selling of products and services, or the transmitting funds or data, over an electronic network, primarily the internet. Data on e-commerce transactions in Bangladesh has been compiled by the central bank and only those transactions completed through the usages of debit and credit cards have taken into consideration.
Banks neglect compensating their clients for forgeries
Banks feel hesitant to compensate accountholders when they fall victim to frauds and forgeries sometimes, a research found out. On the other hand, two more studies showed a paradoxical relationship in Islamic banking operations in Bangladesh: one shows Islamic banks financially more stable while another one reveals such type of operations are less efficient in containing cost and generating profits. One of the three papers was presented by Md Zulkar Nayn, a deputy general manager of the Bangladesh Bank. He pictured the accountholder hassles in his paper on ‘consumer protection: treating bank customers fairly’.
This has been stated by a review report on the banking activities in 2015, which was presented at the annual banking conference held at BIBM auditorium in Dhaka yesterday. A two-day long conference was inaugurated by Bangladesh Bank Governor Fazle Kabir and the conference will come to an end today. Director General of Bangladesh Institute of Bank Management (BIBM) Toufic Ahmad Choudhury presented the report at the inaugural ceremony. The report said: “Recruitment of ethical hacker, placing a proper IT security and monitoring system are the crying need of the hour. But, surprisingly 15% of the banks have no security expert in the IT teams.” The report observed over the years that online banking frauds have been increasing due to the lacking of proper knowledge regarding banking information security.
The finance minister yesterday refused to share with the Philippines government the findings of a probe report on the Bangladesh Bank reserve heist, saying that “it’s internal”. Firstly, the government did not receive any formal letter from the Philippines on sharing the probe report. “Secondly, it’s an internal report; so it can’t be given,” AMA Muhith told journalists after a meeting with the law minister and the central bank governor at the secretariat. The finance minister’s comments came after a Reuters report that Manila wants Dhaka to share the findings of its investigation into how unknown hackers pulled off one of the world’s largest cyber bank heists, to help speed up recovery of the stolen funds.
Foreign fund in Dhaka Stock Exchange jumps 792.0% in 11 months
Net foreign investment in stocks marked a significant jump for January-November period of 2016 compared to the same period a year ago, as overseas investors were anticipating a positive market scenario. Analysts said the favorable macroeconomic indicators coupled with stable political scenario in recent months jacked the foreign investors’ confidence up to increase their positions in the Bangladesh stock market. Net investment by foreign investors for January to November, 2016 stood at BDT 9.6 billion, which was BDT 1.1 billion in the same period a year ago, jumping 792.0% over the period, according to statistics available with the Dhaka Stock Exchange (DSE). The overseas investors bought shares worth BDT 43.8 billion, while they sold stocks of BDT 34.2 billion in the 11 months of 2016, the DSE data showed. In 2015 for January to November, the foreign investors bought shares worth BDT 34.4 billion, while they sold stocks worth BDT 33.3 billion, taking the net position at BDT 1.06 billion. Foreign fund managers see the Bangladesh stock market as one with potential among the emerging markets due to positive macroeconomic indicators and a stable political scenario, said a local stockbroker who deals with foreign investors. Net foreign investment in 2015 was BDT 1.9 billion, a 93.0% increase over 2014, according to DSE data.
Service sector export earnings target set at USD 3.3 billion
The commerce ministry has recently set the export earnings target from service sector at USD 3.9 billion for the financial year 2016-17, envisaging over 2.0% growth in the period. The export earnings target from the service sector was USD 3.2 billion in the FY16. Earlier, the Export Promotion Bureau took an initiative to include the service sector export earnings in the export data and accordingly started publishing the data from October. Following the EPB initiative the commerce ministry made a decision to set an export earnings target from the service sector. With the decision, now the data of earnings from computer service which is included in the export performance data of goods will be included in the service sector data, a commerce ministry official told New Age recently. In the beginning of the current financial year, the commerce ministry set the export earnings target at USD 37.0 billion for the FY17 with 8.1% growth. The target was set based on a commendable performance by the readymade garment sector and the RMG export target was set at USD 30.4 billion for the FY17. Earnings from the computer service were included in the export earnings target for the FY17. According to the EPB data, the commerce ministry set export earnings target from computer service at USD 160.0 million for the FY17.
