Ailing Farmers Bank gets BDT 960 million from Bangladesh Bank (BB)
Cash-strapped Farmers Bank yesterday got a shot in the arm after the Bangladesh Bank agreed to provide short-term loan (repo) amounting to BDT 960 million by way of repo to meet its instant liquidity demands. On Monday, the bank had just BDT 6.5 million in its current account with the central bank. Earlier this month the bank twice failed to honor a cheque worth BDT 354 million presented by the Bangladesh Telecommunications Company Ltd due to fund shortage
Default loans leap over BDT 800 billion mark
Non-performing loans (NPLs) in Bangladesh’s banking sector surged over BDT 800-billion mark for the first time at the end of September last. According to the latest statistics from the central bank, the amount of NPLs, officially termed classified loans, rose to BDT 803.07 billion at the end of last September from BDT 657.31 billion a year back. Thus, the default loans climbed 22.15% up the previous mark on a year-on-year basis. The Bangladesh Bank data also showed that the volume of default loans in the country’s banking sector last declined at the end of December 2016 before a steep climb. •. In a continuous rise in every quarter since then, the volume scaled a new high at the end of the third quarter (July-September) this year (2017). According to the figures from Bangladesh Bank, a total of 475.67 million mobile-based transactions took place in the country during the JulySeptember period of this year, the total value of which was 771.01 billion. The total non-performing loans accounted for 10.67% of the total outstanding loans from the banking sector worth BDT 7527.30 billion counted at the end of September 2017. Dr Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh said, “Rise in non-performing loans beside slowdown in deposit growth is gradually reducing the loan-able funds of the banks,” he said while talking to the FE Tuesday. “This will force the interest rates to shoot up in the near future and we will lose the benefit of the current lower interest rates.”
Parliament (JS) body favors amendment to banking law
A parliamentary watchdog has favored allowing four members of a family in the banks’ board of directors amid widespread criticism about the government move. The parliamentary standing committee on finance ministry also backed another proposal for increasing the tenure of directorship to nine years from existing six years. The proposal will be placed before the parliament today (Wednesday). The amendment bill is expected to be passed in the current session of parliament. Earlier, the JS body held a discussion on the bill on October 29, raising voice against the amendment proposals. It also viewed that it will be a dynasty, creating scopes for looting. According to the minutes of the 21st meeting, the committee chairman had stressed that the provisions should be re-considered.
BB gives Lafarge 90 days to remit Tk 504cr
Bangladesh Bank has kept the valuation of Holcim shares unchanged at Tk 57,202 — 47 percent lower than the price proposed by Lafarge — in its final approval, casting a pall of uncertainty on the proposed merger of the two cement giants. The central bank has given Lafarge 90 days more to remit the money to Amsterdam-based Holderfin, whose shares in Holcim Cement Bangladesh it is acquiring. As per the approval given back in September 17, Lafarge can remit a total of Tk 504.78 crore for 88,244 shares of Holcim within one month, meaning the process was supposed to be completed by October 17. But Lafarge could not do it. Lafarge had valued each share of Holcim at Tk 1.06 lakh and it sought permission from the BB to remit Tk 936 crore. Earlier in October, Lafarge asked the BB to review its decision, according to a position paper of the company.
Meghna Bank MD resigns
Mohammed Nurul Amin, managing director of Meghna Bank, one of the nine new banks, has stepped down recently citing personal reasons. The development comes at a time when the new banks were hitting the headlines due to poor performance and a lack of good governance in their boards. Amin resigned on November 2 and the board accepted the resignation on November 19, officials said. HN Ashequr Rahman, chairman of the bank, confirmed the resignation, which will be effective from November 30. Amin has been with the bank since 2014 and was due to serve for another year.
United Commercial Bank opens 171st branch in Munshiganj’s Balasur
The United Commercial Bank Limited (UCB) has opened its 171st branch at Balasur in Munshiganj. Anisuzzaman Chowdhury, chairman of executive committee of UCB, inaugurated the opening ceremony of the branch on Tuesday.
Four brokerages fined BDT 7 million for rule breach
The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday slapped BDT 7 million in fine in total on four brokerage houses for breaching securities rules. The commission fined Sharp Securities BDT 250 thousand as a BSEC inspection found that the firm committed a number of irregularities including providing loans to relatives of its directors and staff, giving margin loans beyond the BSEC-allowed limit and having a shortage of capital in its consolidated customer account. The brokerage house also provided loans as a dealer and took out cash of more than BDT 5 hundred thousand at a time in breach of securities laws. The BSEC imposed penalty of BDT 2 million on Globe Securities Limited as the regulator found a shortage of capital in the brokerage house’s consolidated customer account in violation of rules 8A(1) and 8A(2) of Securities and Exchange Rule, 1987. A BSEC inspection also found that the securities house opened beneficiary owners’ accounts in the name of approved representatives, breaching the regulations of the DSE and the BSEC. The commission also fined SB Securities BDT 1.5 million as a BSEC inspection found that the firm breached a number of BSEC rules and regulations and it also found shortage of capital in SB Securities’ consolidated customer account. The BSEC also penalized Khurshid Securities Limited BDT 1 million as its inspection found a shortage of capital.
