Banks, power producers get a boost from BB

The central bank has exempted banks from keeping provisions in opening letters of credit to import equipment for electricity plants in order to fast-track the completion of power projects. As per the new directive issued on Wednesday, banks will be eligible for the zero provision facility for power projects, which secured letter of intent from Bangladesh Power Development Board (BPDB). The same preferential treatment will also be made available for the projects which will receive letters of intent from BPDB within September 30, 2018. Banks usually have to keep one percent provision against their liabilities of LCs for all types of products. The central bank has taken the initiative to ensure higher economic growth by implementing power projects within the deadline, according to the circular. The initiative will also help supply electricity to the agriculture and industrial sectors round the clock, it said. The government is prioritising the power sector, so the instruction will help generate electricity at a faster pace, a BB official told The Daily Star recently.

Source: http://www.thedailystar.net/business/banks-power-producers-get-boost-bb-1515355

Troubled banks worry Muhith

Some banks are in serious trouble. A number of sponsors are bankrupting banks, while another group is out to grab power of banks. Some directors, in collaboration with a few sponsors, are busy trying to change ownerships of banks. These were among the observations reportedly made by Finance Minister AMA Muhith in a recent letter to the Bangladesh Bank governor. It is time to merge one or two problematic banks and the Bangladesh Bank should consider this, he said in the letter. “It is my view that time may be right to start the initial process of merging the banks,” said Muhith mentioning the problems in the banking sector. The finance minister sent the letter to the central bank on December 28 last year, an official of the finance ministry told The Daily Star recently.

Source: http://www.thedailystar.net/frontpage/troubled-banks-worry-muhith-1515958

Auto-loans power sales of reconditioned cars

Sales of reconditioned vehicles have boomed in the country in recent times on the back of increased auto-loan facilities from financial institutions, business insiders have said. Some 9,461 cars have been sold in the country in the first five months (July-November) of the current fiscal year 2017-18, while the figure was 20,149 units in FY 2016-17, according to available data. Traders are hopeful of the rising trend to continue in the coming days. They said enhanced purchasing power of the customers, necessity of a private vehicle in the face of poorly managed public transport system and continuous development of road network are also helping the market grow. However, sector insiders said it was high time the government bring necessary change in policy to import more hybrid cars for the sake of environment. They added nearly 90 per cent of the country’s private cars is reconditioned vehicles mostly imported from Japan. Of those, more than 80 per cent cars is manufactured by Toyota.

Source: http://today.thefinancialexpress.com.bd/trade-market/auto-loans-power-sales-of-reconditioned-cars-1515249055

Go for centralised banking to reduce risks, costs

Banks in Bangladesh should adopt a centralised banking system as it helps lenders reduce costs as well as credit and operational risks, a top banker said yesterday. Ahmed Kamal Khan Chowdhury, a former managing director of Prime Bank, said the system also improves efficiency and ensures responsibility and accountability of bankers. He said had Sonali Bank been a centralised bank, the Hall-Mark scam could have been averted. “A centralised banking system could have detected why a branch had been opening so many letters of credit for Hall-Mark. The malpractice could have been stopped just after one case,” he told The Daily Star at a views-exchange meeting at The Daily Star Centre. The good thing is that, he said, some local private banks have already adopted global best practices. Brac, Eastern, The City, NRB Bank and Prime have introduced the system. Of the foreign banks, HSBC, Standard Chartered and Citi have been following the system for long. Under the centralised system, a bank manages its business and operations from the head office through a strong technological backbone. As a result, the traditional branch becomes just a mere sales and services point and is banned from disbursing loans. Even a branch manager can’t open an account without sending it to the central processing system. But there is pain too for adopting the system. “The subject is very technical and lots of process reengineering, restructuring and communication are required. It takes a minimum five to six years to stabilise the system,” said Chowdhury. There is also a shortage of quality workforce capable of understanding the process, he noted.

Source: http://www.thedailystar.net/business/go-centralised-banking-reduce-risks-costs-1516129

Forex reserves under pressure

Bangladesh’s foreign-exchange reserves (forex) came under pressure following higher external payments, particularly as food and fuel costs fired up the bills. Sources said import payments swelled as consumer items, including food-grains and fuel oils, cost higher. The reserves fell below US$32 billion Thursday following a routine payment to the Asian Clearing Union (ACU) against imports during the November-December period of the last calendar year, according to officials. After the payment, the country’s forex reserves came down to $32 billion on Wednesday from $33.11 billion of the previous working day, according to the central bank’s latest statistics. It was $31.999 billion on Thursday.

