Jamuna Bank Foundation (JBF) organised a seminar on International Mother Language Day at Jamuna Bank’s branch in Comilla.

Kanutosh Majumder, Chairman of Jamuna Bank Limited (JBL), presided over the seminar as chief guest, said a press release.

Md Tazul Islam, MP, Director of JBL, attended the function as special guest.

Nur Mohammed, Chairman of Jamuna Bank Foundation, spoke at the seminar and Shafiqul Alam, Managing Director and CEO of JBL attended the function as guest of honor.

Bangladesh Bank has imposed restrictions on the major shareholders of banking companies to ensure proper utilisation of fund of the banking companies and gain confidence of the depositors.

They will have to take board approval before taking financial facilities over Tk1 crore and let the central bank know about the privilege.

The facilities might come in terms of loans and advances, guarantees and other financial facilities, according to a circular Bangladesh Bank issued yesterday to comply with the amendments (up to 2013) to the Bank Company Act 1991. The circular takes immediate effect.

The major shareholders would be the individuals or companies having more than 5% stake in the bank.

The limit of financial facilities would be calculated with having the facilities to be enjoyed by the spouse or organisation having his or her own interest.

According to the circular, the loan or its part and net income interest should not be exempted, and in case of exemption, it should get prior approval from the central bank.

It also asked the bank-related persons to get prior approval by majority members of the respective bank boards for taking financial facilities from the banks.  

The representative directors will have to take prior approval or guarantee from the respective board or similar authorities to get loans and advances or any other financial facilities from the bank.

The loan amount will have to be considered based on the amount of paid up capital of the shareholder institutions, and it should not be more than 50% of the paid up capital.

Loan or other financial facilities cannot be provided to independent directors or persons and institutions having relation with the independent directors.

A bank will not perform any transaction with the bank-related persons that would be easier than with the person not related to the bank.

All financial transactions with a bank-related person or in favour of his interest should be done through prior approval by the majority members of the bank board of directors.

Bangladesh Bank also imposed a restriction on the directors of banking companies not to borrow more than 50% of their respective paid up capital in the bank.  In case, a director’s loan amount is more than 50%, it should be immediately raised to the bank board and informed the central bank.

The additional facilities being enjoyed by any director should be repaid within the stipulated time to be fixed by Bangladesh Bank. The additional amount cannot be renewed or its tenure be extended under no circumstance.

News:Dhaka Tribune/24-Feb-2014

 Rupali Bank Limited organised Annual Business Conference-2014 at a hotel in Cox’s Bazar on Sunday.

Dr Ahmed Al Kabir, Chairman, Rupali Bank Limited, was present as chief guest while M Farid Uddin was present as special guest, said a press release.

Directors of the bank Abu Sufian and AKM Delwar Hossain, Deputy Managing Directors Abu Hanif Khan and Khalilur Rahman Chowdhury, General Mangers Arifur Rahman and Hosne Ara Begum attended the meeting.

A week-long training course on “Banking Laws and Practices” (BLP) organised by Al-Arafah Islami Bank Ltd began at Al-Arafah Islami Bank Training and Research Academy on Sunday.

Md. Habibur Rahman, Managing Director of the bank inaugurated the course as chief guest, said a press release.

Md. Zahid Hasan, Principal of the training institute was also present on the occasion.

General Banking, Foreign Exchange and Investment desk related officials of selected branches of the bank participated in the course.

Overcautious lending following Hall-Mark scam causes profits to nosedive in 2013

Sonali Bank continues to reel from the after-effects of the Hall-Mark scam unearthed about two years ago, with its operating profits in 2013 plummeting as fear-gripped officials hesitate to give out fresh loans.

The bank's full-year operating profits fell 70 percent to Tk 330 crore in 2013 from the previous year.

Pradip Kumar Dutta, managing director of Sonali Bank, said the major reason behind the drop in profits is the huge mismatch between deposits and credit. In 2013, the bank's deposit rose by about 15 percent but its loan portfolio shrank 9.23 percent.

The bank faced a severe crisis in liquidity management last year and even failed to maintain the mandatory cash reserve requirement ratio, which led to fines of around Tk 82 crore from the central bank.

To overcome the liquidity crisis, Sonali took a large amount of deposits at high interest rate in 2013, for which it had to pay Tk 600 crore more in interests.

“However, the bank's liquidity situation has improved now,” he said, adding that the bank currently invests Tk 4,000 crore to Tk 5,000 crore on average every day in the call money market.

The fall in commission from international trade financing is also to blame. Last year, the bank's import business slid 31.81 percent and export business 27.96 percent in comparison to 2012, causing its non-interest revenues to fall by Tk 380 crore from 2012's amount.

However, it was not all doom and gloom for the bank: not only did its default loans drop 23.48 percent in 2013, its recovery of default loans was at Tk 4,330 crore, which is 511 percent higher than in 2012. In 2013, the bank's default loans stood at Tk 9,638 crore.

Subsequently, the bank did not have any shortfall in capital and provisioning; rather it had a surplus in the two categories.
“Last year was the year of default loan recovery,” M Aslam Alam, secretary of the finance ministry's banking division, said at the bank's annual conference yesterday at the capital's Hotel Sonargaon.

He, however, termed the bank's accomplishments in 2013 “one dimensional and not multi-dimensional”, while calling for improved performance in all indicators.

The banking division secretary went on to call out the branch managers for their proclivity for deposit collection and disinterest for giving out fresh loans, due to which the profits took a massive hit.

“It is not acceptable that banks will collect deposit and keep it idle. It must be invested,” Finance Minister AMA Muhith said at the conference.

Sonali Bank Chairman AHM Habibur Rahman, however, acknowledged that many bank officials are afraid of giving out fresh loans due to the Hall-Mark scam.

“It is not proper to avoid risk by not giving fresh loans using the scam as an excuse,” he said, adding that loans have to be given by following rules properly and then there will be no problem in future.

He further said 2012 was a year of disaster for Sonali Bank due to scams involving the Hall-Mark Group, which left the state-run bank's image badly dented.

“After the new board took office, it fixed 2013 as the year of restoring the image. The bank is now overcoming the danger situation. Now the condition is gradually improving.”