Bangladesh Bank is going to make it mandatory for scheduled banks to take prior approval from the BB while issuing prepaid card in a bid to bring financial discipline in the banking sector, officials concerned have told New Age. The banks are now issuing credit and debit cards against the clients’ accounts with them (banks), but the customers do not require a bank account to avail a prepaid card. The clients just have to deposit money with the banks to get such a card. A client is allowed to get a prepaid card of a certain amount of money if he or she deposits the same amount of money with a bank, explains a BB official. The clients usually use prepaid card to purchase products from the different shopping malls which are allowing the banks’ prepaid card, he said. The central bank has now no idea what amount of clients’ money is deposited with the banks against their issued prepaid cards, a BB official told New Age on Monday. Besides, a chain super shop has recently issued prepaid cards to its customers like the banks violating the banking rules. The prepaid card holders of the chain shop are now able to purchase the products from their outlets through using the card. The chain shop is now holding deposited money of the clients by issuing the prepaid card, he said. ‘This is a clear violation of banking rules,’ the official said. The central bank will primarily formulate directives for banks and will later do the same for other institutions, he said. The BB official, however, said the merchants like chain shops were not allowed to issue the prepaid card in line with the banking rules and regulations. The central bank is now considering measures to take action against the chain shop’s issuance of prepaid card, he said. According to BB data, the banks issued 1,02,787 prepaid cards as of September 2014. The central bank official said that the BB would prepare prepaid card issuance guidelines after issuing the circular.

News:New Age/4-Age-2015

NEW DELHI: State-run BSNL is targeting a revenue of Rs 500 crore in the current financial year by utilising its land bank and monetisation of 75,000 towers, among others.
The telecom operator has set a target of generating Rs 500 crore revenue form utilising land bank, training centre and seven telecom factories as well as monetisation of its 75,000 towers, it said.
The company is planning to enter intra-circle roaming pacts with other operators to monetise its network of over 75,000 base tower stations (BTS) or mobile towers, reports TNN.
According to the sources, BSNL officials gave a presentation to telecom minister Ravi Shankar Prasad recently, which highlighted company’s turnaround plan.
BSNL, which has got 82 land parcels, will also be augmenting its GSM mobile capacity in the current fiscal.
The operator is planning about 14,736 2G and 10,914 3G base tower stations in 2015-16. Apart from that it will be integrating its wi-fi hotspot and LTE (4G) with the existing GSM network.
Telecom Minister Prasad had asked BSNL to improve quality of services, especially in border and extremist-affected areas, in a bid to become market leader and win back people’s confidence.
The minister said that the government is committed to revive BSNL and numbers of initiatives are in the pipeline to bring the PSU back to the position of market leader.
Prasad is also undertaking a series of meetings with MPs to make telecom officials directly answerable to Parliamentary representatives so as to have a first-hand account of public sectors performance, problems faced and possible solutions.
Prasad has directed DoT to call five such meetings so that all Members of Parliament are given opportunity to raise issues directly with officials concerned.
BSNL’s profits started declining from Rs 10,183 crore in 2004-05 before recording a loss in 2009-10. 

Bangladesh Bank (BB) Governor Dr Atiur Rahman pledged to promote banking services with the major objective of boosting the ongoing financial services so the poor segment of the society gets the most benefit out of it, according to a BB statement issued on Sunday.
"We want to do more for the people, particularly for the poor, in future through boosting our ongoing financial inclusion programmes across the country," Dr. Rahman said on the eve of his seventh year as the BB governor. He was appointed the 10th governor on May 1, 2009 for a four-year term, which was extended last year for another term.
Recalling his first working day on May 3, 2009, the governor said that he expressed his commitment towards promoting pro-poor economic growth with a view to creating fresh employment opportunities through expansion of the industrial base across the country.
He also started promoting inclusive economic growth through innovative and multi-pronged financial inclusion initiatives, channelling more credit towards socially and environment friendly business activities.
BB under the leadership of Dr Rahman updated its loan classification and provisioning structure in line with the international standard to ensure good governance in the country's banking sector.
"Loan classification and provisioning structure have been upgraded to the international standards. Risk management including strict internal audit and control has been enforced to ensure good governance through heightened supervision," the governor explained.
BB's pragmatic monetary and financial policies also contributed towards attaining content economc growth, maintaining lower inflation, competitive par value of Bangladesh Taka and comfortable foreign exchange reserve position despite episodes of global economic recessions.
Foreign exchange reserves crossed the $ 24 billion-mark for the first time on April 29 following steady growth of both export earnings and workers' remittance inflows.
Besides, refinancing, modernisation of the information and communications technology (ICT) and payments system, environmental risk evaluation guidelines, and other policy supports have been extended to facilitate inclusive and environment friendly financing.
"Risk weighted capital adequacy, liquidity and leverage ratio of banks have been kept as par BASEL-II guidelines, creating avenues for smooth transition to BASEL-III guidelines which will come into effect in 2015," Dr. Rahman added.
Regarding Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT), the governor said modernising Bangladesh Financial Intelligence Unit (BFIU), information exchange/sharing related cooperation with international FIUs has been strengthened to combat money laundering, terror financing and illicit money transfer activities.

