Moniruzzaman appointed Bangladesh Bank deputy governor
The government on Tuesday appointed SM Moniruzzaman as deputy governor of the Bangladesh Bank. According to a notification by the Bangladesh Bank and Financial Institution Division, Moniruzzaman has been appointed as the deputy governor for the next three years on contractual basis. Currently Moniruzzaman is serving as an executive director of the central bank. The government was looking for eligible persons to fill the vacuum in upper level of the bank after sacking its two deputy governors Abul Kashem and Naznin Sultana in March following the US$ 101 million reserve heist in the central bank.
Tighter macroprudential actions in financial regulation may create the scope of ‘regulatory arbitrage’ with destabilising impacts including credit squeeze. Such a forewarning came at a summit meet Tuesday in Dhaka on present-day banking that is marked by a switch from the traditional to digital transactions associated, among others, with cyber-security risks. Elaborating on possible downside effects of tighter macroprudential actions, Bangladesh Bank Deputy Governor S.K. Sur Chowdhury said, “Such a thing might be difficult to tackle, if financial sector regulatory framework is not robust, well-designed and sufficiently staffed.” Macroprudential policy, which is a financial regulatory term, usually refers to a range of measures used for identifying, monitoring and preventing risks in the financial system that may threaten financial stability.
Country’s two private commercial banks are set to open their branches in Kingdom of Saudi Arabia (KSA) soon as the Bangladesh Bank (BB) has given them no-objection certificates (NoCs). The authorities of Standard Bank Ltd (SBL) and Social Islami Bank Limited (SIBL) will open their branches in Makkah and Jeddah respectively in line with the condition/policy of the Islamic country. SBL and SIBL will be operating their branches in KSA as per conventional and Shariah-based banking, high officials of the two private banks said, adding that they will take necessary steps to open branches as early as possible. Earlier, the Saudi government allowed Bangladeshi banks to open branches there to facilitate sending home remittances by Bangladeshi expatriates.
The government has introduced one more short-term treasury bill (T-bill) to manage its cash in a better way, officials said. First auction of the newly-introduced 14-Day T-bill will be held at the Bangladesh Bank (BB) today (Wednesday) as per the decision of the Ministry of Finance (MoF). “The government is expected to borrow BDT 3.0 billion through the new T-bill auction,” a BB senior official concerned told the FE on Tuesday. The short-term T-bill will help the government to handle short-term cash management properly, the official added.
The finance ministry has sought Tk 30 billion from the Bangladesh Petroleum Corporation (BPC) as condition to providing state guarantee for ITFC credits. The BPC owes the exchequer some Tk 263 billion as it took the money to foot oil bills over the past 15 years. Seeking such money by the ministry of finance (MoF) from another government organisation as a requisite for giving state guarantee is, however, a new phenomenon in the country. The payment is sought from the hefty profit that the corporation has been making in oil trading in recent years.
Ministry of Finance demands BDT 30 billion from BPC for credit underwriting
The finance ministry has sought BDT 30 billion from the Bangladesh Petroleum Corporation (BPC) as condition to providing state guarantee for ITFC credits. The BPC owes the exchequer some BDT 263 billion as it took the money to foot oil bills over the past 15 years, he added. Seeking such money by the ministry of finance (MoF) from another government organisation as a requisite for giving state guarantee is, however, a new phenomenon in the country, a senior BPC official told the FE.
EU for ensuring compliance in export-oriented sectors
A visiting delegation of the European Union (EU) Parliament emphasized bringing the country’s other export-oriented sectors under compliance, especially for ensuring workplace safety and labour rights. Once Bangladesh graduates to a MIC, the country’s trade relation with the EU will change. Bangladesh has to meet some criteria, including those on labour rights and environmental issues, to avail the GSP plus benefit.
The Asian Development Bank has unveiled a new country strategy for Bangladesh for the next five years in order to help the country diversify its economy and accelerate rural and balanced regional development. It would adopt a broad-based approach for the Country Partnership Strategy period spanning 2016-20 such that it can respond flexibly to Bangladesh’s needs and demands. Under the new partnership strategy, which was unveiled yesterday at a programme at the National Economic Council in Dhaka, the ADB will provide $8 billion to Bangladesh, up 60 percent from the previous five-year programme.
