Banks asked not to open LCs of unlicensed traders

Posted by BankInfo on Tue, Mar 31 2015 02:10 pm

Bangladesh Bank has asked banks not to open letters of credit for duty-free import of industrial raw materials under bonded warehouse system in favour of the businesspeople who do not have licence or renew them from the Customs Bond Commissionerate. The BB on Monday issued a letter to managing directors and chief executive officers of all banks in line with directions given by the Customs Bond Commissionerate asking them (banks) to take required measures in this regard to tackle duty dodging. A BB official told New Age on Monday that the Customs Bond Commissionerate had issued a letter to the central bank on March 25, requesting it to ensure the government revenue as some banks frequently opened LCs for the duty-free back-to-back imports in favour of some businesspeople who did not have licence. The Customs Bond Commissionerate offered the licence for due-free raw material imports to the businesspeople who use the products to produce export-oriented goods, he said. But, some businesspeople sell the imported raw materials in the local market without using the products to produce the export-oriented goods, the official said. The Customs Bond Commissionerate in its letter said that it had already created a web site in which the list of the licence-holders, who are considered to enjoy the duty-free facility, was attached. The banks should follow the web site before opening the letters of credit for the duty-free imports, the letter said. Besides, the banks will have to issue Proceed Realisation Certificate after ensuring the export worth’s repatriation, the Customs Bond Commissionerate said. The banks give the certificate to the exporters after they repatriate the worth of the exported products to the country, the BB official said. Some banks, however, provide the certificate without ensuring the repatriation worth of the exported products, he said. The Customs Bond Commissionerate earlier suspended a number of licences of the businesspeople as they were found selling the back-to-back imported-products in the local market after enjoying the duty-free facility illegally. For this reason, the Customs Bond Commissionerate has also attached the list of businesspeople with its web site whose licences were earlier cancelled or suspended. The central bank earlier unearthed that some persons patronised by the ruling parties had managed the licence to enjoy the duty-free import although they had not played any role in export-oriented business, the BB official said. ‘After selling the products in the local market, the persons never went for any import again meaning that they did so just to evade the duty’, he said. The central bank will take punitive measures against the banks which will open such type of LCs to facilitate the businesspeople illegally, the central banker said. 

News:New Age/31-Mar-2015

HSBC's top retail banker due in Dhaka today

Posted by BankInfo on Tue, Mar 31 2015 02:03 pm


Anurag Mathur, HSBC's head of international retail banking and wealth management for Asia Pacific, will arrive in Dhaka for a two-day visit today. 
He will meet a number of the bank's clients, stakeholders and local colleagues during his visit, HSBC said in a statement yesterday.  
Mathur is currently responsible for over eight markets in Asia Pacific region, including Bangladesh, Brunei, Macau, Mauritius, New Zealand, the Philippines, Sri Lanka and Vietnam, it said. 
He joined HSBC in Hong Kong in 2009, and has also served as the regional head of business performance in retail banking and wealth management in Asia Pacific. 

News:The Daily Star/31-Mar-2015

BB drafts law for payment systems

Posted by BankInfo on Mon, Mar 30 2015 11:54 am

The central bank has prepared a draft national payment systems act to govern the operations of all kinds of payments in the country.

Once implemented, the Payment Systems Act 2015 will enhance efficiency in controlling the payments.

The objectives of the national payment system include minimising payment, clearing and settlement risks as well as achieving reliable, secure, convenient, cost effective, universal and integrated systems to meet the needs of the growing economy.

It also aims to instate punitive measures for those who contravene laws.

“At present, there are a lot of activities under the electronic system. The law aims to prevent irregularities and bring law breakers to justice,” said Nazneen Sultana, deputy governor of Bangladesh Bank.

The proposed law comes right when transactions through the electronic payment system, the electronic fund transfer and mobile banking are growing tremendously -- a development which necessitates providing users a safeguard from electronic frauds.

The draft of the law has been uploaded on the central bank's website for public scrutiny and opinion, both from individuals and banks, after which the regulator will move to make it law.

Under the draft, Bangladesh Bank will regulate the national payment systems to reduce potential risks, and no individual or company will be able to implement payment services without obtaining a licence from the central bank.

However, banks or other financial institutions which already maintain accounts with the central bank will not require new licence to provide payment services. They will however, need to get the regulator's no-objection certificate.

People found guilty of violating rules under the law would face a fine of a maximum of Tk 5 lakh, or a prison-term of up to three years or both.

If any licensee wants to outsource the payment system management, it has to take permission from the central bank. 

News:The Daily Star/30-Mar-2015


Banking gets speed from e-payment

Posted by BankInfo on Mon, Mar 30 2015 10:21 am

Around Tk 7,000 crore worth of cheques are being cleared a day under the electronic payment system, which makes the economy vibrant, Bangladesh Bank Deputy Governor Nazneen Sultana said yesterday.

