The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has said investment and domestic economic activities are largely affected due to prevailing high interest rates of bank loan. The cost of importing capital machinery and raw materials are also being affected due to higher interest rates of bank loan, the country’s apex trade body made the observations in its quarterly (July to September) published magazine “FBCCI Business News.”
Along with the limitation of infrastructure and ongoing political stalemate, high interest rates of bank loan are hampering the industrialisation and investment of the country, it said. “It is very difficult for any businessman to ensure profitability with high interest rate where lack of infrastructure limitation exists,” it added.
Currently, the interest rates varies from 16 to 19 per cent where additional service charges are taken without proper justification, it pointed out.
“Though different steps have been taken to overcome the problems of infrastructures, no serious attention is being given to lower the interest rate,” it said adding that it was the long-wanted demand of the business community in Bangladesh to reduce the current lending rates for the greater interest of economic development of the country. The prevailing high interest rates of bank loan are leading the local businessmen and entrepreneurs to lose their business competitiveness in the international market compared with the neighbouring countries, the editorial said.
The rates prevailing in the neighbouring countries are apparently much lower, it said and added that thus, it provides a cutting edge in supplying their products to Bangladesh.
It would be very difficult to lower the interest rate until policy decisions were take adequately to overcome the crux of the problems, the FBCCI said.
At present, the banks are holding excess funds and could not lend the excess funds as businesses were reluctant to take loans at high rates, it said.
Besides, the current political situation merged with rising violence in the name of hartal was also creating bottlenecks for the business to shy away from further borrowing and investment in the country, the FBCCI said and opined that the government should come up with a solution to make the interest rates affordable.

News:Daily Independent/25-Nov-2013

The Hongkong and Shanghai Banking Corporation Limited (HSBC Bangladesh) opened a new business development office at Uttara EPZ in Nilphamari.

This is the 8th business development office of HSBC Bangladesh and with this, HSBC has become the only international bank to be present in all the eight EPZs of Bangladesh, said a press release.

Uttara EPZ, established in 2001, housed a range of diversified exporters.

News:Daily Sun/26-Nov-2013

United Commercial Bank Limited (UCB) organised a trainee officer induction programme at the bank’s corporate head office learning and development centre in Dhaka on Monday.

Muhammed Ali, Managing Director of the bank inaugurated the programme. The newly recruited trainee officers attended the induction programme, said a press release.

News:Daily Sun/26-Nov-2013

Bangladesh Bank Governor Dr Atiur Rahman on Sunday said, the central bank, for its financial inclusion efforts, would become a role model for many central banks of the globe in a few years.

“In the last few years, you might have noticed that Bangladesh Bank has recalibrated its focus from traditional central banking to a comprehensive, all-encompassing effort at financial inclusion and financial stability,” said Dr Atiur Rahman at the Annual Banking Conference 2013. “The day is not too far away that Bangladesh Bank would be considered as a role model as other central banks would intend to replicate the financial inclusion initiatives of the Bangladesh Bank,” he said.

He said the banking system is playing an important role in running the economy smoothly and thus helping the process of inclusive growth, which is the ultimate objective of the central bank.

Over the last few years, BB has been relentlessly pursuing to attain the expected economic growth through mass participation by emphasising on bringing a large segment of the population who are still un-served or underserved by the banking system into the network, Dr Atiur noted.

“Thus, people like sharecroppers, women entrepreneurs, marginal farmers who did not have access to credit before are now getting financing facilities without hassles and at affordable interest rates,” he said.

In the last few years, stress was also given on adequate financing for agriculture and allied activities, SMEs by promoting green banking and mobile banking and also financial services throughout the country, the Governor mentioned. Pointing out that no-frill bank accounts brought many goods for lower segment of the society, he said, the BB was moving towards activating these accounts by providing smaller loans under refinance schemes.

About improving supervisory capacity of the BB in the face of some recent financial irregularities, he said the BB has started introducing strategic changes in its existing supervision techniques for ensuring financial stability in the banking sector.

News:Daily Sun/25-Nov-2013

The state-owned BASIC Bank Limited opened its 65th branch at Ishwarganj in Mymensing with online facilities on Saturday.

MA Sattar, MP, Mymensing-8 constituency inaugurated the branch while Sheikh Abdul Hye Bacchu, Chairman, BASIC Bank Limited was present as chief guest, said a press release.

Md Ruhul Alam, General Manager, BASIC Bank, moderated the function where Kazi Faqurul Islam, Managing Director of the bank presided over.

While speaking Sheikh Abdul Hye Bacchu, Chairman, BASIC Bank Limited said people consider BASIC bank as safe as it is wholly owned by the government. As a result, deposits with the bank have increased gradually.

News:Daily Sun/25-Nov-2013