BB plans cut in ADR as credit growth overshoots target
The central bank has planned to slash the limit of advance-deposit ratio (ADR) to help check any possible liquidity pressure on the market due to ‘aggressive lending.’ The ADR of all banks is likely to be re-fixed at 80.50 per cent for conventional banks and at 88 per cent for Sharia-based Islamic banks. The existing ratios are 85 per cent and 90 per cent respectively. The possible change in ADR was indicated at a meeting of the bankers, held at the central bank headquarters in Dhaka on Wednesday with Bangladesh Bank (BB) Governor Fazle Kabir in the chair. The proposed revised limit of ADR is expected to be incorporated into the next monetary policy statement (MPS). The MPS is expected to be announced at the end of this month, officials said. The BB’s latest move came against the backdrop of credit growth at higher rate than that of deposit in the recent months as depositors feel discouraged from putting money in banks because of lower interest rates.
Forex reserves fall to 1-year low after ACU payments
Bangladesh’s foreign exchange reserves fell to $32.01 billion yesterday, the lowest since January last year, following the largest ever payments made to the Asian Clearing Union or ACU. According to central bank data, Bangladesh yesterday paid ACU $1,355 million to settle payments for imports. The ACU is an arrangement by which the participants settle payments for intra-regional transactions among the participating central banks on a net multilateral basis.
Watchful BB bands with banks to face crypto craze
Dazzled by the advent of cryptocurrency, a digital asset designed as a medium of exchange in transactions on virtual money market, Bangladesh’s central bank began to devise ways of dealing with it. People familiar with the development at the Bangladesh Bank (BB) told the FE Wednesday that at least three departments of the central bank got down to working together on the matter as they believe there is “huge craze over the virtual money mostly in Dhaka and Chittagong”. They also believe that there is huge scope for money laundering through such type of frantic trading transcending physical frontiers. The bankers said they had already advertised in all leading media outlets warning people against sale-buy of such currencies, as part of preventive steps to curb the enthusiasm over the phantom.
BB gets two new executive directors
The Bangladesh Bank (BB) has promoted two of its general managers to the post of executive directors (ED). Forex Reserve and Treasury Department’s Md. Azizur Rahman, and Accounts and Budget Department’s AKM Fazlur Rahman were promoted on Monday. The Bangladesh Bank issued a statement in this regard.
Top bankers seek BB support to halt sudden changes in boards
The Association of Bankers, Bangladesh (ABB) yesterday said both management and depositors are now in panic following the sudden changes in ownership of different banks last year. The ABB, an organisation of top executives of the scheduled banks, sought support from the Bangladesh Bank to halt sudden changes in banks’ board so that depositors’ confidence in the banking sector does not erode. In response, BB Governor Fazle Kabir assured of taking relevant measures, Syed Mahbubur Rahman, Chairman of the ABB, told reporters after a quarterly meeting between the central bank’s high-ups and the organisation. “Changes can take place, but sudden reformation is not good for banks. Management of the banks have to face crisis due to such changes,” said Rahman, also the managing director of Dhaka Bank. Last year S Alam Group, a Chittagong-based business conglomerate, took ownership of Islami Bank Bangladesh and Social Islami Bank, which created a volatile situation in the banking sector.
Six state owned banks post hefty operating profits
The combined unaudited operating profits of Bangladesh’s six state-owned commercial banks in 2017 rose 68 percent year-on-year to Tk 3,999 crore, up from Tk 2,376 crore a year ago. Officials attributed the state banks’ increased operating profits to the falling cost of funds and recovery of bad loans during the year. Most of the private banks also made hefty operating profits — between 10 percent and 60 percent — in the just concluded year riding on a resurgence of demand for credit from the private sector. Operating profit is that resulting from business operations (gross profit minus operating expenses) before the deduction of interest and taxes. Of the six, Sonali and Janata each made the highest, over 1,000 crore, last year.
BAMDA arranges seminar
A seminar on Treasury Management: Money Market & ALM was held in the city recently. Bangladesh Money Market Dealers Association (BAMDA) arranged the seminar. Anis A. Khan, immediate-past Chairman of Association of Bankers Bangladesh Ltd & Managing Director & CEO of Mutual Trust Bank Limited was present as the chief guest. CEOs of different commercial banks, high officials from central bank, Heads of Treasuries, dealers of all Banks & NBFIs of the country attended. BAMDA president Md. Abdus Samad chaired the seminar while a seminar paper was presented on current money market scenario & challenges of asset liability management of the organisation.
MH Bhuiyan made NBR Chairman
The government on Wednesday appointed former senior secretary Mosharraf Hossain Bhuiyan as chairman of the National Board of Revenue and senior secretary to the Internal Resources Division on a two-year contract. According to a notification of the ministry of public administration, former industries secretary Bhuiyan would serve as the chief revenue collector for two years after joining the post. Bhuiyan who sought retirement as the industries secretary in June 2017 would replace NBR chairman Nojibur Rahman who has already been appointed principal secretary to the Prime Minister’s Office.
Rice imports hit two-decade high
Rice imports scaled a two-decade high in the first half of the fiscal year as private importers rushed to make profit from higher prices resulting from huge crop losses amid three episodes of floods. Imports of the staple stood at 22.59 lakh tonnes in July-December of fiscal 2017-18, the highest since 1998-99 when a record 30.67 lakh tonnes of rice were bought from external sources in the full fiscal year, according to food ministry data. The government imported 5.08 lakh tonnes of rice in July-December. Analysts said imports soared in the face of speculation of a decline in yield of current aman and low stocks of previous boro rice at private mills. A slash in import duty to 2 percent from 10 percent in August gave a boost to imports. Analysts said higher imports will increase supply, thus helping to stabilise the market and benefit consumers. But the government should be watchful so that higher imports do not hurt farmers by creating a glut in the market, they added.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$ 61.88||↑0.25||↑0.41%|
|Crude Oil (Brent)||$ 67.92||↑0.08||↑0.12%|
|Gold Spot||$ 1,306.91||↓6.30||↓0.48%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.10|
|GBP 1||BDT 112.35|
|EUR 1||BDT 99.86|
|INR 1||BDT 1.31|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.