BB squeezes pvt sector credit growth target in MPS
Bangladesh Bank has lowered private sector credit growth target to 16.20 per cent, which has maintained an upward trend in recent months, in the monetary policy statement for July-December of this year with a view to decreasing the money supply in the market While unveiling the MPS on Wednesday, the central bank estimated that the country would achieve 7.40 per cent GDP (gross domestic product) growth in FY 2017-18 while inflation would remain at 5.50 per cent through implementing the credit supply to the private and public sectors.BB governor Fazle Kabir said that the private sector credit growth stood at 16 per cent and the public sector credit growth at a negative of 16.2 per cent in May year-on-year against the target of 16.50 per cent and 12.10 per cent by June 2017.The BB has set the private sector credit target at 16.20 per cent by December 2017 and 16.30 per cent by June 2018.The BB unveiled the latest monetary policy statement at its headquarters in the capital.BB governor Fazle Kabir chaired the unveiling session of the statement while its deputy governors and executive directors were present.Kabir said that credit growth to the public sector decreased significantly in recent months due to a large amount of government borrowing from the national savings tools avoiding the banking sector.Such borrowing from the savings tools usually put a lower impact on inflation than that of borrowing from the banks.
Investment in nat’l savings tools hits record Tk 52,327cr in FY17
The yearly net investment in the national savings certificates and bonds hit a fresh record of Tk 52,327 crore in the recently concluded fiscal year 2016-17 as there was a huge rush for the tools due to low interest rates for bank deposit products.The previous highest yearly net investment in the saving tools was Tk 33,688.60 crore posted in FY16.Directorate of National Savings and Bangladesh Bank officials said people had been maintaining a huge investment in the last few months as the government earlier hinted at lowering the rate on the tools with a view to reducing the interest rate gap between the NSCs and other rates of deposit products offered by the banks.The net investment also crossed Tk 50,000 crore for the first time in the country’s history in the last fiscal year.The government, however, is yet to take any final decision whether it will cut the rate on the tools, they said.People are now being forced to invest their money in the savings tools as the banks are offering hardly 7 per cent interest rate on their deposit products. The rates offered by the NSCs are between 11.04 per cent and 11.76 per cent, a BB official said.Besides, a section of people including politicians and bureaucrats are also making huge investment to enjoy higher returns from the tools.
BB stands guard against inflation
The rising inflation is weighing heavily on the central bank’s mind as it unveiled a cautionary monetary policy for the first half of the fiscal year yesterday.The private sector credit growth target has been set at 16.2 percent, down from the preceding six months’ 16.5 percent.For achieving fiscal 2017-18’s budgetary growth target of 7.4 percent, a 16.2 percent private sector credit growth target is enough, said Fazle Kabir, governor of the Bangladesh Bank.“Our main task is to monitor inflation round-the-clock and give all-out support to growth,” he said.In the last quarter of fiscal 2016-17, inflation edged up about 44 basis points from the previous quarter to 5.72 percent.Though the private sector growth target has been lowered slightly, the BB policy rate — the main instrument for countering inflationary risk — has been kept unchanged. With the view to balancing growth and inflationary risks against the backdrop of a subdued global inflation outlook and tightening monetary policy conditions in advanced economies, the BB has decided to keep policy rates unchanged at its current level.The repo rate would continue to be 6.75 percent and the reverse repo rate 4.75 percent.
Suspicious transactions detected
Bangladesh Bank has detected several suspicious transactions on the mobile banking platform, especially at late night, which means remittance is being sent home through hundi.“The transactions are made at a certain time in the night and several such transactions took place in one go,” said Abu Hena Mohd. Razee Hassan, deputy governor of Bangladesh Bank, yesterday during the unveiling of the Monetary Policy Statement for the first half of the fiscal year.The BB got report of a good number of suspicious transactions through the mobile banking channels, and investigations also revealed a number of irregularities in the mobile bank accounts, he said.It is now being examined who made the transactions through the accounts; the central bank will take action in this regard soon, he said.Remittance inflow has been sliding in recent times, and to find the reason behind the decline the BB even sent teams to some countries, including the Middle East. One of the reasons for the slump in official remittance figures is the growing tendency among migrant workers to send money through hundi.The money remitted to Bangladesh through hundi is sent from Dhaka to receivers all over the country via mobile banking. The BB detected about 10,000 such accounts through which hundi money is reaching the receivers.The BB is now working on identifying measures that can be taken, including closing down the accounts.