Bangladesh is on track to receiving the GSP Plus status from the European Union when it graduates to the developing country bracket in 2021. As a least-developed country Bangladesh has been enjoying zero-duty benefit to the EU under its Everything but Arms scheme since 1971. But once it becomes a developing country, Bangladesh will no longer be eligible for the privilege. The GSP Plus scheme will be applicable for Bangladesh then, for which the country will have to fulfil some conditions. Strengthening workplace safety, improved labour rights, saving the environment and reduction of corruption are some of the major conditions for receiving the GSP Plus status from the EU, where 60 percent of Bangladesh’s garment prod. Bangladesh’s claim on the GSP Plus status will be stronger after 2017, when all 2,200 garment factories will complete remediation works, Rahman said at a joint press briefing with the visiting EU trade delegation at the capital’s Westin Hotel yesterday.
Bangladesh Securities and Exchange Commission yesterday gave the green light to Shepherd Industries to raise BDT 200 million from the public. The sweater yarn manufacturer will float two crore ordinary shares of BDT 10 each through initial public offering (IPO), the stockmarket regulator said in a statement. The company will use the IPO proceeds for setting up a washing plant, purchasing machinery for the washing plant, expanding the effluent treatment plant and repaying bank loans. The company’s last five years’ weighted average earnings per share stood at BDT 1.44 and net asset value per share at BDT 18.70 in June this year. Alpha Capital Management will manage the IPO.
A severe gas crisis continues to take a toll on production in garment factories in major industrial zones like Savar, Ashulia and Gazipur, said industry owners. The crisis deepened further due to a stoppage of gas supply to the factories from CNG stations in those industrial areas, said a garment factory owner asking not to be named. Savar, Ashulia, Dhamrai and Gazipur are the main industrial hubs for the garment sector. At least 700 factories, especially the small ones, are in big trouble due to the gas shortage. Some of the small factories, which used to run by the gas from the CNG stations, stopped production a week ago and are counting losses now.
Revenue board won’t budge on scrapping package VAT
Despite protest by businesses, the National Board of Revenue (NBR) would prefer to scrap the package VAT system in the next fiscal year after finding poor revenue yield from the measure. According to the available data of the NBR, its VAT wing receives BDT 150-180 million as package VAT annually from the nearly 12,000 small shops across the country while some hundred superstores pay BDT 400 million. The NBR pointed out the package VAT system as a major loophole in the existing VAT-collection system.
The Board of Directors of Summit Alliance Port Limited has approved the opening of a company office in Singapore to maintain close liaison with its international clients. An official disclosure posted Tuesday on the Dhaka Stock Exchange (DSE) website said, “In order to maintain close liaison with the company’s international clients, both existing and potential, having their respective regional office in Singapore as well as to explore new opportunities in different geographical locations within the region, the board felt it necessary to have presence of the company in Singapore.”
Deals of seven private sector power plants likely to be extended by 5-15 years
The government is expected to extend the agreement of seven private sector power plants operated by local and foreign firms to purchase electricity, said officials yesterday. Once the cabinet committee on public purchase in its next meeting approves the agreement extension proposal forwarded by the Power Division, the seven power plants will be able to continue their operations for 5 to 15 years. The agreement expired a couple of months back. Orion Power Meghnaghat Ltd, M/S Khulna Power Company Ltd, M/S Khanjahan Ali Power Company Limited, M/S Acorn Infrastructure Service and Dutch Bangla Power and Association were among the power plants mentioned.
Steel production to jump on big infrastructure projects
Bangladesh will witness a dramatic increase in steel manufacturing in the coming years as consumption is expected to rise rapidly to cater to large infrastructure projects and higher demand across the country. Production will rise to more than six million tonnes a year in a couple of years from four million tonnes now, said Manwar Hossain, managing director of Anwar Group. Some 270 people from 12 countries including India, Singapore, the US, Japan, Korea and some European countries took part in the conference organised by SteelMint Events, an event management company based in India. The event enabled major suppliers of raw materials and technology from all over the world to network with steel, cement and power producers and traders in Bangladesh, said Dhruv Goel, managing director of SteelMint.
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