Important Business News Extracts – September 26, 2017
Govt securities’ yield falls as banks scramble to buy
Yield on government securities took a downturn under a buying spree, especially as banks invest their excess funds in the instruments to reap double benefits. According to officials and market operators, particularly new private commercial banks (PCBs) are purchasing the bills and bonds to maintain SLR (statuary liquidity ratio) with the Bangladesh Bank (BB). They said most of the banks are now interested to invest their excess money in the risk-free government securities also to minimise their cost of funds. The yield, generally known as interest rate, on seven securities out of eight decreased slightly during the September 04-24 period against the previous auctions, they added. Meanwhile, the volume of excess liquidity rose to Tk 1.10 trillion as on July 20 last from Tk 1.06 trillion in the last week of June, according to the central bank officials. However, excess reserves, generally known as excess over daily minimum cash reserve requirement (CRR), with the central bank rose to around Tk 50 billion during the period under review from previous sum of Tk 45 billion. “The amount of excess liquidity in the country’s banking system increased slightly during the period mainly due to lower bank borrowing by the government,” a BB senior official told the FE while explaining the overall liquidity situation on the money market. Such rising trend in excess liquidity in the banking system may continue in the near future, the central banker hinted.
Standard Chartered Bank receives BB Remittance Award
Standard Chartered Bank Bangladesh was the only foreign commercial bank to recently receive the Bangladesh Bank Remittance Award 2016, for its role in facilitating inward flow of remittance in Bangladesh. Speaking on the occasion, Abrar A. Anwar, Chief Executive Officer of Standard Chartered Bank Bangladesh, said, “It is a matter of pride for us that Standard Chartered remains the leader among the international banks in terms of facilitating remittance from non-resident Bangladeshis. We are honoured to be able to stand beside the industrious Bangladeshi Diaspora across the world, helping them invest and send their hard earned income to their families.”.
Training on ‘Prevention of Money Laundering & Combating the Financing of Terrorism’
Abu Hena Mohd Razee Hassan, Deputy Governor & Head of BFIU, Bangladesh Bank inaugurated a Training Programme as Chief Guest on ‘Prevention of Money Laundering & Combating the Financing of Terrorism’ held recently in Mymensingh for the officials of different scheduled banks operating in Mymensingh district. Mercantile Bank arranged the event as Lead Bank under the guidance of BFIU, Bangladesh Bank. Mati-Ul- Hasan, AMD & CAMLCO, Mercantile Bank Limited chaired.
The Anti-Corruption Commission (ACC) arrested on Monday two graft suspects, including a bank manager, in Chittagong in a graft case, reports UNB. ACC deputy assistant director Abdul Awal of its Chittagong Zila office arrested former manager of IFIC Bank Limited MA Moinul Kabir and Rezaul Karim of M/s RK Enterprise at Agrabad of the port city, ACC public relations officer Pranab Kumar Bhattacharya said.
NBR seeks Tk 110cr in unpaid VAT from 9 insurance cos
The National Board of Revenue has demanded Tk 110 crore in unpaid value-added tax on agent commission and reinsurance commission from nine insurance companies. The companies have not deposited the amount in last four years to the government exchequer despite ‘legal obligation’, officials of the Large Taxpayers Unit (VAT) of the revenue board said. They said that the companies were supposed to deduct VAT at the rate of 15 per cent on agents’ commission and pay 15 per cent VAT on reinsurance commission. Bangladesh Insurance Association, however, said that it had made repeated demands to the government not to impose VAT on agents’ commission as the commission was like salary to the agents while it demanded for scrapping VAT on reinsurance commission for the survival of the insurance companies. The LTU detected the non-payment of Tk 110 crore through scrutiny of the annual reports of the nine companies. They said that LTU commissioner Matiur Rahman on Sunday issued separate show-cause notices to the companies which are under its jurisdiction, seeking explanations on why the amount will not be paid within 15 days of issuance of the notices.
A 15-member National Committee for Monitoring and Implementation of Doing Business Reforms (NCMID) has been formed to improve the country’s overall business environment. Cabinet secretary is the chair of the committee and Bangladesh Investment Development Authority (BIDA) will act as its secretariat.
