Important Business News Extracts – October 11, 2017
BB sells $25m to two banks as demand grows
The central bank sold $25 million more to two commercial banks directly on Tuesday to meet the growing demand for the greenback in the market, officials said. “Today, we’ve sold the US currency to the banks at market rate to settle their import payment obligations, particularly for food grains,” a senior official of the Bangladesh Bank (BB) told the FE. However, the exchange rate of Bangladesh Taka (BDT) remained unchanged against the US dollar in the inter-bank forex market on the day. The US dollar was quoted at Tk 80.80 each, unchanged from the previous level, according to the market operators. The BB official hinted that the central bank would continue providing such support to the banks in line with the market requirement.
Growth of industrial loan disbursement fell to a five-year low in fiscal 2016-17 despite a sharp decline in interest on lending. Industrial loan disbursement registered growth of 13.51 percent in the last fiscal year compared to 20.77 percent a year ago, according to data released by the central bank yesterday. An expert and a banker said poor infrastructure and a lack of energy held back new private investments and expansion of existing ones despite political stability prevailing for over two years. Together, banks and non-bank financial institutions disbursed Tk 300,672 crore in FY17, up from Tk 264,887 crore a year ago. They disbursed Tk 219,339 crore in FY15.
Both outstanding and classified loans of state-owned enterprises (SoEs) to five state-owned commercial banks (SoCBs) are on the rise again due to delay in making repayments, officials said. Many of these SoEs fail to pay back loans to the SoCBs as they continue incurring losses for years, they added. As of August last, outstanding debt liabilities reached Tk 83.22 billion, up by Tk 2.17 billion from the previous month. Besides, SoEs’ classified loans increased by Tk 770 million to Tk 2.76 billion in August from Tk 1.99 billion in July. Statistics show that outstanding loans of SoEs with Sonali Bank stood at Tk 52.33 billion in August while with Janata Bank Tk 19.01 billion, Agrani Bank Tk 2.25 billion, Rupali Bank Tk 7.51 billion and BASIC Bank Tk 2.11 billion.
The telecom regulator has recently formulated a draft guideline for pricing of the mobile financial services (MFS), recommending introduction of session-based pricing for the unstructured supplementary service data (USSD) facilities on MFS platforms. The proposed ceiling under this session-based pricing is Tk 0.85 per session, whereas the span of each session will be 90 seconds, according to sources. The Bangladesh Telecommunication Regulatory Commission (BTRC) has already sent the draft guideline for approval of the Post and Telecommunications Division, BTRC officials said. If approved, the new guideline will replace the revenue sharing model that currently exists for MFS in the country. Sector insiders have opined that this would also be an apparent victory for the mobile operators, who have long been demanding introduction of session-based pricing for MFS.
Foreign investor may acquire minority stake in bKash
A foreign investor may acquire a minority shareholding in bKash, Bangladesh’s largest mobile financial service provider. Brac Bank that owns 51 percent of bKash announced it through a posting on the website of Dhaka Stock Exchange yesterday. The bank said its subsidiary bKash has entered into a non-binding ‘summary of terms’ under which a strategic investor may acquire a minority shareholding in bKash. The proposed acquisition, however, remains subject to satisfactory due diligence, negotiation, completion of a definitive share acquisition agreement and compliance with all applicable regulatory requirements, according to the announcement. The Daily Star contacted bKash officials, but they declined to make comments on the issue.
Standard Chartered Bank (SCB) Malaysia has appointed Abrar A Anwar as its managing director and chief executive officer effective from November 1. The former Standard Chartered Bangladesh CEO has 26 years of experience in corporate and investment banking in Bangladesh, India and the UK. Abrar joined the bank in January 2011 and led the corporate client coverage businesses until 2014. He was made the bank’s CEO in January 2015.
