Four state-run banks hid the real information about the BDT 40.7 billion loan default at the fourth quarter in December. According Bangladesh Bank’s (BB) latest report, the default loans in last three months amounted to BDT 112.4 billion. After December, the figure stood at BDT 621.7 billion. The default loan volume jumped to BDT 734.1 billion in March. Four state-run banks hid the real information about the BDT 40.7 billion loan default at the fourth quarter in December. Janata Bank Limited concealed the information about BDT 17.7 billion defaulted loan while Agrani Bank BDT 9.3 billion, Rupali Bank BDT 6.9 billion and Sonali Bank BDT 6.8 billion.
Leading private commercial financier BRAC Bank is investing heavily in digital banking as part of making its retail banking more automated and customer centric, high officials of the bank has said recently. The third generation bank, which has made exponential growth in its retail banking portfolio in recent times, is channeling around Tk. 2 billion in upgrading its core banking, internet banking and credit card software, the concerned officials said. According to BRAC Bank sources, the bank’s retail loan portfolio has increased from Tk. 21.80 billion in 2015 to 34 billion in 2016, witnessing more than 55 percent growth in a single year. The bank now claims to be the largest retail bank in Bangladesh, with a total retail loan portfolio of Tk. 37 billion. However, looking forward, the bank would resort to state of the art digital banking as well as the untapped market in suburban areas for the next wave of growth, officials informed.”We are going to introduce the upgraded version of our core banking software by the first quarter of next year”, Head of BRAC Bank’s retail banking Nazmur Rahim told FE.”At the same time, we are also investing in our internet banking while our credit card software will also be upgraded by the first quarter of 2018″, he added.
The Finance Division of the Ministry of Finance issued a government order on Wednesday to disburse BDT 20.0 billion for the recapitalisation of five banks. As per Finance Minister AMA Muhith’s directive, the recapitalisation fund is targeted to recover client trust in BASIC Bank. The bank lost a huge amount of goodwill due to large-scale corruption. BASIC bank has received BDT 23.9 billion under the government’s recapitalisation programme over the past five years. The latest BDT 10.0 billion brings it up to BDT 33.9 billion over six years.
The taka depreciated by 2.41 percent in the last six months due to slower remittance and export and higher imports. The inter-bankexchange rate of the greenback rose to Tk 80.60 in June from Tk 78.70 at the beginning of January, according to Bangladesh Bank figures. Weak remittance inflow and moderate export growth have contributed to the depreciation of the local currency, said a senior economist of the central bank. Moreover, import saw a significant rise riding on expanding economic activities, squeezing the dollar supply in the market, he said. However, there is no negative impact of the depreciation as the fluctuation of the dollar price was expected, the BB economist said. The current upward trend of the dollar will come as a boon for remitters and exporters. BB has stopped buying the dollar from the market for several months now, as there has not been ample supply of the currency. The letter of credit remained stable at Tk 81.10 to Tk 81.20 per dollar last week, according to Bangladesh Foreign Exchange Dealers’ Association.
BB asks banks to remit Saudi riyal for pvt pilgrims
The central bank has asked commercial banks to remit Saudi Riyal 6,830 for house rent, food and other expenses of each pilgrim, who will perform Hajj through private management, officials said. The Bangladesh Bank (BB) issued Wednesday a circular in this connection and asked the commercial banks for taking necessary measures in this regard. The government has already allowed remitting the amount of Saudi currency for each pilgrim to meet their expenses in the forthcoming holy Hajj.”We’ve issued the circular at the advice of the Ministry of Religious Affairs,” a BB senior official noted. He also said the banks were allowed to remit the amount of Saudi currency to each pilgrim in accordance with the existing financial rules and regulations. The Saudi currency will be remitted using (IBAN) International Bank Account Number of each Hajj agency’s bank accounts, according to the circular. The IBAN is an internationally agreed system of identifying bank accounts across national borders to facilitate the communication and processing of cross border transactions with a reduced risk of transcription errors.
