Important Business News Extracts – September 12, 2017
BB’s refinancing fund for jute gets huge response
The refinancing scheme of Bangladesh Bank for jute sector has drawn a huge response from borrowers as banks have already disbursed Tk 343.22 crore revolving loan since its launch in June 2014. BB launched the refinancing scheme with a fund of Tk 200 crore in 2014 to support jute sector for bringing back its glorious past. Eighteen private and public commercial banks were nominated for channelling the fund to the public and private jute mills, raw jute traders and exporters. The banks are Sonali Bank, Rupali Bank, Agrani Bank, Janata Bank, Basic Bank, United Commercial Bank, IFIC Bank, National Bank, Prime Bank, AB Bank, Mercantile Bank, Uttara Bank, Bank Asia, Standard Bank, One Bank, The City Bank, NRBC Bank and Rajshahi Krishi Unnayan Bank. ‘Of the allocated fund, the banks initially disbursed Tk 175.23 crore. But the amount of disbursement has increased to Tk 343.22 crore due to huge demand from borrowers,’ said an official of BB. He said the central bank allocated Tk 77.63 crore for public jute mills, Tk 93.67 crore for private jute mills and Tk 28.70 crore for raw jute traders and exporters at 5 per cent interest rate to the banks.
BB decides to keep watchful eye on exposure of banks
The central bank has decided to strengthen monitoring of commercial banks’ exposure to share market with a view to avoiding recurrence of an unwanted situation, officials said. Under the latest move, the banks will have to submit their reports on fresh investment in the capital market to the Bangladesh Bank (BB) on weekly basis, mentioning daily transactions separately. Currently, the banks are eligible to submit such weekly reports to the Department of Off-site Supervision (DOS) of the central bank on gross transactions basis without mentioning daily transactions separately. The report must be submitted to the central bank’s concerned department on Thursdays within 5.00 PM by e-mail, according to a communication, issued by the BB Monday. “We’ve intensified our monitoring and supervision on banks’ investment in the capital market through revising reporting format,” a BB senior official told the FE. Under the revised reporting format, the banks will have to furnish information about total fresh investments in the stock market along with total fresh fund provided to their subsidiaries. Besides, the banks will need to provide information about the margin loans made available to the customers by the subsidiaries on daily basis. The central bank has laid emphasis on the issue of minimising risks of the banks, according to the official.
Banks’ CSR expenditure increased by 15.84 per cent to Tk 326.22 crore in the first half of this year from Tk 281.59 crore during the corresponding period a year ago. But 26 banks failed to spend 30 per cent of their total expenditure in educational sector defying the central bank’s directive. Six banks failed to spend any fund in their corporate social responsibility programmes’ fund in the January-June period of this year, according to a recent Bangladesh Bank report. The six banks are: Rupali Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Bangladesh Development Bank, ICB Islamic Bank and Woori Bank. Besides, eight more banks spent an insignificant amount of CSR fund in the first six months of this year. The banks are: Janata Bank, BASIC Bank, Bangladesh Commerce Bank, Meghna Bank, Bank Alfalah, Commercial Bank of Ceylon, Habib Bank and National Bank of Pakistan. The eight banks collectively spent only Tk 1.16 crore in their CSR programmes. The banks and NBFIs will have to use 30 per cent of total CSR expenditure in the education sector for the underprivileged population, according to the central bank circular.
About 3.3 lakh agent banking accounts were opened in the first half of the year — an increase of 60.18 percent — thanks to the growing popularity of this new form of banking service aimed at those living in remote areas across the country. So much that some banks are giving higher priority to developing their agent banking infrastructure than to building their mobile banking platform. Agent banking means providing limited scale banking and financial services to the underserved population through engaged agents under a valid agency agreement, rather than a teller/ cashier. It is the owner of an outlet who conducts banking transactions on behalf of a bank. The Bangladesh Bank has decided to promote this complimentary channel to reach the poor segment of the society as well as existing bank customers with a range of financial services, especially to geographically dispersed locations.
Bankers formed an association of anti-money laundering compliance officers with a view to working jointly in combating money laundering and terrorist financing and extending cooperation to Bangladesh Financial Intelligence Unit (BFIU) and other regulatory authorities, a press statement said. The chief anti-money laundering compliance officers (CAMLCO) and their deputies will be representing their respective banks in the association. An executive committee (EC) of the association was formed unanimously in presence of all the members during the CAMLCO Conference 2017. The EC elected Faruq Mainuddin, chief anti-money laundering compliance officer of City Bank, as its chairman and Swapan Kumar Biswas, Mutual Trust Bank’s CAMLCO, as the general secretary. The executive committee also elected vice chairmen from Janata Bank and Standard Chartered Bank, treasurer from Islami Bank Bangladesh and joint secretaries from Dhaka Bank and Bank Asia.
The government plans to introduce two different interest rates on savings tools in order to rein in its growing reliance on the high-cost borrowings. The government is considering to lower the interest rate on savings certificates for institutional buyers and keep the rate for individual buyers unchanged, said an official in the finance ministry. The official said the rate for institutional buyers could be brought down to close to the rates offered by banks. Hedayetullah Al Mamoon, senior secretary of the finance division, said the ministry is examining the matter, but no decision has been taken yet. He said the savings scheme system would be remodelled keeping in mind the small savers.
That’s It Fashions to buy 1.1cr shares of Pubali Bank
That’s It Fashions Ltd, one of the corporate directors of Pubali Bank, announced yesterday that it wants to buy 1.1 crore shares of the bank within next 30 working days. That’s It Fashions, a concern of Ha-Meem Group, will buy the shares from the block market through stock exchanges, according to a posting on the Dhaka Stock Exchange website. The garment-maker will have to spend nearly Tk 30 crore to buy the shares at the present market price. A Pubali Bank share traded at Tk 26.5 yesterday.
