18 banks asked to explain $43 million LC settlement failure
Bangladesh Bank has issued show-cause notices to 18 scheduled banks to explain why they failed to settle their foreign and local bills against letters of credit in due time in line with the central bank’s directives. In the notices, the central bank said that the banks would have to count fines if they failed to give the BB satisfactory explanation for the failure. A BB official told New Age on Sunday that the central bank served the notices on the banks on August 22, asking them to reply to the notices by September 19 (today). The BB earlier issued a circular saying that it would impose financial penalty on the banks which would fail to make payments to foreign and local parties against LCs in time, he said. According to the central bank data, the total overdue bills in the 18 banks stood at 666 worth $43 million. The amount of foreign overdue bills stood at $25 million and that of local overdue bills $18 million.
Banking services at post offices on cards
The government plans to launch banking services at post offices to give a boost to social safety net programmes and popularise savings tools across the country, especially in remote rural areas. The post and telecom division sought approval from the finance ministry last month to introduce the services under Bangladesh Post Office, said Tarana Halim, state minister for telecom. “We think there is scope to serve the people living in remote areas through the post offices and that’s why we have applied to the bank and financial institutions division.”
Chinese bank to finalise vital projects for funding
A Chinese EXIM Bank delegation is due in the capital soon to negotiate the financing of some important projects, including purchase of six vessels, ahead of President Xi Jinping’s October tour. The President of China is scheduled to visit Bangladesh in mid-October before or after attending a BRICS summit in India. Sources said the EXIM Bank delegation, during its visit in the first week of October, would sit with ministries concerned to complete the negotiations as some deals are expected during the presidential tour of Bangladesh. Earlier in April, another delegation of the Chinese government’s loan-providing bank, had visited some project sites, including that of Karnaphuli tunnel in Chittagong, to find potential of the projects in funding.
Banks reopen after Eid, transaction low
Most financial institutions reopened on Thursday after a six-day Eid-ul-Azha vacation. The attendance of officials and employees at banks and financial institutions in Dhaka’s Motijheel area was less than normal and they had to spend time in leisure as the number of service-seekers was poor, reports BSS. The officials were seen exchanging Eid greetings with one another and their clients. However, normal activities started at Bangladesh Bank.
Cash withdrawal from ATM increase by 26pc
Despite several hacking and hacking attempt, withdrawal of cashes from the Automated Teller Machine (ATM) increased by around 26 per cent in the last fiscal year (2015-2016). As few banks are yet to set up anti-skimming devices in their ATM booths, clients are withdrawing their required cash with risk of fraudulence or hacking in the booths. “It is convenient and we can withdraw cash anytime in a day,” said Maruf Ahmed, a senior employee in a multinational company. “There are always some risks on withdrawing money from ATM. But we have to use it,” he said. Bangladesh Bank statistics revealed that some Tk 1.04 trillion or Tk 1047.64 billion (Tk 104764 crore) were withdrawn from 8,571 ATM booths across the country in FY16. In the previous fiscal year (FY15), banks’ clients withdrew some Tk 832.40 billion from 6,800 ATM booths in Bangladesh.
Imports down by 18% in July
Country’s overall imports dropped by more than 18% in July, the first month of the current fiscal year (FY) 2016-17, mainly due to lower imports of capital machinery, officials said. The settlement of letters of credit (LCs), generally known as actual import, came down to USD 2.80 billion in July from USD3.44 billion during the same period of the previous fiscal, according to the central bank latest statistics. On the other hand, opening of fresh LCs, generally known as import orders, rose by 2.86% to USD3.10 billion in the first month of the FY 17 from USD 3.01 billion during the same period of the FY 16. “We expect that overall imports may pick up in the coming months as the import orders increased in July 2016,” a senior official of the Bangladesh Bank (BB) told the FE Sunday. He also said import decreased in terms of value, not in quantity.
