Bangladesh Bank seeks info on banks’ investment in commercial papers
The central bank has asked all commercial banks to provide information about their investment in commercial papers (CPs) and relevant other issues by October 30, to check if any risk is involved. “We’ve already sent a letter in this connection to the banks and asked them to submit information on investment in the CPs within the stipulated timeframe,” a senior official of the Bangladesh Bank (BB) told the FE Sunday. The banks will have to provide such information as per prescribed format which was included in guidelines on CP for the banks, issued by the central bank on September 25 last. Under the guidelines, the Department of Offsite Supervision (DOS) of the central bank has to be informed about issuing company details, credit rating of issuer, amount of credit enhancement, rate of interest and date of maturity of the CP.
Country’s overall trade deficit increased slightly in the first two months of the current fiscal year (FY) 2016-17 for higher import payments against relatively lower export earnings, officials said. The trade deficit rose by 5.0% or USD 25.0 million to USD 525.0 million during the July-August period in FY 17 from USD 500.0 million in the same period of the last fiscal year, according to the central bank’s latest statistics, released Sunday. “The trade deficit may widen further in the coming months if the declining trend in the country’s export earnings, as calculated in the month of September last by the Export Promotion Bureau (EPB), continues,” a senior official of the Bangladesh Bank (BB) told the FE. The overall export earnings fell by 5.63% to USD 2.24 billion in September 2016 from USD 2.37 billion in the same month of 2015. During the period under review, the country’s overall import payments rose to USD 6.23 billion from USD 5.80 billion in the same period of the FY 16. The trade gap due to imports outstripping exports affected a little bit the country’s balance-of-payments situation. The central banker said the import payments may rise in the coming months also as implementation of different infrastructure-development projects, including Padma Bridge, is being expedited.
China is expected lend Bangladesh a record $40 billion and the loan agreements is likely to be signed during President Xi Jinping’s Bangladesh tour next week, officials have hinted. “Loan agreements of a record amount will be signed,” State Minister for Finance and Planning MA Mannan has said. Xi will visit Bangladesh from October 14. He is scheduled to arrive at Hazrat Shahjalal (RA) International Airport in the morning. Mannan would not disclose the total amount of credit. He said China expressed its willingness about extending the loans after seeing the possibilities that lie in Bangladesh.
Foreigners will come under a coordinated databank just after arrival so they could be traced until checkout and tax evasion by any of them prevented, officials said. They said a databank having networking with relevant nodal points would be developed under the National Board of Revenue (NBR). The NBR recently formed an 11-member technical committee to coordinate outsourcing of the databank-maintenance software. Its databank will interlink with the BIDA and the immigration authority so that the taxmen can find out the foreigners evading payment of tax. Currently, the NBR has no such tool to trace foreign taxpayers and maintain their records through interlinking with the other departments.
Garment workers to get BDT 0.5 million for accidents
Garment workers are set to get BDT 0.5 million upon their retirement or in case of industrial accidents once the government implements a rule in December, said Mujibul Haque Chunnu, state minister for labor and employment. Of the amount, BDT 3 lakh will come from the Workers’ Welfare Fund (WWF) created last year for the garment sector and BDT 0.2 million from the insurance scheme for workers, Chunnu said. The government formed the WWF last year for the benefit of garment workers, who get BDT 0.1 million in case of any industrial accident. Every garment exporter has to deposit 0.03% from their total earnings from shipments abroad in a year to the WWF. The exporters started contributing to the fund from July. The government will also launch a provident fund for workers of all sectors so that they can draw a handsome amount after their retirement. The minister did not specify when the provident fund will be launched. Chunnu also urged the factory owners to play an active role in strengthening workplace safety as it is not the responsibility of the government only.
BSRM Steels, a unit of Chittagong-based BSRM Group, is going to set up a new melting plant by investing about BDT 7.3 billion to produce MS billets, a raw material for steel. The new unit at Mirsarai in the port city will have a capacity to produce 4.3 lakh tons of MS billets a year, said Tapan Sengupta, executive director of BSRM. The plant—the fourth of its kind for BSRM—is scheduled to be functional by the next one and a half years. “The products will be used for meeting the BSRM Group’s growing demand for billets,” Sengupta said, adding that the existing billet production capacity in the three melting units is 12 lakh tons per year. BSRM Steel is the flagship company of BSRM Group, which started its journey in 1952 and now has a market share of about 20%. BSRM Steel was listed on the stock market in 2009. Each share of the company was traded between BDT 94.5 and BDT 104.5, before closing at BDT 96.1 on Dhaka Stock Exchange yesterday. Its net profit rose to BDT 2.1 billion in 2015, from BDT 1.2 billion a year ago.
