Private sector credit growth remained steady in January amid higher import and rising business activities in the country. In January, private sector credit growth stood at 15.6 percent, which is almost identical to the previous month’s figure. Since September last year, the credit growth has been hovering around the 15-percent mark amid a stable political situation and lower lending rates. The Bangladesh Bank has kept the private sector credit target at 16.5 percent for this fiscal year, which its projections say will be enough to support the GDP growth target of 7.2 percent. Total credit to private sector stood at Tk 719,000 crore at the end of January, up from Tk 717,019 crore the previous month, according to data from the BB. “But the matter is whether the credit is going to the manufacturing sector, which plays a role in employment generation,” said Mohammed Nurul Amin, managing director of Meghna Bank.
BB sends teams in 3 countries to find out reasons for falling remittance inflow
As the falling trend of the inflow of remittances is becoming a matter of concern for the country, two teams of Bangladesh Bank (BB) are visiting Saudi Arabia, Malaysia and Singapore to find out the reasons behind the declining trend of remittances, reports BSS. BB Economic Advisor Dr M Akhtaruzzaman is leading a 3-member team now visiting Saudi Arabia where over 80 lakh Bangladeshis have been working and the country received a record US$2955.55 million in remittance in fiscal year 2015-16. General Manager of BB Governor’s Secretariat Dr M Habibur Rahman is leading the other team which is now visiting Malaysia and Singapore, the Southeast Asian countries being the major sources of remittances for Bangladesh. The central bank through the foreign ministry has also asked the Bangladesh missions abroad to take necessary steps in getting the cooperation of law enforces of the respective countries to stop the use of illegal channels by the Bangladesh workers in sending remittances home. Bangladesh migrants sent home US$1337.14 million from Malaysia and US$387.24 million from Singapore in 15-16. According to BB, Bangladesh received US$1478.42 million in remittances from Saudi Arabia, US$744.46 million from Malaysia and US$204.61 million from Singapore for the first eight months of FY17.
The government has decided to provide Tk 2.50 billion to Probashi Kallyan Bank (PKB), a specialised bank, to help it become a scheduled bank, sources said. The decision was taken at a meeting Tuesday at the ministry of finance (MoF) with Finance Minister AMA Muhith in the chair. The bank needs to have Tk 4.0 billion as paid-up capital for becoming a scheduled bank. Presently, the bank’s paid-up capital is Tk 1.0 billion. The meeting also decided that the Wage Earners’ Welfare Board (WEWB) will provide the remaining Tk 500 million as equity. The Board as of now is the majority shareholder of the bank. The meeting also decided that after its conversion into a scheduled bank, the PKB will start general banking activities on a limited scale among migrant workers, returnees, and their relatives through collecting deposits and providing loans. According to officials, the PKB, as a non-scheduled bank, is not allowed to carry out the functions of a scheduled bank. The move to turn PKB into a scheduled bank was taken recently aiming to utilise it for bringing more remittances to the country through legal channel as inward remittance flow has been declining.
Bangladesh Bank (BB) Governor Fazle Kabir said government borrowing is lower now which is an opportunity for the private sector to get more access to finance, reports BSS. He also said foreign remittance is more that 16 per cent lower than the same period of last year which is a matter of concern and the central bank is working hard to encourage non-resident Bangladeshis (NRBs) to send remittances through proper channels. The governor said this when the Board of Directors of Dhaka Chamber of Commerce and Industry (DCCI) led by its president Abul Kasem Khan called on him at BB in the capital yesterday. The governor said young generation needs to be encouraged to come up with innovative entrepreneurship mostly in manufacturing sector rather than trading. Skill development and training are also more important for new entrepreneurs, he said.
Stocks returned to higher Tuesday, snapping a single-session mild correction, largely supported by banks. Analysts said the banking issues kept the market afloat as the sector posted the highest gain of 1.40 per cent with 23 banks closed green, out of 30 listed banks. “The upbeat trend of the market was triggered by healthy gain in banks as investors are expecting better dividend as most of the banks are yet to declare dividend,” said an analyst at a leading brokerage firm. He noted that media reports that most of commercial banks listed on the stockmarket saw hefty net profits in 2016, also encouraged the investors to buy the bank issues. Following the news, the investors were active on bank issues throughout the session while the day’s turnover and gainer chart were dominated by banks. IFIC Bank, First Security Islami Bank and City Bank were top three turnover generators, contributing 11.3 per cent, 9.0 per cent and 8.5 per cent of the sector’s total turnover, respectively. At the same time, IFIC Bank, Jamuna Bank and NCC Bank were top three gainers within the bank sector, gaining 5.72 per cent, 5.2 per cent and 4.8 per cent, respectively.
Online banking transactions of some banks, particularly Sonali Bank Limited, were disrupted temporally on Tuesday due to a technical glitch that hit an internet service provider. Under the existing provisions, the banks will have to install double links of internet service providers at their each branch to ensure uninterrupted services. The internet-based transactions at around 400 branches of Sonali Bank out of 1,208 remained suspended for an hour in the morning for the activation of alternative internet connection, a Sonali Bank senior officer said. “Everything is now normal,” he told the FE. Talking to the FE, a senior official of a leading private commercial bank (PCB) said the disruption was the result of a glitch caused by a fire at a technical office of an internet service provider at Banglamotor in Dhaka Monday night.
