BDT 1.3 trillion liquidity glut in banks cools market: No pre-festival call money volatility
An all-time-high BDT 1.3 trillion liquidity glut in banks cast a damper on usual pre-festival upswing of call money in inter-bank borrowings, officials said. The inter-bank call-money rate remained stable Monday, barely a week before the Eid-ul-Azha fiesta that sees a binge of buying sacrificial animals and their rawhides. The call rate ranged between 2.8% and 4.5% on the day, against the previous range between 2.65% and 4.50%. However, most of the deals were settled at rates varying between 3.5% and 4.0%, they added. On the other hand, the total turnover on the call-money market rose to BDT 58.6 billion on the day from BDT 57.8 billion last Sunday. A senior treasury official of a leading private commercial bank told the Financial Express that the call-money rate is unlikely to rise ahead of the Eid festival despite higher withdrawal of cash from the banks. He also said such short-term borrowings normally increase before Eid to meet a growing demand for money from the banks. Meanwhile, the overall excess liquidity with the commercial banks stood at around BDT 1.3 trillion as of July 14 last from BDT 1.2 trillion as on June 30, according to the officials.
Import payments registered a negative growth of 18.4% in July, the first month of the fiscal year, compared with that of a 16.0% growth in the same month of the FY15 because of sluggish business situation in the country and lower commodity prices on the international market. BB officials told New Age on Monday that the businesspeople were still maintaining a go-slow policy to settle letters of credit as they thought that the country’s existing business environment and law and order situation were not favorable enough for business expansion. According to the BB data, the settlement of LCs stood at USD 2.8 billion in July of the FY17 against USD 3.4 billion during the same month a financial year ago. The settlement of LCs was worth USD 3.0 billion in July of FY14. The import of industrial raw materials, however, posted a slightly higher growth of 2.6% in July of the FY17 compared with that of a 0.6% growth during the same month of the FY16. The settlement of LCs for the industrial raw materials stood at USD 1.2 billion in July of FY17 against USD 1.2 billion in the same month of FY16. Settlement of the LCs for petroleum products posted a negative growth of 33.5% in the first month of FY17 compared with that of a negative growth of 60.9% in the same month of FY16. The import payments for petroleum products stood at USD 114.3 million in July of FY17 against USD 168.2 million in the same period of FY16.
Country’s exports bounced back in August with a 19.8% growth to USD 3.3 billion, compared to August 2015, after July slump. Industry-insiders said the turnaround was driven by increased apparel shipments in August, after a 3.5% fall in July’16 from the mark a year before. This happened to be first decline since September 2015. The July turnover in total export trade was worth USD 2.5 billion. The August figure was 16.5% above the government’s monthly target set for the month, according to provisional data with Export Promotion Bureau (EPB). The overall export earnings grew by 8.4% to USD 5.83 billion in the first two months of the current fiscal year (FY), 2016-17, compared to the corresponding period of last fiscal. However, the total two-month earnings fell short of set July-Aug target by 6.01%, the provisional data showed. Earnings from the lead sector, readymade garments, comprising knitwear and woven items, stood at USD 4.84 billion that marked an 8.0% growth during the period.
The National Board of Revenue is working to give taxpayers the convenience to file and submit tax returns online from this year. “We want to launch the digital platform ahead of the income tax fair in the first week of November this year so that individual taxpayers can file and submit returns online,” said a senior official of NBR seeking to remain unnamed. The deadline for individuals to submit income tax returns is November 30, which is now called Tax Day. Taxpayers will have to pay penalty if they do not submit returns on or before the deadline, the NBR said.Taxmen said they have already accommodated the current fiscal year’s income tax-related changes in the software to introduce the e-filing system. “We are fine-tuning the system now so that taxpayers can easily accomplish their tasks,” the official said. The e-filing of tax returns is one of the two major schemes that the NBR took earlier to automate the tax and VAT systems to ease taxpayers’ hassles and increase transparency and accountability in revenue administration. Once introduced, the digital platform is also expected to reduce human interaction and ensure higher compliance by taxpayers. In the past, particularly since 2009, the tax authority took several initiatives to facilitate tax return submission and tax payment online.