French company set to install second unit of Eastern Refinery
The government is set to appoint a French company for installation of the second unit of the Eastern Refinery (ER) aiming at quick refinement of imported crude oil for energy security, officials said. To this effect, the government has taken a project ‘Installation of Eastern Refinery (ER) Unit-2’ with an approximate negotiated cost of over BDT 2.7 billion. The Bangladesh Petroleum Corporation (BPC) has signed a memorandum of understanding with the Technip, France for installation of the second unit of the ER. The ministry of power, energy and mineral resources (MoPE&MR) has sent a project proposal to the cabinet division for giving notification of award to the Technip and its approval on the draft proposal on the project. The meeting of the cabinet committee on public purchase is expected to approve it on Wednesday. The Technip is widely known across the world for its technical excellence compared with other international companies. If approved by the cabinet committee, the French company will implement the project. The Technip had also helped install the ER in 1968. The present unit of the ER has been doing well even after long 48 years of its commissioning.
Low-cost imports, lack of gas hold back growth of ceramic sector
Non-availability of gas supply for new entrepreneurs and influx of low-cost tableware in the market are holding back the growth of the country’s ceramic sector despite having its immense potential in export market, sector insiders have said. Besides, suspension of GSP by the US and the stronger position of Bangladesh currency against Euro are also taking its toll on export earnings. As a result, new investment in the sector remains stagnant, they added. According to the Bangladesh Ceramic Wares Manufacturers’ Association (BCWMA), 20 companies manufacture tableware in the country, while nearly half of them export their products. The ceramic tableware manufacturers have invested around BDT 24.0 billion till fiscal year (FY) 2015-16. The total number of ceramic manufacturing companies is 58, which have invested around BDT 70.0 billion. However, export earnings from the ceramic sector mostly depend on tableware. In last FY, export earnings from ceramic products stood at BDT 2.95 billion, 11.0% lower than that of FY 2014-15 at BDT 3.3 billion. The export earnings in FY 2013-14 were BDT 3.7 billion, up by 22.9% from the previous FY. Among all kinds of ceramic ware exports, the earnings from tableware in FY 2015-16 stood at BDT 2.8 billion, down by 10.4% from that of FY 2014-15 when it was BDT 3.09 billion. Export earnings from tableware were the highest in the FY 2013-14 or BDT 3.5 billion in the last ten FYs.
Omera Home Appliance has launched Omera Gas Stoves to grab the national and international market. To announce the official launching of the gas stove, East Coast Group held a press conference in the capital yesterday. Managing Director of East Coast Group Companies Tanjil Chowdhury, Director of Corporate Planning Dilruba Chowdhury, and General Manager of Business and Operations Nizam Mohammad Nusrat Ullah attended the press conference. Managing Director of East Coast Group Companies Tanjil Chowdhury spoke about the new gas stove and its features. He claimed that the new stove is the best most durable and technologically advanced product in recent times. He also said: “With stainless steel body, glass top, ceramic and Teflon coating will make the burner gas stove durable and strong.” General Manager of Business and Operations Nizam Mohammad Nusrat Ullah said: “Our products have a good reputation, pursuing excellence, quality first, and customer satisfaction. For that a large factory has been set up for the specialized assembling line of Omera Gas Stove and its production capacity is 100,000 unit of gas stoves every month.” Apart from gas stoves, Omera Home Appliances is also introducing high pressure and low pressure LP gas regulator, radiant cooker, induction cooker, cooker hood and many others on the other side, its LPG cylinder while its LP gas has gained substantial popularity.
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