Insurance losing pace
Insurance penetration has been declining for the past several years, even though the country’s major economic indicators have been growing steadily for over a decade now. In Bangladesh, insurance and other insurance-based forms of risk transfer, overall insurance penetration, both life and non-life, stood at 0.72 percent in 2015, down from 1.13 percent in 2010, according to Swiss Re, a leading global reinsurer. Of the penetration rate last year, 0.53 percent came from life and 0.19 percent from non-life insurance companies. The insurance penetration rate indicates the level of development of a country’s insurance sector. It is measured as the ratio of premium underwritten in a particular year to the country’s gross domestic product. Data shows the penetration rate continued to slide down in Bangladesh since 2010. The rate was 1.02 percent in 2011, 0.95 percent in 2012, 0.85 percent in 2013 and 0.70 percent in 2014. But the penetration rate is much higher in other South Asian countries and Bangladesh’s peer nations across the world.
NGOs in BD receive Tk 50b every year
NGOs in Bangladesh receive around Tk 50 billion every year, said an executive of a leading NGO on Sunday. He also stated if the NGO’s utilise their donation properly then they can work as a catalyst to implement SDG. “Bangladesh has so far 2,500 NGOs and they get an estimated Tk 50 billion as grants every year. Now NGOs have to be more careful for efficient uses of this money,” said Executive Director of BRAC Dr Muhammad Musa while speaking at a workshop in Dhaka, reports BSS.
Dhaka stocks’ pre-Eid bull run continues after holidays
Dhaka stocks increased for the eighth trading session on Sunday, the first session after the nine-day Eid holidays, as investors continued with optimistic purchase, especially those of bank shares. The key index of Dhaka Stock Exchange, DSEX, increased by 0.49 per cent or 22.89 points, to close at 4,623.98 points, the highest since January 24. DSEX has now advanced by 100 points in the eight-day bull run. Stockbrokers said many of the investors continued with optimistic share purchase in an expectation of further rise in share prices before the year-end financial closure. Bank shares continued to get investors’ increased attention resulting in a 1.29 per cent rise in prices of banks’ shares on an average.
Financial Reporting Council to be functional this year
Financial Reporting Council (FRC) will be formed at the end of this calendar year for functioning of Financial Reporting Act (FRA), said Finance Minister AMA Muhith yesterday. “FRC will ensure accountability and improve performance of the professional accountants of Bangladesh,” he said after a meeting with a team of The Institution of Cost and Management Accountants Of Bangladesh at his secretariat office. The minister said implementation of the FRA will bring transparency of the firms listed on the stock market. The much-awaited Financial Reporting Act-2015 got passed in the Parliament on September 6, 2015. The FRC will be the sole watchdog to monitor the functions of auditors and ensure transparency and accountability in accounting and auditing of financial organizations including various government autonomous and non-government institutions. The World Bank Report on the Observance of Standards and Codes, published in 2003, described accounting and auditing environment in Bangladesh dismal. The report suggested establishing an independent oversight body – Financial Reporting Council.
The National Board of Revenue may increase the upper limit of turnover from the existing Tk 80 lakh for imposing turnover VAT on businesses in a bid to implement smoothly the new Value-Added Tax and Supplementary Duty Act-2012 from the next fiscal year. The board is also considering incorporating some of the sensitive items in the list of VAT exemption keeping the VAT rate unchanged at 15 per cent in the new VAT act to ease pressure of burden of VAT on consumers, officials said. They said that the NBR at its latest budget implementation forum meeting took the decisions and assigned the VAT Online Project (VOP) to examine the issues with consultation with the business community.
Grameenphone, Banglalink and Robi, the country’s top three mobile operators, registered 40 percent growth in combined data revenue in the first half of 2016 — a development that bodes well for the Digital Bangladesh cause. Between January and June, the three operators, which control up to 90 percent of the market, altogether raked in Tk 1,014 crore from data services. Data services constituted about 10 percent of the three operators’ revenue during the period, up from 7.07 percent a year earlier. Of the three operators, Robi’s data revenue is growing slightly faster than the other two; it accounted for about 12 percent of the operator’s revenues in the first half of the year.
The telecom regulator on Sunday directed that a mobile phone operator would not be allowed to provide fibre optic connectivity to another mobile operator. A Bangladesh Telecommunication Regulatory Commission directive issued on the day also said the telecom operators have to take all type of fibre optic connectivity, both primary and secondary, from the National Telecommunication Transmission Network operators. The directive also said that in case of complete absence of NTTN’s network in any place the network sharing would be done as per the Infrastructure Sharing Guidelines. BTRC officials said the provision that allows mobile phone operators to provide secondary fibre connection was misused in many ways.