Important Business News Extracts – September 21, 2017
Farm loans disbursement soars in 2 months
Farm loans disbursement registered a 35.46 per cent growth in the first two months of this fiscal year (2017-18), compared with that in the same period of FY 2016-17. Banks disbursed Tk 2,794.05 crore in farm loans in the July-August period of FY18 against Tk 2,062.63 crore distributed in the same period of FY17, according to the latest Bangladesh Bank data. Majority of the banks have been showing an increased interest in disbursing farm loans for long against the backdrop of holding huge surplus liquidity amid dull business situation in the country, a BB official told New Age on Wednesday. Besides, the central bank has recently asked the commercial banks to take a special drive to speed up the disbursement of farm loans in the flood-affected areas, he said. BB also asked the banks, which has presence in the flood-affected areas, to reschedule the defaulted farm loans and suspend the loan installments, which were scheduled to be paid by the farmers. For this reason, the farm loan disbursement increased significantly in the first two months of this fiscal year, the central banker said. Seven commercial banks, however, disbursed no farm loans against their annual targets to the farmers in the first two months of this fiscal year. The banks are Bank Al-Falah, Citibank NA, National Bank of Pakistan, State Bank of India, Woori Bank, Modhumoti Bank and Shimanto Bank.
Discussants have stressed the need for spreading financial literacy among investors and stakeholders to increase their knowledge base about the country’s capital market and thus cut investment risks. They attached the importance to the country-wide financial literacy programme at the inaugural ceremony of a workshop arranged for journalists covering the capital market. State minister for finance and planning MA Mannan MP attended the programme as the chief guest, while the chairman of the securities regulator Professor M Khairul Hossain was the special gust. “The regulator has brought enough reforms in rules and infrastructur\e of the capital market. But the outcome of the regulatory reforms will not be reflected in the capital market unless investors are literate,” said Professor Khairul. He said, however, the interest of foreign investors is increasing following the reforms. The chairman of the securities regulator said the contribution of the country’s capital market to the economy is yet to be at a satisfactory level like other countries. “The contribution of our capital market to economy is less than 10 per cent which is much lower than the contribution of other countries’ capital markets,” Khairul said. He further stressed more utilisation of the capital market for industrialisation.
Partnership ceremony of international conference on business and management
Selim RF Hussain, Managing Director & CEO, Syed Abdul Momen, Head of SME Banking and Zara Jabeen Mahbub, Head of Communications of BRAC Bank Ltd, Dr Md Mamun Habib of BRAC Business School and other senior officials attended recently the partnership ceremony of international conference on business and management.
Jamuna Bank Ltd signed an agreement with Titas Gas
Jamuna Bank Ltd signed an agreement with Titas Gas Transmission and Distribution Company Limited (TGTDCL) at Titas Gas head office in the city recently. Deputy Managing Director of the bank AKM Saifuddin Ahmed and Company Secretary of TGTDCL Md Mustaque Ahmed signed the agreement. Under the deal, Titas Gas subscribers can pay their gas bill to Jamuna Bank branches.
NCC Bank Ltd signed an agreement on MoneyGram remittance services with Rupali Bank
NCC Bank Ltd signed an agreement on MoneyGram remittance services with Rupali Bank in the city on Wednesday. Managing Director & CEO of NCC Bank Mosleh Uddin Ahmed and Managing Director & CEO of Rupali Bank Md Ataur Rahman Prodhan signed the agreement on behalf of their respective organisations.
The birth of BIDA hardly bears fruits yet as the authority is still engrossed in setting its own house in order with policy reforms and bringing coordination among stakeholders. Sources close to the Bangladesh Investment Development Authority or BIDA agreed on this observation, but attributed the sloth to some gestation factors. As a result, the main objectives of merger of two entities — the Board of investment (BoI) and the Privatisation Commission (PC) — into this integrated new outfit remained a distant dream even after the lapse of one year. The Authority was formed aiming to boost investment in the country and effectively deal with the privatisation process.