Source: http://today.thefinancialexpress.com.bd/first-page/forex-reserves-under-pressure-1515173595

Exports rise 7pc in Jul-Dec

Exports rose 7.15 percent year-on-year to $17.92 billion in the first half of the fiscal year, maintaining the growth momentum largely on the back of garments, jute, jute goods and furniture. Bangladesh also beat the export target for July-December by 0.23 percent, according to the Export Promotion Bureau. Alone in December, exports receipts stood at $3.09 billion, up 8.42 percent over the same month in the last fiscal year. The monthly target was, however, missed by 1.84 percent. Garments, which account for more than 80 percent of Bangladesh’s total exports, logged in $14.77 billion in the first six months, up 7.75 percent from the same period a year ago.

Source:
http://www.thedailystar.net/business/exports-rise-7pc-jul-dec-1516126
http://today.thefinancialexpress.com.bd/public/first-page/july-dec-exports-grow-by-715pc-1515086401

Deficit financing jumps 48pc in July-Oct

Financing of the budget deficit in the first four months of the current fiscal year (FY18) stood at Tk 208.04 billion, according to the latest statistics of the central bank. The amount was 48 per cent higher than that used in financing the deficit in the same period of the past fiscal year, it said. Bangladesh Bank estimation showed that budget financing during July-October reached 1.05 per cent of the projected Gross Domestic Product against 4.80 per cent as envisaged in the national budget for FY18. Though the first-half of the current fiscal year has passed, data for only four months or first one-third period of the current fiscal year is available. The central bank data showed that budget financing from the domestic sources rose to Tk 119.75 billion during July-October of this fiscal year, which was Tk 103.41 billion in the corresponding period of FY16.

Source: http://thefinancialexpress.com.bd/economy/deficit-financing-jumps-48pc-in-july-oct-1515219585

Move underway to digitise management of savings tools

Some reforms are in the offing for modernizing management of the savings instruments and converting those to a sustainable source of deficit financing by the government. To this end, official sources said, a move is under way to create a database of the existing savings tools under the Directorate of National Savings (DNS). Besides, overall management of the instruments will come under automation. The finance division, recently, sent a proposal to this effect to the finance minister for his approval, they added. The division has proposed some short-term reform measures under the DNS in the first phase. According to the proposal, a self-sufficient central database of clients/investors in national savings certificates would be created linking with the National Identity Card under the DNS.

Source: http://today.thefinancialexpress.com.bd/first-page/move-underway-to-digitise-management-of-savings-tools-1515173778

DBBL launches VIP banking Lounge at Gulshan

Dutch-Bangla Bank recently launched 2nd VIP Banking Lounge on the premises of Gulshan Circle-1 Branch at 23, Gulshan Avenue, Dhaka for the prime customers of the Bank. Abul Kashem Md. Shirin, Managing Director & CEO of the Bank formally inaugurated the lounge. To be qualified as a VIP Banking customer, an account-holder needs to maintain an average balance of Tk 2.5 million in his/her savings/ current/ SND account, Tk 5.0 million as FDR or Tk. 0.1 million in his/her salary account with DBBL. The VIP Banking customers will enjoy unlimited free access facility & special refreshment in Balaka VIP Lounge at airport (with spouse and children), all DBBL VIP Lounges in the city or at the manager’s private corner of all the branches, higher ATM withdrawal limit, more reward points and waiver of different charges & fees.

Source: http://today.thefinancialexpress.com.bd/public/stock-corporate/dbbl-launches-vip-banking-lounge-at-gulshan-1515081273

City Bank gets $10m from Norwegian lender

City Bank has recently secured $10 million funds from the Norwegian Development Bank (Norfund) to support its offshore banking unit and project financing requirements of customers. A financial closure ceremony was organised in Oslo, Norway where City Bank Managing Director Sohail RK Hussain and Norfund Chief Executive Officer Kjell Roland signed the agreement on behalf of their respective organisations, City Bank said in a statement. City Bank’s Head of Wholesale Banking Sheikh Mohammad Maroof, Head of Structured Finance Mahbub Jamil, Norfund Head of Financial Institutions Erik Sandersen, and Senior Investment Manager Marianne Halvorsen were also present on the occasion, it said.

Source: http://www.thedailystar.net/business/city-bank-gets-10m-norwegian-lender-1516120
http://today.thefinancialexpress.com.bd/stock-corporate/city-bank-arranges-10m-financing-from-norfund-1515251180