Bank of England and business at odds over rate rise

Posted by BankInfo on Thu, Jul 24 2014 11:14 am

Bank of England officials are still concerned by the UK economy’s weakness while business leaders have urged that the “time has come” to raise rates, reports AP.
The nine members of the Monetary Policy Committee voted to keep rates at 0.5%, as expected.
They agreed that while “employment had continued to increase robustly… wage growth had been surprisingly weak”.
But business leaders believe the Bank may be being too cautious and should start raising interest rates.
James Sproule, chief economist at the Institute of Directors said: “The economic recovery is strong enough that the time has come to be making progress towards [interest rates of 3-4%].”
However, the minutes point out that “there were early signs that global growth was weakening, and an unexpected increase in interest rates when real wages were not yet rising could… destabilise the recovery.
Wage growth excluding bonuses slowed to a record low 0.7% in the three months to May.The minutes added: “The committee agreed that no increase was warranted at this meeting, although for some members the decision had become more balanced in the past few months than earlier in the year”.
Mr Sproule said: “We remain concerned that there is insufficient appreciation that we are experiencing extraordinary monetary policy, and it should not be assumed that such extraordinary policy can continue.
“Looking ahead two years, we would like to be reaching a point where monetary policy could again be effective, which means interest rates in the range of 3-4%.”

News:Bangladesh Today/24-July-2014

New India government urges changes to World Bank

Posted by BankInfo on Thu, Jul 24 2014 10:51 am

'We pledged our financial support (to India) but we also spoke at great length about our knowledge partnership that we are going to build'

India’s new government has called for reforms to the World Bank structure to reflect the “emerging” clout of developing nations in a meeting with visiting bank chief Jim Yong Kim.

The government, which took office in May, said in a statement late Tuesday that Finance Minister Arun Jaitley stressed at an evening meeting with Kim the need for significant changes to the way the World Bank operates.

Jaitley told Kim that the Bank needs to play a “global role in poverty reduction and development” and also “reflect the emerging world order in its governance”.

Kim is on an official visit to India that wraps up Wednesday during which he is meeting members of the country’s new right-wing government.

The call by India’s finance minister came on the heels of the BRICS group of nations - Brazil, Russia, India, China and South Africa - establishing earlier this month a development bank to rival the World Bank.

At a meeting in mid-July, BRICS leaders agreed on the set-up of a $50bn development bank by granting China its headquarters and India its first rotating presidency.

The move has been seen as a step away by developing nations from the traditional commanding role of Western nations in the global economy.

India and other developing nations have long faulted the World Bank for failing to give stronger voting rights to developing nations despite the fact they are home to some 40 percent of the global population.

The Press Trust of India news agency quoted Kim as saying late Tuesday that India had historically been the World Bank’s biggest borrower and its success hinged on the country achieving economic success.

“We pledged our financial support (to India) but we also spoke at great length about our knowledge partnership that we are going to build,” Kim said, according to the news agency.

“We will bring innovations from all other countries in the world here as Prime Minister Narendra Modi’s government embarks on an extremely ambition mission to grow the economy,” Kim said.

Modi was elected with his Bharatiya Janata Party winning the biggest majority in three decades on a platform of spurring India’s sharply slowing economy.

India is the World Bank’s highest cumulative borrower with a portfolio of 85 projects to which some $24bn has been committed. 

News:Dhaka Tribune/23-July-2014

Samabaya Bank in Rajshahi inoperative for 10 years

Posted by BankInfo on Thu, Jul 24 2014 10:31 am

RAJSHAHI: Activities of Samabaya Bank in Rajshahi remained suspended for nearly 10 years. As a result, marginal farmers and small entrepreneurs are being trapped by the loan sanctioned at high interest rate by the NGOs.

