Important Business News Extracts – September 18, 2017
BB not giving new Islamic banking licences
More and more banks are showing interest in converting into full-fledged Islamic banks but the central bank is not giving new licences for the expansion of the shariah-compliant finance. The reason is the absence of a regulatory framework that would enable proper monitoring of the Islamic banking industry, said a senior Bangladesh Bank official. The BB has long been working on a uniform shariah law framework but could not finalise yet, he added. Three conventional banks — Standard, Jamuna and IFIC — had applied to the BB several years ago to switch to Islamic banking but they did not get the green light. “We want to go for Islamic banking because people are more interested in it,” said Mamun-Ur-Rashid, managing director of Standard Bank, adding that the Islamic banking sector has been outperforming the conventional banking industry. Shafiqul Alam, managing director of Jamuna Bank, said they had tried for several years to obtain permission from the central bank to launch Islamic banking. “Now we have abandoned the plan.” Islamic banks are showing steady growth over the last couple of years in terms of assets, deposits, and loans and advances.
The government’s borrowing from the banking sources suddenly increased in July-September of the current fiscal year 2017-18. Bangladesh Bank officials say the government is now being forced to borrow from banks against the backdrop of a surge in its expenditure. The government has been forced to increase its expenditure to repair the damaged infrastructures, mainly road and highways, caused by the recent floods across the country, they said. According to the latest BB data, the government borrowed Tk 7,565 crore from July 1 to September 5 although it registered a negative borrowing amount of Tk 18,029 crore in the last fiscal year. The government set a target of borrowing Tk 38,938 crore from the banking source in the FY17 to manage its budget deficit, but it did not make any net borrowing from the banking sources due to a large amount of net sales in government savings certificates and bonds.
BB elected as vice chair of Alliance for Financial Inclusion
Bangladesh Bank has been elected as the vice-chair of the board of Alliance for Financial Inclusion (AFI) for two years. The election took place in the second annual general meeting of AFI during its ninth Global Policy Forum held on September 12-15. The Bangladeshi central bank has been elected among 114 institutions of 95 countries. AFI was founded on the idea that a global knowledge exchange platform was key to expanding and improving financial inclusion policy. The network includes members from more than 90 countries working together to accelerate the adoption of proven and innovative financial inclusion policy solutions with the ultimate aim of making financial services more accessible to the world’s unbanked.
The total amount of outstanding loans of Basic Bank Limited to 628 companies has reached over Tk 65.38 billion, while the bank also provided loans to 57 companies without any document. Basic Bank gave loans to seven companies, which could not be traced in their respective address. The bank’s total capital shortfall has reached over Tk 38.01 billion. Meanwhile, the number of loss-incurring branches of Sonali Bank Limited has increased to 314 until this July, from 305 in July 2016. These were informed at the 14th meeting of the Parliamentary Standing Committee on Public Estimate on Sunday. The Jatiyo Sangsad (JS) body recommended Sonali Bank Limited to submit the complete and updated list of its branches, which have been incurring loss for the last five years or over. The committee also suggested closing those branches.
HSBC Bangladesh yesterday launched the seventh edition of HSBC Export Excellence Awards to recognise exporters for their contribution towards sustainable growth of the economy. Francois de Maricourt, CEO of HSBC Bangladesh, launched the award at a ceremony at Pan Pacific Sonargaon Dhaka hotel. Every exporter is eligible to apply and can nominate oneself and even a fellow by filling up a form by October 5, according to the bank. The nomination form and other details are available at www.business.hsbc.com.bd/eea. The exporter of the year award will be presented in four categories, each under specified annual export turnovers. The awards will be given in four categories: exporter of the year in garments category with annual export turnover over and up to $100 million, exporter of the year in apparel supply chain and backward linkage with annual export turnover over $10 million; exporter of the year in traditional and emerging sectors (non-RMG /textiles) with annual export turnover over $10 million; and exporter of the year in SMEs (non-RMG /textiles) with annual export turnover up to $10 million.
