Delayed B’desh VAT execution stalls revenue reform: Moody’s
Global credit rating agency Moody’s Investors Service on Monday said that delayed implementation of the new VAT law by Bangladesh was ‘credit negative’ as it would impede revenue collection and underscore the institutional hurdles to effective policymaking in the country. The agency in its report Moody’s Credit Outlook-July, 2017 said that deferral of the new VAT law, the third postponement since 2015, would only marginally reduce projected revenue gains for the fiscal 2018 budget, since the more significant revenue increase was projected for later years.‘We expected the now-delayed VAT’s implications for future revenue collection and broader revenue reform to be more far-reaching,’ the outlook said. It was the budget’s most crucial revenue measure, and would have improved the progressivity of the tax system while strengthening compliance, it said. Revenues from the VAT were budgeted to account for about 32 per cent of total collections in fiscal 2018, only a 0.2 percentage point higher as a proportion of total receipts than fiscal 2017 levels.However, the International Monetary Fund estimates that once the new VAT took effect, its collections would directly lift tax revenues by 1 per cent of GDP each year, it said. Moody’s, however, estimated that it would be approximately 10 per cent of revenues.
11 to receive Mercantile Bank Award-2017 today
Eleven prominent personalities and organisations will receive ‘Mercantile Bank Award-2017’ for their outstanding contributions to different fields of the society.Chairman of the Bank Shahidul Ahsan came up with the announcement at a press conference on Monday held at the bank’s head office.Nominated awardees for ‘Mercantile Bank Award-2017’ are Dr. Debapriya Bhattacharya (Economics and Economics-based research), Salahuddin Alamgir (Commerce and Industry), Mofidul Hoque (liberation war- based research), Poet Asad Chowdhury (Bengali language and literature), Chhayanot (Culture), Dr. Syed Anwar Husain (Education), Dr. Samanta Lal Sen (Healthcare), Iqbal Sobhan Chowdhury (Journalism), Bangladesh Atomic Energy Commission (Science and Technology), Shuchona Foundation (Social Development) and Kolshindur village (Sports-Football).
Study: Poor risk management hits state banks’ performance
A total of eight state-owned commercial and specialised banks in Bangladesh bear the brunt of poor risk management, according to a study by the London-based Economic Intelligence Unit (EIU).In its latest report titled “Banking sector faces challenge”, the EIU said the poor risk management system contributes to a high level of non-performing loans (NPLs), low profitability, large capital shortfalls and balance sheet weaknesses of the banks.In January-March 2017, the overall bad loans in the banking sector rose by 18% from the previous quarter to Tk734.1 billion while NPLs at six state-owned commercial banks rose by 15.1% quarter-on-quarter to Tk357.2 billion accounting for just under half of the total non-performing loans.The study, however, observed that an improvement in conditions within the state-owned banking sector will be dependent on the political will to address the problems.With reference to an International Monetary Fund report published on June, the EIU said there were weaknesses in the banking sector owning largely to the legacy of loans to large borrowers, who lack incentives to repay and legal limitations that hamper recoveries.The report also reads that a total of six state-owned commercial banks account for about a quarter of the total banking sector assets.The six are Janata Bank, Agrani Bank, Rupali Bank, Sonali Bank, Krishi Bank and Rajshahi Krishi Unnayan Bank.“For decades, the state banks have lent large amounts to big, influential borrowers, who have been known to be lax with repayments while defaulters are rarely penalised, and instead, loans are routinely restructured to permit further lending to the same borrowers,” the report said.
Five Chinese firms willing to fund JV power project
A consortium of five Chinese banks offered to invest US$1.8 billion in developing a 1320mw coal-fired power plant in seaside Banskhali Upazila in Bangladesh’s southeastern Chittagong district.Senior officials of the Chinese banks expressed their willingness to put their funds in the joint venture (JV) power project at a meeting held at the Bangladesh Bank headquarters in Dhaka Monday with BB Governor Fazle Kabir in the chair.The officials sought policy supports from the country’s central bank in this connection, meeting sources said.At the meeting, the delegates of the Chinese banks showed interest in transfer of their funds directly to the borrower without opening any account with bank/banks operating in Bangladesh.The officials were also interested to know about effective interest rates and the opening of offshore account, they added.
IFIC Bank holds 40th AGM
The 40th Annual General Meeting (AGM) of IFIC Bank Limited was held at Officers’ Club in the city on Monday.
Chairman of the Board of Directors of the bank Mr. Salman F Rahman presided over the meeting, according to a statement.IFIC Bank Directors — Monirul Islam, Jalal Ahmed, ARM Nazmus Sakib and Ms Quamrun Naher Ahmed — and Managing Director & CEO of the bank Shah A Sarwar were present in the meeting.They approved the audited financial statements for the year ended 31 December
2016 and 12 per cent stock dividend for the shareholders.The chairman concluded the meeting by expressing the hope that the four decade-old organisation will continue to grow with sincere efforts of all concerned.
Dhaka stocks soar on positive bank earnings reports
Dhaka stocks skyrocketed on Monday after a slight fall in the previous session amid an increased participation of investors as financial stocks surged with investors gaining fresh enthusiasm for bank shares on the back of a rise in half-yearly operation profits of banks.The key index of Dhaka Stock Exchange, DSEX, advanced by 1.26 per cent, or 71.75 points, to close at 5,726 points on Monday, the highest since April 6 when the index was at 5,736 points.Monday’s gain was the highest single-day gain after February 8 when the index added 96 points.Before Sunday’s 1.42-points fall, the DSE’s key index had gained 194 points in the previous six trading sessions.The market was vibrant throughout the session which touched 5,700-points mark within the first hour of the session and it gained further when last hour’s buying orders poured in.Stockbrokers said the market rose on the day as financial stocks rallied on a strong buying pressure by investors following the media report that operating profits of most of the banks including Islami Bank, Dutch Bangla Bank and Rupali Bank increased in the January-June period of this year.As a result, the prices of non-bank financial institution and bank stocks rallied by 3.66 per cent and 2.65 per cent respectively on the day.
Bank Asia approves 12pc stock div
Bank Asia has declared 12 per cent Bonus Share for the year 2016 at the 18th Annual General Meeting of the Bank held Monday Dhaka Lady’s Club in the capital city. Mr. A. Rouf Chowdhury, Chairman of the Bank presided over the meeting. With 12 per cent stock dividend, the paid-up capital of the Bank would increase to Tk. 9.87 billion. Vice Chairmen Mr. Mohd. Safwan Choudhury and Mr. A.M. Nurul Islam, Chairman of Executive Committee Mr. Rumee A. Hossain, Chairman of Audit Committee Mr. Mashiur Rahman, Directors Mr. M. Irfan Syeed, Mr. Md. Shahajahan Bhuiyan, Mr. Md. Nazrul Huda, Ms Farhana Haq Chowdhury and President & Managing Director Mr. Md. Arfan Ali were present. There was a large turn-out of the shareholders in the annual general meeting. They expressed satisfaction at the overall performance of the Bank and approved the accounts for the year 2016.
Local and Global Stock Indices
|Index Name||Close Value||Value Change||Percentage Change|
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$ 47.02||↓0.05||↓0.11%|
|Crude Oil (Brent)*||$ 49.62||↑0.85||↑1.74%|
|Gold Spot*||$ 1,221.98||↑1.78||↑0.15%|
Major Currencies Exchange Rates Movement in Last Seven Days
|USD 1||BDT 80.80*|
|GBP 1||BDT 104.60*|
|EUR 1||BDT 91.85*|
|INR 1||BDT 1.25*|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.