Important Business News Extracts – February 08 2017
Bangladesh Bank warns banks not to cut interest on deposit
Bangladesh Bank on Tuesday asked banks to take initiatives to prevent the rates of interest on deposits from further falling. The BB issued a circular to the managing directors and chief executive officers of all banks saying that the spread between interest rate on deposits and rate on lending declined sharply below five per cent as banks cut the deposit rates. The BB asked banks to squeeze the intermediation spread by allowing the rates of interest on lending to fall further. The central bank asked banks to recover their defaulted loans so that they (banks) can lower the rates of interest on lending further.
Borrowing from savings tools surpasses target by 20.0% in six months
Government’s net borrowing from the national savings instruments in the first six months has surpassed the target by 20 per cent, set for the entire fiscal year. Officials attributed such a big rise in the sales of savings tools to higher yield rates, which attracted the savers. The net sales of savings certificates stood at BDT 234.7 billion in the July-December period of the fiscal year (FY) 2016-17, against the target of BDT 196.1 billion, set earlier by finance ministry for the entire fiscal year, the Department of National Savings (DNS) data showed.
Complaints against banks soar with Sonali, BRAC leading chart
Complaints filed by clients with Bangladesh Bank against scheduled banks and non-bank financial institutions swelled in the last financial year with Sonali Bank and BRAC Bank topping the chart. A Bangladesh Bank report released on Tuesday showed that financial integrity and customer services department, a wing of the central bank, received as many as 4,530 complaints against the banks and NBFIs in the FY16. The figure was 3,930 in the FY15, 4,476 in the FY14 and 4,296 in the FY13. BB governor Fazle Kabir, while unveiling the report at the central bank headquarters in the capital, said the banks would have to avoid receiving such allegations of the clients as they deposited their money with the banks on the basis of trust.
Islami Bank Bangladesh Limited (IBBL) to issue BDT 5.0 billion Mudaraba Bond
Islami Bank Bangladesh Limited (IBBL) will issue “IBBL Mudaraba Redeemable Subordinated Bond” worth BDT 5.0 billion, said an official disclosure on Tuesday. “The board of directors has taken the decision to raise the Tier-II Capital of the Bank under Basel-III through issuance of 7 years non-convertible “IBBL Mudaraba Redeemable Subordinated Bond” of BDT 5.0 billion under Mudaraba principle of Islamic Shari’ah,” said the disclosure.
Mutual Trust Bank gets USD 20.0 million from German lender
Mutual Trust Bank Ltd on Monday closed a deal to take USD 20.0 million low-cost foreign currency loans from DEG, a German development finance institution. This is the first time MTB has signed an agreement with the DEG to get foreign currency loan, which is long-term in nature. MA Rouf, chairman of the bank, Rena Terfruechte, director (financial institutions for Europe-Asia) of DEG, and Pathomwong Gerdbhoca, senior investment manager, were present at the deal signing ceremony held at a city hotel.
USD 65.0 million World Bank loan deal soon to develop insurance sector
The government would soon sign a USD 65.0 million (about BDT 5.9 billion) loan agreement with the World Bank (WB) to enhance the capacity of the insurance regulator and the state-owned insurance corporations of the country, officials said. They said the WB has already sent the drafts of the financing agreement, project agreement, project appraisal agreement (PAD) and disbursement letter of the loan to the authorities concerned. The Economic Relations Division (ERD), on the other hand, sought opinions on the drafts from the ministries and divisions concerned, aimed at finalising the drafts.
Inflation edged up 12 basis points to 5.15% in January, after being on the decline for several months, on the back of a rise in food prices, especially of the staple rice. The increase in the prices of coarse rice and the admission cost for students at the beginning of the year contributed to the rise in inflation, said Planning Minister AHM Mustafa Kamal as he disclosed the inflation figures at the Planning Commission in the capital. Last month, food inflation soared 115 basis points to 6.53%; it was 5.38% in the previous month. However, non-food inflation dropped to 3.10 percent in January, a decline of 139 basis points from a month earlier.
The government spent BDT 399.7 billion from the BDT 1.1-trillion Annual Development Programme (ADP) in July-January period-marking 4.0% points higher spending over the corresponding period of last fiscal. After Tuesday’s Executive Committee of the National Economic Council (ECNEC) meeting, Planning Minister AHM Mustafa Kamal told journalists that the government agencies spent BDT 399.7 billion or 32.0% of the development budget in the first seven months of the current financial year (FY), 2016-17.
India seeks 1,055 acres of land in Mirsarai Economic Zone
India has sought 1,055 acres of land in Mirsarai Economic Zone (MEZ) in Chittagong to establish industries, exclusively owned by its own investors. The neighbouring country has recently sent an official letter to the government, seeking land allocation. Executive chairman of Bangladesh Economic Zones Authority (BEZA) Paban Chowdhury confirmed the receipt of the proposal from the Indian government.
Banglalink aims to plow USD 100.0 million this year into network expansion
Leading telecom operator Banglalink intends to invest around USD 100.0 million in Bangladesh this year as part of its network development, the top boss of Banglalink’s parent firm said on Tuesday. Focusing on the potentials of mobile financial services in the country, the company chief said the regulator should allow telecom operators to offer these services to the consumers.
Number of Bangladeshis visiting India tops for first time
The number of Bangladeshis visiting India has topped for the first time, overtaking the United States, in 2016, reports New Delhi-based Business Standard. The US, the traditional top source for arrivals in India, has lost the spot it held for years to Bangladesh, it said. Data from the India’s tourism ministry showed 13.7 lakh Bangladeshis visited India in 2016, up by 21 per cent over the number in 2015. The number of visitors from the US was 13.1 lakh in 2016, with an increase of 8.2 per cent year-on-year. The growth of visitors from the UK, the third-largest source market for foreign tourists in India, was 10.4 per cent in 2016.
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