The Mutual Trust Bank Limited opened its Agent Banking Centre at Taltola Bazar
The Mutual Trust Bank Limited opened its Agent Banking Centre at Taltola Bazar, Sonargaon, in Narayanganj recently. Group Chief Communications Officer Azam Khan, Head of Agent Banking Madan Mahan Karmoker and Head of Privilege Banking & Cash Management Unit Irfan Islam of MTB inaugurated the centre..
Taxpayers to pay penalty for hiding tax-exempted incomes
Taxpayers have expressed their resentment over a penal measure that deprives them of tax-exemption benefit of certain incomes. According to the current income-tax provision, tax-exempted income or income entitled to reduced tax rate cannot enjoy the facility if mentioned later in a revised tax return, tax officials said. The provision of revised, updated income-tax return has been introduced in the current fiscal year (FY) through modification of the fiscal measure stipulated in the Income Tax Ordinance1984. Income taxpayers who are enjoying tax exemption or pared-down tax rates will not be allowed to enjoy tax-exemption or tax cutbacks on the incomes somehow left out from the original return but mentioned in the revised one. The rules will apply to both corporate and individual income taxpayers from the current FY (2017-18). Time for submission of income-tax returns for individual taxpayers started on July 1 and will end on November 30, 2017.
Country’s total power generation capacity stands 15761MW
The total power generation capacity of the country now stands at 15,761 MW. This was disclosed by Power Division Secretary Dr Ahmad Kaikaus while he made a power-point presentation on the power sector Sunday. He made this presentation at a function where the Prime Minister Sheikh Hasina inaugurated the Ashuganj 450MW combined cycle (north) power plant, Keraniganj 108MW power plant, import of 60 MW power from Tripura and cent per cent electrification of 10 upazilas of the country through a videoconference from her official residence Ganobhaban. He further informed that the number of power connection receivers increased to 25.9 million in July which was 10.8 million at the beginning of 2009. The transmission lines rose to 10,436 kilometers while the distribution line to 4,01,000 kilometers. The distribution system loss came down to 9.98 per cent from the previous 14.33 per cent, he said. Meanwhile, Rural Electrification Board (REB) has set a target to bring all the 460 upazilas under 100 per cent electrification.
EU buyers cut business ties with 8 more RMG factories
A consortium of European brands and buyers has recently terminated business relations with eight more readymade garment factories in Bangladesh as the companies failed to ensure workplace safety as per the standards of the group. With the eight, the Accord on Fire and Building Safety in Bangladesh has so far cut business relations with 97 RMG factories on ground of safety issues. The eight factories are: Fulpur Knit and Garments Ltd, two factories of FNF Group — Arion Dresses Limited and Klarion Designs Ltd, two factories of Fashion Store Group — Fashion Store Ltd and Purnata Fashion Limited, Tean T-Shirt Fashion Ltd and two units of Rashed Group — Deshone Apparels Ltd and Rashed Exports Limited.
SC extends BGMEA Building demolition deadline by 23 days
The Appellate Division on Monday extended the deadline for demolishing the Bangladesh Garment Manufacturers and Exporters Association Building in the capital by 23 days. The 15-story BGMEA Building was illegally constructed encroaching upon the Hatirjheel Lake. Vacation judge-in chamber, Justice Hasan Foez Siddique, also fixed October 5 for hearing by a regular bench, BGMEA president Siddiqur Rahman’s petition seeking one more year to shift the BGMEA office to Uttara where Rajuk allotted a plot to it. The BGMEA president filed the petition on August 23. The six-month deadline for demolishing the building expires today. The deadline was set by the apex court on March 12 after rejecting BGMEA’s petition seeking review of its order to demolish the illegally constructed building.
Kishoregonj Economic Zone Limited (KEZL), an infrastructure project of Nitol-Niloy Group, has signed a service contract titled ‘Letter of Engagement’ with PwC Bangladesh Private Limited, a world-renowned management consulting company. According to a statement, the accord was signed on Monday at the Nitol-Niloy Centre in Dhaka. The letter of engagement allows PwC to carry out the feasibility study, master plan and financial assessment for KEZL, a 92-acre private economic zone that is under development in Pakundia of Kishoregonj. With the slogan ‘a local hub for global business’, KEZL is ready to lease out industrial plots, buildings and factory sheds with common utility services including availability of gas to the unit investors immediately. The KEZL has received pre-qualification license from the Bangladesh Economic Zones Authority (BEZA) and is well underway to meet all relevant compliance to obtain the final license and commence operations. The statement said the company has already begun the infrastructure development activities in the zone and the appointment of PwC as its consultancy partner reflects the commitment towards converting the zone to a world-class facility in industrial manufacturing and processing.
The use of artificial intelligence (AI) can help a country increase domestic production, reduce costs and ensure security to a great extent, experts said yesterday. The countries in the developed world are using AI widely to boost their growth, said Shehzad Noor Taus, a Bangladeshi born expert and a deep learning software engineer at NVIDIA, a global leader in visual computing technologies. Taus, who is also a former machine learning developer of IBM, spoke at a roundtable on “Artificial intelligence: the next big thing for Bangladesh” organised by eGeneration Ltd, at Janata Tower Software Technology Park in Dhaka. One cannot imagine how widely international companies and agencies are now using AI to boost their production and ensure security, he said. Machines equipped with AI, which is also called intelligent agents, collect information of its users and generate a new kind of data to solve a problem.
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