Bangladesh Infrastructure Finance Fund (BIFFL) has raised Tk 33 crore to help Asim Auto Bricks Industry set up an energy efficient and eco-friendly brick manufacturing factory in Tangail’s Mirzapur. BIFFL, Mercantile Bank and Meridian Finance & Investment are providing Tk 20 crore, Tk 10 crore and Tk 3 crore respectively as loans, says a statement. To mark the financial closure, BIFFL organised a ceremony in a Dhaka hotel on Tuesday. Addressing the event, BIFFL Chief Executive Officer SM Formanul Islam said reducing environmental pollution caused by traditional brick kilns has become a matter of urgency. He said the government was determined to phase out these illegal kilns. There are 7,000-8,000 brick kilns of the old-style design and these are responsible for causing about 37 percent of the environmental pollution in Bangladesh, as per the environment department.“To achieve the Sustainable Development Goals, it is important to promote green brick industries as an alternative to outdated technologies,” said Islam in the statement. He said BIFFL was committed to supporting this industrial transformation. The state-run financial institution has already invested Tk 50 crore in four green brick projects and has 20 more in the pipeline. It plans to invest in at least 100 automated tunnel kiln technology-based projects by 2021.
Muhith hints at revising down excise duty on bank deposits
After State Minister for Finance MA Mannan’s assurance in parliament over the proposed excise duty on bank deposits, Finance Minister AMA Muhith hinted at revising it down.”There are concerns over increasing the rate. If anything changes, it would be the rate of duty, that’s all,” Muhith told reporters on Wednesday after emerging from a cabinet committee meeting. The budget for FY2018 proposes to increase excise duty to Tk 800 from Tk 500 on accounts with balance of Tk 100,000 or more, which drew sharp criticism from several quarters, including trade bodies and economists. Bank accounts with balance between Tk 1 million and Tk 10 million will be charged Tk 2,500 instead of Tk 1,500.Accounts that have deposits between Tk 10 million and Tk 50 million will be charged Tk 12,000 instead of Tk 7,500.The excise duty on accounts holding over Tk 50 million will be raised to Tk 25,000 from Tk 15,000 now. Traders, bankers and economists apprehend that the decision might inspire people to opt for illegal ways of money transactions. Several MPs, both from the ruling party and the opposition, have already called on the finance minister to reverse his decision. The government will find ways to revise it down, State Minister Mannan said in parliament on Tuesday.
Country’s overall import expenditure increased by nearly 12 per cent or around US$ 4.0 billion in the first 10 months of this fiscal year (FY).According to official data, higher import of capital machinery mainly pushed up the import spending. Actual import in terms of settlement of letters of credit (LCs) rose to $37.37 billion during the July-April period in the FY 2016-17 from $33.37 billion during the same period in the previous fiscal. On the other hand, the opening of LCs, usually known as import orders, rose by 13.83 per cent to $ 39.97 billion during the period under review from $ 35.11 billion during the corresponding period, according to the central bank’s latest statistics.”The overall imports increased during the period under review mainly due to higher imports of capital machinery and intermediate goods,” a senior official of the Bangladesh Bank (BB) told the FE Wednesday. The ongoing Holy Ramadan and the upcoming Eid-ul-Fitr festival have also contributed to rise in the overall imports, according to the central banker. A large quantity of essential commodities is normally imported to meet the additional demand of consumers during Ramadan, the month of fasting and religious festivals.”The import may fall slightly during the May June period due to the fiscal year ending,” the BB official hinted.
The government yesterday sanctioned 2.5 lakh tonnes of rice import from Vietnam at prices much higher than that of another one lakh tonnes it approved for import two weeks ago.The cabinet purchase committee gave nod to the new import under a government-to-government (G2G) deal with Vietnam considering that rice price is on the rise in the international market.And with an all-time low rice stock in hand, Bangladesh requires the supply in quick time to subdue a 42 percent unusual hike in domestic coarse rice price.The food ministry yesterday convinced the cabinet body that though it would be pricey, Vietnam has promised to ship the first consignment in 15 days and complete shipping all 2 lakh tonnes of white rice (Atap) and 50,000 tonnes of parboiled (Shiddo) within 60 days.
The food ministry has received the green light from a cabinet committee to import a quarter million tonnes of rice from Vietnam under a government-to-government deal. The cabinet committee on public purchase, headed by the finance minister, cleared the import of 250,000 tonnes of rice at Tk 9.08 billion on Wednesday. Bangladesh will buy 50,000 tonnes of parboiled rice at $470 per tonne and another 200,000 tonnes of white rice at $430 per tonne, Cabinet Division’s Additional Secretary Mostafizur Rahman said at a media briefing after the meeting. Vietnam’s state-run Vinafood 2 will supply 60 per cent of shipments through Chittagong port and 40 per cent through Mongla port. The government plans to buy 1.5 million tonnes of grains during the Boro crop season this year, which may not be possible now after flash floods inundated crop-fields in the northeast.Unseasonal downpours in early April caused the floods leaving crop-fields inundated in Sunamganj, Kishoreganj, Netrokona, Moulvibazar, Sylhet, Habiganj, Moulvibazar and Brahmanbaria.
