Private sector credit flow rises in December after three months

Private sector credit growth increased slightly in December 2016, after experiencing a falling trend in the previous three consecutive months, due to higher trade financing for settling import payment obligations, bankers said. The growth in credit flow to private sector rose to 15.6% in December 2016 on a year-on-year basis, which, however, was lower than the Bangladesh Bank (BB)’s earlier projection. It was 15.0% in November, according to the central bank’s latest statistics, released on Thursday.

Source: http://print.thefinancialexpress-bd.com/2017/02/03/163789

Bank lending rate goes down for 24th month in a row

Scheduled banks cut their rates of interest on lending further in December, the 24th month in a row, as the businesspeople were still reluctant to borrow from banks amid a dull business situation in the country, said Bangladesh Bank officials. The rates of interest on lending declined to 9.93% in December from 9.94% in November, 2016. BB data showed that the average rate of interest on lending dropped below 10.0% in November for the first time in the country’s banking history. The central bank began logging the weighted average interest rates on lending and deposit in 1975 and the interest rate was never seen declining below 10 per cent before November last year. A BB official told New Age on Thursday that the banks were forced to lower the lending rates due to a sluggish credit demand from the businesspeople. He said that the majority of the banks had recently cut their rates of interest both on deposits and lending in the face of dull business.

Source: http://www.newagebd.net/article/8368/bank-lending-rate-goes-down-for-24th-month-in-a-row

30.0% of Rupali Bank’s NPLs belong to 20 top defaulters

Over 30 per cent of the non-performing loans (NPLs)s belong to 20 top defaulters of Rupali Bank, according to governor of Bangladesh Fazle Kabir. “These defaulters should be closely monitored and pursued by the Rupali Bank as per policy and law,” governor Kabir said while speaking as the chief guest at the annual business conference of Rupali Bank at the Krishibid Institution in Dhaka Saturday last. Speakers told the conference that the state-owned commercial banks were lagging behind as far as the competition with their private sector counterparts is concerned due to various reasons, including lack of good governance, ignorance and stubbornness.

Source: http://print.thefinancialexpress-bd.com/2017/02/05/163956

Finance Minister asks BB to explain as IDB president expresses dismay

Finance Minister AMA Muhith asked on Thursday the central bank governor to place a report to him regarding the Islamic Development Bank (IDB) president’s claim that the recent changes in the Islami Bank Bangladesh Ltd (IBBL) did not take place in consultation with foreign shareholders of the bank. New president of the IDB Dr Bandar M H Hajjar reportedly in a recent letter to Mr Muhith expressed his dismay over the recent changes brought to the IBBL board and top management. The IDB and foreign shareholders from the Kingdom of Saudi Arabia and Kuwait now own 52.0% share of the country’s largest private sector bank. On January 05 this year, former secretary of the government Arastoo Khan was elected chairman of board of directors and Abdul Hamid Miah was named as managing director of the bank in a meeting of the board of directors. Later, Mr Muhith told newsmen that the changes in the IBBL were made at the will of the foreign shareholders of the bank and under their pressure On Thursday, replying to a query, he said, “If I take it as a serious matter, my impression was very different. They have told me that there is no basis of the statement you made.”

Source:
http://print.thefinancialexpress-bd.com/2017/02/03/163798
http://www.thedailystar.net/business/idb-dismayed-abrupt-changes-islami-bank-1355152

Cash dollar import unlikely

The import of cash dollars, necessitated by a surge in demand, is unlikely after the National Board of Revenue has refused to provide the 29.0% duty waiver on the purchase. The country experienced a cash dollar crunch last month after the stock came down to USD 7.0 million from USD 17.0 million in March last year. Subsequently, Bangladesh Bank directed Standard Chartered Bank to bring in USD 10.0 million in cash and asked the NBR last month to extend the tax waiver. Earlier in 2011, the BB imported USD 15.0 million through Standard Chartered. The revenue authority is unwilling to give the tax waiver as it says the law does not permit it.

Source: http://www.thedailystar.net/business/cash-dollar-import-unlikely-1356262

Inter-bank dollar transaction declines to USD 53.5 million

Local foreign exchange market faced upward shifts in exchange rates in the week ended Thursday as well. The exchange rate of the dollar was BDT 79.12 in the inter-bank market. Bangladesh Bank continued to buy dollars from the market. The average daily inter-bank USDBDT transaction volume was about USD 53.5 million against USD 57.9 million of the preceding week. Most of the banks kept their USD/BDT rates unchanged for customers this week. The USD/BDT selling rates for importers of major foreign and private banks was at 79.30-80.05, while USD buying rates from exporters were at 78.30-79.05. For non- commercial payments such as Telegraphic transfer as donations, wage earners remittance, dollar drafts etc, the average T.T buying rate was in the range of 77.20-78.65 while average T.T selling rate was at 79.79 on the last working day.

Source: http://print.thefinancialexpress-bd.com/2017/02/04/163843

Investment in national saving tools marches past BDT 230.0 billion in H1

The net investment in the national savings certificates and bonds in the first half of the current financial year 2016-17 increased by 76.4% to BDT 234.7 billion from BDT 133.1 billion during the same period a fiscal year ago. Economists and Bangladesh Bank officials say clients continue to invest heavily in the savings tools in the recent period due to a lower rate of interest on the banks’ fixed deposit scheme. Lack of investment opportunities amid sluggish business is also forcing the clients to invest in the government tools, they say. The huge net investment in the savings certificates and bonds has already created a risky situation for the country’s macroeconomic situation as the government will have to face a budget mismatch, the experts observe.

Source: http://www.newagebd.net/article/8444/investment-in-natl-saving-tools-marches-past-tk-23000cr-in-h1

Savings certificates choke bond market

The high interest rates on government savings certificates are deterring the development of a much-needed bond market and turning investors into savers in Bangladesh, experts said. Bangladesh Bank Governor Fazle Kabir also pointed out the matter while announcing the monetary policy on Sunday. Yet, there has been no action from the government to adjust the interest rate, for which its liabilities are swelling every year. The continued high interest rates on savings certificates hold back the development of a bond market, said Anis A Khan, managing director of Mutual Trust Bank and chairman of the Association of Bankers Bangladesh.

Source: http://www.thedailystar.net/business/savings-certificates-choke-bond-market-1355164

Sovereign wealth fund shortly

A proposal for launching the planned sovereign wealth fund for supporting mega-projects may be placed before the cabinet this week. People familiar with the matter at the Ministry of Finance spoke about the latest developments on the proposed fund, which, however, drew some reservations about its ground reality. Those who disapprove of such move at different levels both in government and private sectors point out that there is such kind of fund under the Ministry of Finance, named ‘Bangladesh Infrastructure Finance Fund’, which should be revamped instead.

Source: http://print.thefinancialexpress-bd.com/2017/02/04/163878

ACC wants to create final legal window

The national anti-graft body recommends allowing unaccounted- for money to be invested in flats or lands under a legal measure ‘once for all’. In giving such a view the Anti-Corruption Commission (ACC) noted that granting legal cover to such undisclosed income-better known as ‘black money’-breeds corruption. Official sources said with the ACC acquiescence in hand the government authorities are likely to incorporate into the budget documentation for fiscal year (FY) 2017-18 the provision of what commonly passes for ‘whitening black money’ through payment of penal tax.

Source:
http://print.thefinancialexpress-bd.com/2017/02/05/163954
http://www.newagebd.net/article/8441/give-money-legalising-scope-once-and-for-all