Capital market refinancing scheme: Govt to relax conditions for borrowers
The supervisory committee of the capital market refinancing scheme is set to prepare a proposal to relax some conditions for borrowers to ensure complete utilisation of the fund. The committee’s plan to work for relaxing conditions has come as a substantial amount of the fund still remains undisbursed. According to information of the supervisory committee, out of Tk 9.0 billion, Tk 2.57 billion remained undisbursed as of March 14. Mohammad Saifur Rahman, the convener of the supervisory committee said they would submit a proposal for relaxing some conditions to the finance ministry soon. “We want ensure the complete utilisation of the fund. That’s why the committee will sit soon for preparing a proposal that will be submitted to the ministry,” said Rahman, also an executive director of Bangladesh Securities and Exchange Commission (BSEC). According to Rahman, their proposal may include the reduction of interest rate and extension of tenure of the scheme. “Some borrowers are also interested to take loans for second time. Our proposal may include the provision of taking loans for second time,” Rahman said.
Inflation went up 16 basis points to 5.31 percent last month due to a rise in the prices of food items, especially beef and edible oil. Food inflation crept up 31 basis points to 6.84 percent in February, according to Bangladesh Bureau of Statistics. The price of per kilogram of beef and per litre of soybean oil rose about 10 percent last month from a year earlier, according to Trading Corporation of Bangladesh. Meanwhile, non-food inflation declined 3 basis points to 3.07 percent. “Overall inflation rose last month due to a hike in beef and edible oil prices,” said Planning Minister AHM Mustafa Kamal yesterday. Though inflation is still below the government’s target of 5.8 percent, Bangladesh Bank announced a cautious monetary policy instead of an expansionary one in anticipation of a rise in inflation.
Implementation of the annual development programme remained dismal during the first eight months of the current fiscal year due mainly to poor performance of the ministries and divisions which got the highest allocations in the budget. According to data of the Implementation Monitoring and Evaluation Division of the planning ministry, 56 development budget implementing ministries and divisions could spend only 36.91 per cent or Tk 45,532 crore of the total ADP outlay of Tk 1,23,346 crore in July-February of the FY 2016-2017. The total ADP outlay, however, was downsized to Tk 1,19,296 crore in February because of the failure of the agencies in spending for implementation of the development projects, especially the foreign funded ones. IMED officials said although the rate of ADP implementation in July-February this fiscal was 4 percentage points or Tk 10,857 crore higher compared with that of the same period of the last FY 2015-2016, the 39 per cent spending in eight months was not acceptable.
Two more economic zones in Narayanganj, Chittagong
The government is set to acquire and develop about 1,000 acres of land in Narayanganj and Chittagong at a cost of Tk 762 crore with the view to setting up two economic zones for foreign and local investors. Of the lands, 491 acres will be acquired in Araihazar of Narayanganj and 500 acres in Mirersarai in Chittagong. The project, which will be implemented by the Bangladesh Economic Zones Authority, got the approval from the Executive Committee of National Economic Council yesterday. The government plans to set up about 100 special economic zones all over the country, Planning Minister AHM Mustafa Kamal told reporters after the meeting. “This will stop wastage of agricultural lands,” he added. Executive Chairman of BEZA Paban Chowdhury told The Daily Star that the government will develop the lands for now and will decide later who will set up industries in the zones.
Data mismatch makes budgetary exercise difficult: Muhith
Finance Minister AMA Muhith, now preparing for authoring the next budget, Tuesday said the data produced by statistical organizations are ‘not reliable and conflicting’ with other official statistics. “Our statistical data are ‘not reliable and conflicting’ with other official data–it needs huge improvement,” he told reporters after a second pre-budget exchange-of-views meeting with leading economists and professionals at the state guesthouse Padma. The finance minister said the data produced by planning division and statistics division along with other key divisions differ significantly. “I have already formed a committee to look into the matter. It is not difficult to improve. There is a need for coordination among the agencies,” he told the meet. He dismissed country’s land management as a “total failure” despite the fact that he has been trying in the first and second tenures of the Awami League government to improve upon such a situation.
The government awarded entrepreneurs for their contribution to promoting jute products at the recently held jute fair. The five-day fair began on March 9 and ended on March 13 at Krishibid Institution Bangladesh in the capital organised by Jute Diversification Promotion Centre. A wide array of jute products were showcased in the fair that drew a total sale of jute goods around Tk3.65 crore and a supply order worth around Tk4.12 crore. A total of 95 entrepreneurs, who participated in the fair received crests on the concluding day of the fair. The fair was held in conjunction with the celebration of first-ever National Jute Day and also for expanding its domestic and international market since the sector has huge potentials for economic development. The award recipients include CORR The Jute Works, Sonali Aansh Industries, Prokritee, Deshi Mart, Fine Fair Curve, Torongo, Brinta Jute Holding Crust and Golden Grid.
Mobile operators Grameenphone and Robi Axiata Limited want implementation of Tech Neutrality before announcing 4G auction to ensure quality of service. The major market players in the mobile telecommunication industry have made the demand while Bangladesh Telecommunication Regulatory Commission (BTRC) is preparing for 4G auction. According to mobile operators, technology neutrality would allow mobile operators to use the 900 MHz and 1800 MHz bands for 3G services. As the 900 MHz and 1800 MHz bands provide better coverage than 2100 MHz, mobile internet services could be provided more efficiently in rural areas. Ekram Kabir, vice president, communications and corporate responsibility, Robi Axiata Limited, said spectrum is also one of the basic and key requirements for launching 4G/LTE. Hence the governmnet should consider spectrum auction and technology neutrality in all existing bands prior to issuing the 4G/LTE License, he said, adding that without compatible mobile devices, consumers will not be able to experience the 4G/LTE.
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