State-owned banks to get capital replenishment

The government decided to funnel money into seven state-owned banks (SoBs) again to meet their capital shortage to some extent. Officials said a decision to this effect came Sunday from a meeting at the ministry of finance with Finance Minister AMA Muhith in the chair. State Minister for Finance M A Mannan, Bangladesh Bank governor Fazle Kabir, secretary of the banks and financial institutions division Eunusur Rahman and chief executives of the banks attended the meeting. However, the meeting did not take a concrete decision as to how much each of the banks will be fed against their total capital shortfall worth Tk 150 billion. Presently there is a Tk 20 billion budgetary allocation to replenish SoBs’ capital and meet other needs. A decision will be taken next month in this regard, Mr Muhith told newsmen after the meeting. Meeting sources said apart from the capital shortage of banks, the provisioning shortfall, and their bond-issuance eligibility and capacity also came up for discussion. In the meeting BASIC bank managing director Khondoker Md Iqbal made a power-point presentation where he portrayed the necessity of floating Tk 26 billion worth of bond to meet capital shortfall.

Source:
http://www.thefinancialexpress-bd.com/2017/03/20/64798/State-owned-banks-to-get-capital-replenishment
http://www.dhakatribune.com/business/banks/2017/03/19/muhith-basic-bank-get-special-treatment/
http://en.prothom-alo.com/economy/news/142719/Swindling-leads-to-Tk-150b-capital-shortfall

Govt hints loss-making state banks may be privatized

The continuous losses of state-run banks prompted the government to consider privatising them all, expect one, said officials yesterday. The issue of sustaining the taxpayer-funded lenders was discussed at a meeting in the presence of Finance Minister AMA Muhith, managing directors of all the seven state banks, governor of Bangladesh Bank, and the finance and banking secretaries. They reflected upon the capital shortfall of five state-run commercial banks and two state-run specialised banks. After the meeting, Muhith told reporters, “Every government-run bank is weak. Every bank has some shortfall whether it is in case of capital or provisioning.” Last year, six state banks logged operating profits of Tk 2,010 crore, down 37 percent from a year ago. After provisioning and tax payments, the state banks registered a net loss of Tk 511 crore for the year, which was Tk 125 crore in 2015. Two other state-owned specialised banks — Krishi Bank and Rajshahi Krishi Unnayan Bank — counted Tk 418 crore in losses last year, against Tk 167 crore in 2015. Privatising the state banks has been a long-standing demand of the experts. Last year, Mohammed Farashuddin, former central bank governor, and Sadiq Ahmed, former director, called on the government to immediately privatise the state banks and take drastic measures against public enterprises to stop them from bleeding the economy.

Source: http://www.thedailystar.net/business/govt-hints-loss-making-state-banks-may-be-privatised-1378459

Banks’ SME loan disbursement target raised by 18pc for 2017

Bangladesh Bank has set the SME loan disbursement target at Tk 1,33,853.59 crore for 2017, which is 17.93 per cent higher than the target set for the previous year. A BB official told New Age on Sunday that banks were now showing an increased interest in disbursing small and medium enterprise loans as the businesspeople were reluctant to set up large-scale industrial units amid a dull business situation in the country. According to the latest BB data, the target of SME loan disbursement by state-owned commercial banks increased to Tk 15,508 crore for 2017 from Tk 13,434 crore for 2016, that by specialised banks to Tk 1,030 crore from Tk 816 crore, that by private commercial banks to Tk 52,887 crore from Tk 44,564 crore, that by Islamic banks to Tk 55,947 crore from Tk 47,215 crore, and that by non-bank financial institutions to Tk 7,172 crore from Tk 5,457 crore. The foreign commercial banks, however, cut their SME loan disbursement target to Tk 1,306 crore for 2017 from Tk 2,015 crore for 2016. SME loan disbursement by banks has continued rising in recent years as the majority of banks have been focusing on the sector as a low-risk business zone.

