BASIC, eight more banks, FIs to get Tk 20 billion

The government is going to grant Tk 10 billion to the scam-hit BASIC Bank to meet its capital shortfall, once more.
Besides, officials said, five state-owned banks (SoBs), one private bank, a specialised financial entity and restructured Grameen Bank (GB) together will also get another dollop of Tk 10 billion under different heads. The ministry of finance has sent a proposal in this regard to the finance minister for approval, at a time when there has been a flurry of debate over repeated giving of taxpayers’ money for so-called recapitalisation to the banks. According to the proposal, the funds are set to be handed out to five state-run banks, private-bank IFIC, House Building Finance Corporation and GrameenBank, the sources said. The money will be made available from a fund of Tk 20 billion that has been earmarked in the budget for 2016-17 for recapitalisation.And from this spare money, the scam-ridden BASIC Bank is getting the highest amount as it stood hollowed for fraudulent lending that led to its management shakeup. Some Tk 10 billion, Tk 3.0 billion, Tk 1.0 billion, over Tk 1.64 billion and Tk 1.0 billion will go into the coffers of BASIC, Sonali Bank, Rupali Bank, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank (RAKUB) respectively from the budgetary fund, according to the finance ministry data. Besides, Tk 1.85 billion will be provided to the IFIC as subscription fee for rights share. Also, Tk 1.50 billion and Tk 2.2 million will be provided to the house-building finance corporation and Grameen Bank respectively, according to government share ratio.The government is going to grant Tk 10 billion to the scam-hit BASIC Bank to meet its capital shortfall, once more. Besides, officials said, five state-owned banks (SoBs), one private bank, a specialised financial entity and restructured Grameen Bank (GB) together will also get another dollop of Tk 10 billion under different heads. The ministry of finance has sent a proposal in this regard to the finance minister for approval, at a time when there has been a flurry of debate over repeated giving of taxpayers’ money for so-called recapitalisation to the banks.

Source: http://print.thefinancialexpress-bd.com/2017/06/08/174756

Excess liquidity wanes as credit demand rises

The overall excess liquidity with the commercial banks decreased by nearly 19 per cent or Tk 230 billion in April from a level it was four months ago due to accelerated credit growth particularly in the private sector, officials said. It stood at Tk 1.0 trillion in the last week of April, falling from Tk 1.23 trillion as on December 31 last year, according to latest statistics of Bangladesh Bank (BB). “The amount of excess liquidity has dropped recently mainly due to a higher private sector credit growth,” a senior official of the central bank told the FE Wednesday. Lower lending rates might have encouraged the businessmen and individuals to borrow more from the banks to meet their demand for funds, he explained. The weighted average interest rate on lending fell to 9.62 per cent in April from 9.70 per cent in the previous month while the weighted average interest rate on deposits came down to 4.97 per cent from 5.01 per cent.

Source: http://print.thefinancialexpress-bd.com/2017/06/08/174758

Foreign banks may be advised to bring in remittance

The Bangladesh Bank (BB) had no proper system in place for monitoring foreign exchange inflow and its utilisation before the sudden hike in price of US dollar in April last, a senior central banker admitted. “Now we are monitoring everything. There was no effective monitoring then,” BB executive director for Foreign Exchange Policy Department Ahmed Jamal told the FE.
People learn from mistakes, he said. In April last, price of US dollar went up to Tk 84 from usual Tk 79 all on a sudden prompting the central bank to intervene.The government also expressed concern over the unusual price hike of the greenback.
Following this, the central bank met treasury heads of 20 banks and asked them to submit forex transaction details for the entire month of April.Mr Jamal told the FE Tuesday there was a mismatch in dollar inflow and utilisation which had triggered the hike in its value against Bangladesh Taka. “But we did not find any foul play behind the dollar price hike,” he said replying to a question. Asked what caused the dollar price hike, Mr Jamal said, there was a liquidity shortfall at that time. “Now it is gone.”
He also said foreign banks do not bring in any remittance to the country but buy US dollars from the local market whenever they need. “We asked them to contribute to remittance inflow.”

Source: http://print.thefinancialexpress-bd.com/2017/06/08/174760

Stop injecting funds into state banks

Half a million people would have been brought out of poverty had the government allocated Tk 2,000 crore to the poor instead of doling out money to the state banks, analysts said yesterday.“There is no logic in subsidising the state’s fragile banks or industries in this way. It’s a reward for their inefficiency,” Abdul Bayes, director of Brac Research and Evaluation Division, said at a discussion.The discussion, styled “National budget 2017-18: expectations, gains, and challenges”, was organised by Brac and the Institute of Informatics and Development at the capital’s Brac Centre.At the discussion, analysts urged the government to increase the allocation for the education sector to at least 4 percent of the country’s gross domestic product.In the proposed budget for fiscal 2017-18, Tk 50,432 crore has been assigned to the sector, which is 2.2 percent of GDP. The amount is an increase of about 14 percent from the current year.Though the budgetary allocation has been increased for the education and health sectors in the proposed budget for the upcoming fiscal year, it is still proportionately lower than what they ought to be, they said.Some Tk 20,679 crore has been proposed for the health sector in fiscal 2017-18, up 18 percent year-on-year.“The main problem lies in implementation of the budget,” said AB Mirza Azizul Islam, former adviser to a caretaker government.On the one hand, the size of the budget increasing, while on the other hand, the level of implementation is decreasing.

Source: http://www.thedailystar.net/business/global-business/stop-injecting-funds-state-banks-1417033

Banks put on alert over fake notes

Bangladesh Bank has asked all commercial banks to be cautious about fake notes as forgers may attempt to release counterfeit notes ahead of the Eid festivals cashing in on increased demand.Banks have been instructed to take necessary measures to prevent the spread of fake notes during the month of Ramadan, according to a central bank notice issued yesterday.The BB advised banks to check notes before putting those in ATMs. At the same time, all branches were asked to display the security features of bank notes in video during banking hours.The central bank fears that forgers will try to release fake notes ahead of Eid-ul-Fitr as cash transactions increase significantly during the festival, said a senior executive of BB.He said banks have been instructed to ensure the use of modern fake-note detecting machine at branch level.People transacted Tk 17,000 crore in the fortnight ahead of Eid-ul-Fitr in 2015, according to BB.

Source: http://www.thedailystar.net/business/global-business/banks-put-alert-over-fake-notes-1417027