The central bank yesterday warned banks against excessive exposure to the capital market, in a bid to ward off a bubble burst witnessed in the previous terms of Awami League.
Bangladesh Bank Governor Atiur Rahman came up with the warning at his first meeting with the chief executives of banks after a new government led by Awami League assumed power last month.
The money market and the capital market will complement each other within the law, and the central bank will strictly monitor all activities to prevent any deviation, he said.
Some banks are investing in the capital market beyond their permissible limit, which goes against the spirit of the recently amended banking law, Rahman said at the meeting at his office in Dhaka.
The governor discussed various issues, including the capital market, default loans and the overall macro-economic situation.
The stockmarket saw a boom when the Awami League-led government came to power in 2009. The market later went through a debacle, which analysts blamed on excessive investments by the banks.
SK Sur Chowdhury, BB deputy governor, told reporters after the meeting that the banks were asked to remain alert so that the crisis does not repeat.
Banks cannot invest more than 20 percent of their capital in the stockmarket, according to the amended banking companies act. The previous law allowed banks to invest 10 percent of their capital.
In line with the new law, the banks that invested more than the limit were asked to bring down the amount below the ceiling by July 2016.
The central bank found six banks have excessive investment in the capital market. The banks were asked to send a plan to the BB on how they would gradually bring down the amount to the acceptable level.
The amount of default loans decreased by 28 percent or Tk 16,137 crore in the fourth quarter last year. The BB governor said the amount fell as loans were rescheduled under a relaxed policy.
He also advised the banks to form a recovery unit to realise the bad loans.

News:The Daily Star/19-Feb-2014

Standard Chartered Bank and Citibank have joined the National Board of Revenue's e-payment foray to facilitate their corporate clients to pay taxes online.
"It is a big step forward. It will enable account holders of the two banks to clear big amounts of taxes, including VAT and customs duty, through their accounts sitting in office," a senior official of NBR said, seeking anonymity.
On Monday, Standard Chartered and Citibank signed separate agreements with Sonali Bank, a partner in NBR's e-payment initiative, to offer their corporate client's the facility to pay taxes through their accounts.
This is the first time two banks having online banking facilities joined NBR's electronic tax payment platform, which has so far received a lukewarm response since its launch in May 2012.
NBR officials said the electronic tax payment system did not support paying large amounts of taxes through account to account transactions. So far, individual taxpayers are able to pay taxes by debit or prepaid card.
However, VAT and customs duty online payment remain low as it is not feasible to pay large sums of money through electronic cards, said Sonali Bank officials.
Since the system's launch, NBR has received about Tk 5 crore in taxes through the portal, mainly from individual taxpayers; of the amount, none came from VAT and a negligible amount came as customs duties, officials added.
NBR and Sonali Bank officials expect the trend to change after corporate clients of the foreign banks begin to pay taxes through their accounts.
"We expect a spiral in the payment of large amounts of taxes through the e-payment gateway," said a Sonali Bank official, adding that the system that is currently being developed would be ready for use by mid-March.
More banks with online banking facilities will join the foray this year, he said.
Rashed Maqsood, managing director of Citibank, said the agreement lays the foundation for Sonali Bank to integrate Citi into the tax payment architecture of the government, which currently supports tax payments for individuals only.
“Once the new system goes live under this agreement, Citi's client will be benefitted for being able to pay tax online.”
Officials said the payment of taxes online would save taxpayers time.
"Our clients will be able to generate challans or receipts for tax payments sitting in their offices," said Abrar A Anwar, managing director for wholesale banking of Standard Chartered.
“This is a great step forward for digitisation of payment services because NBR is one of the main receivers of funds from payment of taxes, VAT and customs duty.”

News:The Daily Star/19-Feb-2014

 Premier Bank Limited organised a prize giving ceremony to celebrate another successful campaign namely Locker Campaign-Magic Box recently.

The campaign was organised by the Retail Banking Division of the bank, said a press release.

A day-long Workshop on “AML & CFT issues for BAMLCOs” was held at Al-Arafah Islami Bank Training and Research Academy (AIBTRA) on Tuesday.

Md. Habibur Rahman, Managing Director of Al-Arafah Islami Bank Limited inaugurated the workshop as chief guest, said a press release.

News:Daily Sun/19-Feb-2014

Pubali Bank Limited (PBL) on Tuesday announced the launching of VISA Debit Card for its customers.

Helal Ahmed Chowdhury, Managing Director and CEO of Pubali Bank Limited inaugurated the launching of VISA Debit Card as chief guest.

Speaking on the occasion, Helal Ahmed Chowdhury said that ‘Pubali Bank is committed to tender smart and convenient banking services to its clients in the fastest possible time. As a step of fulfilling the commitment and based on clients’ augmented demand presented the VISA Debit Card’.

He also added that customers may use their VISA Debit Card for shopping at Point-of-Sale merchants, for transacting on the internet as well as perform Cash Withdrawal, balance enquiry and generating mini statements from any VISA ATM.