Habibur Rahman, Chairman, Board of Directors of Pubali Bank Limited, presiding over its 34th AGM at the bank's head office in the city on Thursday. The AGM approved 5pc Cash & 8pc Stock Dividend for the year 2016 for the shareholders.

Posted by BankInfo on Sat, Apr 29 2017 12:46 pm

Habibur Rahman, Chairman, Board of Directors of Pubali Bank Limited, presiding over its 34th AGM at the bank\'s head office in the city on Thursday. The AGM approved 5pc Cash & 8pc Stock Dividend for the year 2016 for the shareholders.

news:new nation/29-apr-2017

Arastoo Khan, Chairman of Islami Bank Bangladesh Limited addressing a Client Get-together programme of Chittagong Zone at a city hotel recently. Professor Syed Ahsanul Alam, Vice Chairman, Major General (Retd.) Engr. Abdul Matin, EC Chairman, Md Abdul Ham

Posted by BankInfo on Sat, Apr 29 2017 12:33 pm

Arastoo Khan, Chairman of Islami Bank Bangladesh Limited addressing a Client Get-together programme of Chittagong Zone at a city hotel recently. Professor Syed Ahsanul Alam, Vice Chairman, Major General (Retd.) Engr. Abdul Matin, EC Chairman, Md Abdul Ham

news:new nation/29-apr-2017

BB clueless about US$ becoming abnormally costlier last week

Posted by BankInfo on Sat, Apr 29 2017 11:58 am

Bangladesh Bank (BB) officials are in the dark as to why the value of cash greenback went up last week unusually to over Tk 84 despite having cash 20 million dollar in circulation in the country, sources said.

Usually $15 million is found good enough to meet any situation, they added.

The sudden hike in the value of greenback from Tk 79 to over Tk 84 created an uproar compelling the central bank to put an unofficial cap on selling price of US dollar by banks.

At this stage, the central bank decided to probe the price hike and go for tougher action against banks, if any of them is found involved in manipulation.

The BB will sit with treasury heads of 20 banks tomorrow (Sunday) to discuss the issue and get a briefing on reasons behind the price hike of US dollar.

"We don't know why it happened. We'll definitely look into it, and take actions, if anyone is found guilty," Deputy Governor of the central bank Abu Hena Mohd Razee Hassan told the FE Friday over phone.

He said if the issue is not investigated now, a similar situation may recur.

"Four to five weeks back, I knew that the volume of cash dollars available in the country stood at $20 million, much higher than the need," Mr Hassan said.

He said $14 million to $15 million in cash is good enough to meet any need.

Officials said in January this year that the central bank had taken a move to import cash dollars as its volume came down to nearly 7.0 million. But the move did not materialise following a row over charging duty on cash dollar import.

The national board of revenue (NBR) did not agree to give import duty waiver on cash dollar import.

However, according to Mr Hassan, cash dollar flow went up significantly in the following months, contributed by travellers and wage earners.

In Bangladesh, the foreign currency price is being determined by market forces since floating exchange rate was introduced in 2003.

The central bank fixes inter-bank rate of foreign currencies, but does not control their prices. Bangladesh Bank is also a market player in foreign currency trading, officials said.

Managing Director and CEO of Mutual Trust Bank Limited (MTB) Anis A Khan told the FE over phone that there is no ceiling on foreign currency selling prices. "The market determines the price."

"It's a rare aberration," he said pointing to unusual price hike. "It was unexpected."

Asked whether banks could have sought dollar supply from the central bank in the event of a shortfall, Mr Khan answered in the negative. He said getting cash dollars from the central bank takes time.  

Mr Khan, also Chairman of the Association of Bankers, Bangladesh, said the central bank can take action against anyone found involved in the price manipulation of US dollar.

He said the treasury heads of the banks, who deal with foreign currency transactions, need to be more mature in understanding and controlling the market.

news:financial express/29-apr-2017

Offshore banking getting popular among investors

Posted by BankInfo on Sat, Apr 29 2017 11:50 am

Offshore banking, the unit of commercial banks that gives out foreign currency loans, is increasingly getting popular among both overseas and local investors because of the low cost of funds.

For instance, in 2016, loans under offshore banking grew 20.41 percent year-on-year to Tk 39,329 crore, according to data from the Bangladesh Bank. In 2014, the amount was Tk 26,174 crore.

The low cost of the fund is driving the growth of offshore banking.

A loan through the offshore banking unit costs 4-6 percent in contrast to about 10 percent locally.

“Offshore banking is getting popular with clients because of the low interest rate,” said Ahmed Kamal Chowdhury, managing director of Prime Bank.

