BRICS to launch bank, tighten Latin America ties
The BRICS group of emerging powers will launch its own development bank at a summit next week, using its growing influence to establish a counterweight to Western-dominated financial organizations.
Fresh from the World Cup final, Brazilian President Dilma Rousseff hosts the leaders of Russia, India, China and South Africa in Fortaleza on Tuesday before an unprecedented meeting with South American leaders the next day in Brasilia.
On the diplomatic front, the summit will mark the first face-to-face meeting between India's new Hindu nationalist Prime Minister Narendra Modi with Chinese President Xi Jiping.
For Russian President Vladimir Putin, who traveled to Cuba this week, the trip comes amid newly frayed relations with the West over the crisis in Ukraine.
The leaders, including South African President Jacob Zuma, will establish two new financial organizations: a development bank to fund infrastructure projects and a reserve fund to fend off currency and balance of payments crises.
The BRICS are "countries with enormous potential that can gain many benefits for themselves but also for a new economic and international political order," said senior Brazilian foreign ministry official Jose Alfredo Graca Lima.
Graca Lima said the bank and the reserve would "complement" the Washington-based World Bank and International Monetary Fund.
The bank will have capital of $50 billion with each country contributing $10 billion, while the reserve, which has been described as a "mini-IMF," will have $100 billion at its disposal, Graca Lima told reporters.
For the fund, China will make the biggest contribution, $41 billion, followed by $18 billion from Brazil, India and Russia and $5 billion from South Africa.
- Opposed interests -
"The BRICS want to create alternatives, a type of global monetary policy more in tune with the realities of emerging countries," Andre Perfeito, chief economist at Gradual Investimentos consultancy, told AFP.
Despite their agreement on the need for a bank, the five countries are split on where it should be headquartered.
Graca Lima said Shanghai was the frontrunner to host the bank but South Africa's Trade and Industry Minister Rob Davies said Johannesburg was still in the running. New Delhi and Moscow are the other candidates.
The five nations are also negotiating who should hold the bank's rotating presidency first. And the membership of the board of directors has yet to be decided.
The BRICS were created after economist Jim O'Neill used the acronym in 2001 to describe the growing powers. They are now seeking to break the European, US and Japanese domination of financial institutions.
Private banks raise capital base to meet global standards
Private banks are raising their capital base in every quarter to meet new international standards that will take effect next year.
Their capital base went up around 1.63 percent in the first quarter of this year, while state banks are in a weak position in maintaining capital.
Of all the commercial banks, BASIC Bank plunged into the worst financial condition due to huge irregularities.
Spiralling bad loans have widened the bank's capital shortfall to Tk 1,036 crore at the end of March.
In line with Basel II standards, banks have to maintain 10 percent capital of their risk-weighted assets.
But BASIC Bank's capital adequacy ratio (CAR) was -0.66 percent during January-March, according to central bank statistics.
Basel II was intended to create an international standard for banking regulators to control how much capital banks need to put aside to guard against financial and operational risks.
However, the condition of other state-owned commercial banks was also weak in the quarter as they maintained a CAR of 9.77 percent on average.
But the private banks have been increasing their capital base in every quarter: their CAR rose by 0.13 percentage point in the first quarter and stood at 12.39 percent.
On March 31, the private banks' total capital was Tk 49,092 crore, up from Tk 48,303 crore on December 31, 2013.
Foreign banks always maintain a higher CAR, which was 22 percent at the end of March. As the state banks' capital marked a fall in the first quarter, the overall capital of all banks decreased to Tk 64,575 crore in March from Tk 65,191 crore three months ago.
When Basel III standards will come into effect, banks will have to maintain CAR at double the present requirement, said Anis A Khan, managing director of Mutual Trust Bank, a private bank.
With the increase in lending, banks' capital requirement will go up and so they will have to raise their capital every year, he added.
If banks have a stronger capital base, they will be able to give their clients bigger amounts of loans, the demand for which will increase with the rise in business activities in the country, Khan said.
Pubali Bank Managing Director Helal Ahmed Chowdhury said the local banks can enjoy various benefits in international business if their capital base is strong.
Also, the local banks can bargain with their foreign counterparts for a cost-effective rate on charges of various services if their capital base is strong, he said.
As banks will start making preparations for Basel III standards from next year, they will have to strengthen their capital base further, Chowdhury said.
News:The Daily Star/13-July2014
Al-Arafah Islami Bank holds business confce
Md. Habibur Rahman, Managing Director of the bank was present as the chief guest while Abdul Malek Molla, director of the bank was present as special guest, said a press release.
Deputy Managing Directors Md. Mofazzal Hossain, Kazi Towhidul Alam, Md. Golam Rabbani and Mohammad Abdul Jalil were present on the occasion.
Heads of different departments of the bank’s head office, managers of four corporate branches, zonal heads of seven zones and managers from selected branches participated in the conference.
The bank’s achievement during last year as well as its future plan was discussed during the conference.
Islami Bank holds business development conference
Islami Bank Bangladesh Limited organised business development conference for Dhaka central, north and south zones and corporate branches at a local convention hall in Dhaka on Friday.
Prof. Abu Nasser Muhammad Abduz Zaher, Chairman of the bank was present in the conference as chief guest, said a press release.
Union Bank ltd. opens Agrabad, CTG branch
In the purpose of providing shariah based modern banking service Union Bank Ltd. has been inaugurated its Agrabad Branch on 10th July, 2014 at CDA plot # 59(1st floor) Agrabad Commercial Area, Agrabad,Chittagong, informed by the authority. President of Chittagong Chamber of Commerce Mahbubul Alam inaugurated the branch. Among others Honorable Vice-Chairman Belal Ahmed, Managing Director Md. Abdul Hamid Miah, SEVP S.A.M Salimullah,Agrabad Branch Manager Faridul Haque Chowdhury, Renowned Businessmen, Industrialists, Local Elites, Executives and Officers of the Bank were also present on the occasion.
A Doa-Mahfil was also organized on the occasion. The Bank is committed to play the leading role in the economic development and Industrialization of the Country.
News:Bangladesh Today/12-July-2014