Review cap on credit card interest

About 70.0% of credit card-users pay off their loans before incurring any interest, leaving banks to rely on the remainder to make profits, said bankers. The proposed 5.0% cap on interest rate of consumer loans will take a toll on earnings, as the cost of fund for the rest 70.0% users has to be included into the pricing of the 30.0%, it said. The ABB also pointed out four major new provisions, which require the central bank’s urgent review. Interest on consumer credit now stands at 11 to 12.0%, which means the cap would bring down the interest on the payment tool to 16-17% from the existing highest rate of 36.0%, it said. The reason for such high rate is most issuing banks offer 45-50 days interest-free period to cardholders, the association said. Though, cardholders do not incur any interest for the period, the issuing bank has to absorb the cost of fund for these days, it said.

Source: http://www.thedailystar.net/business/review-cap-credit-card-interest-1418953

Forex reserves not enough: IMF

The International Monetary Fund has raised questions about the adequacy of Bangladesh’s foreign currency reserves, now more than USD 32.0 billion, at a time when the government seems rather satisfied with the sum. The amount is enough to foot 8.95 months’ import bill of Bangladesh, but given the country’s slow export growth and decline in remittance inflows, the safe reserve limit should be equal to 9.6 months’ import bill, the IMF said last week. In the first ten months of the fiscal year, the average monthly import bill was USD 3.62 billion. A USD 10-billion sovereign wealth fund was in the works to channel the reserves to various infrastructure projects, and the cabinet even gave its nod to the proposal. The IMF in its assessment last year had said a reserve level equivalent to 8.5 months’ import bill was adequate. But since then several macroeconomic developments have taken place that have changed the baseline scenario, including the current account on which the reserve adequacy assessment is based. The current account has swung from a previously projected deficit of 1.3% of GDP in fiscal 2015-16 to a surplus 1.7%, mainly on subdued imports.

Source: http://www.thedailystar.net/business/forex-reserves-not-enough-imf-1418947

‘Banks to bear transfer cost of remittance up to USD 200.0

Bangladesh Bank has taken a decision to allow non-resident Bangladeshis to send their hard-earned money home without cost up to USD 200.0 with a view to encouraging them to remit greenbacks through banking channel. The central bank will ask the commercial banks to reimburse the cost of remitted money from their respective fund of corporate social responsibility programme, a BB official told New Age on Sunday. An NRB will be allowed to remit the money amounting up to USD 200.0 twice in a month without counting any charge, according to the central bank decision, he said. Banks here in Bangladesh will pay the charges to the foreign banks and exchange houses on behalf of the remitters, said the official. A large number of NRBs are now using ‘hundi channel’, an illegal channel of money transfer, to send the money to their near and dear ones because of a lower rate of the US dollar against the taka in the banking sector. Besides, the local agents of the hundi cartel have also introduced a door-to-door service for sending money to the relatives of the NRBs resulting in a major setback in the inflow of remittance in recent months, he said. The hundi cartel is now using the mobile financial services to send money on real-time basis to the relatives of the NRBs, he said.

Source: http://www.newagebd.net/article/17550/banks-to-ber-transfer-cost-of-remittance-up-to-200

Buyback policy for government securities on the cards

The government has planned to introduce a buyback arrangement for its securities to bring dynamism in the secondary market, officials said. They said the Ministry of Finance, Bangladesh Bank (BB) and Primary Dealer (PD) banks will work jointly to formulate a policy and implement the plan. At present, the government buys back its securities from the market as and when it thinks necessary due to absence of any policy. If implemented, the buyback would take place under the policy. The latest move came against the backdrop of falling trend in trading at the secondary market mainly due to the lack of adequate securities.

Source: http://print.thefinancialexpress-bd.com/2017/06/12/175118

Dhaka Stock Exchange (DSE) gets poor response to share sales to strategic partner

The board of directors of Dhaka Stock Exchange has rejected the prices quoted by four entities for the DSE’s shares in their bid to become strategic partner of the demutualised bourse. The bourse will consult with the Bangladesh Securities and Exchange Commission in this regard before taking any further decision, the DSE MD said. There are clear directions in the Demutualisation Act over the issue and the bourse will follow the act in consultation with the commission, Majedur said. Under the Exchanges Demutualisation Act, 2013, the BSEC may grant more time to the DSE to find a strategic investor. If the DSE fails to find any strategic investor for it within the extended deadline, the commission may allow the bourse to issue shares to any other investors as par the process its board determines.

Source: http://www.newagebd.net/article/17554/dse-gets-poor-response-to-share-sales-to-strategic-partner