Finance minister Abul Maal Abdul Muhith on Tuesday told parliament that the number of loan defaulters in the country was now 2,02,623.The defaulters, persons or companies, had borrowed money from 55 state-run and private commercial banks and\ defaulted on their loans till March this year, Muhith said while replying to an Awami League lawmaker Pinu Khan’s question. The finance minister, however, did not mention the total amount of money the defaulters had borrowed from the banks and defaulted on. Bangladesh Bank data prepared in March showed that the amount of defaulted loans in the country’s banking sector stood at Tk 73,409 crore. More than Tk 42,000 crore has been written off, a separate BB data showed. Muhith said, ‘The government has already enacted Artha Rin Adalat Ain 2003 to realise the money and cases have been filed under the law,’ said. ‘Bangladesh Bank has also provided necessary directives to the banks to realise the money,’ the minister said in his scripted answer. Responding to another question of opposition Jaitya Party lawmaker Pir Fazlur Rahman, the minister said the government outlined various measures to bring the loan defaulters to book. According to the statistics placed by the minister before parliament, the defaulters have been holding some Tk 41,401 crore in loans taken from eight state-run banks and Tk 3,152 crore has been realised from the defaulters between July, 2016 and March, 2017.
Banks asked to keep open some branches in June 23-24
Bangladesh Bank on Tuesday asked schedule banks to keep open some of their branches connected with apparel industries on June 23 (Friday) and 24 (Saturday) to facilitate payment of wages and festival allowances to garment workers ahead of Eid-ul-Fitre.BB also asked the banks to supply adequate cash to all of their ATMs during the Eid holidays and take security measures to settle transaction by clients through ATM, PoS and online e-payment gateway. The central bank issued a circular to all banks asking them to keep open their branches located in Dhaka city, Ashulia, Savar, Gazipur, Valuka, Narayanganj and Chittagong for two hours — 9.30am-12:00pm — on June 23 and full work hours on June 24. In an another circular, BB asked the banks to keep open their branches located at air, land and river ports from June 23 to June 25 to help the attached custom houses and stations so that the businesspeople can run their export and import during the period. The three-day official Eid holidays will begin on June 25.BB also asked the banks to keep open on June 24 their branches which deal with inward remittance. The banks have been asked to keep open their selective branches considering the number of remittance recipients and amount of inward remittances. The central bank also asked the banks to keep adequate cash in their ATMs so that the clients would be able to withdraw money round the clock during the Eid holidays. If any ATM faces technical problem during the vacation, the bank concerned will have to solve the trouble immediately, it said. The banks will have to deploy security guards to keep safe their ATMs.
Bangladesh Bank has issued a show-cause notice to NRB Commercial Bank chairman Farasath Ali asking him to explain why he placed ‘false information’ before the central bank regarding the private commercial bank’s proposal to appoint independent directors. According to the notice, board meeting’s minutes signed by Farasath informed the central bank that the shareholders of NRB Commercial Bank approved its proposal to appoint three independent directors in the bank’s board at the fourth annual general meeting of the bank. The board of directors of the bank also subsequently approved the proposal, the minutes said. But, BB general manager Md Masud Biswas, who was appointed as observer to the bank in December 2017, informed BB high ups that the bank’s shareholders had opposed the proposal to appoint independent directors at the AGM of the bank held on May 18, 2017.The directors of the bank were also involved in a conflict over the proposal to appoint independent directors at the 54th board meeting. The board of the bank is yet to take any decision on appointing the independent directors, according to the BB observer’s report. The bank presented the minutes of AGM and board meeting to the central bank on May 22, claiming that the shareholders and the directors approved the proposal to appoint the independent directors. The central bank letter said that Farasath was responsible for giving ‘false information’ as he signed the distorted minutes. The BB asked the NRB Commercial Bank chairman to explain within seven working days why he submitted ‘false information’ to the central bank.
Banks have tied up with clothing brands, supermarket chains and restaurants in the contest to get customers to splurge during Ramadan and the Eid-ul-Fitr festival. Standard Chartered, Mutual Trust, Eastern, City, Brac and many other banks are offering discounts of up to 30 percent for purchases made with cards during the month of Ramadan. bKash, a mobile financial service provider, is offering 10-20 percent cash back for payment made through the platform at a select few clothing stores.“Bangladesh Bank asked us to make digital payment popular, so we are offering cash backs to get people to take to the platform,” said Kamal Quadir, CEO of bKash. Standard Chartered, the pioneer in the card business in Bangladesh, is providing the highest offers for Ramadan and Eid shopping. The bank is offering cash back of 2 to 7.5 percent for spending through card in grocery shop, dining, hotel and all other retail transaction. A Standard Chartered MasterCard holder can enjoy up to 20 percent discount at 20 clothing stores and 25 percent discount with Visa card. The bank also offering 35 percent discount on furniture and electronics purchase from 11 brands for the occasion of Eid-ul-Fitr. “Banks are offering incentives for card transaction to promote a cashless society,” said Abrar A Anwar, chief executive officer of Standard Chartered Bangladesh, adding that it is a global practice to accelerate economic activities. Banks and merchants are jointly making the offers and both parties are being benefited as it leads to an increase in card transaction. The offers also tempt customers to buy more, he added. Among other banks, Mutual Trust Bank, Dhaka Bank, United Commercial Bank, National Bank, NRB Bank are running ‘buy one get one free’ offer for iftaar and suhoor buffets at standalone restaurants and upscale hotels for their card holders.
