Mamun-Ur-Rashid, Managing Director of Standard Bank Limited, inaugurating a five day- long course on \"Capacity Building for Credit Operation\" at its Training Institute recently. Among others, Md. Zakaria, Principal and Md. Amzad Hossain Fakir, Faculty o

Of the firms, Square Pharmaceuticals will invest $8 million in Kenya and DBL Group will invest $8 million to build an RMG factory in Ethiopia

Bangladesh Bank has approved the proposals of seven local firms to bring their capital aboard for investment.

Central bank’s Executive Director ANM Abul Kashem made the disclosure while speaking at a workshop in Dhaka Tuesday.

However, economists consider overseas investment by local firms “uncomfortable” when the country needs more local and foreign investment.

They said thousand of crores of taka is being laundered abroad and the government, meanwhile, is giving the firms an opportunity to invest abroad.

Dr Naznin Ahmed, senior research fellow of Bangladesh Institute of Development Studies (BIDS), told Bangla Tribune: “Bangladesh will be benefited if the interest from the overseas investment can be brought to the country. But, it would be better if the money was invested here.”

Also Read- Local firms look beyond borders

She also stressed the need for improving the investment situation of the country to discourage overseas investment.

It was learnt that Square Pharmaceuticals will invest $8 million in Kenya, DBL Group will invest $8 million to build an RMG factory in Ethiopia, MJL will invest $547,000 in a joint venture in Myanmar.

Bangladesh Bank official Abul Kashem said ACI Pharmaceuticals was permitted to pay $3 million for medicine patents.

He said Incepta Pharmaceuticals was permitted to invest £10,000 in the UK.

Spectrum Engineering will invest $7,500 in Singapore. Service Engineering was also permitted to invest $7,500.

BSRM was permitted to invest $4.6 million to build a factory in Kenya.

According to the central bank, the seven firms will have to fulfil a set of conditions, including bringing back the interest money and not laundering money.

Also Read- Overseas investment proposals of Akij, Nitol Niloy, Ha-Meem tabled

On the other hand, the central bank rejected Nitol-Niloy Group’s proposal to buy cultivable land in Uganda, Summit Group’s proposal to build a shipyard factory in Singapore, Deshbondhu Group’s proposal to build a sugar factory abroad, Meghna Group’s proposal to set up industry in Cambodia and Pran Group’s proposal to launch a company in India.

Furthermore, Bangladesh Bank approved several other firms’ proposal for foreign investment and sent the proposals for the Foreign Ministry’s opinion.

These include Akij Group’s $1.61 billion to buy two Malaysian companies, clothing giant Ha-Meem Group’s $840 million to build an RMG factory in Haiti and Nitol-Niloy Group’s $560 million to set up a bank in Gambia.

At the same time, the central bank sent a letter to Finance Ministry’s financial institutions division secretary Md Yunus Rahman to take the matter into consideration whether it would be right to allow overseas investments, instead of local investment.

Regarding this, Bangladesh Bank Governor Fazle Kabir said: “We have to achieve 8% GDP to become a higher middle-income country. To attain that goal, we will have to increase local and foreign investments.”

FRANKFURT AM MAIN: Eurozone banks offered businesses and households easier access to credit and more lenient repayment conditions in the second quarter, the European Central Bank said Tuesday, confounding expectations the market would tighten.

 "The net easing of credit standards... followed a net easing in the previous quarter, despite expectations in the previous survey round that they would tighten slightly," the ECB said in a press release, reports AFP.

 Banks loosened standards they use to judge creditworthiness both on loans to businesses and mortgage lending to households, the Frankfurt institution found in a June survey of 142 banks in the single currency area.

 ECB figures showed lenders eased requirements for businesses by 3.0 percent, accelerating the 2.0 percent loosening seen between January and March.

 Banks said that pressure from competitors for borrowers' business was the main factor behind the changes.

Meanwhile, creditworthiness standards were 4.0 percent looser for mortgages, a slight slowdown from the previous quarter's 5.0 percent.

 The central bank also found that banks had offered more generous terms and conditions in all categories of loan contracts in the second quarter, continuing a trend seen in the first three months.

 On the demand side, "merger and acquisition activity and fixed investment made an important and increasingly positive contribution to demand for loans to enterprises," the ECB pointed out.