The central bank's initiative has revolutionised the payment system, she said at the launch of Al-Arafah Islami Bank's mobile banking service—Hellocash—in the capital.

Around 1.5 lakh cheques are being cleared a day with the electronic payment system. “Previously, it used to take three or more days to clear a cheque.”

A huge change has taken place in electronic fund transfer, Sultana said. About 10 lakh instructions are received and Tk 300 crore in funds are transferred electronically a day, she said.

The salaries of government and non-government employees are now transferred to their accounts within a minute, said Sultana.

The central bank bears the cost of running the system, she added. “Our governor [Atiur Rahman] often says this is a kind of CSR of the central bank. We want people to get used to electronic banking and take benefits from it.”

Twenty out of the 28 banks which got Bangladesh Bank's approval for mobile banking, including Al-Arafah, have so far introduced the service.

At present, around Tk 391 crore is transacted through mobile banking, she said.

Transaction in banks did not decrease even amid political unrest, thanks to the electronic fund transfer facilities, she said.

Banking services are not available in all the 68,000 villages of the country, said Md Habibur Rahman, managing director of Al-Arafah.

About 70 percent of the population has mobile phones, he said, adding that his bank will try to extend such services to all of them through mobile phones.

The bank's new service will also allow clients to pay utility bills, enjoy cash-in and cash-out services, send-receive remittance and many other transactions with security and ease, he said.

Badiur Rahman, chairman of the bank, and SM Shameem Iqbal, vice chairman, also spoke.

News:The Daily Star/30-Mar-2015

US caught off guard by success of new China-led bank

Posted by BankInfo on Fri, Mar 27 2015 11:52 am

AFP, WASHINGTON: The success of the new China-led development bank has caught the United States off guard, after it fought the project and now finds itself increasingly isolated. Britain, Germany, France... the United States has watched, helpless and dumbfounded, as its European allies flocked to join the Asian Infrastructure Investment Bank, seen as a potential rival to the World Bank and the Asian Development Bank, both institutions under powerful US influence.

The list does not stop there. Other US allies, like Australia and South Korea, are considering joining the AIIB, which already has about 30 member nations and the blessing of International Monetary Fund chief Christine Lagarde.“The US has been caught flat-footed by the rush of countries, including its close economic and political allies, that are lining up to join the China-led AIIB,” Eswar Prasad, a former head of the IMF’s China division, told AFP, pointing to the “declining power of the US in driving the global economic policy agenda.”The Obama administration has been waging an intense but low-profile lobbying campaign against rival China’s $50 billion bank project unveiled in October. Officials have insinuated that the AIIB would lower international development standards.“Will it adhere to the kinds of high standards that the international financial institutions have developed? Will it protect the rights of workers, the environment, deal with corruption issues appropriately?” Treasury Secretary Jacob Lew said last week in testimony in Congress.The upfront opposition, which is fed by a climate of mistrust between the world’s leading economic superpower and its fast-growing rival, has proved ineffective.
“The US became isolated on the issue relatively early because they were so vocally critical. As a result the US lost the opportunity to have more of an open discussion with countries who were considering joining,” said Scott Morris, a former Treasury official, in an interview.
That failure has its consequences. In a rarity since the end of World War II, the United States must prepare to cope with a multilateral institution on which it will have no direct influence.
Accustomed to constructing the world’s financial architecture, the United States may be overconfident and underestimated the powerful attraction of China and its colossal cash reserves.
“The United States has only known its status as a leader and it has psychologically not adjusted to the real emergence of other countries including China. Their mentality is a bit behind the reality,” said Hongying Wang, an expert on US-China relations at the Centre for International Governance Innovation, a Canadian think tank. According to experts, Washington also underestimated the weariness of certain countries, including its allies, with its lack of enthusiasm for multilateral economics.
The United States is blocking 2010 reforms of the IMF that would raise the voting rights of emerging powers and sometimes is accused of neglecting the World Bank. Washington is the major stakeholder in both institutions.
“These countries have more ambition for larger multilateral institutions and they become frustrated with the position 
of the United States, which is not terribly ambitious,” Morris, the former Treasury official, said of the countries that are joining the AIIB.
Growing aware of its isolation, the United States has begun to relax its position by opening the door to cooperation with the China-led bank, which is expected to be open for business by the end of the year.
“The United States would welcome new multilateral institutions that strengthen the international financial architecture,” said Nathan Sheets, Treasury under secretary for international affairs, on Monday.
In a recent blog post, the US Treasury said that it will continue to “engage 
directly” with China and coordinate with other international partners “to provide concrete suggestions on how the AIIB 
can best adopt and implement high-quality standards.”

 News:The Independent/27-Mar-2015
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