Banking, business majors’ profits boost corporate tax
Increased profits netted by major commercial banks and big companies yielded higher revenues for government exchequer by over 7.0 per cent in the immediate-past fiscal.Officials said the corporate-tax collection by the Large Taxpayers Unit (LTU) under income tax wing of the National Board of Revenues (NBR) marked a fair growth in the just-concluded fiscal year (FY) due to increase in profits of the major commercial banks and large businesses.According to provisional figures, the LTU collected Tk 149 billion in income tax in FY 2016-17, up by nearly Tk 10 billion from previous year’s figure.Corporate-tax collection was Tk 139.11 billion and Tk 144.81 billion in 2015-16 and 2014-15 respectively.However, target for the unit was Tk 175 billion as per original estimate of revenue target of Tk 2.03 trillion handed to the NBR.Although the government revised the aggregate revenue- collection target downward to Tk 1.85 trillion, it was not reset in the field-level tax offices.
AB Bank in disarray after ACC lawsuit
The first joint-venture bank in Bangladesh is going through a series of crises after a graft case was filed by the Anti-Corruption Commission (ACC) over the embezzlement of Tk383 crore between 2011 and 2015.ACC filed the case with Banani Police Station in the city on June 28 in which 12 high-ups of AB Bank, including its Managing Director Moshiur Rahman Chowdhury and Chief Financial Officer (CFO)-cum-company secretary Mahadev Sarker Sumon, were named, while 16 others were also accused.Ever since the case has been filed, these 12 officials have refrained from attending office, causing many important issues including loan disbursements to remain unsettled.None of the accused in the case was present during a recent visit to the bank’s head office by this correspondent.Deputy Managing Director (DMD) Sajjad Hussain told the Dhaka Tribune that Managing Director Moshiur Rahman Chowdhury is on sick leave and that he was acting up to the role.
Farmers to be exempted from service charge for farm loans
Farmers will not pay any service charge while taking agriculture loans from the banks in line with the latest decision of the Bangladesh Bank.The new policy will come into effect from this fiscal year, meaning that the farmers will count only nine per cent interest rate set by the central bank to take farm loans from the banks, a BB official told New Age on Thursday.The farmers are now forced to pay application processing and evaluation fee including Tk 600 as stamp charge to the banks while taking farm loans. The central bank will unveil its farm loan policy for FY 2017-18 within third week of this month when it will give the new instruction to the banks.The central bank has set the farm loan disbursement target for banks at Tk 20,400 crore for FY18, increasing by 16.23 per cent, from Tk 17,550 crore for FY17.The banks crossed their annual target of farm loan disbursement in 11 months (July-May) of FY18 against the backdrop of a decreased credit demand from the industrial sector.The banks distributed Tk 18,935.57 crore in farm loans in the July-May period of FY 2016-17, which was 107.89 per cent of their annual farm loan disbursement target.The central bank has not prepared the achievement figure of FY17 as it is yet to get the farm loan disbursement figure of June from the banks.
Lending rate rises in May after 29-month fall
Interest rates on banks’ lending products increased in May after 29 months of fall as the private sector credit growth has been rising in recent months, said Bangladesh Bank officials and an expert.The weighted average interest on lending rose to 9.66 per cent in May from 9.62 per cent in April this year.A BB official told New Age on Thursday that banks had increased their lending rates after a long pause due to an increased credit demand from the businesspeople in the last few months.He said that the majority of banks had recently cut their rates of interest on lending, whereas they maintained cutting the deposit rates.Due to the higher credit demand from the businesspeople, excess liquidity holding by banks has recently decreased, which has forced them (banks) to increase the interest rates for their lending products.Former interim government adviser Mirza Azizul Islam told New Age on Friday that the weighted average interest rates on lending had increased in May due to a higher credit growth in the private sector.‘The common people are now reluctant to keep deposits with banks due to a lower interest rate. In many cases, the interest rates on deposit products decreased below the inflation rate,’ he said.Against the backdrop, banks may think to increase their deposit rates in the months to come to encourage depositors, he said.As part of the move, banks have increased the lending rates in advance, he said.The country’s year-on-year private sector credit growth stood at 16 per cent in May against the central bank’s monetary target of 16.50 per cent for the January-June period of this year.