 Historic low interest rates also encouraged both companies and households to borrow money, while mortgage borrowing was boosted by a rising housing market.

 Low rates are one of the ECB's massive interventions in the economy, alongside buying tens of billions of euros of government and corporate bonds every month and a programme of cheap loans to banks.

 Central bank governors designed their policies to pump cash through the financial system and into the real economy by encouraging banks to lend, aiming to power growth and drive inflation towards their target of just below 2.0 percent.

 While many observers anticipate the ECB will announce later this year that it will wind down its controversial bond-buying programme, president Mario Draghi is expected to hold course for now at a policymakers' meeting Thursday.

SHANGHAI: China's banking regulator told some lenders to lower the rates they offer on wealth-management products, people familiar with the matter said, as officials move to reduce financial risks and stimulate the economy.

 Banks, including some big lenders, received the order from the China Banking Regulatory Commission earlier this month, said the people, asking not to be identified as they aren't authorised to speak publicly, reports The Business Times.

 The requirement applies to on-balance sheet wealth-management products, which account for about a fifth of the nation's more than US$4 trillion of so-called WMPs, according to one of the people.

 Lenders had pushed WMP yields to a 17-month high in an effort to offset a funding squeeze caused by China's campaign against leverage. Chinese regulators are concerned that some banks may be passing on the higher funding costs to their borrowers, potentially threatening economic growth and stoking inflation.

 China "is reluctant to close the taps for funding in the economy through risky off-balance sheet products, but as a compromise is 'asking' banks to lower the interest rates on them," said Andrew Collier, an independent analyst in Hong Kong and former president of Bank of China International USA.

 "It is another clever way to try to reduce risk in the economy without shutting off credit." Financial and economic stability were key messages expressed by officials attending a once-in-five-year work conference last weekend.

China is grappling with how to ensure annual growth of at least 6.5 per cent this year, while reining in financial sector risks ahead of a leadership transition this fall at the 19th Communist Party Congress.

Bangladesh Bank (BB) is thinking of redesigning the remittance channel to arrest the declining trend of remittance inflow. Economists belive any continuation of the downtrend might affect the country’s macroeconomic stability that took a long time to achieve.

 A team of experts are now working on the observations of a study conducted recently by a group of BB officials in some countries look into the decline in remittance inflow, sources said.

 Economists and bankers suggest remodeling the country’s banking channel incorporating the mobile financial services (MFS) to check the fall in remittance inflow amid a rising trend in the use of illegal channels like Hundi.

 The experts blamed the use of illegal money transfer system widely known as Hundi amid fluctuating exchange rates of Taka and higher fees charged by exchange houses for the decline in remittance inflow.

 Earlier this month, the finance minister hinted that the government was planning to lower the remitting fees to boost remittance inflow through formal channels.

 Former BB governor Dr Atiur Rahman said the government has been planning a collaboration between the banks and mobile financial services to combat the uprising of Hundi.

 “The central bank has to concentrate on expansion of the formal banking channel with the use of MFS.

Currently, one or two international money transfer agencies are dominating the market. We should tag our banking service with MFS to bring more foreign currency through the legal channel,” Dr Atiur Rahman told daily sun.

 He also suggested lowering the charges at exchange houses operated by banks to encourage the expatriates to remit money through the formal channel.

 Remittance, which contributed 13 percent to Bangladesh’s gross national product (GNP) in 2015, has been on a downward trend in the last few years.  

 The expatriate Bangladeshis remitted nearly $12.77 billion last fiscal, which is a six-year low. The amount dipped around 14.5 percent from the previous financial year, according to central bank data.

 The money sent by expatriate Bangladeshis had been hovering over $14 billion annually since 2012-13 fiscal. Remittance crossed the $15 billion mark in 2014-15 fiscal.

 However, Agani Bank Chairman Zaid Bakht opposed the idea of lowering the service charge for remitting money from abroad, arguing that it will discourage banks to established exchange houses.

 “The banks spend a lot to operate the exchange houses. Besides, the fees charged by the exchange house is not the only reason for the fall in remittance inflow, an instability in the global money market is also responses for this,” Zaid Bakht, also a director of Bangladesh Institute of Development Studies, told daily sun on Saturday.

 He recommended for introducing a special duel currency rate at the exchange houses to address the fall in remittance flow.