The taxmen Monday received 91 income tax returns and issued 32 electronic taxpayers identification numbers (e-TINs) in favour of the taxpayers in a day-long tax camp in the capital. The taxpayers paid around Tk 0.55 million against the returns submitted in the camp arranged by tax zone-6 in city’s New Market and Elephant Road area. Some 896 taxpayers received different services. Vice chancellor (VC) of Dhaka University (DU) Dr Md Akhtaruzzaman was chief guest in the programme while National Board of Revenue (NBR) member (tax survey and inspection) Ziauddin Mahmud was special guest. A K Borhanduddin, income tax commissioner of the tax zone-6, presided over the programme. Dhaka Mohanagar Shop Owners’ Association president Toufiq Ehsan, Dhaka New Market Samity president Dr Dewan Aminul Islam Shahin, Dhaka South City Corporation councilor of Ward-18 Jasimuddin Ahmed and Ashraf Uddin Ahmed FCA also attended the programme.
The Chittagong Development Authority (CDA) is formulating a 10-year master-plan under a project for ensuring better traffic management in the port-city. The project is implemented with the financial assistance of the World Bank (WB). Its objective is to formulate the Strategic Urban Transport Master Plan (Chittagong SUTMP), through which the transport system of the port-city can be improved to a great extent. E-Gen Consultants Ltd of Bangladesh, in association with Integrated Transport Planning of the UK, is responsible to conduct the project as consultancy firm. In a workshop under the project, jointly arranged by CDA and WB at Radisson Blu on Sunday, the organizers said they would work to modernize the city’s transport management within 10 years from 2020. Academicians, experts, city planners, engineers, architects, professionals from various organizations concerned, trade-body leaders and representatives of different forums of public and private sector joined the workshop.
The state-owned Petrobangla signed the country’s first ever sales and purchase agreement (SPA) with RasGas Company Ltd. of Qatar on Monday to import 2.5 million tonnes of lean LNG (liquefied natural gas) annually for 15 years. The procurement-price has been set at around 12.65 per cent of the three-month average Brent crude prices plus 50 cents per MMBtu (million British thermal unit), a senior official at the Energy and Mineral Resources Division under the energy ministry told S&P Global Platts. At current levels, the LNG price would be around $6.50 per Mcf (1000 cubic feet) almost three times the weighted average price of natural gas price in Bangladesh at $2.19 per Mcf, he added. Petrobangla, however, has options to review the terms of conditions with RasGas after nine years, the official said requesting anonymity, as he is not authorised to speak to the media.
Complexity surfaces over tax deduction from IGW operators
Complexities surfaced over deduction of tax from the International Gateway Operators’ charges for outgoing international calls. The issue came into light as the Finance Act, 2017 incorporated a provision slapping 7.5 per cent tax over the whole amount paid to the IGW operators by the access network services for outgoing international calls. The newly added section 52R (2A) in the Income Tax Ordinance said that, ‘where any amount is paid or credited in respect of outgoing international calls, the provider of Interconnection Exchange (ICX) services or Access Network Services (ANS) shall deduct tax at the rate of 7.5 per cent on the whole amount so paid or credited at the time of such payment or credit.’
Prices of gold have been revised downward further in a week to keep it compatible with those of international market, jewellers said. In a statement, the Bangladesh Jewellers Samity (BAJUS) statement on Tuesday the new prices would come into effect from today (Tuesday). According to the new rates, the price of a gramme of 22-carat gold has been fixed at Tk 4,100, which was Tk 4,200 previously, BAJUS General Secretary Dilip Kumar Agarwala said.
Bashundhara Group will establish a modern pulp, paper and board factory with an investment of $500 million at the Mirsarai Economic Zone (MEZ). The proposed industrial facility, to be developed on 500 acres of land, is expected to create employment for nearly 10,000 people. The group’s concern Bashundhara Industrial Economic Zone (BIEZ) signed an agreement with Bangladesh Economic Zone Authority (BEZA) on Monday after receiving the land allocation, the authority said in a statement. Harunur Rashid, executive member of the BEZA (Investment Promotion) and managing director (MD) of the BIEZ Safwan Sobhan signed the agreement on behalf of their respective sides at a function in Dhaka.
Major Currency Exchange Rate Movement in Last Seven Days
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