Citycell has requested National Bank to pull back its gambit to sell off the mobile operator’s office space in the capital’s Mohakhali area as part of the efforts to recover Tk 454.45 crore of unpaid loans. Last month, the private commercial bank ran a newspaper advertisement requesting bids by June 15 to purchase the 38,800 square feet floor and 5.04 decimal of land that currently serves as the operator’s head office.“We found no interested bidder,” said an official of the bank. The bank is yet to decide whether it will call for another round of bids. “Citycell owners are out of the country now. They requested us to go for a payment arrangement,” he added. Earlier, Faisal Morshed Khan, son of Citycell Chairman Morshed Khan, also said they are in talks with the bank on the issue and would pay off the loans shortly. Recently, the telecom regulator recommended the government to cancel the licence of the operator for not paying dues. The telecom division has forwarded the recommendation of Bangladesh Telecommunication Regulatory Commission to the Prime Minister for a final nod, said a top official of the telecom division.In October last year, the BTRC brought down the curtains on Citycell over dues amounting to Tk 477 crore pertaining to spectrum and licence fees, revenue sharing and late penalty. After the cancellation of its spectrum, Citycell had paid Tk 230.19 crore to the BTRC along with Tk 14 crore as tax to the National Board of Revenue, according to documents. Citycell disputes the amount claimed by the BTRC, so the High Court formed a committee to settle the matter. The committee has submitted its report recently.
Eastern Bank Ltd. (EBL), in association with Metlife, has launched an income protection plan for its payroll banking customers. Named as “EBL Salary Shield” this unique insurance coverage will provide 6 months’ salary in case of natural death of a payroll banking accountholder to the nominees. The amount will be for 12 months if the death is accidental in nature. In addition to this, an accountholder can get hospital expenses reimbursement including daily hospital cash up to a specified amount. All EBL Payroll Banking customers will be eligible to take this coverage from EBL. Ali Reza Iftekhar Managing Director and CEO of EBL and Md. Nurul Islam, Chairman- Bangladesh, Nepal & Myanmar of Metlife signed the agreement on behalf of the respective organizations in Dhaka recently. Senior management from both the companies were present on the occasion.
The amount of funds raised through IPO (initial public offering) declined by 61.0% in the fiscal year (FY) 2016-17 compared to previous FY 2015-16. In the FY 2016-17, six companies and three MFs raised an aggregate amount of capital worth BDT 3.3 billion, which was 61.0% or BDT 5.3 billion less than the amount of fund raised in the FY 2015-16. The officials of the securities regulator said the amount of raising capital declined during the FY 2016-17 due to different reasons including the increased number of compliances included in the revised public issue rules. On the other hand, the issue managers said the number of approving IPOs was not up to the mark due to go slow policy of the securities regulator.
Proposed budget long on hopes but short on measures
The World Bank on Tuesday said that the proposed budget for the upcoming fiscal year was full of ambitious targets, but devoid of specific actions required to achieve the targets. At a press conference held at its Dhaka office on the proposed budget finance minister AMA Muhith placed before parliament on June 1, the multilateral lending agency also said that the budget was long on hopes but short on measures. WB Dhaka office lead economist Zahid Hussain said that it would be impossible to achieve the targets without making necessary reforms particularly in the financial sector. He said that the overall budget implementation would largely depend on the successful enforcement of the new measures on value-added tax. The government’s target is increasing the country’s GDP by boosting revenue generation, but it would depend mostly on the implementation of the new VAT law. The WB also ruled out any adverse impact on the essential commodities because of the implementation of the complete VAT and Supplementary Duty Act-2012 from July 1 this year. WB country director Qimiao Fan said that the proposed measures in VAT were investment friendly. Quoting a study by the International Monetary Fund, Zahid said inflation might increase by 0.05 per cent following the enforcement of the new VAT Act. He, however, said inflation might register further increase because of propaganda by vested quarters.The WB also criticised retention of supplementary duty for protection of the local industry in the proposed budget.
New VAT to boost economic growth, revenue: World Bank
The World Bank yesterday endorsed the new value-added tax law, saying the effective implementation of the legislation will boost economic growth and revenue generation. The Washington-based lender said the new VAT law and the new income tax zones aimed at widening the tax base are the steps in the right direction. The VAT and Supplementary Duty Act 2012 got passage in parliament in 2012. Since then the government has been discussing the law with stakeholders to implement it. However, the government’s decision to enforce the 15.0% VAT rate from July 1 has drawn huge criticisms from ruling party lawmakers, ministers, economists, and opposition politicians. The uniform 15.0% VAT rate will replace the existing 15.0% standard rate and a number of truncated rates in some cases.