Sources close to Samabaya Bank said the activities of Samabaya Bank were closed as the bank failed to repay a loan of Tk 55 lakh to the government. As a result, activities of 186 units of Samabaya Samity in various areas of the district remained stalled. At the same time, a substantial amount of money sanctioned to the field levels through various samabayas also remained unrealised for a long time.

Only in Godagari upazila there were 20 units of Samabaya Samity. Only two of these remained somehow active through the own initiatives of the members and others are now almost non-existent. Out of two active units, one is situated at Rishikul Union Bohumukhi Samabaya Samity Limited.

Years ago, farmers and small entrepreneurs used to get small agriculture and other small loans through these Samabaya Samities at a nominal interest rate. There was also no scope to becoming loan defaulter to any member because the loan was being sanctioned through forming co-operative societies.

As the activities of the Samabaya Bank remained closed for nearly 10 years, almost all the co-operative societies formed years ago no longer exist. As a result, farmers and small business entrepreneurs were drawing loan from various NGOs at an exorbitant, multiple interest rate and are turning paupers.

News:Daily Sun/24-July-2014

Al-Arafah Islami Bank holds seminar

Posted by BankInfo on Thu, Jul 24 2014 10:22 am

Md Habibur Rahman, Managing Director of Al-Arafah Islami Bank Limited, speaks at a seminar on “Ramadan o Al-Quran” at the bank’s head office in Dhaka on Tuesday.

 Al-Arafah Islami Bank Limited organised a seminar on “Ramjan o Al-Quran (Ramadan and Al-Quran)” at the bank’s head office in Dhaka on Tuesday.

Md Habibur Rahman, Managing Director of the bank was present as chief guest, said a press release.

Dr. Hasan Mohammad Moinuddin, Assistant Professor of International Islamic University, Chittagong (Dhaka campus) was the main discussant.

Md. Mofazzal Hossain, Kazi Towhidul Alam, Md. Golam Rabbani and Mohammad Abdul Jalil, Deputy Managing Directors, top executives of the bank, among others, were present on the occasion.

News:Daily Sun/24-July-2014

Sonali Bank faces crisis as clients reluctant to get loans

Posted by BankInfo on Wed, Jul 23 2014 10:30 am

The disbursement is Tk3,236 crore lower than Tk36,771 crore released in the first half of last year

Loan disbursement of the state-owned Sonali Bank dropped by 8.8% to Tk33,534 crore in June this year compared to same period of the last year as the bank has so far failed to disburse expected-level of loans among its clients.

The disbursement is Tk3,236 crore lower than Tk36,771 crore released in the first half of last year.

The bank published notices in the newspapers offering loans, but yielded no result so far, Sonali Bank Managing Director Prodip Kumar Dutta told a press conference at the head office of Sonali Bank in the capital yesterday.

“We are reminding the branch managers, heads of regions and general managers to enhance the loan disbursement,” he said.

“We have set the loan disbursement target for the branches and the performance of the branches is being strongly monitored by the head office.”

The adjusted loan growth rate of Sonali Bank was negative by 7.07% in the last year against the target limit of 8% set by Bangladesh Bank.

The total loan growth of the banks decreased by 11.67% or Tk3,963 crore in the last year, according to the Bangladesh Bank data.

The credit ceiling of Sonali Bank has been set at Tk1,328 crore for the year 2014, which is 6% of the adjusted loan status of Tk22,133 crore in 2013.

The bank won’t be able to achieve its loan disbursement target as the bank is also going through a financial crisis, said a senior executive of Bangladesh Bank.

The bank is yet to settle over 1,700 accepted bills with other banks, relating to Hallmark scam as the state-owned bank is suffering find crisis, he said.

Moreover, the bank is suffering from image crisis due to the Hallmark loan scam, he added.

“Though the bank suffered from capital shortfall of Tk278.43 crore in March this year, which was Tk821 crore in 2013, we will be able to meet the shortfall at the end of this year,’’ however, hoped managing director of Sonali Bank.

News:Dhaka Tribune/23-July-2014
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