Bangladesh Bank to set farm loan target at BDT 175.0 billion for FY17
Bangladesh Bank is likely to set the farm loan disbursement target for banks at BDT 175.0 billion for the upcoming fiscal year 2016-17, said officials of the central bank. The probable loan disbursement target is 6.70% higher than that of the current FY16. The BB had set annual farm loan disbursement target at BDT 164.0 billion for FY16, BDT 155.5 billion for FY15, BDT 145.9 billion for FY14, BDT 141.3 billion for FY13 and BDT 138.0 billion for FY12. The seven state-run banks — Sonali, Agrani, Janata, Rupali, BASIC, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank — are likely to keep unchanged their disbursement target in FY17 from that in FY16. The seven banks had set a farm loan disbursement target at BDT 92.4 billion for FY16. The private and foreign commercial banks have increased their disbursement target for FY17 as their total lending increased in this fiscal year. According to the BB data, the central bank has set a loan disbursement target of BDT 82.6 billion for the private and foreign commercial banks for the upcoming fiscal year against BDT 71.1 billion for FY16. In FY15, the agriculture loan disbursement surpassed the annual target to stand at BDT 159.8 billion. Banks disbursed BDT 160.4 billion in farm loans in FY14 while the target was BDT 146.0 billion. In FY13, banks disbursed BDT 146.7 billion in farm loans against the target of BDT 141.3 billion. In the July-April period of FY16, banks disbursed BDT 141.3 billion in farm loans, which is 86.15.0% of the annual target. Besides, the growth in the 10 months is 13.94% compared with the same period of FY15 when banks had disbursed BDT 124.0 billion.
Source: http://newagebd.net/233849/bb-to-set-farm-loan-target-at-BDT -17500cr-for-fy17/
Dhaka to join IDB’s move to set up Islamic Infrastructure Bank
Bangladesh wants to join the initiative of the Islamic Development Bank (IDB) to set up an Islamic Infrastructure Bank. The new move is aiming to provide funds to Muslim countries for implementing their mega infrastructural projects. Prime Minister Sheikh Hasina, now on a five-day official visit to the Kingdom of Saudi Arabia (KSA), expressed the interest when IDB acting President Dr Ahmed Tiktik met her at the Royal Conference Palace here Saturday evening and informed her about the IDB’s move. Sheikh Hasina also urged the IDB to reduce the interest rate of International Islamic Trade Finance Corporation (ITFC), an autonomous entity within the IDB, for Bangladesh’s oil-import purpose. As a leader in Shari’ah-compliant trade finance, the ITFC deploys its expertise and funds in businesses and governments in its member countries. Its primary focus is on encouraging intra-trade among OIC member countries. As a member country of IDB, Bangladesh takes credit from the ITFC for oil import.
DSE, CSE say their demands not met in proposed budget
Dhaka and Chittagong stock exchanges on Sunday said most of their budget demands remained unmet in the proposed budget for the fiscal year of 2016-17. The finance minister, AMA Muhith, on Thursday placed before parliament the proposed budget for FY17. At separate press conferences in Dhaka, the bourses said the government should incorporate their budget proposals including scrapping of corporate tax on the bourse’s earnings so that the capital market could contribute more effectively to the economy. He, however, said that it was a positive sign that the government did not impose any fresh burden (tax) on the capital market. DSE chairman Siddiqur Rahman Miah said the bourse appreciates the finance minister’s positive approach towards the capital market. At a separate press briefing, Chittagong Stock Exchange chairman Muhammad Abdul Mazid said that the government should provide policy support and incentives to the capital market for creating positive perception regarding the market.
Raising investment to 31.0% of GDP very tough, say economists
The government has targeted to raise private and public investment to an ‘ambitious’ 31.0% of the gross domestic product (GDP) in the upcoming financial year (FY) 2016-17 which economists termed as ‘extremely challenging’. Some local economists said Saturday since there was no remarkable improvement on the government’s policy reforms and implementation of the mega projects, it is not possible to raise the investment-GDP ratio by 1.6% points within a year. According to the Bangladesh Bureau of Statistics (BBS)’s provisional data, the investment-GDP ratio at current prices in the FY2016 has risen only by 0.5% points to 29.4%. The achievement in the outgoing FY2016, however, was much lower than the preliminary investment-GDP ratio target of 30.1% in the national budget. Meanwhile, private investment in terms of GDP in the outgoing FY2016 at current prices has dropped by 0.4% points to 21.8%. In the last FY2015, the private investment- to-GDP ratio was recorded at 22.1%. Analysts said the overall investment data was showing higher trend in the outgoing FY2016 as the government injected funds by 0.30 percentage points higher to 7.7% of GDP compared to the previous FY2015. In the previous FY2015, the investment-GDP ratio increased by only 0.29 percentage points to 28.9%. Similarly, the data of the investment-GDP ratio in the previous FY2014 also showed a nominal expansion by 0.2% points to 28.6% and in FY2013 it was boosted by only 0.13 percentage points to 28.4%.
Government to speed up ADP efforts
Both the finance and planning ministries will get down to monitoring the development budget from the first month of fiscal 2016-17 after disappointing implementation this year. In the first ten months of the fiscal year, the implementation of the annual development program has been the lowest in five years. Between July last year and April this year, BDT 451.6 billion was utilized, which is about 50 percent of the revised allocation of BDT 910.0 billion for fiscal 2015-16, according to the Implementation Monitoring and Evaluation Division. The original ADP allocation for this year was BDT 970.0 billion, but it was revised down for the lack of ability to implement it. It seems there is slackness in the implementing authority, finance minister said, adding that Planning Minister AHM Mustafa Kamal himself is concerned over the final implementation status of this year’s development projects given the slow pace thus far. Every year the ministries are seen to intensify their spending in the last two months after doing not much for the rest of the year. Considering this, the government plans to digitize the project monitoring system to ensure timely implementation as well as quality in project spending, Muhith said in his budget speech for fiscal 2016-17.
