Badiur Rahman, Chairman, Al-Arafah Islami Bank, presides over a board meeting at the bank’s board room in Dhaka on Saturday.

The 250th meeting of the board of directors of Al-Arafah Islami Bank Limited was held at the bank’s board room in Dhaka on Saturday. 

Badiur Rahman, Chairman, Board of Directors of the bank presided over the meeting, said a press release. 

The meeting reviewed overall business performance of the bank.

Farman R Chowdhury Sunday joined Shahjalal Islami Bank Limited (SJIBL) as Managing Director (MD) and CEO.

Prior to his new assignment, he was Managing Director of ONE Bank Limited, said a press release.

After completing MBA from the IBA of the University of Dhaka, Farman started his banking career in October 1986 as a Management Trainee in American Express Bank.

Later, he joined ONE Bank Limited in July 1999 as first branch manager.

He has earned a vast experience in banking operation, especially in credit and marketing functions.

During his twenty-seven years banking career, he received trainings in banking and finance at home and abroad and attended at many seminars, workshops and symposiums relating to banking and finance.

Banks will be open throughout the country on Saturday to facilitate the nomination filing process for the upcoming national elections.

Bangladesh Bank General Manager AFM Asaduzzaman confirmed the news to the Dhaka Tribune Thursday evening. “A circular to this regard will be issued soon.”

News:Dhaka Tribune/30-Nov-2013

Bangladesh Bank has launched a cost of fund index for financial institutions to rationalise their interest rate, service charges and commissions for protecting the interest of the customers.

“We are going to implement a new monitoring system named base rate system. Its main component is cost of fund index,” Bangladesh Bank Governor Dr Atiur Rahman said, launching the index at its headquarters in Dhaka on Wednesday.

“We have to be careful so that efficiency or inefficiency of fund management of financial institutions is not directly imposed on the clients.” Evaluating the interest rate will be easy for financial institutions by using this cost of fund index as reference rate.

As a result, customers’ interest will be protected and there will be a healthy competition among the financial institutions.

The formulation of this identical base rate method will create level playing field in the overall financial sector, said the central bank governor.

By this based rate system, he said transparency and accountability will be ensured in fixing the interest rate and profit of financial institutions will be sustained.

A large part of funds of financial institutions comes from bank loan. So the fund cost index will play a role to protect the customers’ interest in the financial institutions. 

News:Dhaka Tribune/28-Nov-2013

Bangladesh Bank has posted an observer in the problem-ridden BASIC Bank to ensure enforcement of prudential regulations and help revive the bank from continuous financial deterioration.

The central bank took the decision and issued an order in this regard on Wednesday, deputing General Manager Ashok Kumar Dey of the Department of Banking Inspection as the observer with immediate effect.

Ashok Kumar Dey has been assigned to attend all the board meetings of the bank and observe the audit reports.

Bangladesh Bank signed a MoU (memorandum of understanding) with the bank on July 17 due to capital inadequacy, provision shortfall, continuous deterioration of profit, high rate of advance-deposit ratio, aggressive on loan disbursement, approval and renewal of loans, huge irregularities on loan rescheduling and lack of corporate governance in management.

The bank fell on risk due to failure in compliance of prudential regulation in every case.

But, the bank failed to recover its financial health following the condition of MoU, rather all financial indicators deteriorated during July to September period.

Bangladesh Bank recently held a meeting with BASIC Bank internally to review the bank’s financial situation. After the meeting, the Bangladesh Bank took the decision to post an observer in the bank, said a Bangladesh Bank senior executive.

According to latest data, capital shortfall of the bank rose to Tk6bn during July-September period from Tk1.82bn.

Provision deficit increased around 50% to Tk3bn from Tk2bn and non-performing loan increased to Tk18bn from Tk9bn.

The proposed MoU that contains 26 conditions stipulates that BASIC Bank must improve its capital to 11% of its risk-weighted assets while the asset growth should not exceed the capital growth. In addition, the credit growth must not exceed the deposit growth.

The bank’s classified loans should be reduced to 5% of the total loan by December from the existing 17% while its credit growth should not exceed 10% annually and 2.5% quarterly.

The bank will also be asked to realise Tk2.12bn which is 30% of Tk7bn classified loans by December.

All the classified loans of the bank’s Dilkhusha, Gulshan and Shantinagar branches are required to be recovered by December following the MoU. 

News:Dhaka Tribune/29-Nov-2013