Important Business News Extracts – September 13, 2017
Banks’ net income drops 33pc in one year to June
Net income of all banks after provisioning and tax dropped by nearly 33 per cent or Tk 8.96 billion as of June 30 of the current calendar year. According to unaudited and provisional figures, compiled by Bangladesh Bank (BB), the net income of the banks came down to Tk 18.45 billion as of June 30, 2017 from Tk 27.41 billion as of June 30, 2016. Bankers attributed that the net profit of the banks decreased significantly during the period under review mainly due to higher provisioning requirements against the bad debts. The provisioning against total bad debts of all banks rose to Tk 52.56 billion on June 30, 2017 from Tk 34.08 billion as of June 30, 2016, the BB data showed. Some banks did not perform as per their respective desired levels during the period under review mainly due to increase in their volume of non-performing loans (NPLs). The volume of classified loans rose by more than 19 per cent to Tk 741.48 billion as on June 30, 2017 from Tk 621.72 billion as on December 31, 2016. The amount of NPLs was Tk 633.65 billion a year before.
Four state-owned commercial banks (SoCBs) received Tuesday directives for largely lending to small and medium enterprises (SMEs), particularly manufacturing ones, rather than disbursing large loans. Officials said the redirection of the public banks’ credit operations came as a remedy for their growing risks of getting deeper into the problem of accumulating classified loans. The public-sector banks have also been asked to improve their financial health forthwith through reducing the volume of classified loans. The instructions were given at a meeting held at the central bank headquarters in the capital with Bangladesh Bank (BB) Governor Fazle Kabir in the chair. The meeting was convened to review the progress in implementing memorandums of understanding (MoUs) and key financial indicators of the four SoCBs — Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank. The chief executive officers (CEOs)-cum-managing directors (MDs) of the public banks and four observers were present at the meeting.
BB to give award to encourage inflow of remittances
Bangladesh Bank (BB) will give remittance award to the highest remittance senders and the highest remittance receiving institutions for encouraging Non Residence Bangladeshis (NRBs) to send money through legal channels, reports BSS. “We will give the ‘Bangladesh Bank Remittance Award-2016’ under five categories to expedite the inflow of remittance,” BB’s Financial Inclusion Department General Manager M Abul Bashar told the news agency yesterday. The categories are skilled remitter, unskilled remitter, bond investor NRB, exchange house owner NRB and the highest remittance receiver bank. Abul Bashar said the award will be handed over at a function to be held on September 19 at Bangla Academy in the city. Finance Minister AMA Muhith is expected to attend the function as the chief guest while Financial Institutions Division Secretary M Eunusur Rahman and BB Governor Fazle Kabir will attend it as special guests. BB Deputy Governor Shitangshu Kumar Sur Chowdhury will chair the function.
NBR, BABT at loggerheads over budgetary measures on taxation
The key budgetary measures on tobacco taxation has remained unimplemented even after two and half months of adopting it in the national budget for the current fiscal year 2017-2018 due to legal complexities and difference of opinion between the tax authorities and British American Tobacco Bangladesh. Large Taxpayers Unit under the value-added tax wing of the National Board of Revenue could not collect supplementary duty in line with the budgetary measures from the BATB since July 1, 2017 as the company has been denying paying the tax questioning the legality of the measure. In this context, the LTU (VAT) has sought directives from the revenue board whether it will issue demand notice to the company claiming the arrears, officials concerned has told New Age.
The last barrier to foreign direct investment (FDI) in apparel sector beyond the export processing zones (EPZs) is now removed as the Export Promotion Bureau (EPB) has expressed its readiness to issue utilisation declaration (UD) certificates in favour of externally-financed garment units, if necessary. Earlier, the government had decided that the two garment-industry associations — BGMEA and BKMEA — will issue UD certificates in favour of foreign-funded garment factories if any of them enlists as their member. However, if any foreign factory does not take membership of either, the EPB will issue UD certificates for them since the certificate is mandatory to export apparel from Bangladesh to the rest of the world, a top official said. “We have issued UD certificate in the past before the responsibility was vested in the BGMEA and the BKMEA. We don’t need additional preparation to do it again,” EPB vice-chairman Bijoy Bhattacharjee told the FE. “If anyone approaches us, we will issue the certificate. But we will encourage foreign-funded factories first to get membership of BGMEA or BKMEA and take UD certificate from them,” he said.
Bangladesh inked a memorandum of understanding (MoU) with Oman last week for LNG (liquefied natural gas) imports, said officials. State-run Petrobangla will now initiate negotiation with Oman LNG soon to fix up volume, price and specification of the LNG to imported from the Middle Eastern country, said a senior official of the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources. He said Bangladesh will import lean LNG similar to natural gas produced from Bangladesh’s domestic fields, which will be blended with domestic gas before delivery to end-users. This is Bangladesh’s third LNG supply agreement, as the country is faced with declining natural gas reserves and mounting demand from downstream power and fertiliser sectors. Petrobangla earlier inked an initial agreement on July 13 to import annually around 2.5 million tonne of lean LNG from Qatar’s RasGas over 15 years.
The government is going to import 50,000 tonnes of refined sugar to increase national stock and meet possible shortage of the essential food item, said official sources. The decision came at a time when the retail prices of sugar fell during the last couple of months. The Ministry of Industries will place the import proposal at the meeting of the Cabinet Committee on Public Purchase today. Finance Minister AMA Muhith will preside over the meeting. Chairman of Bangladesh Sugar and Food Industries Corporation AKM Delwar Hossain said Prime Minister Sheikh Hasina has already given permission to import 100,000 tonnes of sugar to meet a possible crisis due to the recent devastating floods in the country.
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