Important Business News Extracts – December 28 2016
Banks plan to issue bonds to boost capital
Many public and private banks have been considering issuing bonds next year to maintain the new international standards for capital adequacy ratio. Officials at the finance ministry and the Bangladesh Bank said the government has been considering releasing bonds to meet the huge capital shortfall in BASIC, Sonali and Rupali banks. But private banks have been mulling over the same but to increase their capital more in accordance with international standards. The amount of capital that may be raised from the market has not yet been finalised, but BDT 40.0 billion to BDT 50.0 billion worth of bonds may be released, officials said. The government has been considering issuing bonds worth more than BDT 25.0 billion for scam-hit BASIC Bank and BDT 5.0 billion for Rupali Bank. Four private banks have sought permission from the central bank to issue bonds to improve their capital base.
The local currency BDT appreciated by 10 paisa against US dollar on Tuesday in a single day after two months in the inter-bank foreign exchange (forex) market. The US dollar was quoted at BDT 78.70-BDT 78.80 against BDT 78.80 of the previous working day, according to treasury officials of commercial banks. It was BDT 78.80-BDT 78.85 on Thursday.
Finance Minister AMA Muhith said Tuesday the government will give funds for recapitalisation of the cash-strapped BASIC Bank to help keep it afloat.The problem-ridden bank had sought BDT 26.0 billion in the form of bond to help meet its capital shortfall as per requirement of the Basel-III provision. Mr Muhith last Wednesday approved a proposal of banking division and asked the finance division to take steps for issuance of bond.
Bangladesh Bank relaxes rules, cuts cost of remittance harnessing
The central bank relaxed the policy on drawing arrangement between offshore exchange houses and local banks and slashed the deposit to augment falling remittance receipts. Under the relaxation, the amount of security deposit for drawing arrangement came down to USD 10,000 from USD 25,000 while security deposit for Non-Resident BDT (NRT) account got trimmed down to BDT 0.2 million from BDT 0.5 million.
The government moves to revise down the project aid (PA) in the current development budget as many project-executing agencies performed poorly in utilisation of the allocated foreign funds. Officials said Monday government’s Economic Relations Division (ERD) has arranged two days of consultation with the agencies concerned on revision of the project aid (PA). The foreign-fund-mobilising authority, ERD, will sit with 93 government ministries and agencies today (Wednesday) while with another 47 tomorrow (Thursday).
Four state-owned gas companies owe BDT 308.0 billion to National Board of Revenue (NBR)
The National Board of Revenue (NBR) has decided to step up its efforts to realise arrear revenue worth BDT 308.0 billion from four state-owned companies under Petrobangla. Titas Gas Transmission and Distribution System Limited, Bakhrabad Gas Distribution Company Limited, Jalalabad Gas Transmission and Distribution System Limited and Karnaphuli Gas Distribution Company Limited owe the amount against distribution of gas produced by the International Oil Companies (IOCs). Large Taxpayers Unit (LTU) under the Value Added Tax (VAT) wing has issued a total of seven demand notices to Petrobangla from May 20, 2015 to December 14, 2016 to clear the dues.
The Dhaka District Magistrate in a report has recommended the Cabinet Division to form a new wage board especially for the garment industry workers. According to official sources, the recommendation came in the wake of the workers unrest in Ashulia on the outskirts of the capital Dhaka. The garment factory owners reopened their factories yesterday. The factories remained closed since December 20 due to workers’ unrest. State Minister for Labour and Employment Mujibul Haque Chunnu ruled out the possibility of forming a new wage board for garment workers this year as such a wage board is due in 2018. According to the magistrate’s report, major demand of the garment workers is giving workers a minimum wage of BDT15, 000. During the workers’ unrest in Ashulia, some 69 garment factories declared that they were shutting down their manufacturing units. In 2013 the government declared a minimum wage of BDT5,300 per month for garment industry workers. Earlier, the figure was BDT3,000.
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