The 19th annual general meeting (AGM) of Bangladesh Commerce Bank Limited (BCBL) was held on Saturday at the National Sports Council Auditorium in Dhaka. Engr. Rashid Ahmed Chowdhury, Chairman of the Board of Directors of BCBL, presided over the meeting. Among the members of the Board of Directors, Dr. Md. Jafar Uddin, Md. Moshiur Ali, Mohammed Arshed, Md. Shafiqul Islam, AAM Zakaria and Humayun Bokhteyar along with Begum Kamun Nahar as a representative of the Ministry of Finance were present. RQM Forkan, CEO and MD, Md. Saifur Rahman Patwary, AMD, Kazi Md. Rezaul Karim, DMD, and Md. Salim Hasan, Company Secretary of BCBL, were also present. The annual financial statements of the BCBL for the year 2016 were accepted and approved in the meeting.
A Memorandum of Understanding (MoU) was recently signed between NRBC Bank Limited and Titas Gas Transmission & Distribution Company Limited, says a press release. As per the agreement, all branches of the NRBC Bank will receive payments of gas bills from now on. Dewan Mujibur Rahman, Managing Director and CEO of NRBC Bank Ltd., and Md Mustaque Ahmed, Company Secretary of Titas Gas Transmission & Distribution Company Limited, signed the agreement on behalf of their respective sides.
Midland Bank Limited (MDB) to collect Titas Gas bills
Midland Bank Limited (MDB) on Sunday inked a Memorandum of Understanding (MoU) with Titas Gas Transmission and Distribution Company Limited at the latter’s Head Office in Dhaka, said a statement. Md. Ahsan-uz Zaman, Managing Director and CEO of MDB, and Mustaque Ahmed, Company Secretary of Titas Gas, signed the MoU on behalf of their respective organisations in presence of Titas Gas Managing Director Engineer Mir Moshiur Rahman. Under the MoU, the MDB will collect gas bills from Titas customers through its branches.
Karnaphuli Dry-Dock gets EZ pre-qualification licence
Bangladesh Economic Zones Authority (BEZA) on Sunday issued pre-qualification license to Karnaphuli Dry-Dock Special Economic Zone. The facilities including jetty and dry dock to be established in the economic zone (EZ) is expected to earn USD 120 million per year employing nearly 3,000 people, sources concerned said. According to a statement, the pre-qualification license giving ceremony was held at the BEZA conference room in the city. BEZA Executive Chairman Paban Chowdhury, its member M Emdadul Haque and Md. Harunur Rashid, the EZ’s Managing Director (MD) MA Rashid and other officials attended the ceremony, among others. It was also said that the IFC (International Finance Corporation) provided Karnaphuli Dry-Dock Limited with a credit amounting to Tk 8.0 billion after conducting feasibility study.
The UK export finance support available for the country’s trade with Bangladesh has increased to £625 million from £150 million, said Rushanara Ali MP, UK Prime Minister’s Trade Envoy for Bangladesh, as she began a week-long tour in the country. According to a bdnews24.com report, she is leading a trade delegation of nine UK rail companies, said the British High Commission in Dhaka in a statement on Sunday. High Commissioner Alison Blake said given the strong friendship and close ties between the UK and Bangladesh, her visit will “open up new avenues for trade.” The UK export finance support increased over 400 per cent, which means an additional nearly £500 million capacity to help UK exporters, and their buyers in Bangladesh get access to the best quality British goods and services.
Dhaka-Kolkata container train service trial run in October
Bangladesh and India are going to pilot the container train service between Dhaka and Kolkata next month to assess the feasibility of initiating the full-pledged service on commercial basis. The decision was made at an inter-governmental railway meeting between the two countries held in New Delhi in September 13-15 to facilitate movement of export-import goods through the railway, a member of the Bangladesh delegation told New Age on Sunday. The meeting also decided to start the new passenger train service between Khulna and Kolkata in full-fledged from November 16, he said. The customs and immigration formalities for the train service will be conducted at Kolkata terminal for India and at Benapole for Bangladesh, he said, adding that the train might be named either Bandhan Express or Sampreeti Express.
