Serbia’s Kapital Bank asks Bangladesh to repay $2m 

Kapital Bank of Serbia has asked Bangladesh to repay US$2m loan which were taken before Serbia broke up from Yugoslavia in 1992.

Yugoslavia’s Jugo Bank was renamed as Kapital Bank of Serbia after the break-up.

 Bangladesh’s government is now checking if the loan taken from Yugoslavia’s Jugo Bank is still valid after those long years and the secession. 

“We have asked the authority of Agrani Bank to check if the loan is still valid,” said a senior official of Bank and Financial Institutions Division.

The state-run Agrani Bank is part of the projects which have remained stalled since the break-up.

Economic Relations Division sent a letter to the banking division seeking information about the loans. 

“The contract was signed between Bangladesh and former Yugoslavia for a development project, not with Serbia’s Kapital Bank,” Dr Khondoker Bazlul Hoque, chairman of Agrani Bank.

He said: “We won’t recognise legal entities of Serbia’s Kapital Bank and Serbian firms.”  

In 1981, the government of Yugoslavia started a project titled “Dry dock and heavy steel structure” in Bangladesh. The contract of the project signed between two state-owned firms of former Yugoslavia - Milutionvicpimco and Brodimpeks - and Bangladesh’s state-owned firms Ship Building Corporation and Bangladesh Chemical Industries Corporation (BCIC).

The total cost of the project was $4.1m which taken from Juga Bank as loan. Chalna port authority and former Ship Building Corporation and BCIC repaid $3m of the amount as of June 30, 1990.

Later in 1992, the United Nations imposed sanction on financial transactions in Yugoslavia as civil war erupted in the country. In 1996, the UN lifted the sanction.

In 2012, Serbia’s Kaptial Bank sent a letter to Bangladesh’s Agrani Bank to repay rest of the loan.

Banking Division wanted to know from Agrani Bank that if Bangladesh’s government at that time gave any assurance to Yugoslavian government to repay the whole amount of the loans.

It also sought information about Ivn Milutionvic-Pimco whether the firm is the genuine successor of the Yugoslavia’s former state-owned firms Milutionvicpimco and Brodimpeks.

The division wanted to know when Jugo Bank was declared insolvent by commercial court of Belgrade. 

 The distribution of winter clothes by Islami Bank Bangladesh Limited (IBBL) is going on across the country. As part of the country-wide programme, Mymensingh Branch of the bank distributed winter clothes among orphan children of An-noor Furkania Moktob of Rahmatpur Boishakhai village recently, said a press release.

Md. Motiar Rahman, Senior Vice President and Head of Mymensingh Zone of the bank was present at the function as chief guest.

Boshir Ahmed, Vice President of the bank and Branch Manager, clients and customers and local elites were also present on the occasion.

Mirpur-1 branch of the bank also distributed winter clothes among the cold-stricken poor of the locality. Md. Shahidullah Khandakar, Senior Vice President and Head of Mirpur branch of the bank was present in the function as chief guest.

Wizeghat Branch of the bank distributed winter cloths among the cold-hit poor people of the locality recently. Md. Forkan Uddin Nizami, Vice President and Branch Manager of the Bank was present on the occasion.

A Rouf Chowdhury, Chairman of Bank Asia Limited, distributes blankets among cold-hit villagers of Malkhanagor in Sirajdikhan upazila of Munshigonj district recently.

Bank Asia Limited under its CSR programme distributed blankets and warm clothes among cold-hit and marginalised poor in different parts of the country.

The areas are Munshigonj, Dinajpur, Rajshahi, Bogra, Naogaon, Pabna, Jessore, Barisal, Kishoreganj, Noakhali and Chandpur districts, said a press release.

Md. Shah Alam, Principal, Z Rahman School and College, distributes blankets among the students of Z. Rahman Premier Bank School and College in Dhaka on Thursday.

Premier Bank Limited distributed blankets among the students of Z. Rahman Premier Bank School and College and other cold-hit people dwelling in the nearby areas.

The board of directors and the management of the bank carried out the distribution programme, said a press release.

Bangladesh Bank on Wednesday asked the scheduled banks and non-bank financial institutions to extend sufficient cooperation to the individuals willing to invest in the government securities.

To this end, the BB issued a circular to managing directors and chief executive officers of all banks and the NBFIs saying that the central bank had been informed that individual-level investors were not getting proper support from their banks in investing treasury bills and T-bonds.

The BB asked the banks to activate their operation in selling and purchasing the government securities in the secondary bond market as the individual-level investors are now more interested in investing in the T-bonds and the T-bills.

‘Some banks are now reluctant to encourage individual-level investment in the government securities and they also mislead their clients in this connection,’ A BB official told New Age on Wednesday.

According to a government ordinance about the issuance of government securities, individuals and institutions resident in Bangladesh such as banks, NBFIs, insurance companies, bodies corporate, authorities responsible for the management of provident funds and pension funds will be eligible to purchase the T-bills and T-bonds, the BB circular said.

Individuals and institutions who are not resident in Bangladesh will also be eligible to purchase the government securities with coupon payments and resale or redemption proceeds transferable abroad in foreign exchange.

Such type of purchase is made with funds from a non-resident foreign currency account with a bank in Bangladesh in the name of purchaser.

Besides, the government securities purchased by a non-resident may freely be resold to a resident in Bangladesh or to another non-resident, the BB circular said.

It said that the banks and the NBFIs, which has MI module account with Motijheel office of the BB, are allowed to purchase the required T-bills and T-bonds from the primary auction for the government securities.

The banks will have to open business partner ID for investors to operate such type of business.
The banks also purchase and sell the government securities through the over the counter and online-based trade work station.

Some primary dealer banks have already used the systems to give support to their clients, the BB circular said.
The BB suggested that other banks should follow the successful PD banks which are now using the systems.