Local banks last year made Tk 10,363 crore of cash recovery from the classified loans, which provided them a spot of respite from their runaway default loans. 

Of the amount, the private commercial banks made the highest recovery of Tk 6,381 crore, followed by state-owned commercial banks at Tk 2,126 crore, according to Bangladesh Bank statistics. 

The specialised banks recovered Tk 1,705 crore and the foreign commercial banks Tk 151 crore.

Default loans rose in the first three quarters of last year to Tk 57,291 crore, which prompted the concerned parties to take up wholesale loan rescheduling, loan write-offs and cash recovery in the last quarter.

Subsequently, the total default loans at the end of 2014 came down to Tk 50,155 crore, which was 9.69 percent of the total outstanding loans.

Banks could recover 20.66 percent of the bad loans as of December 31 last year, with private banks leading the recovery. 

Default loans at private banks stood at Tk 18,426 crore and of the amount, 34.62 percent has been recovered.

Specialised banks recouped 23 percent of their total bad loans of Tk 7,259 crore. 

State banks got back 9.25 percent of their default loans of Tk 22,763 crore, while foreign banks realised 8.79 percent of their total bad loans of Tk 1,706 crore.     

A central bank high official said, of the three measures, the banks fared best with cash recovery.

As default loans increased substantially in the second half of last year, the Bangladesh Bank governor directed all chief executives of the banks to take intensive measures to rein it in.

A high official of Sonali Bank said a task force was formed to increase recovery; the task force continuously monitored the branches so that the loan recovery increases.

An official of Pubali Bank said the private commercial bank's board gives profit targets to them. Even after that, if the classified loan could not be brought down, they were forbidden from transferring the interest accrued on bad loans to income. So, the bank rescheduled loans and also made recovery against those, he added.

An official of Agrani Bank said they not only made recovery against classified loans, they also made cash recovery against the written-off loans.

One of the reasons for falling bad loans is the rescheduling of default loans. They rescheduled bad loans worth Tk 6,216 crore in the last quarter of 2014 alone.

The central bank allowed a relaxed loan rescheduling policy between December 2013 and June 2014, under which banks rescheduled around Tk 20,000 crore.

BSEC, DSE push each other to press BB

Bangladesh Securities and Exchange Commission and Dhaka Stock Exchange at a meeting on Thursday pressed each other to discuss with the central bank on relaxation of rules connected with banks’ capital market investment, sources said. BSEC chairman M Khairul Hossain presided over the meeting held at its office where BSEC commissioners Md. Helal Uddin Nizami, Md Amzad Hossain, Arif Khan, DSE chairman Siddiqur Rahman Miah, managing director Swapan Kumar Bala, directors M Kaykobad, Md Shakil Rizvi, Mohammad Shahjahan, Khwaja Ghulam Rasul and Sharif Anowar Hossain were present. Representatives of DSE at the meeting said if the Bangladesh Bank allows the banks to calculate capital market exposure excluding long-term equity investment, the banks will get a chance of increasing their stock market investment. Besides, it will automatically pull down some banks’ capital market exposure within the BB-set 50 per cent of consolidated investment limit and put a positive impact on the market accordingly, they said. As the market regulator, BSEC should talk with the central bank in this regard, they said. Following the DSE plea, the capital market regulator asked the premier bourse to press Bangladesh Bank to relax its latest directive regarding banks’ capital market investment. At the same time, the market regulator asked the stock exchange to hold meetings with the central bank in a bid to explain the prolonged market fall and suffering of investors due to banks’ inactively at the capital market. Although the premier bourse has already written a letter to the BB to discuss about banks’ capital market related issues. Despite the fact, BSEC asked the bourse again to discuss with BB regarding the issue. The commission at the meeting also said the DSE and DSE Brokers’ Association as a representative of the brokers should raise their voice regarding the negative impacts of banks’ inactivity on capital market. A BB circular issued in February last year had asked the banks to calculate capital market exposure on consolidated basis scrapping its earlier circular of counting capital market exposure on solo-basis. The central bank, asking the banks to bring down capital market exposure limit within the stipulated limit gradually by July 21, 2016, said the market value of total investment of a banking company in the capital market on consolidated basis could not exceed 50 per cent of the sum of its consolidated paid-up capital, balance in share premium account, statutory reserve and retained earnings as stated in the latest audited financial statement. DSE representatives at the meeting also requested the BSEC to take measures in reducing limit-free share prices movement of newly listed companies for the existing scope of five days, listing newly listed companies under ‘Z’ category in case of none-holding of annual general meeting in the immediate past year and not to allow margin loan for newly listed companies shares. Siddiqur Rahman Miah expressing concern over the prolonged fall in share prices requested the capital market regulator to take proper measures to remove obstacles which are hampering investors’ confidence over the market, a DSE press release said. Swapan Kumar Bala at the meeting said that the government should withdraw the capital gain tax on banks, non-bank financial institutions, merchant banks and brokerage houses under the newly imposed section 53 (0) of income tax ordinance. Bala also raised the role of Bangladesh Bank regarding banks’ capital market investment. Khairual Hossian said that the commission will discuss with the proper authorities for the continuation of existing facilities, the DSE press release said. The commission will also try to remove the obstacles for the investors, he said.