Move to build Ctg-Cox’s Bazar rail link progresses
Government’s initiatives to build a rail link between Dhaka and Cox’s Bazar progress. Two agreements in this connection were signed Thursday and another will be signed Saturday. The government will construct a single line dual gauge railway track from Dohazari of Chittagong to Cox’s Bazaar via Ramu and another rail track from Ramu to Gundum. The 100-kilometer single-line dual-gauge railway from Chittagong’s Dohazari village to Cox’s Bazar via Ramu will cut travel time by four hours between Dhaka and the coastal resort city, report agencies. The construction of the new route, marked as a fast-track project, will also form part of the Trans-Asian Railway (TAR) route to connect Bangladesh to its regional neighbours, including China, Myanmar and Thailand. In this connection the government Thursday signed the two agreements, one on appointing the consultant for the Dohazari-Ramu-Cox’s Bazar rail project and the other on purchasing 200 passenger carriages for the Railway. Railway Minister Mujibul Haque was present at the signing of two separate deals on rail sector development at the Rail Bhaban in the capital city.
Bangladesh Railway (BR) to bring its entire network under integrated telecom system
Bangladesh Railway (BR) has planned to bring its entire network under an integrated telecommunication system through setting up of a 575-kilometre optical fibre line over 44 upazilas under 17 districts to build a much safer and more secure train communication system, reports UNB. This effort is also meant for coping up with the growing number of railway tracks as well as bogies and engines. A BR official said the BR will implement the proposed project from January 2018 to June 2020 with an estimated cost of BDT 781.3 million to be entirely borne from the national exchequer.
Beximco Pharmaceuticals has become the first Bangladeshi company to export medicines to Canada. The first consignment of Olopatadine, a sterile ophthalmic product, was delivered to the North American country on Saturday, Beximco said in a statement. Health Canada, a department of the Canadian government responsible for national public health, approved Olopatadine (0.1 percent solution used for treating symptoms of eye allergy) in the last financial year. According to IMS data, the current market size for Olopatadine eye drops (of all strengths) in Canada is $14 million. “The entry into the Canadian pharmaceutical market, following the successful launch of our first product in the US last year, is a significant step forward in strengthening our presence in North America,” said Nazmul Hassan, managing director of Beximco Pharma.
Soaring Price of Rice: Govt intervenes to stabilise market
With rice prices soaring across the country, the government yesterday made a rather delayed intervention in the form of selling the staple at a subsidised price under a nationwide Open Market Sale programme. Engaging nearly a thousand dealers, the food ministry channelled OMS rice for Tk 30 a kg to people lining up at designated sale points. Though the price of OMS rice has doubled this time to Tk 30 from Tk 15 a kg, it is still lower by at least Tk 20 a kg from yesterday’s retail market price. The state-run Trading Corporation of Bangladesh (TCB) said the coarse varieties of rice were on sale in the capital’s retail markets for Tk 50 to 54 a kg yesterday, Tk 10 higher than that only a month ago.
Orion Gas Limited, a subsidiary of Orion group, has sought an exemption from VAT and advance trade VAT (ATV) on the import of liquefied petroleum gas (LPG) cylinder. Officials of the Finance Division informed that the summary of the request has already been placed before Finance Minister AMA Muhith. Earlier, the National Board of Revenue (NBR) proposed that the 15% VAT and 4% ATV would remain applicable on the import of LPG cylinders and containers of iron or steel which are widely used in the country. On the other hand, the tenure of 15% VAT waiver for local production of LPG cylinder has been extended up to 2019. n empty 12kg LPG cylinder in the local market sells for BDT2,200-2,550, whereas the price of an empty 14.5 kg LPG cylinder in neighboring India is Rs446.5 (Tk567).
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