The government may backtrack on its plan to implement the new VAT law from July this year, in the face of pressure from a section of businesses and lobby groups, a highly placed source said yesterday. Instead, the government may choose to continue collecting the indirect tax under the existing VAT Act of 1991 and announce a fresh deadline to enforce the much-talked-about VAT and Supplementary Duty Act 2012.The new law seeks to impose a 15 percent single and uniform VAT. Revenue officials have already got a hint of the government plan to postpone implementation of the 2012 law, according to the source, who sought anonymity. But Finance Minister AMA Muhith remains mum, declining to comment on the matter yesterday when reporters asked him to clarify government’s position. “You will come to know when I speak on June 28 and when the prime minister speaks the same day [in parliament]. She will cover some areas. I will cover some areas. There is no chance to know about it before that,” he said. Finance ministry sources said things began to change after Muhith placed the proposal for implementing the new VAT law from July and putting an end to the multiple VAT rates.
The government has decided to lower the import duty on rice to 10 per cent from existing 25 per cent to help keep its prices stable in the local market, Commerce Minister Tofail Ahmed said on Tuesday.”It has also decided to waive exiting 3.0 per cent regulatory duty (RD) on rice import to help improve the supply situation of the staple food,” the minister told reporters at his secretariat office after a workshop on the Competition Act, 2012. He said the government has taken decision to reduce existing duty on rice import by 18 per cent aiming to keep its prices stable in the domestic market. Earlier, total 28 per cent tariff was imposed on import of the staple food. “The new duty rate will be 10 per cent for importing rice. For this, the prices of the staple food will get back to normal in the market soon,” he added. At present, prices of essential items across the country remain stable. Necessary steps have been taken to stabilise the prices of these items permanently, he also said. The government in June 2012 enacted the ‘Competition Act 2012’ to prevent, control and eradicate collusion, monopoly and oligopoly, abuse of dominant position in the market and other anti-competitive practices.
ECNEC approves BDT 139.1 billion power distribution projects
The Executive Committee of the National Economic Council (ECNEC) on Tuesday approved two projects for extending the power distribution network to ensure cent percent rural electrification in eight divisions with an estimated cost of BDT 139.1 billion, reports UNB. Briefing reporters after the meeting, Planning Minister AHM Mustafa Kamal said a total of 12 projects were approved at the meeting involving an estimated cost of BDT 303.4 billion. “Of the total project cost, BDT 259.0 billion will come from the state exchequer while BDT 338.0 million from respective organizations’ own funds while rest BDT 44.1 billion as project assistance,” he added. The Planning Minister said the extension of distribution network project for ensuring cent percent rural electrification in Dhaka, Mymensingh, Chittagong and Sylhet divisions will be implemented at a cost of BDT 71.3 billion of which BDT 71.2 billion will come from the state exchequer while the rest of BDT 169.0 million from the respective organisation’s own fund.
The Bangladesh Railway (BR) on Tuesday signed two deals with Indonesian and German companies involving BDT 3.59 billion to procure 50 passenger carriages and four relief cranes for improving railway services in the country. According to project information, PT INKA will provide 50 broad gauge passenger carriages at a cost of BDT 2.12 billion and Kirow of Germany will supply two metre gauge and two broad gauge relief cranes at a cost of BDT 1.46 billion in 24 months. Both the purchases will be funded by the Asian Development Bank with the objective of increasing the BR’s passenger capacity and improving train services by ensuring efficient operation of trains.
Cellphone operators pay BDT 8.6 billion revenue in fiscal ’17
The government has realised Taka 8.6 billion (855 crore) as revenue from the six mobile phone operator companies in fiscal 2016-17. State Minister for Post and Telecommunication Begum Tarana Halim said Tuesday this at the Jatiya Sangsad while replying to a query from treasury bench lawmaker Sukumar Ranjan Gosh (Munshiganj-1) in the house, reports BSS. Of the total revenues, the Grameenphone Bangladesh Limited has paid BDT 4.31 billion, Robi Axiata Limited, the second largest mobile operator in Bangladesh, provided BDT 2.22 billion. Bangla Link Digital Communications Limited has paid BDT 1.61 billion revenue to the government, Airtel Bangladesh Limited provided BDT 148.6 million, Pacific Bangladesh Telecom Limited BDT 110 million and the state-owned Teletalk Bangladesh Limited has paid BDT 150 million.
Businesses urge government not to raise import duty on car parts
Local car assembling industry faces a major blow due to a proposal for imposition of excessive duty on car production, import in complete knock down (CKD) and its equipment in the budget for the fiscal year 2017-18. A few industries engaged in car production in the country will face uncertainty. The new car manufacturing plant of PHP Group that has invested BDT 6.0 billion (BDT 600.0 crore) is likely to face closure, sources concerned said. Over 100.0% increase in supplementary duty than the existing duty has been proposed in the next fiscal budget on local car manufacturing industry which cannot be termed productive and pro-investment, trade body leaders, industrialists and businesses observed. Car manufacturing industry sources in Chittagong said the duty imposed on import of chassis fitted with engine is 59.0% in the current fiscal which is already too high. But in the proposed budget for the next fiscal year, the duty has been raised to 89% from 59% on chassis import and 126% duty from existing 59% on body.
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