The customs houses will remain open on September 9, 10 and 11 ahead of Eid-ul-Azha for ensuring smooth export and import services of readymade garments. The National Board of Revenue took the decision this afternoon to facilitate export and import activities of the country’s main export earning industry, said a press release. However, the government has declared September 11 a holiday as part of a six-day long vacation starting from this Friday (September 9). The NBR said its customs houses in Dhaka, Chittagong, Mongla, Pangaon and Benapole will remain open to provide services to exporters.
The rush to obtain taxpayer identification numbers intensified after the National Board of Revenue mandated that public and private sector employees, who earn Tk 16,000 or more a month, will have to have TINs to receive their salaries. Some 1.31 lakh individuals have signed up for electronically generated TINs since July 1, to comply with the tax authority’s rule. “It appears that employers have started asking employees to get TINs. The amount of salaries paid to employees will be treated as income, if employers fail to show TINs,” said a senior official of NBR, asking not to be named. Public sector employees who draw salaries and allowances at the 10th grade will have to have TINs, the NBR said in a notification early this month.
Bangladesh Shipping Corporation inks deal with Chinese firm to purchase 16 ships
Bangladesh Shipping Corporation (BSC) will purchase 16 ships from China for carrying coal to be used for power plants, officials said. Six of them are mother bulk carriers while 10 are lighter bulk carriers. Executive Director (Finance) of BSC Yasmin Afsana and representative of China Harbour Engineering Company Limited (CHEC) in Bangladesh Huang Daojun signed Monday a memorandum of understanding (MoU) in this regard on behalf of their respective sides at the ministry of shipping (MoS). Shipping Minister Shajahan Khan was present at the signing ceremony. About the prices of ships, a high official of the MoS told the FE that the two sides will sit again to finalise the financial amount and mode of payment after six months since the date of MoU signing. He said within two years since the date of MoU signing, the ships will arrive in Bangladesh from China. Each of the mother bulk carriers will be 80 thousand dead weight tonnes (DWTs) while lighter bulk carriers between 8 and 10 DWTs. China Harbour Engineering Company Limited (CHEC) will provide the ships under Chinese loans. Earlier, BSC signed a MoU with another Chinese firm in April last to procure two mother tankers. Besides, six more big-sized ships for BSC are in the pipeline.
Executive Committee of the National Economic Council (ECNEC) set to approve yet another 4-lane road project
The government is likely to approve Bangladesh’s largest road development project, the Elenga-Rangpur 4-lane, at a cost of BDT 118.8 billion, officials said Monday. Planning Commission (PC) officials said it would place the Elenga-Hatikumrul-Rangpur road up gradation project before the Executive Committee of the National Economic Council (ECNEC) today (Tuesday) for approval. The project implementing agency- the Roads and Highways Department (RHD)-would develop the existing 190.40km highway into a 4-lane one with the financial support from the Asian Development Bank (ADB). The ADB will finance the project from the regional fund called-South Asia Sub-regional Economic Cooperation (SASEC). According to the project proposal, the ADB will provide BDT 93.4 billion from the SASEC fund while the government will make available the remaining portion of the projected expenditure. Meanwhile, the PC has asked the Ministry of Road Transport and Bridges (MoRT&B) to justify cost of the proposed Elenga-Hatikumrul-Rangpur 4-lane road project as it has found the cost abnormally high, compared to that of identical projects, officials said.
Big businesses making a beeline for LPG stations’ licenses
Businesspeople are lining up en masse to avail government licenses to install LPG (liquefied petroleum gas) stations and conversion workshops to establish a strong foothold on the newfound fuel market. Applications for around 1,000 LPG re-fuelling stations, also named auto-gas stations, across the country have already reached the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources (MPEMR), a senior EMRD official told the FE. He said many business enterprises are also enquiring about the process of getting licenses. Most of the applicants do not have previous experience in doing LPG or re-fuelling business, he added Beximco Petroleum, Intraco CNG, Green Power Energy, Energypac and Golden Energy are among the business houses that are awaiting MPEMR nod for license. Among them, Beximco Petroleum alone has applied for getting licenses to install 500 auto-gas re-fuelling stations and 25 conversion workshops. Intraco applied for 200 re-fuelling stations, said the official. The government will scrutinize the applications to make sure that no firm establishes monopoly on the booming LPG market, he added. The government has already adopted country’s first-ever policy guidelines for installing re-fuelling stations and conversion workshops and their maintenance.
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