BB relaxes provisioning requirement for NBFIs
Bangladesh Bank on Monday relaxed provisioning requirement for non-bank financial institutions against their investment in mutual funds because of the losses that the NBFIs incurred due to their price slide.
The BB, in a circular, said the NBFIs would not require maintaining provision against their investment in a mutual fund if the cost price of a unit equals or goes below 85 per cent of market price or net asset value of the unit.
It said the NBFIs would have to maintain the provision, which will be calculated based on two formulas, if the unit’s cost price goes over 85 per cent of the market price or net asset value of the unit.
The first formula will consider the provision based on cost price and market price. The second formula will consider the difference between the cost price of a unit and 85 per cent of the net asset value.
The directive will be applicable for close-ended mutual funds.
For open-ended mutual funds, the BB said, the NBFIs will have to maintain provision if the unit of the fund equals or goes over 85 per cent of the net asset value of the unit.
The central bank asked the NBFIs to implement the directive immediately.
A BB official told New Age that prices of many mutual funds had slumped in recent times amid bearish trend in the capital market, resulting in losses of the NBFIs.
The central bank issued a similar directive on March 12, 2015 regarding provisioning system for scheduled banks’ investment in mutual funds, he said.
The BB issued the new circular for the NBFIs in accordance with directives set for the banks, he said.
BB defends large loan restructuring policy after Tofail flak
Bangladesh Bank on Monday defended its restructuring policy for large loan saying that it would help the businesspeople who became defaulter due to uncontrolled adverse impact of financial sector on their business. The BB issued a press release saying that the habitual defaulter would not be allowed to get any support from the central bank’s large loan restructuring policy. A BB official told New Age that the central bank had recently faced severe criticism from different corners including commerce minister Tofail Ahmed over its policy support to the large defaulters. For this reason, the central bank is now trying to recover its image by issuing the press release saying that some developing countries including India, Philippine and Malaysia have already set such restructuring policy for large loans, the official said. The BB in its press release claimed that the country’s business sector had faced a tough situation in 2014 due to political unrest. Considering the circumstances, the BB extended its support to the large borrowers to save them from unfavourable business situation, it said. The BB issued large loan restructuring policy on January 29, 2015 for the borrowers facing financial crisis, giving a maximum period of 12 years to repay their overdue and defaulted loans for term credit with a lower rate of interest. Minimum outstanding loan amount for restructuring will be Tk 500 crore or above in aggregate and a particular loan account can avail the facility only once, the circular said.
News:New Age/12-May-2015OVERSEAS ASSETS OF LOCALS, EXPATS BB to have power to seek info
The cabinet has approved the draft of the ‘Foreign Exchange Regulation (Amendment) Act, 2015’ empowering the Bangladesh Bank to seek information on any overseas assets owned by local and expatriate Bangladeshis. The draft also proposes to seek information about assets of foreign citizens living in Bangladesh. The Bangladesh Bank will be given the power to seek information on any overseas assets of Bangladeshi citizens wherever they reside and foreign nationals living in Bangladesh, cabinet secretary Muhammad Musharraf Hossain Bhuiyan told reporters after the weekly cabinet meeting. The approval of the draft was given at the weekly meeting of the cabinet held at the Secretariat on Monday with Prime Minister Sheikh Hasina in the chair. The cabinet thanked the Indian government and its citizens for clearing the long-pending land boundary agreement. The cabinet also congratulated three Bangladeshi-origin British citizens for being elected members of parliament in the UK general elections. The cabinet secretary said that the draft act would make easier for foreign exchange agencies and foreign companies for opening branches or liaison offices by waiving the existing mandatory provision of taking Bangladesh Bank’s prior permission. The Board of Investment will issue the permission, and Bangladesh Bank will be informed in this regard within 30 days, he added. At present, permissions are required from both the BoI and BB to set up such offices. The updated draft included new provisions for currency transaction by Bangladeshi citizens and foreign citizens living in Bangladesh to regulate the purchase and sales of foreign currencies and securities. The law also proposed for empowering Bangladesh Bank to impose fine against the foreign exchange dealers in case of violation of the law. A committee headed by an Executive Director of Bangladesh Bank prepared the proposal for the law reviewing the existing laws of other countries, particularly of neighbouring ones. Earlier on January 12, the Banking and Finance Division under the Ministry of Finance placed the draft law. On that day, the cabinet approved in principle the draft law with some observations. The Banking and Finance Division on Monday again placed the draft law before the cabinet incorporating the cabinet observations. The cabinet also in principle approved the draft of ‘The Rabindra University Law, 2015’ aimed at preserving the memory of Bishwakabi Rabindranath Tagore as well as pursuing study and practising and carrying out research on his works. Prime minister Sheikh Hasina on May 8 laid the foundation stone of Rabindra University at Shahjadpur, Sirajganj. The cabinet secretary said that not only the language and literature of Kabiguru will be practised at the university there would also be other disciplines of learning including arts, music, dance, fine arts, sociology, agriculture, cooperatives, law, business administration, science and engineering technology. ‘It is natural, the focus will be on arts, music, dance and fine arts, but there would be specific focus on creation and philosophy of Rabindranath,’ he added.