Islami Bank to sell property of three SA Group units
Islami Bank has moved to sell off the mortgaged property of three companies owned by Chittagong-based SA Group to recover default loans of Tk 573.74 crore. Through advertisements, the bank has announced an auction to sell off the machinery and a ship of: Sharija Oil Refinery, Sharija Navigation and Kamal Vegetables Oil. Sharija Oil Refinery owes Islami Bank Tk 417.84 crore, while Kamal Vegetables Oil owes Tk 153.16 crore and Sharija Navigation Tk 2.73 crore. “We called the auction as part of the procedure to file a case with the money loan court against the defaulter,” said Arastoo Khan, chairman of Islami Bank. Contacted, Shahabuddin Alam, chairman of SA Group, said: “Islami Bank called the auction following the legal process — the Bangladesh Bank instructed them to do so.”
Brac Bank, Srimangal’s Tea Resort and Museum ink agreement
Brac Bank Limited has signed a new business agreement with Tea Resort and Museum in Srimangal, on Tuesday. Under the agreement, the customers can use any credit or debit card to pay bills at Tea Resort and Museum. The bank’s Head of Retail Banking Nazmur Rahim, and Bangladesh Tea Board Secretary Mohammad Nurullah Noori have signed the agreement on behalf of their respective sides at the bank’s Head Office in Dhaka.
The National Board of Revenue (NBR) is exploring the possibilities of forming a separate revenue armed force for facing the threats and attacks in the process of revenue collection. The proposal came amid reports that the revenue officials had faced attacks by miscreants several times while discharging their duties. NBR arranged a partnership dialogue on its premises on Tuesday with the law-enforcing agencies and other stakeholders to discuss the issue. State Minister for Finance and Planning M A Mannan attended the dialogue as the chief guest. Senior Secretary of Internal Resources Division (IRD) and NBR Chairman Md Nojibur Rahman chaired the meeting.
Bangladesh’s apparel exports to China and Japan — world’s second-and third-largest economies — fell significantly this fiscal so far as businesses failed to reap benefit of duty-free market access. Experts and exporters cited a number of bottlenecks that caused the fall in the first quarter of the current fiscal year compared to that of the corresponding period of last fiscal. The country received US$74.30 million from apparel exports to China in a 10.15 per cent negative growth during the period over that of corresponding period of FY2016-17, according to data available with the Export Promotion Bureau (EPB). Growth in export earnings from Japan also declined, by 9.81 per cent to $170.83 million, during the July-September period of the current fiscal from $189 million fetched in the corresponding period of last fiscal. Exporters and experts found absence of proper networking from the industry level to increase the bilateral trade with China and Japan, resulting in the setback.
The garment exporters’ profitability has hit a rock-bottom thanks to the continued downward price pressure by the international retailers amid rising production costs. “In fact we are just keeping our businesses afloat,” said a garment manufacturer who exports apparel items worth nearly $500 million a year. The price of garment items has been falling 5-8 percent every year whereas the cost of production is increasing 15-18 percent, he said.
Shipping Minister Shajahan Khan has asked the people concerned to complete the land acquisition of Payra port soon, reports BSS. He made the directive while addressing a meeting of the Payra Port Authority (PPA) at the Shipping Ministry on Monday, said an official release. Shipping Ministry Secretary Md Shahadat Hossain, PPA Chairman Commodore M Jahangir Alam and PPA Member (harbour and marine) Commodore M Saidur Rahman were present at the meeting, the release added.
Tk 194.38m projects undertaken to boost tea production
The government has taken three projects involving Tk 194.38 million for separate areas of the country to increase tea production which is expected to help earn more foreign currencies after fulfilling the local demand, reports UNB. The projects are: Extension of small holding tea cultivation in northern Bangladesh, eradication of rural poverty by expanding small holding tea cultivation in Lalmonirhat and extension of small holding tea cultivation in the Chittagong Hill Tracts. According to an official document, the extension of small holding tea cultivation in northern Bangladesh will be implemented in greater Panchgar, Thakurgaon, Lalmonirhat, Dinajpur and Nilphamari districts involving Tk 49.76 million.
Major Currency Exchange Rate Movement in Last Seven Days
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