Remittances from major destinations on dive

Inward remittances from 13 major countries out of 18 marked a sharp fall so far in the current fiscal year against the corresponding previous period. Officials said the inflow of remittances from six Middle-Eastern countries along with two others dropped more than 15.0% during the July-November period of the fiscal year (FY) 2016-17. Lower development activities in the Gulf Cooperation Council economies because of rock-bottom prices of fuel oils on the international market are seen as a major cause. Bangladesh received a total of USD 2.99 billion in remittances from the eight countries during the period under review. It was USD 3.5 billion in the same period of the FY’16. The inflow of remittance from the Kingdom of Saudi Arabia (KSA), a major importer of Bangladeshi manpower, dropped by 22.9% or USD 285.5 million to USD 963.9 million in the first five months of the FY’17 from USD 1.3 billion in the same period of the last fiscal. Remittance from the United Arab Emirates (UAE) treads the KSA track as it also fell sharply by nearly 21.0% or USD 227.3 million to USD 874.2 million during the period against USD 874.2 million a year ago, according the central bank latest statistics. Overall remittance inflow dropped by 15.7% in the first five months of the current FY compared to the same period of the last fiscal. The remittance receipts came down to USD 5.2 billion during the July-November period of the FY’17 from USD 6.2 billion in the same period of the previous fiscal. Single-month receipts were estimated USD 951.4 million in November 2016, down by USD 59.6 million from the level of the previous month. In October last, the remittances came to USD 1.0 billion. It was USD 1.1 billion in November 2015.

Source: http://print.thefinancialexpress-bd.com/2016/12/06/158724

Current account slips into deficit after four years

The current account balance has slipped to the negative territory for the first time in four years due to remittance contraction and high import growth. Between July and September this year, the current account deficit stood at USD 504.0 million, which was USD 1.7 billion in the surplus a year earlier, according to data from the central bank. The last time the current account was in deficit was in fiscal 2011-12, when it was USD 447.0 million in the negative. Since then, the current account never slipped into deficit at any point in time. Remittance has remained a major source of foreign currency for the last 10-12 years. It slumped 17.7% in the first quarter of the fiscal year. And remittance’s downward trajectory continued: in the first five months of fiscal 2016-17, about USD 966.0 million was received from expatriates, down 15.6% year-on-year. The growing tendency of expatriates to send money through illegal channels and the oil price crash have been blamed for the decline in official remittance figures. The oil price slump, which dropped to a historic low in January, affected the incomes of Gulf Cooperation Council economies, from where Bangladesh gets the bulk of its remittance. Among the Middle Eastern countries, a sizeable sum comes from Saudi Arabia and the UAE. In the first five months, remittance inflow from Saudi Arabia slid 22.8% and from the UAE 20.6%. Remittance from other countries dropped as well. For instance, after the Middle Eastern countries, the highest remittance comes from the US, and it plunged 35.0% during the period. In the first three months of fiscal 2016-17, imports rose 17.3% and exports only 3.5%.

Source: http://www.thedailystar.net/business/current-account-slips-deficit-after-four-years-1325653

Mobile financial services not cost-effective: BIBM Study

Some 90.0% of the respondents in a study opined that the mobile financial services (MFS) in the country are not cost-effective. Two private banks – Brac Bank Ltd and Dutch-Bangla Bank Ltd (DBBL) – have 88.4% market share of total MFS in the country, although 13 banks came into operation to provide the services and some 20 banks took approval to come to the market. These were revealed in a paper titled ‘Impact of Mobile Banking on Financial Inclusion in Bangladesh: Current Status, Opportunities and Challenges’. It was presented by Bangladesh Institute of Bank Management (BIBM) Associate Professor Md Mahbubur Rahman Alam and Assistant Professor Kaniz Rabbi. The paper, along with four others, was presented in the last session of the two-day annual banking conference, organised by BIBM at its headquarters in the capital. According to the paper, 65.0% of MFS’ non-users said security risk is the main concern for them for not taking the services. It also found that among other reasons of not using MFS include high transaction cost, realization of extra charges by agents, and not knowing English. While discussing on the paper as the chair of the session, Bangladesh Bank (BB) Deputy Governor S K Sur Chowdhury said the banks should design more affordable and client-centric MFS to make those popular.

Source: http://print.thefinancialexpress-bd.com/2016/12/06/158719

BD among top 10 receivers of legal financial transfer

Bangladesh stands 10th on a list of the developing countries classed as ‘receivers of licit or recorded financial transfers’ during 1980-2012, apart from witnessing substantial flight of capital. According to the findings carried in a new report of Global Financial Integrity (GFI) for the period of 33 years, the country’s cumulative receipts of recorded transfers stood at $116.8 billion. The GFI report also mentioned that since the late 1990s, developing countries, including Bangladesh, had lost $16.3 trillion through broad leakages in the balance of payments (BoP), trade misinvoicing and recorded financial transfers.

Source: http://www.thefinancialexpress-bd.com/2016/12/06/55401

Foreign workers in expressway project get income tax waiver

Foreign workers in the Dhaka elevated expressway project will enjoy three years’ tax exemption on their income received as salary and allowance from the project. The tax exemption will be considered to be effective from August 14, 2015 to 2018. Foreigners, who will work in the project, will enjoy the tax exemption until 2018, said a senior tax official. The revenue board issued the SRO giving priority to smooth implementation of the project, he said. “The issue of tax exemption for foreign workers was not mentioned in the agreement signed between the government and the foreign contractor company,” he added.

Source: http://www.thefinancialexpress-bd.com/2016/12/05/55397

BB directs banks to form sustainable finance units

The central bank has asked financial institutions to create a sustainable finance unit, to help the country achieve the sustainable development goals or SDGs. The unit, which has to be formed in 45 days, will also take care of green banking and corporate social responsibility initiatives. “With the formation of the sustainable finance unit, green banking unit and CSR cell in banks and non-bank financial institutions will be abolished,” Bangladesh Bank said in a notice on Thursday. The unit will be led by the chief of risk management division and a senior deputy managing director will chair the sustainable finance committee.

Source: http://www.thedailystar.net/business/banking/bb-directs-banks-form-sustainable-finance-units-1325641

BSEC to revise corporate governance guidelines

The securities’ regulator is set to introduce a provision, among others, of appointing at least one woman director in the companies’ boards as part of women empowerment. The Bangladesh Securities and Exchange Commission (BSEC) is working to upgrade the mandatory corporate governance guidelines by incorporating some new provisions. The other proposed provisions, which are also set to be included in guidelines, are the formation of a risk management committee and reducing the responsibility of a chief executive officer (CEO) who looks after more than one company as group CEO. The securities’ regulator is set to introduce a provision, among others, of appointing at least one woman director in the companies’ boards as part of women empowerment. The Bangladesh Securities and Exchange Commission (BSEC) is working to upgrade the mandatory corporate governance guidelines by incorporating some new provisions. The other proposed provisions, which are also set to be included in guidelines, are the formation of a risk management committee and reducing the responsibility of a chief executive officer (CEO) who looks after more than one company as group CEO.

Source: http://print.thefinancialexpress-bd.com/2016/12/06/158672