Bangladesh’s revenue authority and USAID country chapter’s trade- facilitation wing jointly launched a customs website Wednesday with interactive options encompassing entire spectrum of trading matters, including overseas ones. Launched under the joint auspices of the National Board of Revenue (NBR) and USAID Bangladesh Trade Facilitation Activity (BFTA), the Bangladesh Customs Website is expected to help promote transparency and availability of customs trade information. It will also disseminate passengers’ arrival and exit data, duty calculators, duty-free facilities, baggage rules and all of the updated statutory regulatory orders (SROs). The duty calculator of this website allows interested traders and others to get accurate information on Total Tax Impact (TTI). They would be able to know the payable duties and taxes for import consignments or items. Speaking at the lunching ceremony in a city hotel, State Minister for Finance and Planning M A Mannan said the website would help in enhancing capacity of the NBR and facilitate people. He appreciated the cooperation of USAID in developing the information superhighway on trade and tax.
State-owned enterprises (SoEs) run deep in debt, as of latest calculations, as repayment rates stand much lower than borrowings for government’s indifference towards their reform. People familiar with the developments gave such an observation and expressed the fear that the SoEs’ rising debt posed a potential risk for the country’s fiscal management. They told the FE that government’s failure to recover the SoEs’ loans would only exacerbate public liabilities. Besides, such low recovery would lower credit availability for others. The finance division in its latest accounting, up to June 30 last year, showed that total dues with the SoEs stood at Tk 869.91 billion. The amount is up by Tk 70.72 billion or nearly 9.0 per cent from that of the previous fiscal year (FY), 2015. The sources said the repayment in the year under review was just around Tk 15 billion or less than 2.0 per cent of the dues. However, the biggest borrower from government exchequer was Power Development Board with Tk 435.43 billion with interest up to June last year. In an analysis the DSL wing of the finance division shows dues with the power board have been ballooning as its power-generation cost is high compared to its selling rates. The other big borrowers are Petrobangla, Bangladesh Chemical Industries Corporation (BCIC) and Bangladesh Petroleum Corporation (BPC).
Bangladesh will remain the apparel sourcing hotspot for international retailers and brands over the next five years because of competitive prices and China’s declining market share in garment business, says a global survey. McKinsey & Company, the world’s most prestigious management consultancy firm, prepared the biennial survey based on interviews of chief purchasing officers (CPOs) of top 63 global garment retailers and brands that buy apparel items worth $137 billion a year. “Bangladesh retains the top spot, selected by nearly half of all respondents — similar to its rating in 2015,” it said, mentioning that the CPOs were asked which countries they expected to be the top three sourcing hotspots over the next five years. In the survey titled “The apparel sourcing caravan’s next stop: Digitisation”, 49 percent CPOs said Bangladesh is still their first choice as sourcing destination while 43 percent opted for Ethiopia, 37 percent for Myanmar, 35 percent for Vietnam and 22 percent for India. Being the second largest apparel exporter worldwide after China, Bangladesh exported garment items worth $28.14 billion in the last fiscal year, registering 0.20 percent year-on-year growth.
Government to stock up on 900,000 tons of rice by November
The government will stockpile 900,000 tons of rice by November 12 to stem the rising price of the staple food in local markets. According to the sources in the Ministry of Food, the per kg rice price has risen by 39% over the last nine months in Bangladesh’s markets, but by only 6% on the international market. Coarse rice is now selling at BDT 64 in local markets – a record high for the country. This same rice was sold at BDT 38 at the beginning of the year. Finance Minister AMA Muhith chaired Wednesday’s cabinet committee meeting, which also approved the Food Ministry’s proposal to import 50,000 tons of non-bashmoti and parboiled rice from Thailand through an international tender. In local currency, the per kg price of this rice has been fixed at BDT 36. Food Secretary Kaikobad added that the total import of more than 900,000 tons of rice will be made entirely through Government-to-Government agreements.
Local conglomerate United Group has won the contract to build another 200MW furnace oil-fired power plant in Mymensingh, reports UNB. Cabinet purchase committee approved on Wednesday a proposal of the Power Development Board (PDB) to purchase electricity from independent power producer (IPP) project at a tariff of 10.7 cents per kilowatt hour (Tk 8.5 per unit) for next 15 years. The plant will run at 80% plant factor with 12% discount factor. To purchase all the electricity produced at the plant over the next 15 years, the government will pay BDT 176.40 billion (17,640 crore).
Crop insurance scheme, launched as pilot projects in three districts, has so far settled claims worth over BDT 3.2 million on total 1,373 policies issued by the Sadharan Bima Corporation (SBC) giving a big support to farmers who suffered losses due to vagaries of nature. It fetched BDT 800,000 as premiums from the farmers. However, it has only settled approximately BDT 2.18 million in Sirajganj district for crop losses. Wasiful Hoq, project director at the weather index-based crop insurance project, told the FE that there were 500 policies in Siajganj and the farmers gave premiums at the rate of BDT 250 for a bigha and the government gave BDT 325 including VAT as subsidy.
