The 358th ATM booth of Islami Bank Bangladesh Limited (IBBL) was recently inaugurated at Sector 11 of Uttara in Dhaka.

Nurul Islam Khalifa, Deputy Managing Director of the bank inaugurated the booth as chief guest, said a press release.

Md. Abdul Jabbar, Executive Vice President and Head of Dhaka North Zone, Md. Rafiqul Islam, Senior Vice President and Head of Uttara branch of the bank and local elites were present on the occasion.

Mati-ul-Hasan has been joined as Deputy Managing Director of Mercantile Bank Limited.

Mati-ul-Hasan started his career with IFIC Bank Limited in the year 1984 as probationary officer, said a press release.

He was entrusted with many important assignments including Manager of Principal Branch at Motijheel.

He also held the position of Manager, Foreign Trade Division of IFIC overseas Branch at Karachi and Chief Manager, Lahore Branch, Pakistan.

He was also the Deputy Managing Director of Nepal Bangladesh Bank Ltd. a Joint Venture of IFIC Bank Limited at Nepal.

Prior to joining to Mercantile Bank Limited, he was the Deputy Managing Director of IFIC Bank Limited.

NRBs, World Bank, ADB, European Union to give funds

Bangladesh Bank is going to introduce four new refinance and pre-finance schemes of Tk 1,000 crore for small and medium entrepreneurs in a bid to boost the country’s SME sector, said officials.
A BB official told New Age on Sunday that non-resident Bangladeshis, World Bank, Asian Development Bank and European Union would give financial support to create the refinance and pre-finance schemes.
The central bank will collect Tk 400 crore from the NRBs to create a refinance scheme in cooperation with the United Nations Capital Development Fund, he said.
‘The BB will be able to bring the NRBs fund in the country under the initiative. The central bank has already held a meeting with the UNCDF in this regard,’ he said.
The official said the NRBs would get 1 per cent interest for their investment in the scheme.
The BB will disburse the fund to the scheduled banks with 5 per cent interest and clients will receive the fund with 10 per cent interest from the banks, he said.
The ADB will give Tk 100 crore to the government and the central bank will use the fund as refinance scheme to increase skill and business capacity of the SME clients.
The ADB will provide the fund by June with 0.75 per cent interest.
Under this refinance scheme, the central bank will train up around 10 lakh entrepreneurs and bankers across the country in a bid to create awareness of the SME business among them, the BB official said.
The EU will also provide Tk 200 crore to the government to stimulate the SME activities, he said.
The BB official said high officials of the EU felt encouraged to provide the fund after attending the women entrepreneurs conference and products display held on March 13, 2014 at the Ruposhi Bangla Hotel in the capital.
The EU will conduct a survey before giving the fund and the survey team will come in the next month, the official said.
The World Bank will provide Tk 170 crore as pre-finance fund to the government and the central bank will utilise the fund, he said.
The rural clients will use the fund to rebuild their houses, he said.
The BB will disburse the fund to the clients through both the banks and non-government organisations.
The official said that the fund would not relate directly to the SME activities, but it would help spur the clients’ business.
The World Bank will impose 0.75 per cent interest on the fund and the banks will disburse the fund with the highest 10 per cent interest.
Clients, however, will count 12 per cent interest if they receive the loans from the NGOs.
The BB official said that the cost of fund of NGOs was high than the banks, so they (NGOs) would impose higher interest rate.
BB SME and special programmes department general mananger Md Masum Patwary told New Age on Sunday that the four refinance and pre-finance funds would be introduced in the quickest possible time.
The country’s SME clients will be able to get more loans with lower rate of interest once the schemes are launched, he added.

'The new banks are also facing difficulties in getting business as per expectation mainly due to the higher interest on loans'

Bad loans and weak governance to blame

Scam-hit BASIC Bank has made loans more expensive than any of the 56 banks operating in the country, according to latest data of Bangladesh Bank
The state-owned bank's weighted average interest rate on loans stood at 16.37 percent on March 31 this year, up by more than 3 percentage points than the average rate of all banks.
BASIC's interest rate spread, which is the difference between lending and deposit rates, is also highest among all eight state-owned banks. Its spread was 5.55 percent at the end of March, against the industry average at 5.15 percent.
“Bad loans and weak governance in the bank pushed its interest rate up,” said Monzur Hossain, senior research fellow at Bangladesh Institute of Development Studies.
At the end of December 2013, BASIC's nonperforming loans stood at 11.82 percent or Tk 1,282 crore of its total loans, down from 18.43 percent or Tk 1,863 crore in the previous quarter.
The credit for the fall in NPL goes to the central bank, which had relaxed loan rescheduling rules in December 2013 to safeguard businesses affected by political unrest. The BB move helped all banks, especially the state banks burdened with bad loans, reduce their NPL.
“But in reality, BASIC Bank's NPL will be no less than 40 percent of its total loans,” an official of the bank said, requesting not to be named.
The official said, before 2009 BASIC's NPL had never crossed 5 percent of its total loans.
He said it had been the best state-owned bank till 2009 when the Awami League-led government formed a new board of directors headed by Sheikh Abdul Hye Bacchu.
According to insiders in the bank, BASIC has lent around Tk 8,500 crore since September 2009. Of the amount, nearly Tk 4,500 crore are bad loans and may never be recovered.
“The bank charges higher rates from its clients to show profits. But why will people borrow at this high rate?” questioned a managing director of a private bank.
“It means borrowers are taking loans from the bank not to pay back,” he said.