Cumulative written-off bank loans now BDT 414.4 billion
Written-off loans continued to rise until March, 2016 as the banks cleaned their balance sheets by reducing default loans, officials said. Cumulative loans, written off by the banks, rose by nearly BDT 2.0 billion to BDT 414.4 billion during the first quarter of the current calendar year from BDT 412.4 billion three months ago, according to the central bank’s latest statistics. However, the amount of banks’ cumulative written-off loans increased by more than 11.0% to BDT 414.4 billion as of March 31 last from BDT 372.5 billion in the same period of the previous calendar year. During the January-March 2016 period, the amount of written-off loans by six state-owned commercial banks (SoCBs) rose to BDT 220.8 billion from BDT 220.7 billion in the previous quarter. On the other hand, a total of BDT 180.4 billion loans were written off by 39 private commercial banks (PCBs) during the period under review against BDT 179.1 billion three months ago. Loans, written off by nine foreign commercial banks (FCBs), rose to BDT 7.6 billion in the Q1 of 2016 from BDT 7.1 billion in the previous quarter of 2015.
Bangladesh Bank to set higher credit growth target
Bangladesh Bank may set the private sector credit growth target at 16.5% in the monetary policy for the first half of the fiscal year, in keeping with the present momentum. Governor Fazle Kabir is set to announce the monetary policy today for the first half of fiscal 2016-17 in what will be his first big policy statement since he took over the reins from Atiur Rahman in March. In June last year, the BB set the private sector credit growth target for fiscal 2015-16 at 14.8%, but the mark was crossed in May and it stood at 16.4% at the end of the fiscal year. The government forecast the economic growth pace to be 7.2% for the current fiscal year, while it set the goal of containing inflation within 5.8%. In the monetary policy, the inflation target may be set at 5.5%, lower than the government target. However, no change will be brought to the policy rates as they were cut by 50 basis points in January.
Banks’ adjustment of over exposure: PCB subsidiaries get ‘breathing’ space
The latest enhancement of paid-up capital by commercial banks for their subsidiaries has given a ‘breathing’ space and scope of adopting existing business to the banks amid the sluggish trend of capital market, the top officials said. As per the approval of the Bangladesh Bank (BB) and the securities regulator, some banks having over exposure expanded the paid-up capitals of their subsidiaries by converting their loans into equities. The bank subsidiaries whose paid-up capitals have been expanded are: AB Investment, Southeast Bank Capital Services, Shahjalal Islami Bank Securities, NBL Securities, MTB Capital, Mercantile Bank Securities and One Securities. Earlier, the parent companies’ loans provided to their subsidiaries were also a component of the capital market exposure. Due to sluggish trend of the capital market observed after 2010-11 stock market debacle, the subsidiaries were not in a situation to repay principal amount and the interests well. The central bank later excluded the banks’ equity investments from the exposure limit following the longstanding demand of the stakeholders.
Bangladesh Bank says no organizations allowed to invest gratuity funds in NSCs
Bangladesh Bank has said all organizations, including banks and private and government entities, are barred from investing their gratuity funds in savings schemes offered by Directorate of National Savings. The BB on July 20 issued two separate circulars to all scheduled banks and NBFIs, and branches of the central bank reminding them that no organizations were allowed to invest their gratuity funds in any savings tools of DNS including 5-Year Bangladesh Sanchayapatra as per the Sanchayapatra Regulations 1977 (amended-2002). A BB official told New Age on Monday that although there was bar, some banks and private companies had recently invested their gratuity funds in the 5-Year Bangladesh Sanchayapatra violating the regulations. ‘Banks, NBFIs or other organizations are only allowed to invest their provident fund in the 5-Year Bangladesh Sanchayapatra. But they have also invested their gratuity fund in the tools,’ he said. The organizations are allowed to invest their gratuity funds in the Treasury bills and bonds owned by the government. The investment in the DNS’s national saving schemes crossed BDT 300.0 billion in 11 months of the just concluded financial year 2015-2016 against the government target of BDT 150.0 billion for the whole year.
