Three-fourth bankers favor merger of banks: Bangladesh Institute of Bank Management (BIBM) study

Some 72.0% bankers are in favor of reducing the number of banks in Bangladesh through merger or acquisition as their number is high given the size of the economy, according to a survey. About 88.0% of the respondents said mergers, acquisitions or takeovers may be executed to trim the number of banks, particularly the weak ones, found the survey of the Bangladesh Institute of Bank Management (BIBM). The survey, which was conducted through interviews, showed 11% respondents are okay with the existing number of banks, while 17% declined to make comments. Currently, 57 banks are operating in the market. Nine banks were given license in 2013. The report said aggressive lending by banks in the competitive market has caused pileup of bad loans. As of June this year, total default loan stood at BDT 633.7 billion, accounting for 10.06% of the total loan outstanding. State-owned banks accounted for one-third of the total sour loans.

Source:
http://www.thedailystar.net/business/three-fourth-bankers-favour-merger-banks-bibm-study-1475620
http://www.newagebd.net/article/26025/72pc-of-bankers-think-number-of-banks-should-be-cut-study

NBR asks banks to ensure full info in import docs

The National Board of Revenue has asked the country’s commercial banks to comply with the responsive declaration procedures in opening letter of credit and approving other import-related documents for preventing tax evasion and trade-based money laundering. Import consignments with incomplete information in the LC documents will face 100 per cent physical inspection and customs commissioners will have the authority to summon the LC issuing bank officials to be present during the inspection. The customs wing of the NBR on Wednesday issued a set of instructions for the banks to ensure scrutiny of the import documents and requested the Bangladesh Bank governor to inform the banks about the NBR decisions. Responsive declaration of goods will not only prevent duty evasion and trade-based money laundering but also expedite valuation process thus facilitate international trade, customs officials told New Age on October 12. Complying with the responsive declaration procedures will also prevent misdeclaration — under invoicing and over invoicing — by importers, they said.

Source: http://www.newagebd.net/article/26175/nbr-asks-banks-to-ensure-full-info-in-import-docs

Revenue sleuths to probe suspect LCs, invoices

Revenue authorities may launch cent-percent physical inspection of the products in case of incomplete information in any suspect letter of credit (LC) or invoice. Officials said such full-scale Customs probe is conceived as part of government measures for checking alleged trade-based money laundering and duty- dodging. The decision has been taken in a recent meeting of the National Board of Revenue that tossed effective means of thwarting these twin financial crimes. Customs policy member Md Lutfor Rahman chaired the meeting, attended by officials of both the Customs and the commercial banks. The National Board of Revenue (NBR) at the meeting urged the banks to follow a set of rules for checking trade-based both-way money laundering through export and import. In the LC or LC Authorization, the commercial banks have to furnish details of products: their names, HS code, generic names, brand names, commercial names, chemical names, model, art, part number and so. The banks will have to scrutinise the information before invoice certification, the meeting sources said. The meeting addressed the causes of money laundering and duty- dodging that importers or exporters could do through furnishing incomplete information in LC, invoice, packing list of import-export products.

Source: http://today.thefinancialexpress.com.bd/first-page/revenue-sleuths-to-probe-suspect-lcs-invoices-1507999803

BB rejects First Security’s fund transfer appeal

First Security Islami Bank’s plan to purchase floor space in Italy for its exchange house has collapsed after the central bank turned down its request to transfer funds. The bank applied to the Bangladesh Bank in May to purchase about 972 square feet floor space in Rome for €3.6 lakh (equivalent to Tk 3.20 crore). After assessing the proposal, the BB on September 20 in a letter told the 18-year-old bank that it would not be a good business move on its part as its income from sending in remittance is on the wane. In fiscal 2016-17, $511 million of remittance flew in to the country from Italy, up 45.58 percent year-on-year, according to data from the central bank. First Security channelled only 6.80 percent of the sum, down 1.44 percentage points from a year earlier. As per its application to the BB, the bank has to count €24,552 as rent every year to operate its exchange house in the Italian capital. The rent would come down to €15,552 per year if it is able to purchase the floor space.

