By all indicators it was deemed to be the best performing bank in Bangladesh, posting a profit of Tk 2,300 crore last year, leaving any other private bank far behind. However, that could not rid the bank of its ill repute—that it was a de facto bank of Jamaat-e-Islami, the Islamist bank. Its top man was Abu Naser Md Abduz Zaher, Jamaat’s key man who fled the country when the war crimes trial got momentum, and its main funder was war criminal Mir Qashem Ali, who had to walk the gallows for his crimes in 1971. There were allegations raised in the US Senate that an Islamic terrorist, Abdur Rahman, had an account with the bank, a claim that the bank later refuted. Its political façade notwithstanding, the bank worked as a good financial intermediary. So when the government started a process to ‘cleanse Jamaat’s influence’ from the bank in June 2016, the move did not cause much heartache to many. What was surprising was the way it was executed. In quick sweep, the bank’s chairman, vice-chairman and managing directors were forced to pack bags and leave. A former secretary, Arastoo Khan, was appointed as the head of its board. He was appointed on behalf of an obscure company, Armada Spinning Mills Ltd, from Chittagong.
Overnight rate of Dhaka Inter-Bank Offer Rate (DIBOR) was 3.8687 per cent at the end of last week. Thus, this week’s inter-bank transaction in Dhaka has opened with this overnight rate Bangladesh Foreign Exchange Dealer’s Association (BAFEDA) releases the different rate of DIBOR every working day. In the last working day or Thursday (June 15, 2017), one week DIBOR rate was 4.2687 per cent, while one-month rate was 5.0771 per cent and three-month rate was 6.5583 per cent. These rates are all annual rates.
Most banking clients out of internet, mobile banking services
A large majority of bank clients are yet to get the internet and SMS (short messaging service) or mobile banking services as the country’s banks are reluctant to promote the facilities, said officials of Bangladesh Bank. Officials of the central bank said most of the banks were unwilling to spend money for the infrastructure required to introduce and promote the services and the banks also lacked skilled manpower to operate the facilities. According to the latest Bangladesh Bank data, only 3.09% of bank clients were enjoying internet banking and 26.51% of clients were receiving SMS banking service as of March 30, 2017. A BB official told New Age on Thursday that banks’ poor coverage of internet and SMS banking services indicated that the banking sector was still far away from becoming a full-fledged digitalized banking system, although the government claimed that the country progressed a lot towards implementing the digitalization method in all sectors.
Remittance slowdown: Bangladesh Bank prods banks on improving services
The central bank has asked the commercial banks to take measures for improving the quality of remittance services so that the Non-Resident Bangladeshis (NRBs) send their hard-earned money home through formal channel. The banks have been instructed to open a ‘help desk’ for ensuring better services at each of their branches those deal with the remittance. The banks will have to ensure providing information on remittance to the beneficiaries with priority, according to a notification issued by Bangladesh Bank (BB) Thursday. The banks have been advised to open a separate book to record allegations by the beneficiaries and submit fortnightly reports to the Foreign Exchange Policy Department of the BB.
MTB hands over cheque of BDT 0.5m to ‘Poriborton Chai’
Mutual Trust Bank Limited (MTB) recently handed over a cheque of BDT 5 Lac to ‘Poriborton Chai’ at a simple ceremony held at MTB Centre, Gulshan. Fida Haq, Chairman, ‘Poriborton Chai’, Anis A. Khan, Managing Director & CEO, MTB along with other senior officials of the bank were present on the occasion. ‘Poriborton Chai’ is a social organization that has been working towards mobilizing the youth of Bangladesh to solve environmental and cleanliness issues of suburban/urban areas of the country. “Shobuj Ishkool Gori” or “Greening 100 Schools of Bangladesh” is a significant initiative of the organization where it aims to bring about a complete environmental makeover to the schools through active participation of the students and teachers of the participating schools as well as their own volunteers.
