Govt eyes Tk 17,000cr in budget support next fiscal year

The government has set a target to mobilise Tk 17,000 crore in budget support from development partners in fiscal 2020-21 to meet its additional financing need owing to the coronavirus pandemic. The budget support being sought is way higher than the Tk 2,100 crore set in the original fiscal plan for this year and Tk 56 crore in the previous one. The budget support for the next fiscal year accounts for 18.31 per cent of the Tk 92,837 crore external borrowing target set. The ADB has approved $500 million and the AIIB sanctioned 250 million. The WB may approve $250 million by this month. This means, the government is on track to mobilise funds from the development partners. Although the funds from the development partners have been approved in the current fiscal year, they would be spent in the fiscal 2020-21’s plan. If needed, the government may borrow from the ADB and the IMF in the next fiscal year as well. The budget deficit for the current fiscal year was estimated at Tk 145,380 crore and it was pushed upwards to Tk 153,513 crore in the revised budget, which is 5.5 per cent of GDP. The overall budget deficit will be Tk 190,000 crore in fiscal 2020-21, which is 6 per cent of GDP, said Finance Minister AHM Mustafa Kamal in his budget speech. Bangladesh would receive Tk 4,013 crore in grants in fiscal 2020-21, up from Tk 3,454 crore in the revised budget. Of the grants, Tk 613 crore would come in the form of food support and Tk 3,400 crore in project assistance. Of the external financing, Tk 88,824 crore will come in the form of loans, which was Tk 63,659 crore in the revised budget. The support for loans includes Tk 67,102 crore in project assistance. Continued remittance weakness in the coming months will slow fiscal 2019-20’s growth to 1.4 per cent and lead to a 7 per cent fall in fiscal 2020-21, the IMF said recently. Revenue collection crashed more than 55 per cent in April and the National Board of Revenue may end up facing a shortfall of Tk 100,000 crore in the current fiscal year. The government has unveiled various stimulus packages amounting to $103,117 crore, which is 3.7 per cent of the country’s gross domestic product, to help people, businesses, entrepreneurs, farmers, industrialists and exporters counter the impact of the pandemic.

Source: https://www.thedailystar.net/business/news/govt-eyes-tk-17000cr-budget-support-next-fiscal-year-1915293

BB extends loan status classification to Sep 30

The central bank has extended the deadline for loan status classification by banks further to September 30, as it now forecasts the economy would be enshrouded by the coronavirus-induced gloom for longer than it had imagined earlier. Now, banks will have to maintain the same credit status of a borrower as on January 30 until the new deadline. Banks, however, would be able to classify any loan if their situation improves, the Bangladesh Bank said in a notice yesterday to help businesses and industries operate in the adverse scenario brought on by the coronavirus pandemic. On March 19, less than two weeks after the government first reported the country’s maiden coronavirus cases, the central bank asked lenders not to consider businesspeople as defaulters if they fail to repay instalments until June 30 this year. It came after banks in April requested both the finance ministry and the central bank to push back the deadline for loan status classification to December 31 from June 30 as many borrowers are failing to pay instalments because of coronavirus-induced losses. All instalments of the term loans, including agriculture and small credits and investment, between January 1 and September 30 would be considered as deferred. The instalment size and numbers would be re-fixed in October. he repo rate was lowered from 6 per cent to 5.75 per cent in March and later to 5.25 per cent on April 12. The cash reserve ratio was initially reduced from 5 per cent to 4.5 per cent (daily-basis) and from 5.5 per cent to 5 per cent (bi-weekly basis), with a further reduction to 3.5 per cent and 4 per cent, respectively, from April 15. The BB has raised the loan-deposit ratio and investment-deposit ratio by 2 percentage points to facilitate credit to the private sector and improve liquidity in the banking system. As part of the stimulus packages, the central bank has injected Tk 73,000 crore in the banking system through the refinancing schemes and the cut in the CRR. There was Tk 113,000 crore additional liquidity in the banking sector as of April 30, after meeting the statutory liquidity ratio. There is another Tk 62,000 crore additional fund owing to the healthy reserve.

Source: https://www.thedailystar.net/business/news/bb-extends-loan-status-classification-sep-30-it-fears-pandemic-would-ram-1915289

Internet-based trading in the offing

Country’s main bourse has taken a move to launch digital trading considering the safety and security of investors and other market stakeholders as the deadly virus goes virulent across the country. Mobile app and other devices will be used in such kind of trading. As part of the move, a two-day workshop titled ‘role of stock brokers in internet-based trading’, arranged by DSE Training Academy ended on Monday. A total of 400 officials of brokerage houses of DSE participated in the course and they learned about many aspects of internet-based trading. In order to avoid large gathering at one place and to maintain social distancing for holding shareholders’ meeting, if necessary, board meeting, board committees’ meeting and meeting of the teams formed by the board, both the stock exchanges may use digital platform at different locations considering the safety of the investors and the professionals. The BSEC issued a directive in this regard on March 25 following the proposals made by some listed companies and the Bangladesh Association of Publicly Listed Companies (BAPLC). The securities regulator said the directors of the listed companies may hold their board meetings through digital platform subject to limitation and compliances in other regulatory framework.

Source: https://today.thefinancialexpress.com.bd/stock-corporate/internet-based-trading-in-the-offing-1592238088