Q1 revenue collection Tk 3,355cr short of target despite good growth
Tax receipts by the National Board of Revenue fell short of target by Tk 3,355 crore in the first quarter of the current fiscal year 2017-2018 though the collection registered a healthy growth in the period compared with the same period of last FY. According to official data of the revenue board, tax officials managed to collect Tk 43,745 crore in July-September of the year against the target of Tk 47,100 crore set for the months. Overall revenue collection grew by more than 20 per cent in the first three months of the fiscal year compared with that of the same period of last FY 2015-2016 when revenue collection was Tk 36,436 crore, according to the data. Officials of the revenue board said that though the revenue collection witnessed a healthy and satisfactory growth, it was not enough to achieve the target of Tk 2,48,190 crore with 34 per cent growth set for the entire fiscal year. They said that the government set an ambitious target for the NBR without considering the historical trends and economic health of the country.
Govt to finally relax rules for trade unionism
Under pressure from the international community and rights groups, the government has finally agreed to ease the requirements for forming trade unions at factories in the next amendment of the labour law. At present, signatures of at least 30 percent of the workers in the factory are needed to form a trade union — an uphill task for union leaders. Furthermore, many workers do not want to participate in the election process of trade unions out of fear of getting sacked. The requisite number of signatories might now be brought down to 15-20 percent. It might be even lower for large factories. The decision came at a meeting of Commerce Minister Tofail Ahmed, Law Minister Anisul Huq and State Minister for Labour Mujibul Haque Chunnu at the secretariat yesterday. At the meeting, the ministers discussed the recent feedback from the International Labour Organisation on the draft of the amended labour law that it forwarded in August.
Summit Liquefied Natural Gas (LNG) signs USD 100 million contract with Geocean, MacGregor
Summit LNG Terminal has signed a USD 100 million turnkey contract with the consortium of Geocean SAS and MacGregor to build infrastructure for its floating LNG storage and regasification terminal in Cox’s Bazar. The project is scheduled to be completed in 16 months. Summit Power International is the largest independent power producer in Bangladesh, representing approximately 21% of the private power market with consolidated generating capacity of 1,160 MW
Accenture closes Dhaka office
Accenture, a global professional services company, left Bangladesh shutting its Dhaka office on Monday without paying the current month’s salary and other benefits to its staff members, according to some employees. Some 300 employees staged demonstration in front of Accenture’s office in Gulshan and threatened to go on a hunger strike to realise the dues and benefits, Shahin Ahmed, general secretary of the Accenture Employees Union Bangladesh, said yesterday. The demonstration will continue until the demands are met, he said. The announcement of the closure of operations came from a tri-party talk among the Accenture management, employee leaders and government representative. The management of the firm sent a common email to its employees Sunday night, communicating that it was closing the office
BTRC won’t cooperate with Teletalk over dues
Bangladesh Telecommunication Regulatory Commission has initiated a move to refrain from supporting and giving any sort of approval to state-owned mobile phone operator, Teletalk, for non-compliance with an order of the telecom regulator. An instruction of the commission in this connection was circulated among different departments of the commission on Tuesday, an official of the commission told New Age. He said that the commission imposed the regulatory embargo as Teletalk refrained from paying Tk 67,61,200 penalty that was imposed on the operator in 2016 due to its failure to block more than 1,500 SIM cards, used for terminating illegal VoIP calls. As per the telecom rules, mobile operators are bound to block a SIM card within two hours that would be detected by the BTRC’s SIM Box Detection System for using illegal VoIP calls. On October 22 this year, a BTRC letter asked the state-owned mobile phone operator to clear the penalty within seven working days.
Local and Global Stock Indices
|Index Name||Close Value||Value Change||Percentage Change|
|DSEX||6281.87||↓ 37.25||↓ 0.59%|
|DJIA||23,590.83||↑ 160.5||↑ 0.69%|
|FTSE100||7411.34||↑ 21.88||↑ 0.30%|
|Nikkei 225||22,623.23||↑ 206.75||↑ 0.92%|
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$57.74||↑ 0.91||↑ 1.60%|
|Crude Oil (Brent)*||$63.08||↑ 0.51||↑ 0.82%|
|Gold Spot*||$1,279.82||↓ 0.79||↓ 0.06%|
Major Currencies Exchange Rates Movement in Last Seven Days
|USD 1||BDT 83.22|
|GBP 1||BDT 110.28|
|EUR 1||BDT 97.68|
|INR 1||BDT 1.28|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.