Government to tax interest from companies’ fund investment
The National Board of Revenue proposed to impose a 5.0% advance income tax to be deducted at source on interest income derived from investment in savings instruments and bank deposits by different funds of companies. The revenue board proposed to impose the source tax on income of such funds including approved superannuation fund, pension fund, gratuity fund, recognized provident fund and workers’ profit participation fund for the first time in the country. The proposed Finance Bill 2016 incorporated two separate provisions in the Income Tax Ordinance-1984, imposing 5.0% AIT on the income to be generated from investment in savings tools, by the funds maintained by companies for welfare of employees. The NBR, however, proposed exemption from deducting tax if the cumulative investment at the end of the year in the pensioners’ savings certificate does not exceed BDT 500,000. The other provision said that 5.0% tax at source would be applicable on income of funds arising from savings deposits, fixed deposits or any other term deposits maintained with any scheduled bank including co-operative bank, a bank run on Islamic principles or non-banking financial institution, leasing company and housing finance company.
PACKAGE VAT: Traders issue ultimatum for restoring earlier rate
Traders on Sunday issued a 15-day ultimatum to the government, demanding that the government restore the previous status of package value-added tax in the proposed budget. They warned that traders would wage a tougher movement across the country, if their demand is not met by June 20. Babosayee Oikkya Forum issued the ultimatum at a press conference held at Dhaka Reporters Unity in the capital. Terming the proposed budget completely unfriendly to business and industry, he said all the people in the country would be affected due to the budget as the ‘unusual’ proposal on VAT would be the cause of commodity price increase. Finance minister AMA Muhith kept the package VAT system for the next fiscal year in the proposed budget, but it was a jugglery with figures, he said. ‘Although the finance minister has put off the implementation of the new VAT act for one year, he has made effective 85 per cent of the provisions of the act through different other budget proposals. Traders would not get benefit of the package VAT system,’ Abu Motaleb, general secretary of the forum said. If necessary, he said, businesses would stop paying VAT until the issue is resolved and traders would stage demonstration on the street.
BDT 4.2 billion released for land acquisition of Anwara economic zones
The government has released over BDT 4.2 billion fund to acquire land for an exclusive economic and industrial zone for Chinese investors, called Anwara-II Economic Zone, at Anwara Upazila in Chittagong. Earlier on May 30, Finance Division allocated the fund under the revised annual development program (RADP) of the outgoing fiscal year 2015-16 to establish the zone on a 774-acre land. The land will be provided to Chinese investors on a long-term lease basis. Chinese government-nominated firm China Harbour Engineering Company Limited has already been appointed to develop the zone. The zone, once established, is expected to create a large number of employments for the Bangladeshis. The proposed site of the zone is 39 kilometers from Chittagong port, 28 kilometers from Chittagong city and 46 kilometers from Shah Amanat International Airport. Four conditions have been attached by the ministry on the use of the released fund. The implementing agency will have to follow all the relevant financial rules including Public Procurement Act 2006 and Public Procurement Rules 2008 while using the money, according to finance ministry documents.
GP, Telenor roll out digital health service
Grameenphone and Telenor Health yesterday rolled out a new digital service, Tonic, in Bangladesh to take healthcare services to the underserved. Tonic, an outcome of extensive research and development process that included input from health experts, medical practitioners and ordinary people, covers a range of wellness and health needs in four categories. Tonic Jibon offers tips and information via SMS, web and Facebook to help members live a healthy life by eating well, staying active and being mentally refreshed on a daily basis. Tonic Daktar provides access to knowledgeable and friendly advice from a doctor with a phone call — 24 hours a day and seven days a week. Tonic Discounts helps make hospital care more accessible by extending concession of up to 40 percent on fees at over 50 popular hospitals across the country, while Tonic Cash service offers members BDT 500 in cash to assist in covering costs if they are hospitalized for three nights or more.
Job creation hits over a decade low
Job creation in the private sector slumped to over a decade low due to steep fall in private sector projects registered with the Board of Investment (BoI), according to the latest data of Bangladesh Economic Survey (BES). The number of new employment generated from the projects registered with (BoI) dropped to 146,353 as of February of the current fiscal year (FY) 2015-16, a sharpest fall against 226,411 generated in FY2014-15 and lowest since FY2001-02, according to the available data. After picking up employment generation in FY2010-11 with the total number of 503,662 new jobs, the growth continued to fall since then. The countries various think tanks including CPD (Centre for Policy Dialogue) recently criticized the government for the falling trend in job creation while the country is experiencing a robust GDP growth of over 7.0%. The actual foreign and joint venture investment dropped by over 47.0% to USD 223.0 million as of February of this fiscal year compared to USD 422.0 million in the last fiscal year, according to the report. Country experienced sharp fall by 80.0% in foreign investment in fiscal year 2014-15 from USD 2.12 billion in the previous fiscal year. However, proposal for registration of foreign investment was BDT 296.2 billion as of February of the current fiscal year, far below from BDT 806.2 billion in last fiscal year.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$49.03||+0.41||+0.84%|
|Crude Oil (Brent)*||$49.96||+0.32||+0.64%|
|Dow Jones Industrial Average||17,807.06||(31.5)||(0.18%)|
|USD 1||BDT 78.33*|
|GBP 1||BDT 112.76*|
|EUR 1||BDT 88.84*|
|INR 1||BDT 1.16*|
*Currencies and Commodities are taken from Bloomberg.