Bangladesh Bank raises three SoCBs’ credit growth limit: Boosting productive investment main objective
The central bank has enhanced the credit-growth limits for three state-owned commercial banks (SoCBs) for this calendar year despite their soaring classified loans. Officials said the annual lending-growth limits for Sonali, Janata and Rupali have been re-fixed at 10%, 12% and 15% respectively, up from 6.0%, 10% and 12% a year ago. Agrani’s loan-growth ceiling stayed at the same level as of last calendar year at 10%. On July 26 last, the central bank of Bangladesh unveiled its ‘cautiously accommodative’ monetary policy for the first half of this fiscal year (FY), 2016-17, aiming to achieve maximum economic growth through boosting investment particularly in productive sectors. The central bank has set the ceiling for private-sector credit growth at 16.50% until June 2017 from 14.80% a year ago. The central banker has expressed the hope that such enhancement will help in expanding business activities particularly in productive sectors.
Bangladesh’s net foreign direct investment (FDI) in a financial year has crossed the $2 billion mark for the first time in the history. According to the latest balance of payment (BOP) figures released by Bangladesh Bank, net FDIs in the last FY 2015-16 stood at $2.001 billion, up by 9.34 percent from the previous fiscal. Net FDI inflow is calculated by deducting the disinvested amount from the gross flow. FDIs in Bangladesh come as equity capital, reinvested earning and intra-company loan, making up the Gross Flow. Disinvestment is calculated by deducting the cost recovery and profit-sharing amount, which the foreign companies take out from the country on investments made. Analysts attributed the rise to mega infrastructure projects like the Padma Bridge by the Bangladesh government.
The Federal Reserve Bank of New York and Bangladesh’s central bank have agreed to withdraw additional payment security measures put in place after one of the world’s biggest cyber heists, the theft of $81 million from Bangladesh Bank’s account at the Fed, two sources said. The decision comes after SWIFT, the global financial messaging platform, promised in May to strengthen security on software tools used by its clients and to develop new tools that would spot a compromised account and raise a red flag when a payment instruction deviates from normal patterns. The decision was taken at a meeting in New York this week between officials from Bangladesh Bank, the New York Fed and SWIFT, said a source close to Bangladesh Bank who has direct knowledge of the matter.
The flow of inward remittances increased by nearly 18.0% in August, as expatriates sent increased amount of money ahead of the Eid-ul-Azha festival, officials said. The remittances from Bangladeshi nationals working abroad were estimated at USD 1.2 billion in August 2016, up by USD 178.1 million from the level of the previous month. In July the remittances stood at more than USD 1.0 billion, according to the central bank statistics, released on Sunday. It was USD 1.2 billion in August 2015. A senior official of the Bangladesh Bank (BB) told the Financial Express that the inflow of remittances is showing a declining trend in various countries, including Bangladesh, mainly due to the ongoing economic recession in different parts of the world. “The overall development activities in the Middle-East countries are gradually squeezing because of lower prices of fuel oils in the global market,” the central banker explained. However, the flow of inward remittances decreased by 15.3% to USD 2.2 billion during July-August period of this fiscal year (FY) 2016-17, from USD 2.6 billion in the same period of FY 16.
Ministries and divisions could utilise only 0.56% of the Annual Development Program allocation in the first month (July) of the current fiscal year spending BDT 6.9 billion. The ADP implementation is BDT 200.0 million less than July of the last fiscal year when the expenditure was BDT 7.1 billion with 1.0% implementation rate. According to the latest data of the Implementation, Monitoring and Evaluation Division, only BDT 780.0 million (0.11%) was spent from the government fund during the first month, while BDT 6.0 billion (1.49%) in July from project assistance. Besides, BDT 200.0 million (0.16%) was spent from the organization’s own fund during the first month of the current fiscal year. Out of the 54 ministries and divisions, the IMED figures showed, the Cabinet Division witnessed the highest implementation rate of 4.79% during July, while 27 ministries and divisions could not spend any money in the month. Out of the top 10 ministries and divisions, the IMED figures revealed that the Power Division spent the highest amount of BDT 4.6 billion (2.44%) in July. In May last, the National Economic Council approved BDT 1,107.0 billion for the ADP for the current fiscal year (FY 2016-17), giving top priority to the transport sector. The NEC also approved BDT 126.5 billion of the self-financed projects and adding that the development budget size for the current fiscal reached BDT 1,233.5 billion.
With increased shipments of garment, overall exports to the US rose 1.1% to USD 3.6 billion in the first seven months of this year, according to data from the US Department of Commerce. Between January and July, manufacturers exported USD 3.4 billion of garment products to the US, Bangladesh’s single largest export destination. The number is a 0.9% rise year-on-year. Although the growth of apparel exports to the US is not too high, the trend is still inspiring, said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association. China has been losing its market share in the US. This is another major reason for the higher growth of Bangladesh’s garment exports to the US, he said. Of the top 10 garment exporters to the US, only Bangladesh and Vietnam showed positive trends in the shipments during the period. Vietnam’s exports grew 1.8% to USD 6.5 billion in the first seven months.