Chinese President’s visit: Road, rail in focus under USD 50.0 billion investment plan
Much of the focus would be on development of road and rail infrastructures in Chittagong-Cox’s Bazar and Dhaka-Sylhet corridors under the around USD 50.0 billion investment plan during Chinese President Xi Jinping’s ensuing visit to Bangladesh, sources concerned said. They said the two friendly countries would work out investment of more than USD 20.0 billion for constructing the Karnafuli tunnel, a marine drive, an elevated expressway and rail connectivity in the Chittagong-Cox’s Bazar corridor and a four-lane road and a dual-gauge railway line in the Dhaka-Sylhet corridor. They also said that the investment criteria for these projects would later be dealt with by the concerned agencies and companies as some Chinese companies have already been involved in completing groundwork with the agencies concerned. An official said these would be part of the deal on around USD 50.0 billion to be signed during the Chinese President’s visit as China wants to help in developing a multimodal transportation system in Bangladesh. A further $30 billion will be spent for ICT, power and port projects, among others, officials said.
Local manufacturers and exporters of ceramic products are feeling the pinch after the US suspended a trade benefit for Bangladesh, industry people said. The falling exchange rate, the poor pressure and supply of gas, and no incentives for export of the products are also eroding the sector’s competitiveness, they added. “The cancellation of the GSP (generalised system of preferences) to the US market had a direct impact on us,” said Humayun Kabir, chief executive of Shinepukur Ceramics that accounts for 40.0% of Bangladesh’s exports of ceramic products. Export Promotion Bureau data shows Bangladesh exported ceramic products worth USD 47.58 million in fiscal 2013-14. Exports fell to less than USD43 million in the following year and USD 37.69 million in 2015-16. Bangladesh’s ceramics export in 2015-16 was less than that of nine years ago, although 40 out of the 60 ceramic factories in the country were set up in the last 10 years. Exports also fell short of targets in the first two months of the current fiscal year.
The retail prices of floating glass almost doubled in last four months, following imposition of new minimum import tariff on about 30 types of glasses in the national budget for the fiscal year 2016-17. According to port authorities and glass market insiders, around 50 containers of imported glasses are now lying at the port. Their importers are not releasing the items after the new valuation fearing substantial loss. National Board of Revenue (NBR) issued a Statutory Regulatory Order (SRO) on July 1, imposing new minimum import tariff on 300 products including 30 types of glasses. The glasses include dark blue, green, lake blue, bronze, reflective glass in sheet, clear float glass, tempered and laminated safety glass, and mirror glass. Sector insiders said the price of per square feet mirror glass has increased from BDT 35.0 to 65.0 in last four months in phases. The prices of other glasses have also soared during the period. Bangladesh Glass Merchant Association President Alamgir Hossain said at present there are only two big manufacturers in the country — PHP and Nasir Glass. They are enjoying duopoly by controlling around 60.0% of the more-than-BDT 180.0 billion local float glass market. On the other hand, the country’s oldest glass manufacturer — the state-owned Usmania Glass Factory — and MEB Sheet Glass Industries are producing sheet glass, capturing maximum 10.0% market shares.
The telecom regulator has recently directed the internet service providers to block internet protocol television (IPTV) and video on demand services in the country. Both the services are gaining popularity for entertainment, mostly in urban areas. Bangladesh Telecommunication Regulatory Commission asked the ISPs in a letter to immediately suspend these services. Otherwise, the ISPs will face legal actions, reads the letter. IPTV is a system where television services are delivered using the internet protocol suite over a packet-switched network such as local area network or the internet, instead of being delivered through traditional terrestrial, satellite signal, and cable television formats. Video on demand allows users to select and watch/listen to video or audio content when they choose to, rather than having to watch at a specific broadcast time. IPTV technology is often used to bring video on demand to television and personal computers. ISPs started offering these services last year. Currently, BTRC has no official guideline for IPTV and video on demand services.
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