Md Abdul Halim Chowdhury, Managing Director of Pubali Bank Ltd, addressing a training course on 'Foundation Training for Probationary Officers' at its training institute recently. Niranjan Chandra Gope, Principal of Pubali Bank Training Institute, preside

Posted by BankInfo on Sat, Jul 29 2017 12:01 pm

Md Abdul Halim Chowdhury, Managing Director of Pubali Bank Ltd, addressing a training course on \'Foundation Training for Probationary Officers\' at its training institute recently. Niranjan Chandra Gope, Principal of Pubali Bank Training Institute, presi

News:new nation/-jul-2017

Farman R Chowdhury, Managing Director of Shahjalal Islami Bank Limited, poses with the participants of a 15-day long 'Foundation Training Course' for the newly recruited Management Trainee Officers of the bank at its training institute recently.

Posted by BankInfo on Sat, Jul 29 2017 11:53 am

Farman R Chowdhury, Managing Director of Shahjalal Islami Bank Limited, poses with the participants of a 15-day long \'Foundation Training Course\' for the newly recruited Management Trainee Officers of the bank at its training institute recently.

News:new nation/29-jul-2017

BB lowers private sector credit target

Posted by BankInfo on Thu, Jul 27 2017 11:16 am

‘We have set 15.8% as domestic credit growth because the credit flow in the last fiscal was lower than the set target’

The target was 16.5% in the second half of the last fiscal year, which ended on June 30.

After discussing with stakeholders and economists, BB Governor Fazle Kabir announced the monetary policy at the central bank’s headquarters on Wednesday.

He said the bank was targeting 12.1% credit growth in the public sector and an overall domestic credit growth ceiling of 15.8%.

“We have set 15.8% as domestic credit growth because the credit flow in the last fiscal was lower than the set target,” the governor said.

The credit growth has only been lowered for the public sector, not the private sector.

The Exporters Association of Bangladesh (EAB) president, Abdus Salam Murshedy, was critical of the central bank policy.

“Both the exports earnings and private sector investment growth are showing little growth, but Bangladesh Bank has contracted the credit growth target in its monetary policy for the next six months,” he  told the Dhaka Tribune.

“If Bangladesh Bank increases the credit growth, it will encourage both banks and investors to disburse more and expand businesses.”

When journalists at on Wednesday’s event asked the governor whether the MPS is contractionary, since the credit growth target has been lowered, the response came from a deputy governor.

Deputy Governor SK Sur Chowdhury replied: “The recent rise in foodstuff prices are an omen for inflation. Hence we have set the domestic credit growth target at 15.8% (but) it will be adjusted if needed.”

Fazle Kabir said the policy will help the Bangladesh economy to achieve 7.4% GDP growth at the end of the current fiscal year, while limiting the inflation rate to 5.5% as per the government target in the budget for this fiscal year.

The inflation rate at the end of last FY stood at 5.4% against the pre-set target of 5.8%.

The governor also suggested that in order to meet the budget deficit, the government should increase borrowing credit for state-owned banks, and cut dependency on national savings certificates by lowering the existing interest rate on NSCs and fixing a ceiling for their sales.

News:Dhaka Tribune//27-jul-2017

De-risking batters nine banks, the syndrome may spread

Posted by BankInfo on Thu, Jul 27 2017 11:04 am

More banks fear overall profitability slide for such action against money laundering

At least nine local banks have been battered by newly-invented 'de-risking' strategy to combat money laundering that may also affect profitability of other local banks.

Such official findings stem from the national action plan mandated by an international combat against money laundering and terror financing.         

"Some other local banks have also been affected by the de-risking," Abu Hena Mohammad Razee Hassan, Deputy Governor of Bangladesh Bank (BB), disclosed while replying to a query about the impact on de-risking of Bangladesh.

The term 'de-risking' refers to financial institutions closing the accounts of clients perceived high risk for money laundering-or terrorist-financing abuses, namely money service businesses, nonprofit organisations, correspondent banks, and foreign embassies.

The central bank of Bangladesh has already advised the global banks through their local offices or representatives to inform the Bangladesh Financial Intelligence Unit (BFIU) of the central bank before cutting ties with local commercial banks, said Mr. Razee Hassan, also head of the BFIU.

"The issue has already been discussed at FATA (Financial Action Task Force) and APG (Asia Pacific Group on Money Laundering) recent meetings," the BFIU chief noted.