Small footwear makers Sunday urged the government to impose 300 per cent supplementary duty on imported shoes and sandal so that the local manufacturers can survive the competition. They also urged the government to slap only 3.0 per cent import duty by withdrawing all the existing duties on imported footwear accessories for the local entrepreneurs, including different parts of footwear, necessary fabrics, base metal-buckle, adhesive glue and gurn latex. They made the call at a press conference organized by Bangladesh Leather and Rexine Footwear Manufacturers Association at the National Press Club in the city. Speaking at the program, president of the association Sohel Ahmed said some of the traders, giving false declaration to the customs, import shoe and sandal showing lower price on paper, which is throwing the local manufacturers into unfair competition. The government should fix the price of imported shoes and sandals to prevent import of substandard footwear, he added.
Bangladesh to seek immediate approval for trade negotiations outcome: 10,000 products to enjoy marginal tariff preferences onAsia-Pacific Trade Agreement market
Bangladesh plans to press for immediate ministerial council approval for outcome of the fourth-round negotiations at the APTA (Asia-Pacific Trade Agreement) standing committee meeting in Bangkok this week. Officials said the approval would yield marginal tariff preferences to nearly 10,000 products in the markets of APTA member-states. Presently, under the third round of negotiations, 4,290 products are entitled to get the tariff preference. Bangladesh, China, India, Lao PDR, the Republic of Korea, Sri Lanka and Mongolia are members of the Asia-Pacific trade bloc. A five-member Bangladesh delegation, led by a joint secretary of the Ministry of Commerce (MoC), will attend the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)-sponsored meeting in the Thai capital. A senior MoC official told the Financial Express that during the meeting, the formation of working group for signing separate deals among the member-states regarding three framework agreements–on trade facilitation, trade in services, and investments–will also be discussed.
Uncertainty lurks around the construction of the proposed garment industrial park at Bausia in Munshiganj as the Chinese developer company has abandoned the job unfinished. BGMEA and Oriental International Holding Ltd of China signed an agreement in 2014 to develop the industrial park on 530 acres of land at a cost of USD 2.3 billion. The Bausia project, a joint venture of BGMEA and Oriental, was supposed to house more than 200 factories that would export goods worth USD 3 billion-USD 5 billion a year and employ nearly 300,000 workers. “The Chinese company has left the project over land acquisition problems,” Hedayetullah Al Mamoon, senior secretary to the commerce ministry, told The Daily Star. The government cancelled the land acquisition process for the proposed industrial park as the Chinese investors failed to compensate the affected land owners within the stipulated time. The industrial park, which was supposed to be completed within three years of signing the agreement, will have utility services, a central effluent treatment plant, daycare centres, waste-dumping yards, banks and insurance offices.
After maintaining a rising trend for three consecutive years, wheat output declined in the last fiscal year (FY’16) due to outbreak of wheat blast, officials said. The short-duration winter in the country has also caused a decline in per hectare yield, experts said. Wheat cultivation begins in November-December and its harvesting time is from March to April, according to the Bangladesh Wheat Research Centre (BWRC). Wheat production declined to 1.348 million tonnes in FY’16 from 1.35 million tonnes in FY’15, according to Bangladesh Bureau of Statistics (BBS) provisional estimate. An official at the BBS said per hectare yield was 3.03 tonnes in FY’16 which was 3.09 tonnes in FY’15.
Retail, garments, tourism to drive e-commerce growth
Bangladesh’s e-commerce industry could become a one-billion-dollar market in the next five years, aided by retail, garments and tourism sectors that increasingly go online, industry insiders have said. “Currently, an estimated Tk. 10 billion transaction takes place annually through e-commerce websites in the country and that volume is significantly growing,” Rajib Ahmed, President of e-commerce Association of Bangladesh, told FE. “However, in the next five years, not only retail outlets or tourism companies will use this platform, but the readymade garment industries will drive the growth in this sector,” he added.
In collaboration with Intel and Microsoft, the local brand Walton is going to manufacture 6th Generation high-tech devise including laptops and desktops computer, mobile phones and tabs, said a Walton statement. To supply international standards to the local ICT market, Intel and Microsoft are providing technical and financial supports to Walton, it added. Walton Group Director SM Rezaul Alam said: “Walton is going to manufacture international standard laptops in the local ICT market at affordable rates compared to other brands’ laptops.” The plant of manufacturing motherboard like high-tech hardware is under construction at Walton factory and it would come into operation soon, said Alam. After the inception of production, he said: “We would be able to supply laptop in the Bangladesh IT market at around 50% lower prices than the other brands’ rates.” Walton is working relentlessly in raising the country’s image in the global arena through supplying ‘Made in Bangladesh’ labeled world-class high-tech devices in the global markets, he noted.
Citycell to pay Tk 477.51 crore due to BTRC in 3 months
The Appellate Division of the Supreme Court on Monday ordered Citycell, the country’s oldest mobile phone operator to pay its Tk 477.51 crore dues to the Bangladesh Telecommunications Regulatory Council (BTRC) in installments within three months. A five-member bench, led by the Chief Justice SK Sinha, passed the order after hearing petition filed by Citycell. The court also ordered that Citycell can continue its operation on some conditions condition.
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