Bank Asia-UNDP partnership to serve 60m people
Partnering with the UNDP, Bank Asia is building a digital banking circuit with various newer products to deliver formal financial services to around 60 million unbanked people across Bangladesh. The major initiative builds on a belief that traditional banking falls short of reaching this multitude with the banks’ institutionally organised networks. “Traditional banking services will not ensure formal financial services to unbanked people, almost half of the population. We are shifting our focus from traditional banking to small-scale banking to penetrate unbanked areas at a lower operational cost,” said President and Managing Director of the bank Md Arfan Ali.In an interview with The Financial Express, he said the United Nations Development Programme (UNDP) and Bank Asia recently signed an agreement to work jointly to facilitate the payment under social-safety nets and enhance financial literacy of people through digital financial services.
SJIBL, BASIS ink MoU
Shahjalal Islami Bank Ltd. and Bangladesh Association of Software and Information Services (BASIS) signed a Memorandum of Understanding (MoU) Tuesday at Shahjalal Islami Bank’s Head Office, Gulshan, Dhaka.Under this agreement the members of BASIS will get investment facility for competitive terms from Shahjalal Islami Bank Ltd. On the other hand the clients will be allowed to purchase product from BASIS members and the SME/Corporate clients of the Bank will be able to purchase software on discount from BASIS.
De-risking batters nine banks, the syndrome may spread
At least nine local banks have been battered by newly-invented ‘de-risking’ strategy to combat money laundering that may also affect profitability of other local banks.Such official findings stem from the national action plan mandated by an international combat against money laundering and terror financing. “Some other local banks have also beenaffected by the de-risking,” Abu Hena Mohammad Razee Hassan, Deputy Governor of Bangladesh Bank (BB), disclosed while replying to a query about the impact on de-risking of Bangladesh.The term ‘de-risking’ refers to financial institutions closing the accounts of clients perceived high risk for money laundering-or terrorist-financing abuses, namely money service businesses, nonprofit organisations, correspondent banks, and foreign embassies.
Growth momentum to slow without policy upgrades
Maintaining the past growth performance will become increasingly challenging for Bangladesh without a significant rise in public and private investment, said a top official of the International Monetary Fund.“Yes, the fast growth of the past could be sustained, but it will not happen automatically,” said Brian Aitken, the division chief of the Asia Pacific department of the IMF.Aitken’s comments came in an interview with The Daily Star on the sidelines of the 2017 IMF-BNM summer conference in the Malaysian capital. The two-day conference ended yesterday.To sustain the growth momentum, Bangladesh’s policy practices and institutions need to be upgraded to better fit with the aspiration of a middle-income country status.In this respect, one of the key tasks is to develop the country’s capital markets for financing long-term private investment that would greatly improve growth prospects, he said.Boosting government tax revenue is also vital to provide adequate resources for public infrastructure investment and social spending.
BD, EU to discuss ways to improve business climate Thursday
Bangladesh and the European Union (EU) will discuss on Thursday the progress of policy actions needed to further improve the situation for EU trade and investment, and indentify new areas of cooperation.Both sides will discuss the issues of mutual interest in a broad way considering longstanding partnership between Bangladesh and the EU at the third Bangladesh-European Union (EU) Business Climate Dialogue to be held in the Commerce Ministry here.Commerce Minister Tofail Ahmed will preside over the dialogue which will begin at 11am, a Commerce Ministry senior official told UNB on Wednesday.This business climate dialogue usually takes place between the EU Business Council (EUBC) and the Ministry of Commerce while the second such dialogue was held in Dhaka on December 8 last year. Both sides met first in May last year.
Exporters face tight schedule at Ctg port
Amid the ongoing vessel congestion at Chittagong port, garment exporters have been hit with a new problem: the relaxation in cut-off time for their export containers was withdrawn last week, squeezing the time they used to get to ensure timely shipment of their cargoes.Because of the latest change, a number of export containers are regularly missing scheduled shipments as vessels are forced to set sail leaving behind the containers even after they were ready, alleged leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).Garment exporters termed the move as another blow to the sector and demanded the decision be reversed.According to the container manual of the port, export-bound containers need to reach the port yards at least four hours before their particular vessel berths at the jetties.However, garment exporters have enjoyed relaxation in the cut-off time for years since the sector operates amid problems including inadequate supply of energy, road congestion and weak infrastructure in the largest port of the country. Under the relaxed rules, the port used to allow garment exporters to bring their containers three hours before the departure of the vessel. In some cases, containers were allowed entry even two hours before the sailing. On July 19, the Chittagong Port Authority (CPA) withdrew the relaxation and directed all of the 16 private off-docks, where containers laden with export-bound garment products are loaded, to send the containers six hours before the sailing.The CPA said the move aims to cut the waiting time for vessels. Since then the port authorities have not allowed export-oriented garment containers to enter the port if they had missed the cut-off time, said Ruhul Amin Sikder, secretary of the Bangladesh Inland Container Depot Association (BICDA).
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Major Currencies Exchange Rates Movement in Last Seven Days
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