Govt mulls over Tk 10,000cr fund for jute industries
The government is giving thought to a proposal on forming a Tk 10,000 crore special fund, similar to Export Development Fund, which aims at expanding jute industries and regain its past glory, Textiles and Jute Minister Emaz Uddin Pramanik told parliament yesterday.It is also using Tk 6,000 crore provided by China for balancing, modernisation, rehabilitation and expansion of 26 jute mills in phases, he said reading out scripted replies to lawmakers’ queries.Coming to office in 2009, the Awami League government overturned decisions of its predecessors to reopen five jute and three textile mills, he said.This created 6,093 and 450 jobs in the respective mills, he said, adding that reopening the jute mills took some Tk 105.29 crore.Daulatpur Jute Mills was closed in 2002 and Peoples Jute Mills (now Khalishpur Jute Mills), Qaumi Jute Mills (now Jatiya Jute Mills), Karnafuli Jute Mills and Forat Karnafuli Carpet Factory were all shut down in 2007, he said.The Peoples and Qaumi jute mills were reopened in 2011 while the rest in 2013, said Pramanik.The textile factories are Darwani Textiles Mills, Rangamati Textile Mills and Magura Textile Mills.
The impending 15 percent VAT on rod will take a huge toll on construction of buildings, particularly in rural areas, steel millers said yesterday.If every tonne of rod is priced at Tk 50,000, each customer will have to pay Tk 7,800 as VAT under the new law, up from Tk 900 now, said Manwar Hossain, chairman of the Bangladesh Auto Re-Rolling and Steel Mills Association (BARSMA).As a result, the development of the rural housing sector, which account for about 30 percent of the country’s total demand for iron bar, will grind to a halt.The government is set to impose a uniform 15 percent value-added tax on most goods and services available in the country under the new VAT law from July 1.“The consumption of rod in rural areas will crash overnight as its prices will go beyond the purchasing capacity of many families.”Hossain’s comments came at a press conference jointly organised by the BARSMA along with the Bangladesh Re-Rolling Mills Association and the Bangladesh Steel Mill Owners Association at the auditorium of the Dhaka Chamber of Commerce and Industry.The use of rod in rural areas may fall to about 2 3 lakh tonnes from the existing 15-18 lakh tonnes, according to the BARSMA chairman.Home construction in rural areas was one of the major factors fuelling the growth of the steel industry.
Bangladesh seeks USD 1.0 billion from Asian Infrastructure Investment Bank (AIIB) for six projects
Bangladesh has sought extended financial support from the Asian Infrastructure Investment Bank (AIIB) for its six projects costing more than USD 1.0 billion. According to officials, the six projects are mostly from the Power Division while one is from the Bridges Division. Usually, the AIIB provides the LIBOR (London Based Inter Bank Offered Rate)-based loan for its member-countries with maturity of 25 years. Currently, the World Bank is the largest multilateral lender, followed by the Asian Development Bank while Japan is the biggest bilateral donor for Bangladesh.
The government is set to establish two land-based liquefied natural gas terminals alongside the floating terminal, as it continues with its efforts to alleviate the country’s energy shortage. A Japanese firm, Tokyo Gas Engineering Solution Corporation, will be appointed to conduct the feasibility study on the sites at a cost of BDT 580.0 million. Bangladesh is looking outside to alleviate its energy shortage largely caused by depletion of domestic reserves and rising demand. Gas supply stands at about 2,700 MMCFD per day against the demand for 3,300 MMCFD. In December, Petrobangla signed an initial agreement with India’s energy company Petronet to set up an LNG re-gasification terminal on Kutubdia island and a pipeline at an estimated cost of USD 950 million.
South Korean technology giant Samsung is set to inaugurate two factories in Bangladesh today with a view to manufacturing four home appliance products — a move that can be viewed as recognition of the country’s engineering capabilities. The plants, where LED television, refrigerators, air conditioners and microwave oven will be manufactured, have been set up in joint venture with local Transcom Group and Fair Electronics. Under the deal struck with Transcom Electronics, Samsung will manufacture LED television at the former’s state-of-the-art facilities in the capital’s Mohakhali area. The plant on 18,000 square feet started manufacturing televisions on a test basis from last month. Some 13 models of televisions — all of which would be less than 55 inches — will be manufactured at the plant, with some of the components brought in from Vietnam. The factory will be operated by 85 engineers, while Samsung will provide technological support.
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