Imports soar 28pc on food grains, machinery, fuel oils

The country’s overall imports jumped by more than 28 per cent or US$1.09 billion in January mainly due to higher import of food grains, capital machinery and fuel oils, officials said. The settlement of letters of credit (LCs), generally known as actual import, in terms of value, rose to $4.98 billion in January 2018, from $3.89 billion in the same period of the previous calendar year, according to the central bank’s latest statistics. The actual import was $3.65 billion in December 2017. On the other hand, opening of fresh LCs, generally known as import orders, rose by over 23 per cent or $998.14 million to $5.33 billion in January 2018, from $4.34 billion a year ago. It was $3.89 billion in December 2017. “The overall imports increased last month mainly due to higher import of capital machinery, food grains, particularly rice and wheat, and petroleum products to meet the growing demand for the essentials in the local market,” a senior official of the Bangladesh Bank (BB) told the FE. Import of capital machinery or industrial equipments used for production rose to $480.59 million in January 2018 as against $264.34 million in the same month of 2017. The central banker also said the import of capital machinery may increase in the coming months also following implementation of different infrastructure projects including Padma Bridge. Currently, the government is implementing nine projects under the supervision of Fast Track Project Monitoring Committee, headed by Prime Minister Sheikh Hasina, for ensuring their quick completion.

Source: http://today.thefinancialexpress.com.bd/last-page/imports-soar-28pc-on-food-grains-machinery-fuel-oils-1519667375

7 banks face Tk 9417cr capital shortfall

Four state-owned banks (SoBs) — Sonali Bank, Rupali Bank, Janata Bank and Basic Bank- are facing a capital deficit of BDT 76.26 billion, Finance Minister said. Among the 57 banks in the country, the four state-owned banks and three private banks face the capital crisis as per the data collected on September 30, 2017, he also added. According to the Finance Minister, the amount of capital deficit in the four state-owned banks is BDT 76.26 billion and that in three private banks is BDT 17.91 billion. So, the total capital deficit in the (seven) banks is BDT 9.41 billion. The three private banks are Bangladesh Commerce Bank, Farmers Bank and ICB Bank. The capital deficit is BDT 31.40 billion in Sonali Bank, while BDT 25.22 billion in Basic Bank, BDT 12.72 billion in Janata Bank and BDT 6.89 billion in Rupali Bank. Meanwhile the minister admitted that the food inflation in the first quarter of the current fiscal (2017-18) increased but the non-food one marked a fall. The overall inflation in the stipulated three months of the current fiscal was 5.57, 5.89 and 6.12% which was 5.40, 5.37 and 5.71% in the previous fiscal. The 12 months average after the quarter of the 2017-18 fiscal is 5.55% while it was 5.71 during the last fiscal. The remittance inflow has increased by 4.4% in the first quarter of the current fiscal compared to the previous year. Export earnings rose to 8.7% which was 8.1% in the previous year, import expenditure increased by 28.4% to USD 13.2 billion, the growth for opening import LCs is 36.5%, the private sector credit flow increased by 17.8% while the rate of general point-to-point inflation came down to 5.5% from 5.7% in September last.

Source:
http://today.thefinancialexpress.com.bd/first-page/four-sobs-facing-tk-76b-capital-deficit-1519666957
http://www.newagebd.net/article/35551/7-banks-face-tk-9417cr-capital-shortfall

Bangladesh Bank sells $18m to seven banks

The central bank of Bangladesh has sold US$18 million more to seven commercial banks to meet the growing demand for the greenback in the market. “We’ve sold the foreign currency to the banks on Monday to at market rate settle outstanding letters of credit (LCs) against imports particularly fuel oil, food grains and capital machinery for power sector,” a senior official of the Bangladesh Bank (BB) told the BBN in Dhaka.