Bangladesh Bank has disbursed loans amounting to Tk 5,831.39 crore as of April 30 from its seven refinance schemes for the country’s disadvantaged entrepreneurs, which has played an important role in raising the capacity of small and medium enterprises. The majority of clients have taken the credit from the schemes with a lower interest rate of 8 to 9 per cent that has help the entrepreneurs to open new businesses or to expand the existing ones, a BB official told New Age on Thursday. The central bank introduced refinance scheme for the first time in November, 2001 for entrepreneurs engaged in agro-based products processing industries in the rural areas. Under the refinance schemes, banks disburse loans to their clients from their own sources after which they get the amounts from the BB. The central bank provides the fund to banks with an interest rate of five per cent and they (banks) in most of the cases add three to four per cent on the rate while disbursing the loans to their clients. The BB is now operating seven refinance schemes under its SME and special programmes department. The Asian Development Bank and the Japan International Cooperation Agency have given financial support to two of the seven schemes, the BB official said. The seven schemes are worth Tk 3,203.26 crore, but clients have so far got loans amounting to Tk 5,831 crore from the programmes as five of the schemes are revolving fund in nature.
Government’s charged expenditure has risen significantly in recent years, mainly for an alarming increase in domestic debt servicing. Official documents show the amount of such spending at BDT 1.53 trillion in the outgoing fiscal year (FY) 2016-17. The expenditure is set to rise to BDT 1.64 trillion in the next financial year, beginning July 01, according to budget documents of demands for grants and appropriations for financial year 2017-18. It was BDT 1.4 trillion in 2013-14. Charged expenditure is mainly meant for payment for salaries of the members and employees working under constitutional bodies. The expenditure also consists of debt servicing both for domestic and external borrowings.
The government has again extended the tenure of IPO (initial public offering) quota facility for another six months for small investors who were affected during 2010-11 stock market debacle. The ministry of finance (MoF) has extended the tenure following the proposal made by the Bangladesh Securities and Exchange Commission (BSEC). As per the guidelines of capital market refinancing scheme, 20.0% IPO quota is preserved for affected small investors.
Government to ink USD 300.0 million credit deal with ADB on June 21
The government is set to sign two separate loan agreements on June 21 for construction of Chittagong-Cox’s Bazar Railway Line, reports BSS. “A total of two contracts would be signed between Bangladesh government and the Asian Development Bank (ADB) worth USD 300 million at Sher-e-Bangla Nagar for Chittagong-Cox’s Bazar Railway Project, Phase-1-Tranche-1under South Asia Sub-regional Economic Cooperation (SASEC),” an official of Economic Relations Division (ERD) told the news agency on Saturday. The objective of the project is to construct the Single Line Dual Gauge (DG) railway track from Chittagong to Cox’s Bazar via Ramu to Gundum in Myanmar, the official said. Rail connectivity to Cox’s Bazar will boost tourism as Dhaka’s passengers will be able to reach the coastal resort city in only six hours – four hours faster than the current quickest route by road. Even the journey from Kolkata will be only a matter of 16 hours, according to the project sources.
Consumers’ interest has been sacrificed while framing the various VAT and supplementary duty proposals for the upcoming fiscal year, said the Centre for Policy Dialogue yesterday. “Attempt to collect revenue from all low-hanging fruits is observed,” said Fahmida Khatun, executive director of the CPD, while presenting an analysis on the proposed budget for 2017-18. The event, which was held at the capital’s Lakeshore Hotel, was attended by ministers, politicians, economists, businessmen, revenue officials and representatives of international development agencies. The think-tank’s observation comes at a time when there is a palpable concern that the implementation of the unified 15 percent VAT would fuel the cost of living for many. VAT on major items such as electricity, spices and mustard, soap, pest and tooth-brush, branded garments, education at English medium schools, furniture, iron and steel products and restaurants is likely to lead to higher inflation once the new law becomes effective from July 1.
