Important Business News Extracts – February 01 2017
Monetary Policy Statement (MPS) silent on NPL, capital flight
Country’s apex trade body, FBCCI, said the just-announced monetary policy statement (MPS) is devoid of direction over major financial flaws like non-performing loans (NPLs) and capital flight. Some other staggering issues like undisclosed money and cuts in the rates of interest for businesses, especially the SMEs (small and medium enterprises), also were not properly reflected in the policy, according to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). The FBCCI made the observations over the half-yearly monetary policy Tuesday at a press conference where the federation expressed its serious concern over the revenue board’s delayed approach in reaching any decision regarding the controversial Value Added Tax and Supplementary Duty Act 2012. Speaking at the press conference FBCCI President Abdul Matlub Ahmad said the NPL ratio in the banking sector has gradually been growing, having stood at BDT 633.0 billion in financial year (FY) 2015-16.
‘Fake’ directors, Tk 701cr shady loans: scams galore in NRBC
Bangladesh Bank has found that the board of directors of recently-established NRB Commercial Bank was engaged in massive irregularities — from forging signatures of directors to sanctioning Tk 701 crore in loans flouting rules and regulations. A number of BB inspections conducted between June, 2016 and December 2016 found that the private commercial bank showed in its documents presence of four directors, all non-resident Bangladeshis, in its board meetings held during 2013-2016 although they were actually not in the country during that period. The government approved the bank in 2013 with the aim of attracting investment from NRBs to the bank.
Finance minister Abul Maal Abdul Muhith told parliament on Tuesday that he would consider the imposition of 14.5 per cent ‘fat tax’ on junk food while preparing the budget for 2017-18 financial year. The junk food and fast food are gaining huge response from people as it is cheap but these foods are unhealthy, Muhith said replaying to a call attention notice placed by lawmaker Nurjahan Begum. The lawmaker demanded 14.5 per cent fat tax on junk food holding the food responsible for increasing obesity and terming it unhealthy food.
Govt bids for brightening BD global business branding
The government set a target to raise Bangladesh’s global position in doing-business index to two digits from the current 176th by creating investment-stimulating environment for both local and international investors. Bangladesh Investment Development Authority (BIDA) fixed the five-year target in making decision on reforming rules and regulations, procedures after two days of brainstorming discussions with all relevant ministries, agencies, chambers and think tanks. Disclosing this at a press conference Tuesday at a city hotel, BIDA Executive Chairman Kazi M Aminul Islam expressed the hope of meeting the challenging target, saying that authorities concerned have willingly determined areas of responsibilities and set respective targets for bringing down the ranking below 99.
The government has taken a package of reforms that includes curtailing time to complete the process for starting a business to seven days with the aim of raising the country’s position in the global doing business index. The Bangladesh Investment Development Authority at a press conference on Tuesday announced the reform package that also includes reforming rules, regulations and procedures after two days of brainstorming discussions with all ministries, agencies, chambers and think tanks concerned. BIDA executive chairman Kazi M Aminul Islam said that the package of reforms, which would implemented from today, was envisioned to bring down the country’s ranking in ease of doing business index below 100th position from the current 176thposition in next five years. He said that the package was set as authorities concerned had willingly determined areas of responsibilities and set respective targets for bringing down the ranking below 100. Aminul said that different ministries and agencies had identified areas of reform in 10 indicators of the doing business ranking, including time for completion of process for starting business to seven days from 19.5 days. The package also eyes cutting time for giving construction permits to 60 days from 278 days and electricity to 28 days from the present 404 days.
Power transmission line from Payra to Patuakhali on cards
The government plans to construct a transmission line from Payra to Patuakhali to start supplying power to a 1,320MW coal-based power plant in Payra deep seaport area by 2018. The Executive Committee of the National Economic Council (Ecnec) approved a BDT 3.4 billion project yesterday for the construction of the 230 KV transmission line. The North West Power Generation Co with joint collaboration with China will build the power plant. The government’s target is to complete construction of the two-unit power plant by 2019 and start supplying power from a unit by October 2018. The Ecnec meeting chaired by Prime Minister Sheikh Hasina yesterday approved a total of eight projects at a total cost of BDT 125.5 billion. Another project for the development of the second phase of Anannya Residential Area in Chittagong will be implemented with BDT 28.3 billion. Under the project, 2,825 residential plots will be built on a 419-acre land in Chittagong. Some of the plots will be of 4-katha and some others 5-katha. In the project, there will be 110 commercial plots in the residential area where market, office, community hall, medical college, university and theme parks will be built.
Agriculture growth cuts poverty faster than non-farm sector
Gross domestic product (GDP) growth in agriculture sector leads to poverty reduction three times higher than similar growth in the non-agricultural sector, a study revealed Tuesday. BRAC Research and Evaluation Division (RED), in collaboration with the UK Department for International Development (DFID), conducted the study on ‘Strategic Agricultural Sector and Food Security Diagnostic for Bangladesh’. The study results were disseminated at Brac Inn in city on Tuesday. Director of BRAC Research and Evaluation Division Prof Abdul Bayes and agronomist Dr SM Fakhrul Islam completed the study which was begun by late BRAC Executive Director and noted economist Dr Mahabub Hossain. The study used data from the Department of Agricultural Extension, the Bangladesh Bureau of Statistics and a panel survey data of the BRAC collected from farmers of 64 districts in 2004 and 2014. The study projected that Bangladesh will have a surplus rice production of 1.2 million metric tons (MT) and surplus maize production of 1.8 million metric tons by 2030. On the other hand, the country will have marginal deficits in production of wheat, potato, pulses, vegetables, meat, egg and fresh water fish. The demand for wheat will be 3.0 million MT, an increase by 0.4 million MT from the 2015 consumption level which is 15.0% higher. The projections say that Bangladesh will have a surplus production of rice, maize, potato, vegetable and milk by 2050. It will have deficit in production of wheat, pulses, fruits, meat and fresh water fish by 2050.
Grameenphone logged in the highest profit in its 19-year history last year thanks to healthy growth in internet subscription and a reduction in operational expenditure. The country’s leading mobile phone operator recorded BDT 22.5 billion in net profit in 2016, up 14.16% from the previous year. Data revenue continued its growth momentum along with the voice, he said disclosing the annual financial results at a press briefing in Dhaka yesterday. Grameenphone’s data revenue soared 69.7% year-on-year to BDT 14.4 billion in 2016. The user base expanded 56.1%. Typically, voice revenue declines when data revenue increases, but this time Grameenphone experienced growth in both sectors. Its voice revenue grew 5.1%. The operator ended 2016 with 58.0 million active connections, up 2.2% from a year earlier. Biometric verification might be a factor behind the growth, though other operators recorded a decline in their subscriber base.
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