Spinners are facing troubles as they cannot release cotton from Chittagong port in time due to congestion that was created from the breakdown of two of the four gantry cranes in June. Cotton is an essential raw material for the garment sector, the country’s main export earner. The spinners import cotton from India, the US, African countries and many others, and they have to wait for eight to 10 days to release the cotton from the port. Even six months ago the spinners could release the cotton from the port within three days, which was very convenient for them, he said. The longer waiting time at the port means paying fees to the Chittagong Port Authority (CPA) every day as berthing charge.
Leather products may get 15pc cash incentive for next five yrs
The government is preparing a policy to continue providing the existing cash incentive to the leather goods and footwear sector for next five years, aims at boosting exports as well as attracting foreign direct investment (FDI), officials said. The commerce ministry requested the finance ministry recently to take necessary steps in this regard, they added. The finance ministry was also working on the proposal, an official of the finance division said. A draft policy to boost export capacity of the sector was also prepared and placed at a recent meeting of the cabinet committee on economic affairs for consideration. The cabinet body, however, suggested including the industries ministry while finalising the draft policy, according to an official document obtained by the FE. The final draft of the policy is supposed to be placed before the cabinet body again by September 30. The government offered 15 per cent cash incentive against exports of the products in the current fiscal year. In cases of exporting crust and finished leather, the cash incentive is 10 per cent.
Bangladesh government is aiming to launch the 4G service by December this year to ensure the fastest data service for mobile phone subscribers of the country. State Minister for Posts and Telecommunications Tarana Halim said, “We are committed to launch the service within December this year.” The junior minister came up with the announcement while she was talking to reporters at a press conference at her office in Dhaka on Wednesday, reports UNB. The tender processing for taking part in the 4G service auction will be finished by November, she said. The government will earn revenue of Tk 110.0 million from the auction, Tarana said. After launching the service in December, the existing mobile phone operators have to distribute the network in the divisional towns within nine months while the new operators will get 16 months in this regard, she added. The operators will get nine months more to extend the service to 30 per cent internet users of the district level, said the junior minister.
Bangladesh achieves response capability to mitigate cyber-attacks
Bangladesh has achieved response capability of Computer Security Incident Response Teams (CSIRT) to mitigate the targeted cyber-attacks through a cyber-drill conducted by the Organisation of Islamic Cooperation-Computer Emergency Response Teams (OIC-CERT) on Tuesday. OIC-CERT is an international platform mainly for member states of the Organisation of the Islamic Cooperation (OIC) focusing on cyber security and knowledge sharing. Bangladesh’s cyber-security platform BGD e-GOV CIRT is among the government CIRT of 11 countries which also achieved the response capability. The 11 countries are: India, Brunei, Egypt, Indonesia, Malaysia, Spain, Sri Lanka, Taiwan and Tunisia.
‘Belt and Road’ can duly benefit developed, developing states
The Chinese flagship move – commonly known as ‘Belt and Road’ (BR) – could deliver mutual and equal socio-economic benefits for both the developed and the developing countries, speakers said while inaugurating this year’s Media Cooperation Forum (MCF) on the BR on Tuesday. Seeking media’s active cooperation and focus for promoting the best practices along the region, they said it will undoubtedly help remove the barriers to trade, investment and socio-cultural advancements at a time when the concept of globalisation is facing hard times. China’s leading media house – the People’s Daily – hosted the forum at Dunhuang in Gansu province, which is a key intersection of the ancient Silk Road linking the East and the West. Over 300 media outlets from 126 countries and international organisations took part in the forum, making it the largest gathering of media people. Opening the forum, President of the People’s Daily Yang Zhenwu said media could be the information highway by covering developments on various aspects along the BR map with positive mindsets, and could help ensure global governance.
Major Currency Exchange Rate Movement in Last Seven Days
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.
ABOUT DHAKA BANK
Dhaka Bank has truly cherished and brought into focus the heritage and history of Dhaka and Bangladesh from Mughal outpost to modern metropolis. Most of its presentation, publications, brand initiatives, delivery channels, calendars and financial manifestations bear Bank’s commitment to this attachment.