Source : http://www.newagebd.net/article/11581/banks-sme-loan-disbursement-target-raised-by-18pc-for-2017

CID gets more time to submit BB heist probe report

Dhaka Metropolitan Magistrate AKM Moinuddin Siddique on Sunday extended the deadline to April 18, reports bdnews24.com. Earlier, case investigation officer and Criminal Investigation Division (CID) Additional Superintendent Raihan Uddin requested the extension before the court. CID has failed to submit the report, missing 12 different deadlines after it was ordered to conduct the investigation on Mar 16 2016, said Court Police General Recording Officer Sub-Inspector Jalal Uddin. CID had previously received an extension on Feb 15. On February last year, $81 million from Bangladesh’s foreign exchange reserves was stolen from the New York Federal Reserve and much of it was transferred to the Philippines branch of Rizal Commercial Banking Corp. Bangladesh has, so far, managed to retrieve $15 million of the stolen funds and is working to recover the rest. In addition to the CID investigation, another probe, led by former Bangladesh Bank Governor Mohammed Farashuddin, is being conducted by the Ministry of Finance.

Source: http://www.thefinancialexpress-bd.com/2017/03/19/64739/CID-gets-more-time-to-submit-BB-heist-probe-report

Mercantile Bank to form new unit for mobile financial services

Mercantile Bank will set up a subsidiary company to run its mobile financial services (MFS) in an effort to become a top player in the field. “Our services will be driven by an independent company that will be owned by the bank,” said Adil Raihan, deputy managing director of Mercantile Bank, which now runs MFS under the brand name MYCash. The decision was taken at the bank’s board meeting on Thursday. MFS is different from core banking and so, it is better to run the service by a dedicated company, where professionals and experienced people will operate it, Raihan said. On the paid-up capital and launch of the new company, he said these are subject to regulatory approval by Bangladesh Bank. Mercantile Bank first introduced the MFS under the brand name MPay in 2012, which was re-launched as MYCash in 2014. About Tk 30 crore to Tk 40 crore is transacted through this service every month. Through MYCash, the bank provides customers with different services, including cash-in, cash-out, mobile top-up, deposit, fund collection, salary disbursement and merchant payment.

Source: http://www.thedailystar.net/business/mercantile-bank-form-new-unit-mobile-financial-services-1378432

Financial services elude half of rural households

Almost half the rural households remain outside the reach of financial markets despite expansion of microfinance over the last two decades, according to a study by Brac. The number of rural households borrowing money from the financial market increased to 48 percent from 38 percent during 1988-2014, according to a research styled ‘NGOs and rural credit market’. Abdul Bayes, director of Research and Evaluation Division of Brac, presented the research findings at a seminar on NGO and development at Brac Centre in Dhaka yesterday. The share of households taking loans from NGOs increased from 8 percent in 1988 to 49 percent in 2000 and 70 percent in 2014. The high-cost informal credit market has shrunk but about a fourth of households still take loans from informal sources. The market share of informal credit narrowed from 71 percent in 1988 to 23 percent in 2014. The access to credit for the landless households expanded more than the landowning households. In the last two decades, the share of landless households in the credit market improved from 38 percent to 54 percent, while it went from 40 percent to 42 percent for landowning households, according to the study.

Source: http://www.thedailystar.net/business/financial-services-elude-half-rural-households-1378444

Deposits in school banking accounts Tk 1,021 crore

Total deposits in the bank accounts owned by schoolchildren in the country increased to Tk 1,020.79 crore as of December 31 from that of Tk 982.59 crore as of September 30 last year. A Bangladesh Bank official told New Age on Thursday that deposits in the school banking accounts increased in recent months as banks had recently taken a number of initiatives to facilitate opening such accounts. He said that banks were now trying to open lower-cost savings accounts like students accounts that resulted in an increase in the number of schoolchildren accounts and the deposits in the accounts under the school banking programme. The BB data showed that the number of schoolchildren bank accounts increased to 12.57 lakh as of December 31 from 12.55 lakh as of September 30, 2016. The number was 10.34 lakh as of December 31, 2015. According to the BB official, banks usually count more interest rates for their fixed deposit schemes than they do for school banking accounts. Banks are now reluctant to open FDRs as they have been facing huge excess liquidity for long due to the ongoing dull business situation in the country, he said. Against the backdrop, banks have taken initiatives to collect lower-cost fund from clients, he said.

Source: http://www.newagebd.net/article/11444/deposits-in-school-banking-accounts-tk-1021-crore