Source: https://businessnews-bd.net/bangladesh-bank-sells-18m-2/

Growth of currency outside banks triggers concern

The volume of currency outside the banking system has grown significantly in recent months ahead of the national elections, raising suspicion about the use of such money. The currency outside the banking system rose by 14.06 per cent or Tk 156.41 billion to Tk 1268.83 billion until November last calendar year from Tk 1112.42 billion in the same month of 2016, according to the central bank’s latest statistics. It was Tk 1131.53 billion in December 2016. Senior bankers and experts, however, expressed concern over high growth currency outside the banking system and said flow of funds in excess of normal volume in the banking system will largely help meet the growing demand for liquidity. The presence of more than usual amount of currency outside the banking system has also affected the deposit growth than that of credit in the recent months, according to banking-sector insiders. Besides, the widening gap between credit and deposit growth continued in 2017 as many people with surplus funds stayed away from banks due to lower interest rates, they added.

Source: http://today.thefinancialexpress.com.bd/first-page/growth-of-currency-outside-banks-triggers-concern-1519666718

Electronic KYC by June

Bangladesh Bank is set to introduce the electronic Know Your Customer (e-KYC) system under which bank accounts can be opened without filling in any paper-based documents. Those with e-KYC will be allowed to operate limited-scale transaction through the agent banking network and mobile financial services, in a development that is set to boost the country’s financial inclusion cause. “The new system will help the unbanked and underprivileged people enjoy banking services,” said Md Anwarul Islam, assistant spokesperson of the BB. The central bank will try to complete all process to introduce e-KYC, which has been in the works for the last two years, within June. The customers will also be able to put in money in deposit pension schemes and the government savings certificates. The regular KYC required filling up forms along with photo and supporting documents.

Source: http://www.thedailystar.net/business/electronic-kyc-june-1540792

Cash incentive rules flouted

Kuliarchar Sea Foods, a Cox’s Bazar-based fish exporter, withdrew about Tk 19 crore in cash incentives from Mercantile Bank last year, violating government rules. Exporters cannot collect the incentive, meant to encourage exports, until the entire export earnings are credited by the importer to the exporter’s bank, according to a Bangladesh Bank circular issued in December 2001.

Source: http://www.thedailystar.net/frontpage/cash-incentive-rules-abused-1540735

Dhaka Stock Exchange (DSE) staunchly defends its selection

Dhaka Stock Exchange (DSE) management sticks to their decision to select a Chinese consortium as the bourse’s strategic partner, saying they didn’t “compromise on competence”. Apparently to dispel ongoing contentions over the issue, DSE managing director said the premier bourse has chosen the best eligible strategic partner considering the price and technical soundness. He informed that the regulator (Bangladesh Securities and Exchange Commission) is looking into the proposal of the Chinese consortium. The DSE managing director also said that the government and the central bank are playing market-supportive role for the sake of the capital market.

Source:
http://today.thefinancialexpress.com.bd/first-page/dse-staunchly-defends-its-selection-1519666901
http://today.thefinancialexpress.com.bd/first-page/muhith-sceptical-of-chinese-consortiums-capability-1519666852
http://www.thedailystar.net/business/chinese-consortium-get-nod-be-dses-strategic-partner-1540789

S&P puts Bangladesh bank sector at higher risk category

Global credit rating agency Standard and Poor’s has put the Bangladesh’s banking sector at higher risk category amid rising non-performing loans, supervision gaps, overcapacity of banks and other irregularities in the sector surfaced in recent months. The S&P placed the country’s banking sector in the group ‘8’ on a scale of 1 (lowest risk) to 10 (highest risk) under its Banking Industry Country Risk Assessment report published on Monday. Some banks in Bangladesh will continue to face asset quality challenges, with sizable reported nonperforming loans, in addition to a high level of restructured loans, the report said. ‘Bangladesh is in the process of implementing international regulatory standards. However, we believe supervision has gaps and imposes limited market discipline. Also, the banking system has overcapacity and market distortions,’ it said. A supportive core customer deposit base and low reliance on external funding temper these weaknesses. Currently, the country’s banking sector is overcrowded with 57 banks including nine which got licences in 2013. The government is planning to give licence to more new banks following intense lobbying despite opposition of the central bank. The agency expects Bangladesh Bank continue to address the banking industry’s legacy stressed assets and gaps in governance, it said.

Source: http://www.newagebd.net/article/35563/sp-puts-bangladesh-bank-sector-at-higher-risk-category