Among the nine local banks, five are state-owned commercial banks while one is a Shariah-based Islamic bank and three other conventional local private commercial banks. They have been designated as the mostly affected banks of Bangladesh, according to a BB senior official.

Currently, 49 local banks are running their operations across the country. He also said the BFIU has urged the global banks to review the corresponding relationship discontinuation with the local banks.

"Some corresponding relationships had been discontinued on the basis of media reports," the official said in reply to a query.

Adverse impacts of de-risking increased further in 2016, affecting 60 per cent local banks as against 53 per cent a year before. It was 60 per cent in 2014, according to a study conducted by the Bangladesh Institute of Bank Management (BIBM).

Contacted, Shah Md. Ahsan Habib, professor and director of the BIBM, said the profitability of banks may be hampered following adverse impacts of the de-risking drive.

 "Cross-border transactions and remittance business of the banks have been affected due to the de-rising," Dr. Habib explained. He also urged the banks to take effective measures to improve compliance capacity of AML/CFT for avoiding such negative impacts.

"Workers' remittance inflows are suffering downturn not just because of weakened demand for migrant workers in major migrant labour-hosting countries but also because it is getting harder, even impossible in some instances, for migrant workers to access legitimate channels for sending money home, with high-cost burdens of compliance with unduly  stringent AML/CFT regulations dissuading international banks from relationships with remittance-handlers," the central bank said in its latest monetary policy statement (MPS), released Wednesday.

It also said: "Urged repeatedly in global dialogues, inter alia by the BB and other Bangladesh authorities, global AML/CFT standard-setters are now reportedly looking into this."

The inflow of remittances dropped by 14.48 per cent to US$ US$12.77 billion in the fiscal year (FY) 2016-17 from $14.93 billion a year ago.

News:Financial Expres/27-jul-2017

BB unveils 'cautious' H1 MPS against lurking economic risks

Posted by BankInfo on Thu, Jul 27 2017 10:42 am

"We'll not support growth at the cost of inflation," says governor Fazle Kabir

The central bank unveiled Wednesday country's monetary policy for July-December period targeting 12.9 per cent expansion in money supply.

It described the expansion "accommodative" with the projected economic growth for the current financial year, but economists found the stance 'cautious'.

Broad money, which includes demand deposits with commercial banks, and any monies held in easy-accessible accounts, has been programmed up to December to grow 12.9 per cent.

And up to June next, the rate rises 1.0 percentage point to 13.9 per cent.

Such monetary stance is in keeping with the targeted gross domestic product (GDP) growth at 7.4 per cent, set in the national budget for the current fiscal year (FY) 2017-18, the Bangladesh Bank said.

Reserve money, whose components are currency in circulation, bankers' deposits with the central bank and other deposits with the Bangladesh Bank, has been programmed at 12 per cent up to June.

The money circulation from now on will be estimated on annual-average basis instead of point-to-point basis.

Public-sector-credit growth, which had plunged into a negative 16 per cent up to last May, now has been projected to expand at 3.8 per cent up to December and much higher at 12.1 per cent at the end of the financial year as the government may need funds for non-implementation of the VAT Act 2012.

However, the Bangladesh Bank Governor, Fazle Kabir, while delivering his speech at the MPS- launching programme at the BB headquarters, said this monetary-policy stance is growth- supportive as well as conducive to employment.

"We'll not support growth at the cost of inflation," said the governor, whose bank reigns over the country's monetary system.      

Mr. Fazle Kabir, however, sees two challenges in executing the MPS: higher yields on national savings certificates and falling trend in remittance by the country's expatriate nationals.

He suggests the yields on the savings certificates should be consistent with the market rates.  And for augmenting the remittance inflows through formal channels the central bank is working on effective ways.

The governor feels no need for changes in the policy rates for the time being-the central bank will take instant measures if necessary.

He notices an upturn in food inflation on the back of floods in northeastern haor areas. "We expect inflation will remain tolerable as India has less than 2.0 per cent inflation along with low prices of some key commodities on the global market."

Mr. Kabir said the central bank will facilitate 'angel' investment in the country to help the small startups or innovative entrepreneurs.

He said the venture-capital firms were seen not interested about the startups. "Even India is facilitating angel investment, so why not in the country."

News:Financial Express/27-jul-2017
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