Important Business News Extracts – February 07 2017
Eastern Bank Limited to get USD 40.0 million loan from DEG, FMO
Development banks of Germany DEG and of Netherlands FMO will provide a term loan of USD 40 million to Eastern Bank Ltd (EBL), a leading private sector bank of the country, said a statement. Ali Reza Iftekhar, Managing Director and CEO of Eastern Bank Ltd., Rena Terfruechte, Director Financial Institutions Europe/Asia of DEG and Dave Smit, Senior Investment Officer of FMO jointly signed the agreement to this effect at the EBL head office in the city Monday. Deputy Managing Director Ahmed Shaheen and other senior executives of EBL, DEG and FMO were present on the occasion.
BDT 3.5 billion more bad debts written off in July-September
Country’s scheduled banks wrote off more bad debts worth BDT 3.5 billion in the July-September period of 2016 with IFIC Bank and Janata Bank shedding the highest amounts of dud loans in the period. IFIC Bank and Janata Bank wrote off total BDT 1.8 billion in bad loans to bring down their defaulted loans and clean up their balance sheets. The banking sector, however, in the period recovered BDT 2.5 billion from the amount of bad loans they had earlier written off. According to the latest Bangladesh Bank data, banks’ total write-offs of uncollectible loans increased to BDT 426.7 billion as of September 30 from BDT 423.2 billion as of June 30, 2016. The amount of write-offs was BDT 414.4 billion as of March 31, 2016 and BDT 412.4 crore as of December 31, 2015. Write-offs in the banking sector usually increase when the defaulted loans in the industry maintain an upward trend, a BB official told New Age on Monday.
Bank deposits maintained a robust 13 percent growth year-on-year in December, despite declining interest rates. Bankers and analysts attributed the deposit growth to a lack of popularity of alternative investment tools available in the market. The ease of converting deposits to cash and its safety also encourages people to park their money in the banking system, they added. Moreover, a part of remittance that flows through non-banking channels also reaches the rural people and is saved as deposits, and the interest income is not their concern, he added. Total deposits stood at BDT 9088.6 billion at the end of December 2016, up from BDT 8035.1 billion in the same month of 2015, according to data from Bangladesh Bank.
The government has raised the subsidy to farmers for purchase of agriculture machinery to 50.0% with a view to expanding mechanized seeding, transplanting and harvesting such that growers can produce more food at a reduced cost. Previously, the farmers got subsidy of 30.0%. The government also increased the ratio of subsidy to 70.0% for buying certain types of farm machines by farmers in haors and the southern coastal zones. For that end, the Executive Committee of the National Economic Council last month raised the allocation by about 37.0% to BDT 3.4 billion
USD 10.0 billion Sovereign Wealth Fund gets cabinet nod
The cabinet approved in principle on Monday the formation of a US$ 10-billion Sovereign Wealth Fund, initially with USD 2.0 billion, with money from the country’s foreign exchange reserve to finance various mega projects. Prime Minister Sheikh Hasina presided over the cabinet meeting at Bangladesh Secretariat, which also approved five other proposals. The meeting was also apprised of five other issues. Briefing newsmen after the meeting Cabinet Secretary Mohammad Shafiul Alam said each year USD 2.0 billion will be given to the fund, thus raising its amount to USD 10.0 billion in five years.
Exports brought home USD 3.3 billion last month, up 4.0% from a year earlier, driven by higher shipments of garment. The amount was 6.4% higher than the previous month’s receipts but fell short of the target of USD 3.4 billion. January’s receipts take the export earnings for the first seven months of fiscal 2016-17 to USD 20.1 billion, a 4.4% increase from a year earlier. Garments, which typically account for 80.0% of the export receipts, raked in USD 2.7 billion, up 3.1% year-on-year and 4.7% month-on-month, according to data from the Export Promotion Bureau.
The Power Division is poised to overrun its budget. It has already sought BDT 6.8 billion more in the revised annual development recipe for fully funding projects undertaken for this fiscal. Sources said Monday the Division placed the demand for higher funds as it will require more money for implementing some ongoing power-generation, transmission and distribution projects. The division officials said they would need a total of BDT 167.4 billion in the upcoming Revised Annual Development Programme (RADP) for the financial year (FY) 2016-17. The RADP is expected to be finalised within this month.
Bangladesh Chartered Accountants Bill gets cabinet approval
The Cabinet approved on Monday the draft of the “Bangladesh Chartered Accountants Bill, 2017” in a bid to make the existing law more time befitting while raising the punishment for its violation. The approval came from the regular weekly meeting of the Cabinet held at Bangladesh Secretariat with Prime Minister Sheikh Hasina in the chair, reports UNB.
49.3% shoppers possess high-level knowledge on e-commerce
About half of the shoppers or 49.3% people have high-level of knowledge on e-commerce, reveals a latest survey. Of them, 30.8% shoppers in the malls of Dhaka city possess high-level knowledge while 18.5% have a very high-level knowledge on e-commerce, according to the survey. The survey titled “Shopper Survey on E-Commerce in Bangladesh: Perception, Demand and Usage Trends” was carried out by Center for Enterprise and Society (CES) of University of Liberal Arts Bangladesh (ULAB). Conducted last year, the survey interviewed 400 shoppers at four different city locations – Dhanmondi, Mirpur, Uttara and Gulshan, and the findings of survey have been made public recently. According to the survey, respondents in the age group between 19 and 24 are most likely to know about e-commerce while male respondents and students were found more likely than female respondents and professionals.
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