Foreign currency loans are helping local producers, mostly garment manufacturers, to keep their product prices low.

“The availability of foreign currency loan has, in fact, helped bring down the overall interest rate in the banking sector,” he said.

Islami Bank leads the charge in offshore banking: as of last year it gave out Tk 3,103 crore.

Eastern Bank comes in second spot with about Tk 2,256 crore loans, followed by Brac at Tk 2,163 crore, Prime Tk 1,786 crore, City Tk 1,478 crore, UCB Tk 1,176 crore and AB Tk 1,136 crore, according to central bank data.

Among the state-owned banks, only Agrani has offshore banking: its portfolio, as of 2016, stood at Tk 109 crore.

Private banks' offshore lending last year totalled Tk 22,735 crore, while the nine foreign banks lent Tk 16,484 crore.

The initiation of offshore banking in Bangladesh dates back to 1985, when a guideline was issued to bring in foreign investment.

But the offshore banking units' activities were limited earlier as foreign currency was not available. They picked up steam in the last several years because of the mounting reserves, and faster growth of remittance and exports.

Through the offshore units, local banks borrow foreign currencies from abroad or local authorised dealer banks and lend to both foreign and local firms at LIBOR (London Interbank Offered Rate) plus rate.

The BB has been also liberal in allowing banks to provide foreign currency loans to local businesses.

An economist of the central bank said low-cost borrowing was giving foreign producers an edge over local producers, who had to pay higher interest for their local currency loans.

This prompted the central bank to open up -- a move that has helped in bringing down the overall lending rate, he said.

The economist said excess liquidity in the market is also pushing the interest rate down as most foreign currency loans are used for imports.

Imports, in terms of letter of credit settlement, surged 10.15 percent year-on-year in the first eight months of the fiscal year.

On the other hand, exports grew only 3.31 percent during the period, according to data from the BB.

The fast expansion of foreign currency loans has prompted the central bank to take an initiative to amend the guideline on offshore banking to beef up monitoring, said a senior BB official.

At present, regular banking norms do not apply to offshore banking.  The amended guideline will introduce conventional banking norms such as similar capital requirement, provisioning, classification, credit rating, single borrower limit for offshore banking too. Offshore banking needs to be organised in a better way to mitigate any future risk from exchange rate fluctuation, the central bank economist said.

Chowdhury of Prime Bank said the main objective of offshore banking was to bring in foreign deposits but the banks could not do it. Now, offshore banking units mainly lend to local companies. Default rate in case of offshore banking came down to 0.26 percent last year from 0.29 percent in 2015, according to data from the.

But a top executive of a private bank said the risk of offshore banking lies in the recovery process, which is lengthy.

“If a client defaults, then it is very difficult to recover the loans. Banks can't recoup the loan directly from the client as custom clearance is also related to it,” he added. 

news:daily star/28-apr-2017

ADB, City Bank sign $5m loan agreement

Posted by BankInfo on Sat, Apr 29 2017 11:17 am
Star Business Report

The Asian Development Bank (ADB) and City Bank yesterday signed a $5 million loan agreement to support import and export financing for Bangladeshi businesses.

The Trade Finance Programme (TFP) of the ADB will provide trade loans under the deal to City Bank to on-lend to local firms, the Manila-based lender said in a statement.

“We are pleased to be growing the partnership with City Bank and to support more trade, which is directly linked to job creation and economic growth,” said Edward Faber, TFP relationship manager for Bangladesh.

“With ADB's backing, City Bank will be able to increase its financial support to local companies, including small and medium businesses,” Faber said. City Bank became a partner bank in ADB's TFP in early 2016 under the TFP's guarantee product. Since then, ADB and City Bank have worked on eight transactions together valued at $15 million.

“City Bank signed the Trade Finance Guarantee Facility agreement last year and our relationship with ADB has been stronger since then,” said Sohail RK Hussain, managing director of City Bank.

“As City Bank's vision is to be the financial supermarket, we believe that our participation in this revolving credit agreement will help us offer diversified and competitive trade finance products and services to our customers," he said.

The TFP has been operating in Bangladesh since 2005 and currently works with 14 local partner banks. To date, the programme has supported over 1,700 transactions, for almost $2.5 billion in trade in Bangladesh.

City Bank is one of the oldest private commercial banks in Bangladesh with total assets at about Tk 260 billion as of December 2016 and an extensive network of 120 branches all over Bangladesh.

The ADB TFP, backed by ADB's AAA credit rating, provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia to engage in import and export activities.

news:daily star/28-apr-2017
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