News:New Age/12-May-2015
Pubali Bank holds 1st managers confce of Khulna region
Md Abdul Halim Chowdhury, Managing Director of Pubali Bank Limited, and other high officials are seen at the 1st Managers Conference-2015 of Khulna region of the bank at a local hotel in Khulna recently.
Pubali Bank Limited has organised the First Managers’ Conference-2015 of Khulna region of the bank at a local hotel in Khulna recently. The main objective of the conference was to motivate the managers to increase bank’s business by rendering better services, said a press release. Md Abdul Halim Chowdhury, Managing Director of Pubali Bank Limited, was present at the programme as the chief guest. Mohammad Ali, General Manager and Chief Technical Officer of Pubali Bank, attended the function as special guest with RM of Khulna region General Manager Md Humayan Kabir in the chair. He stressed the selection of potential borrowers and advised to enhance bank business on recovery of overdue, classified and write- off loan on priority basis.
News:Daily Sun/12-May-2015
Successive bank robberies cause worries among CTG bankers
Some 700 branches of 55 banks in Chittagong, including government and private ones, went into a tizzy yesterday following two successive robberies at a couple of banks in the port city.
Chittagong Metropolitan Police (CMP) has convened a meeting at the CMP conference room today against the backdrop of the bank robberies. The top brass of the CMP will hold the meeting with senior officials of the banks to discuss ways and means to enhance security at the banks in the city. While talking to The Independent, senior officials of some banks expressed grave concern over the robberies. The bankers said the Bangladesh Bank (BB) officially issued directives to all banks of the city to ramp up security inside the banks and on their premises.
“We have panicked over the successive robberies in the banks. The central bank has already officially directed us to beef up security in the bank. In accordance with the directive of Bangladesh Bank, we have already beefed up our security to ensure that no untoward incident takes place,” said Delwar Hossain, an officer of Jamuna Bank’s Jubilee Road branch.
“We have adopted measures to increase the number of CCTV cameras at the vaults. We have also increased the number of armed security personnel in and around the bank,” added Delwar Hossain.
“We have been asked by the central bank to beef up security by installing more CCTV cameras that can preserve footage up to one year in and around the bank. Bangladesh Bank has also asked to enhance the capacity of the CCTV cameras so that more area can be covered,” said Jahangir Alam, manager of Bank Asia (Khatunganj branch).
“We have taken steps to ramp up security by increasing the number of armed security personnel to three or four as most of the robberies have occurred on holidays,” added Alam, who is also the first vice president of Bank Asia.
Meanwhile, Sammilita Banker Oikya Parishad, a platform of the bankers, formed a human chain on the Chittagong Press Club premises to protest the killings of bank officials and employees. During the protest programme, the bankers also demanded exemplary punishment for the people involved in the robberies and greater security at the banks.]
Md Masrur Hossain, president of Sammilita Banker Oikya Parishad, said they were very much concerned over the rampant robberies at banks.
“Nowadays, meritorious persons are choosing banking as their profession.
However, no one will opt for the profession if bank officials and employees are killed by robbers,” added Masrur, who is also an assistant manager of BASIC Bank (Pahartali branch).
“We are passing through a nightmare phase as a result of the robberies in the banking sector. This will adversely impact the overall economic activities of the country if such a situation persists,” said Syed Amir Hossain, general secretary of Sammilita Banker Oikya Parishad.
CMP commissioner Abdul Jalil Mondal told The Independent that they have taken special measures to ensure security for some 700 branches of 55 banks, both government and private, in the city. “We have also asked the banks to beef up their own security measures to preclude any unexpected incident,” said Mandal, adding that all the important points of the city have been brought under the monitoring of closed circuit TV (CCTV) cameras.
“We are trying to identify and nab the people involved in the robberies in the city, based on the CCTV camera footage of the banks,” added the commissioner.
News:The Independent/11-May-2015