Banking Companies Act to be amended to fund power projects
The government may amend the banking law to facilitate the country’s power sector to get loans beyond the single borrower exposure limit.The move comes after the power division last month requested banks to channel Tk 20,000 crore into the power sector over the next six months.At present, banks can provide loans of up to 25 percent of their capital to a single borrower. For some banks it would not be possible to lend at a scale needed by the power sector companies without exceeding the limit.For instance, a prominent business group has recently sought a large sum for its power project from a state-owned bank but was turned away due to the single borrower exposure provision.This prompted the chairman of the group to request the Bangladesh Bank to relax the provision.Subsequently, a committee was formed on July 4 to go through the Bank Company Act 1991 to check if there is any provision that bars banks from providing large loans to the power sector. If yes, the committee has to recommend the necessary amendments.The single borrower exposure limit is a global practice to enable banks to effectively manage their credit risks, said Salehuddin Ahmed, a former governor of the BB. He said the amendment of the provision to facilitate a certain sector will put the banks at risk and harm the financial stability.Moreover, such amendment will reduce the bank’s ability to comply with Basel-III capital requirement, Ahmed added.The move to amend the law is to facilitate a certain business group, said a senior executive of a private bank.
Vice Chairman of House of Mannan Charitable Trust and Sponsor Director of Social Islami Bank Limited
Vice Chairman of House of Mannan Charitable Trust and Sponsor Director of Social Islami Bank Limited Nargis Mannan inaugurated Syeda Rezia Memorial-Ibrahim General Hospital established by House of Mannan Charitable Trust at Masimpur, Sirajganj Saturday. The trust was established by the Founder Chairman of Social Islami Bank Limited Prof. Dr. M A Mannan. President of Bangladesh Diabetic Samity Prof. Dr. A. K. Azad Khan was present as the special guest. Chairman of Social Islami Bank Limited Major Dr. Md. Rezaul Haque (Retd) also seen.
New DMD of Rupali Bank
Abdul Majid Sheikh has been promoted to deputy managing director (DMD) of Rupali Bank Ltd recently.Prior to the new assignment, he was the general manager (admin and human resource department) of the bank, according to a statement.Majid Sheikh started his career as a senior officer at Rupali Bank in 1986. He discharged his duties in various capacities including regional and divisional head.Graduated from Dhaka University, he completed his MSc and later MBA degrees from the university.Born in 1958 in Munshiganj, he visited many countries in the world to attend seminar and training programmes.
Public Bank Scams: Problems left to persist
Governance failings and appointment of politically linked people to the boards of public banks have been contributing to default on large loans, frequent scams and poor recovery of stolen money.These open the door for corruption, money laundering, and financial crime risks, according to the Mutual Evaluation Report (MER) of the Asia/Pacific Group on Money Laundering (APG).In the report, the Australia-based inter-governmental body fighting money laundering, said better government steps were needed to freeze assets early on during investigation and to bring back the money that had been laundered.Default loans stood at Tk 111,347 crore as of April this year, said Finance Minister AMA Muhith in parliament on Monday. Just before the Awami League-led alliance assumed power in early 2009, the amount was Tk 35,000 crore.Since 2009, the government had appointed politically linked people to the boards of public banks, much to the dismay of the central bank.The recent APG report, prepared after its mission to Bangladesh late last year, referred to the $467 million loan scam of Sonali Bank (discovered in 2012), fraud involving $337 million of BASIC Bank between 2010 and 2012, and the embezzlement of $51 million from Janata Bank.
