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.
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%.
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.
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.
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.
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.
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.
Bangladesh’s garment shipments to Italy and Japan, the nationals of which were killed in a terrorist attack in Dhaka in July, remained unscathed in July-October — a development that will bring a heavy sigh of relief among exporters. In fact, apparel exports to the two nations increased during the period, according to data from the Export Promotion Bureau. In a brazen attack in the heart of Dhaka’s diplomatic zone on July 1, nine Italians, seven Japanese, three Bangladeshis and an Indian were killed. All Italians killed in the attack were garment retailers, who had been doing business with Bangladesh for many years. For example, Nadia Benedetti owned a buying house, Studiotex, which sourced more than $50 million worth of garment items from Bangladesh in a year.
Three mega projects worth BDT 1.4 trillion or USD 18.4 billion, including Jamuna Railway Bridge and Rooppur nuclear power plant-Bangladesh’s largest one-are up for government approval. Officials said Monday the three behemoths will also bring in the highest amount of foreign assistance worth USD 14.4 billion from overseas development partners. The third project is expansion and strengthening of the power system networks under DPDC that costs BDT 205.0 billion, equivalent to USD 2.6 billion. The largest one–Rooppur nuclear power plant–involves the single-largest amount of BDT 1.1 trillion or USD 14.5 billion. As per official estimate, the much-cherished Jamuna Railway Bridge project involves a cost of BDT 97.3 billion or USD 1.3 billion. The three major infrastructure projects are likely to get the seal of endorsement today (Tuesday). The government’s highest economic policymaking body, ECNEC, might approve the three mega-projects, including the setting up of Rooppur nuclear power plant, in its meeting Tuesday, a senior Planning Commission (PC) official said. Three foreign donors–Russia, China and Japan’s JICA-will provide a total of BDT 1.1 trillion (USD 14.4 billion) worth of loans for the three mega-projects, said the official. With the support of Russian USD 11.4 billion credit, Bangladesh Atomic Energy Commission (BAEC) will set up the 2400-megawatt Rooppur nuclear power plant at a total cost of BDT 1.1 trillion. With a BDT 1.12-trillion loan from China, Dhaka Power Distribution Company Ltd (DPDC) would expand and strengthen the electricity- distribution system in the capital city and its adjacent areas. And with a BDT 77.2 billion support from Japan, Bangladesh Railway will construct a separate railway bridge parallel to the Bangabandhu Bridge across the mighty river Jamuna.
Mobile operators’ investment declined 6.2% last fiscal year, while their revenues increased 4.3%, according to statistics from the telecom regulator. The six mobile operators altogether earned BDT 229.6 billion and invested BDT 53.2 billion. Of the six operators, only Grameenphone and Citycell bumped up their investments in fiscal 2015-16, according to the Bangladesh Telecommunication Regulatory Commission’s annual report. Grameenphone led the charge in terms of investment in fiscal 2015-16, putting in BDT 22.8 billion, which is an increase of 21.0% from a year earlier. Beleaguered Citycell, which did not make any investment in fiscal 2014-15, put in BDT 644.4 million last year. Grameenphone made significant investments during the period to expand 3G coverage and strengthen 2G network, said Sayed Talat Kamal, the operator’s head of external communications. In terms of revenues too, Grameenphone was in pole position. Its revenues increased 5.7% to BDT 108.9 billion, which is 47.4% of the industry revenues earned in fiscal 2015-16. Robi was the second largest operator in terms of revenue and investment in fiscal 2015-6. Its revenues stood at BDT 51.6 billion, up 1.9% year-on-year; its investment was BDT 16.4 billion, down 9.97% from a year earlier. Banglalink’s investment declined 20.0%, while its revenue growth was flat at BDT 43.7 billion. Airtel’s investment declined 32.9% to BDT 2.5 billion, while its revenue increased 10.6% to BDT 14.9 billion. State-owned Teletalk’s revenues swelled 30.7% to BDT 9.8 billion but its investment slumped 83.0% to BDT 360.0 million.
BTRC likely to frame free communications apps use guidelines
The Bangladesh Telecommunication Regulatory Commission is likely to formulate guidelines on using free communications apps in a bid to introduce revenue collection system from such services. The authorities are getting less revenue as social communication apps are becoming popular day by day among users meaning that they (users) are using less the traditional communications methods like cellular phone, telecom regulator officials said. BTRC chairman Shahjahan Mahmood in a recent press briefing also hinted that some rules and regulations might be introduced for the social networking and communications apps. The matter sparked serious debate in many public platforms with anticipation that the government might block such social apps. Later, the BTRC on Tuesday issued a public notice saying that the government had no plans to block free communications apps. Earlier, the government on November 15 last year blocked access to a number of social networking and free communications services including Facebook, Viber, WhatsApp, Tango, Twitter and Skype amid political tension and security concerns.
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