Source: http://www.thedailystar.net/business/bb-rejects-first-securitys-fund-transfer-appeal-1476502

Ibrahim Khaled: Bankers should protest the new Bank Company Act

Bankers should speak out against the proposed changes to the Banking Company Act 1991 which are set to receive parliamentary approval soon, the former deputy governor of Bangladesh Bank said yesterday. The amendments tabled by the Finance Ministry in the new Bank Company Act were passed by the cabinet on May 8 and include increasing the maximum tenure of the board of directors of private banks from six years to nine years, and allowing four members of a family to sit on a board instead of two. “Because of interference by directors, banks have already been transformed into a ‘grocery shop’ for friends and family members,” former deputy governor Khondkar Ibrahim Khaled said. “If the new law is enacted, then bankers would not be able to work at all. We as citizens are going to have to raise our voices against the amendment to the law and you people (bankers) should protest from your professional position.” The former deputy governor was addressing a research workshop on ‘Exploring Merger and Acquisition in the Context of the Banking Sector of Bangladesh,’ organised by the Bangladesh Institute of Bank Management (BIBM) at its headquarters in Dhaka.

Source: http://www.dhakatribune.com/business/banks/2017/10/13/bankers-protest-new-bank-company-act/

Access to finance still a challenge for SMEs

Eminent economist Professor Wahiduddin Mahmud Thursday said that despite exponential growth of non-farm activities in rural economy, there is still a problem of scaling up small and medium enterprises (SMEs) due to lack of access to finance. Non-farm activities in rural areas by the farmers have increased 7-10 per cent over the past 26 years as it was reflected in the economic census of 2013, he said, addressing a workshop in the capital as a special guest. He also pointed out that those who identify themselves as real farmers were actually involved in multiple sources of income or multiple occupations, contributing to the country’s economy. “Many small trading and business establishments have been done with the help of microcredit. But scaling up of these small units is a problem, creating a missing middle,” he added. Planning Minister AHM Mustafa Kamal was present as the chief guest of the workshop titled “Draft Questionnaire on Statistical Business Register” held at Bangladesh Bureau of Statistics (BBS) auditorium.

Source: http://today.thefinancialexpress.com.bd/public/last-page/access-to-finance-still-a-challenge-for-smes-1507827048

Most companies look unaware of business continuity planning

Country’s companies, small or large alike, looked blissfully unaware of business-continuity planning to survive any calamity though recent trends leave them susceptible to a variety of existing and emerging risks. Latest studies and a spot survey drew such conclusion about state of disaster-preparedness of the businesses and business bodies. Business continuity planning (BCP) is the creation of a strategy that recognises the threats and risks facing a company in the event of a disaster and suggests measures to protect its personnel and assets and help continue operations. The BCP involves defining potential risks, determining how those risks may affect operations, implementing safeguards and procedures designed to mitigate those risks, testing those procedures to ensure that they work, and periodically reviewing the process to make sure that it is up to date. Bangladesh Institute of Bank Management (BIBM) in the past week unveiled a study as regards addressing disaster risks by banks: Bangladesh perspective. It also showed that the banking sector had no such effective business continuity or recovery plans. This correspondent also conducted a similar survey on 30 leading firms to ascertain whether they have such planning or not. Save some multinational companies, this concept was hardly found in existence in any of the business corporations.

Source: http://today.thefinancialexpress.com.bd/first-page/most-companies-look-unaware-of-business-continuity-planning-1507999655

Grameen Bank seeks AG’s help regarding board meeting

Nobel Prize-winning microcredit lender Grameen Bank has written to Attorney General Mahbubey Alam to seek his opinion about holding board meetings with its three government-appointed directors. Speaking to the Dhaka Tribune yesterday, Mahbubey Alam confirmed that he had received a letter from the bank regarding the matter. The bank has been operating without calling any board meeting in the last 30 months. On September 24, Financial Institutions Division sent a letter to the bank, asking it to hold a board meeting with its three directors. “According to a decision taken in a meeting at the residence of Finance Minister AMA Muhith, the Grameen Bank will seek opinion from the attorney general about holding meetings with its directors,” reads the letter signed by FID Deputy Secretary Md Motiar Rahman. The board of Grameen Bank is a 12-member body comprising three government-appointed directors and nine borrower-directors selected from the bank’s shareholders and borrowers.

Source: http://www.dhakatribune.com/business/banks/2017/10/13/grameen-bank-seeks-ags-help-regarding-board-meeting/