Bangladesh Bank has issued a set of policies for rescheduling agriculture loans, aiming at easing the conditions and the process of paying bank the outstanding loans and obtaining fresh credit by the farmers, reports BSS. “Considering the significant contribution of the farmers to the economic growth and attaining sustainability in the agriculture sector, the central bank has taken some decisions to help implement the farmer-friendly policy of the government and recover the outstanding farm loans”, BB said in a circular, issued to all banks on Monday.
The central bank instructed all banks to reschedule outstanding agriculture loans on the basis of the bank-client relationship. In some special cases, the loan rescheduling could be allowed without any down payment.
BB said the banks could also disburse fresh loans to the farmers after rescheduling the outstanding credits, and the fresh loans would not require any down payment.

The closing ceremony of secured Commercial Paper (CP) of BDT 500 million, arranged by Mutual Trust Bank Limited (MTB) and issued by Bengal Plastics Ltd., a concern of Bengal Group of Industries, a leading conglomerate of the country, was held at a city hotel recently, according to a statement.

M A Mannan, MP, Minister of State of the Ministry of Finance attended the program as the Chief Guest. MTB Chairman, Rashed Ahmed Chowdhury was present as the Special Guest while Bengal Group Chairman, Morshed Alam, MP, Vice Chairman, Jashim Uddin, MTB Vice Chairman M.A. Rouf, JP, MTB Managing Director & CEO Anis A. Khan, and on behalf of the Subscribers Md. Ahsan-uz Zaman, Managing Director and CEO, Midland Bank Ltd., Ajith Naranpanawe, Country Manager, Commercial Bank of Ceylon PLC, Habib Yousuf, Regional General Manager, Habib Bank Ltd., Mirza Elias Uddin Ahmed, Deputy Managing Director, Jamuna Bank Ltd. and Mohammad Borhanuddin, SEVP & Head of Corporate Assets & Client Origination,  Bank Asia Ltd. were also present.

The State Minister and Chief Guest of the event M A Mannan, MP appreciated the efforts of MTB and the Bengal Group to successfully launch a CP in the market. Such innovative ideas are important for the growth and development of the financial market, he said.

The MTB Chairman Rashed A. Chowdhury thanked Bengal Group for choosing MTB as their financial partner for their business growth, and, for contributing, significantly, to the overall socio-economic development of the country. Morshed Alam, MP, Chairman of Bengal Group of Industries expressed his gratitude to MTB and the subscribers for having confidence in his enterprise.

He urged all to work passionately to contribute to the improvement of the financial sector of the country and tap the growth potential of Bangladesh.

The Board of Directors of United Commercial Bank Limited (UCBL) and Prime Insurance have recommended 30 per cent and 15 per cent dividend respectively for their shareholders for the year ended on December 31, 2014.
UCBL has recommended a total of 30 per cent dividend including 10 per cent cash dividend and 20 per cent stock dividend for its shareholders, reports UNB. On the other hand, Prime Insurance has recommended a total of 15 per cent dividend including 10 per cent cash dividend and 5 per cent stock dividend.

News:Daily Sun/24-Feb-2015

Md Abdul Halim Chowdhury has been appointed as Managing Director of Pubali Bank Limited. Earlier, he was Managing Director (Current Charge) of the bank since December 7, 2014. Prior to his appointment as MD (CC), Md. Abdul Halim Chowdhury was Additional Managing Director of the bank, said a press release. Abdul Halim joined Pubali Bank Ltd as Principal Officer in 1988. He was Deputy Managing Director of the bank and also served as general manager of Credit Division, head of different corporate branches and regional head of Dhaka central region.

Capital Adequacy Ratio (CAR), a percentage of a bank’s risk weighted credit exposure, has improved in the October-December quarter of last year thanks to the reduced default loan burden. 

The CAR of the banking sector rose to 11.35% in the quarter compared to 10.57% in the previous quarter (July-September), said a Bangladesh Bank press release issued yesterday. 

The standard CAR for banks has been set at 10% by Bangladesh Bank in accordance with the Basel-2 rules. 

The ratio went up as the provisioning requirement of the bank reduced during the quarter due to regularisation of huge default loans through taking advantages of relaxed policy of the loan rescheduling, said a senior executive of the central bank.

The provision shortfall of the banking sector came down to Tk796 crore during the last quarter of 2014 from the shortfall of Tk2,400 crore in the previous quarter. 

The bank maintained total capital of Tk71,754 crore in December compared to Tk64,933 crore in the previous quarter. 

The amount of reserved capital in the banking sector was Tk20,578 crore in the year 2008 following the Basel-1 rules. Later, the amount of reserved capital rose by 249% or Tk51,176 crore from the year 2008 to 2014 in line with increasing of required capital as per Basel-2 rules.

The growth rate of default loans has come down to single digit in the fourth quarter of last year from double digit that continued in the previous three quarters, thanks to the measures taken by the central bank.

The gross default loan rate stood at 9.69% in October-December quarter of the year 2014 from 11.60% in the previous quarter (July-September). 

The total default loan amount stood at Tk50,000 crore at the end of December, dropped by Tk7,000 crore  from Tk57,290 in September last year, according to Bangladesh Bank data. 

The rate of the state-owned banks came down to 22.23% in December quarter compared to 27.42% in September quarter. 

The state-owned banks conducted a massive drive to reduce the default loans in the following quarters under Bangladesh Bank pressure as these banks are mainly blamed for the high default rates. 

The default loan rate of the private banks has come down to 4.98% in December quarter from 6.34% in the previous quarter.