No loan disbursed from stock market refinance scheme in 3 months
The government’s BDT 900-crore refinance scheme for crash-hit investors failed to stimulate them in making fresh investment as none of the investors received such facility in last three months. The Investment Corporation of Bangladesh, which handles the fund, released around BDT 45.9 million as loans to FAS Capita from the scheme in April 21, 2016. Due to investors’ disinterest about the refinance loan, the supervision committee on refinance scheme in May this year proposed that the finance ministry could extend the scheme by one more year to December 31, 2017. Besides existing tenure of the refinance scheme, the committee also proposed to reduce interest rate on the loan. Following the committee proposal, the finance ministry in June extended the refinance scheme by one more year from December 31, 2016 and reduced interest rate to 7.5% from 9.0% to get better response from the investors. The government’s relaxed policies, however, failed to draw investors’ attention as the ICB is yet to receive any application in this regard. ‘Although various measures have been taken to popularize the fund, no response was found,’ a senior ICB official told New Age recently. Besides, the ICB issued two sanction letters for loan from the refinance fund a couple of months back, but the organizations are yet to receive the letters, he said.
Standard Chartered to launch video banking in Bangladesh
Standard Chartered Bank said it will soon introduce video banking service for both its Personal Banking and Priority Banking segments in Bangladesh. Video Banking will bring the following benefits to clients: a) More choice, more convenience: Clients have a secure channel to access live, on-the-spot services through video, audio and web chat, giving them a convenient new way to do their banking. b) Document-sharing: Banking consultants can share screens with clients while speaking with them. Both consultant and client will also be able to upload and share documents. c) Access to investment advisor: Priority Clients can have “face-to-face” discussions with investment advisors to explore new wealth management opportunities. This is especially convenient for clients in markets such as Malaysia where branches are spread out geographically.
Bangladesh is set to tie up with a new economic bloc, led by Russia, aiming to explore untapped export potential in markets of its member-countries, officials said. A senior official at the ministry of commerce (MoC) told the FE. He said the Eurasian Economic Union (EEU), which groups five northern Eurasian countries–Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia–has forwarded a draft of the MoU for finalizing. The official said the MoC convened an inter-ministerial meeting last week where participants opined that a financial deal with the bloc would be beneficial for Bangladesh. “We had been in talks with Russia for signing a trade deal during the last ten years. After forming the EEU and getting membership of the World Trade Organization (WTO) it did not show any further interest to sign the deal,” he said. He said getting duty-and quota-free access to the Russian market under bilateral arrangement has become uncertain. “Now we have to pursue any types of trade benefit with the EEU since Russia is also a member of the customs union they formed.” Another senior MoC official told the FE Bangladeshi goods have immense potential on the Russian market. Export of Bangladeshi products to Russia has increased fivefold during the last five years, amounting to USD 314.3 million in the fiscal year 2015-16. Source:http://print.thefinancialexpress-bd.com/2016/07/26/147361
Consortium to invest USD 12.0 million to make LPG cylinders
A consortium of 16 local and foreign companies yesterday announced a plan to invest about USD 12.0 million to manufacture LPG-carrying cylinders, bullet trucks and industrial tanks. The consortium, called Star Infrastructure Development Consortium Ltd, signed a deal with Servigas Co of Iran for technical support. Three sites have primarily been shortlisted for the plant: Sonargaon in Narayanganj, Kishorganj and near Mongla seaport. The final site selection depends on Servigas’s technical report, said Abdul Matlub Ahmad, chairman of Nitol Niloy Group, a member of the consortium, at the deal signing ceremony held at the capital’s Westin hotel. Ahmad; Mohd Noor Ali, chairman of the consortium and the managing director of Unique Group; Sh Rabiee, MD of Servigas; and MH Mohajerani, sales and marketing manager of Servigas, signed the deal. Production will start in the next one year, Ahmad said, adding that customers will get quality products at affordable prices. Currently, there are 60 household gas distributing companies that can use cylinders, bullet trucks and industrial tanks. Servigas is a subsidiary of Butane Group, the first liquefied petroleum gas distribution company in Iran. It now exports gas and other related equipment to Europe and some other countries in Asia. The consortium’s initiative will play an important role in the government’s efforts to diversify its power sources, said Tawfiq-e-Elahi Chowdhury, the prime minister’s energy adviser Source: http://www.thedailystar.net/business/consortium-invest-12m-make-lpg-cylinders-1259410 http://newagebd.net/242483/pvt-consortium-iranian-co-ink-deal-produce-lpg-cylinder/
Local and Global Stock Indices
Dow Jones Industrial Average
Crude Oil (WTI)*
Crude Oil (Brent)*
Major Currencies Exchange Rates Movement in Last Seven Days
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.
ABOUT DHAKA BANK
Dhaka Bank has truly cherished and brought into focus the heritage and history of Dhaka and Bangladesh from Mughal outpost to modern metropolis. Most of its presentation, publications, brand initiatives, delivery channels, calendars and financial manifestations bear Bank’s commitment to this attachment.