Banks must reduce classified loans by this year: BB
The central bank has asked all the scheduled banks for taking effective measures to reduce the volume of classified loans significantly by the end of this year. The bankers have, however, sought judicial support to this end. A tripartite meeting of Law Commission, the BB and senior bankers is expected to be held soon to gear up settlement of such loan disputes. The BB and the commission already sat months ago to discuss issues like the functioning of money loan courts, strengthening recovery of NPLs and Credit Information Bureau-related matters. The amount of classified loans in the banking industry reached an all-time high of nearly Tk 1.0 trillion in September ahead of the upcoming national polls. The volume of defaults jumped by nearly 34 per cent or Tk 250.67 billion to Tk 993.70 billion as of September 30, from Tk 743.03 billion as of December 31, 2017, the BB data showed. The share of classified loans also rose to 11.45 per cent of the total outstanding credits during the period under review from 9.31 per cent nine months before. The loans include substandard, doubtful and bad/loss of total outstanding credits, which stood at Tk 8,680.07 billion as of September 30, 2018, from Tk 7,981.96 billion as of December 31, 2017. It was Tk 7,527.30 billion as of September 2017. The total amount of provisioning shortfall rose by over 20 per cent to Tk 81.27 billion as of September 30 from Tk 67.67 billion nine months ago, according to the BB’s latest statistics. A total of 12 out of 57 banks failed to keep the requisite provisions against loans, particularly the NPLs, in the third quarter (Q3) covering July-September period of 2018.
Trade top priority: US envoy
Increasing the US trade in Bangladesh will be the top priority of future bilateral relations. Bangladesh is a significant market for America as the export of the US to the country of 170 million people has been increasing rapidly. The US is the single largest export destination for Bangladesh. The value of two-way trade is more than $7 billion a year and the balance of trade is heavily tilted towards Bangladesh, which exported goods worth more than $6 billion last year. The two-way trade is projected to be higher in the future. US exports to Bangladesh rose 100 percent year-on-year in 2017. Promoting labour rights and workers’ safety is not only the right things to do as it is also the foundation for freedom of association.
Assess impact of new VAT law first: FBCCI
The Federation of Bangladesh Chambers of Commerce and Industry has urged the revenue authority to conduct an impact assessment study before implementing the new VAT law. In a letter sent to the chairman of the National Board of Revenue, the apex trade body suggested that the changes between the VAT and Supplementary Duty Act 2012 and VAT Act 1991 should be identified as part of the study. It stressed the need for assessing the impact of the new law on import, exports, manufacturing and trading in light of the VAT Act 1991 that has been in effect for more than two and a half decades. The FBCCI in its letter urged for studying incidence of application of 15 percent VAT, and impact of withdrawal of package and truncated VAT rates on retail business, service sector and consumers. The FBCCI also demanded that the NBR revise the new law by doing cost benefit analysis on the basis of proposals from the NBR field offices and recommendations of its member organisations.
Govt signs deal with WB for livestock funds
Bangladesh has signed a $500 million financing agreement with World Bank to improve livestock and dairy production as well as provide better market access to 2 million household farmers and small and medium-scale agro-entrepreneurs. The agreement was signed by Monowar Ahmed, secretary to Economic Relations Division (ERD), and Dandan Chen, acting country director of WB for Bangladesh, Bhutan and Nepal, at the ERD in the capital. By 2021, the country is likely to face an annual shortage of 1.5 billion eggs and nearly 6 million tonnes of milk, according to World Bank. By enhancing the availability of dairy, egg and meat products, the project will help improve nutrition for citizens, especially children, pregnant women and new mothers. the project will help small-scale livestock farmers—half of whom are women—adopt improved agricultural technologies. The project will promote climate resilient and emission-saving practices in the sector and will address issues related to food safety, environmental pollution, anti-microbial resistance and animal welfare. The credit, coming from the WB’s International Development Association, has a 30-year term, including a five-year grace period, and carries a service charge of 0.75 percent and an interest of 1.25 percent.
EZs to ‘create 10m jobs’
The government is eyeing to generate some 10 million employment opportunities and boost export earnings by around US$ 40 billion through the establishment of countrywide 100 economic zones (EZs) by 2030. The government is working to create some 10 million employments and boost export earnings by another US$ 40 billion through establishing these 100 economic zones across the country by 2030. In order to increase industrialisation and create employment, the government approved 600 industrial enterprises for setting up their industries in eight export processing zones till June 2018. These industries are being set up at these export processing zones (EPZs) – Chattogram, Dhaka, Cumilla, Mongla, Ishwardi, Uttara-Nilphamari, Adamjee and Karnaphuli.
Govt to excavate 800km canal to increase use of surface water
The government has set a target to dig 800 kilometres of canal across the country by this fiscal year aiming to increase the use of surface water for irrigation purposes. Bangladesh Agricultural Development Corporation (BADC) is set to bring 0.78 million more hectares of land under surface water irrigation, said officials. 450 kms of canals will be dug while 350 kms of old canals will be re-excavated under the Annual Development Programme (ADP). The canals will be built in the BADC’s 25 project and programme areas across the country except three Barind districts. BADC has got an allocation of Tk 4.4 billion to excavate the canals, build 400 new irrigation infrastructures, set up 250 water pumps, and supply 0.142 million tonnes of cereal, spice and vegetable seeds, 35 million pieces of fruit, wood and medicinal saplings and 1.1 million tonnes of non-urea fertiliser. BADC also will set up 60 solar panel-based water pumps and will repair 3,000 old pumps, he said, adding that 40 per cent of the canals were dug until last week. Use of surface water has increased to some extent in recent years as it was 26.56 per cent in 2017 while 25 per cent in 2016. Above 1.7 million farming households in Bangladesh leave cropland fallow and unproductive after the monsoon season amid a shortage of water supply.
Cabbage export to grow more than double this winter
Export of cabbage is going to more than double this winter, as the demand for the Bangladeshi produce is growing across the globe. The export volume might multiply in coming years, as local traders eye to tap the market during the January-February period when global demand goes up. According to the Bangladesh Fruits Vegetables and Allied Products Exporters’ Association (BFVAPEA), local companies are set to export 2,000 tonnes of cabbage from Jashore district from January. The country shipped over 800 tonnes of cabbage last winter. A company will make a shipment of 500 tonnes of cabbages to explore the markets in Malaysia, Chinese Taiwan, Singapore and Vietnam. If we can maintain the quality by adopting contract farming and GAP, we can easily make more than 0.1 million tonnes of export within a few years. For export, local companies have signed contracts with 300 farmers in Jashore to get pest- and disease-free safe cabbage. The global market size of green cabbage is $ 5.8 billion (2017), of which Spain accounts for 19 per cent.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$ 47.29||↓0.88||↓1.83%|
|Crude Oil (Brent)||$ 56.46||↓0.78||↓1.36%|
|Gold Spot||$ 1,244.22||↑1.44||↑0.09%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.7824|
|GBP 1||BDT 105.7501|
|EUR 1||BDT 95.3611|
|INR 1||BDT 1.1871|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.