Bangladesh is projected to be the top importing country of cotton across the world in the 2017-18 marketing year, according to the latest forecast made by the United States Department of Agriculture (USDA). The country has already become the largest cotton importer and is going to remain so in the next season beginning on August 1, 2017. In the last year, Bangladesh imported 1.35 million tonnes of cotton in 2015-16 and expected to import around 1.36 million tonnes in the ongoing year (2016-17). According to the USDA projection, Bangladesh will import 1.52 million tonnes of cotton in the next season. Vietnam will remain the second largest importer of cotton in the next year as it is now. USDA forecast also shows that production of cotton would grow by nearly 7 per cent while global consumption is expected to remain above the production. This will result in declining global stocks for the third consecutive year.
EU warns Bangladesh again not to exploit RMG workers for sustaining GSP
The European Union has once again warned Bangladesh to step up its efforts in preventing workers exploitation in the garment sector mainly to sustain the privileged market access there under the Generalised Scheme of Preference (GSP). Members of the European Parliament (MEPs), in a resolution adopted Wednesday, said textile workers in Bangladesh, many of whom are young women, suffer long working hours; low wages, uncertainty and hazardous conditions and trade union leaders are often persecuted. The European parliament adopted the resolution tabled by its Committee on International Trade (INTA) on “The State-of-Play of the implementation of the Sustainability Compact in Bangladesh”, an EU-driven initiative to strengthen labour rights and safety at work in the readymade garment sector of Bangladesh.
Plan to import LNG from spot markets, under term deal
Bangladesh will import liquefied natural gas (LNG) from international market under term deal and from spot markets to have a competitive buying price, said officials. To ink term deals, state-run Petrobangla has already inked two separate memorandums of understanding (MoUs) with Qatar’s RasGas and Switzerland-based AOT Energy, said a senior Petrobangla official. Negotiations with the RasGas and AOT Energy are now continuing, he said. Bangladesh is eyeing to start import of LNG from international market from early 2018 as the country’s first LNG import terminal, a 3.75 million tonne per year capacity floating storage and regasification unit (FSRU) being developed by US-based Excelerate Energy, is expected to be commissioned in April 2018. The country’s second FSRU, also with a similar capacity of 3.75 million tonne per year, is being developed by Summit Group with its commissioning expected by the end of 2018.
Leaders of the Real Estate and Housing Association of Bangladesh on Saturday urged the government to consider reducing the rate of value-added tax stipulated in the new VAT Act, saying that uniform 15.0% VAT rate would largely affect the housing sector. They said that the cost of a housing project would rise by 30.0% if 15.0% VAT was imposed on the sales of apartment and building materials. They said that imposing 15.0% VAT on five raw materials — rod, cement, brick, stone and sand — would led the housing sector to destruction.
India imposes anti-dumping duty on chemical import from Bangladesh
India has imposed anti-dumping duty of up to USD 118.0 per tonne on import of a chemical used for corrosion control and paper bleaching from Pakistan, Bangladesh, and three other countries. The duty has been levied to protect domestic manufacturers of the chemical from “material injury” due to the cheap imports, according to a report published in www.financialexpress.com of India. The revenue department has issued a notification specifying the levy on import of hydrogen peroxide – other than of food and electronic grade with concentration of 90% and above – from Bangladesh, Taiwan, Korea, Pakistan and Thailand. The duty – in the range of USD 27.8-117.9 per tonne of the chemical – will remain in place for five years. Earlier, National Peroxide Ltd and Hindustan Organic Chemicals had approached the Directorate General of Anti- Dumping and Allied Duties (DGAD) for initiation of an anti- dumping probe and imposition of a related duty concerning imports of hydrogen peroxide.
$300m loan deal for Ctg-Cox’s Bazar railway June 21
The government is set to sign two separate loan agreements on June 21 for construction of Chittagong-Cox’s Bazar Railway Line. ‘A total of two contracts would be signed between Bangladesh government and the Asian Development Bank worth of US$ 300 million at Sher-e-Bangla Nagar for Chittagong-Cox’s Bazar Railway Project, Phase-1-Tranche-1under South Asia Sub-regional Economic Cooperation,’ an official of Economic Relations Division told BSS in Dhaka on Saturday. He said acting secretary of Economic Relations Division Kazi Shafiqul Azam and country director of ADB Kazuhiko Higuchi would sign the deal on behalf of their respective sides.
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