Thrust on expanding Islamic banking system
A six-day long (July 15-20, 2017) training course on Islamic Banking and Finance organised by Central Shariah Board for Islamic Banks of Bangladesh was inaugurated Saturday for executives and officers of various banks and financial institutions, said a statement.Held in the EXIM Bank Training & Research Academy at Karwan Bazan, Dhaka, the Inaugural Ceremony of the training course was presided over by Mr. AQM Safiullah Arif, Secretary General, Central Shariah Board.The course was attended as the Chief Guest by Principal Sayed Kamaluddin Zafree, Chairman, Central Shariah Board for Islamic Banks of Bangladesh and as the special guest by Mr. M Azizul Huq, Chairman of Executive Committee of the same Board.Chief Guest Principal Sayed Kamaluddin Zafree in his speech called upon the participants to flourish Islamic banking system through using acquired knowledge in their professional lives side by side with spreading it among their colleagues. He said, the periphery of knowledge should be wider than the sphere of concerned work.
The 3rd Zonal Heads’ Conference-2017 of Uttara Bank Limited
The 3rd Zonal Heads’ Conference-2017 of Uttara Bank Limited was held at the bank’s head office in the city on Saturday. Chairman of Uttara Bank Azharul Islam Limited was present at the function as the chief guest with Managing Director & CEO Mohammed Rabiul Hossain in the chair.
Govt moves to review minimum wage for automobile workers
The government has initiated a move to review the minimum monthly wages for the workers of automobile workshop industry and tailor industry, more than seven years after revision of wages for the sectors, officials said.The minimum monthly wages for tailor industry and automobile workshop industry were revised in 2008 and 2009 respectively, they added.In this connection, they said, the labour ministry issued two circulars on July 02 last and announced the names of the representatives both from workers and owners for recommending minimum wages for the sectors. The wage board consists of a chairman, an independent member and one each permanent representative from employers and workers while one each temporary representative has been selected from the employers and workers of respective industries.As per the gazette notifications, the labour ministry appointed Bangladesh Automobiles Workshop Malik Samity secretary general Md Jahangir Alam as the employers’ representative and Bangladesh Motorjan Mechanic Federation president Mahbubur Rahman Ismail as workers’ representative to the wage board.
Exports to Sri Lanka jump in FY17
Bangladesh exports to Sri Lanka sharply increased in the just concluded fiscal
year as the figure totalled $42.24 million registering a 38.76% growth over the previous year. In the FY2015-16, the export was $30.44 million.The pharmaceutical products constituted the largest part of the exports with $13.87 million followed by medicament mixture which earned $11.70 million, medicaments nes in form of dosage $9.11 million and garments $1.44 million, according to the Export Promotion Bureau data.Sri Lankan President Maithripala Sirisena is in Bangladesh now on a three-day official visit. And it is expected that the bilateral trade and commerce between Bangladesh and Sri Lanka would reach to a new level as a lot of issues to be discussed broadly.As of FY2015-16, bilateral trade of two countries stood at $75.62 million and the trade is in favour of Sri Lanka. Bangladesh export was $30.45 million, while import from the country was $45.16 million in the year.
PE funds increase emerging market assets to over $500b
Private equity funds have increased their total of assets under management in emerging markets funds to more than $500 billion, a survey of private capital found, a sign the sector could begin to catch up with other regions if the trend continues, reports dealstreetasia.com.Total assets held by emerging markets-focused private equity funds increased from $254 billion at the end of 2010 to $564 billion as of September 2016, according to alternative assets research firm Preqin.The firm also found that the EM-dedicated private equity funds have seen their assets grow at an average annual rate of 21 percent over the past decade, growing from $93 billion in December 2006. This comes despite EM-focused private equity funds representing a declining percentage of global activity in recent years. In 2016 187 emerging market private equity funds were closed for new deposits with $45 billion of aggregate annual capital raised. That’s down from 2011 when 482 private equity funds were closed for funding and raised $87 billion.
Local and Global Stock Indices
|Index Name||Close Value||Value Change||Percentage Change|
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$ 46.54||↑ 0.46||↑ 1.00%|
|Crude Oil (Brent)*||$ 48.91||↑ 0.49||↑ 1.01%|
|Gold Spot*||$ 1,228.70||↑11.12||↑ 0.91%|
Major Currencies Exchange Rates Movement in Last Seven Days
|USD 1||BDT 81.20*|
|GBP 1||BDT 106.36*|
|EUR 1||BDT 93.14*|
|INR 1||BDT 1.26*|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.