The government and the World Bank (WB) yesterday signed a $70 million agreement for an ICT project meant to drive growth, employment and governance.

The project aims to create an estimated 30,000 direct jobs in the information technology and IT-enabled services sectors.

Senior Secretary of Economic Relations Division Iqbal Mahmood and WB Country Director Ellen Goldstein signed the deal for the project that will start in December this year and end in December 2017.

The project's total cost will be $71 million, of which the global lender will provide $70 million at an interest rate of 0.75 percent to be paid back in 40 years, including a grace period of 10 years.

Bangladesh needs targeted programmes to develop its potential in the IT and ITES industries and to build the necessary e-government foundations, Mahmood said.

“The project would directly benefit 30,000 youth who will gain marketable and globally recognised IT and ITES skills. Among them, 9,000 will be women,” Goldstein said.

Bangladeshis will benefit from increased incomes due to the en-hanced employment opportunities

in the growing global IT industry,

she said.

Ten thousand non-computer science graduates will be trained as software developers, said ERD's Additional Secretary Arastoo Khan.

Besides, 20,000 more will be trained in computer language, customer services and other trainings on computer literacy, he said.

News: The Daily Star/Bangladesh/27-Nov-12

City Bank yesterday launched CityMaxx American Express Card first time in Asia, which allows customers to gain interest on money up to 15 days after it has been spent.

“Using CityMaxx card, customers could keep on earning interest as usual for 15 days even after the money has been spent form the account,” said Mashrur Arefin, deputy managing director and chief operation officer of City Bank.

The card offers 5 percent cash back on all spending at major grocery outlets in the country, 1 percent cash back on any spending at any shop and restaurant, said Arefin.

News: The Daily Star/Bangladesh/27-Nov-12

Banks' scope to invest in the stockmarket will remain high despite a proposed amendment to the Banking Companies Act, as the banks have a strong capital base now.

The amendment will allow the banks to invest 40 percent of their capital in stocks though the present law allows them to invest 10 percent of their total liabilities in the stockmarket.

After the amendment, banks will be able to raise their stock investment up to Tk 23,000 crore from Tk 16,000 crore recorded in September.

According to Bangladesh Bank statistics, the amount of total capital in the banks was Tk 56,201 crore in June.

When the stockmarket was booming in 2010, the banks' investment in stocks was below Tk 20,000 crore.

Though as per the draft amendment, the scope for banks' investment in the stockmarket will decrease, the remaining scope is still much higher than the global standard, said a BB official.

The International Monetary Fund also suggested that banks' investment in the stockmarket should be 25 percent of their capital.

The central bank official said the banks' capital has grown much in the recent time as per the Basel-II requirements, but their capital will increase further when Basel-III will take effect soon.

According to the central bank statistics, the total capital of the banks was Tk 20,578 crore in 2008.

The banking sector has witnessed an increase of Tk 35,623 crore in their capital in the last four years.

It means the overall capital growth has been 173 percent over the last four years with an annual average growth of about 49 percent.

As per Basel-II requirements, banks need to maintain their capital at 10 percent of their risk weighted assets. But in reality, the banks have been able to maintain their capital at 11.31 percent, which is more than the required level.

The BB official said, this was mainly due to the transfer of a large portion of their profit to capital. As a result, the base of the banking system has become stronger, he added.

News: The Daily Star/Bangladesh/26-Nov-12

Tax collections from large corporate taxpayers might trail much behind the projected level in the current fiscal year (FY 2012-13) in view of lower level of profits, now estimated for most of the country's private commercial banks (PCBs).

"The decline in the profit level of commercial banks is now our major concern. We have observed that financial condition of the majority of the banks worsened in the third quarter of this calendar year," said a senior tax official.

There are a total of 330 large corporate taxpayers including banks and nearly 706 individual taxpayers under the Large Taxpayers' Unit (LTU) of the National Board of Revenue (NBR). Of the corporate taxpayers, banks contribute nearly 60 per cent to the LTU's aggregate revenue income earnings.

The government set a tax collection target of Tk 123.50 billion for the LTU for fiscal 2012-13, up by 33 per cent from the Tk 94 billion target of the previous fiscal.

Last year, the LTU brought 50 merchant banks under its supervision to augment revenue collections.

But the merchant banks were also facing losses due to their financial straits, largely because of the fall-outs from the capital market collapse, the senior tax official said.

Until November 15, the LTU received 279 tax returns from the corporate taxpayers and 356 tax returns from individual taxpayers.

Meanwhile, a total of 192 individual taxpayers submitted applications to the LTU, seeking extension of time for submission of their tax returns.

The LTU received a total of Tk 7.60 billion in tax collections from both corporate and individual taxpayers. Of the amount, the unit collected Tk 7.41 billion as income taxes from 279 corporate taxpayers and Tk 193 million, from individual taxpayers. The tax official said about 1,000 tax-return files of individual taxpayers are lying with the LTU.

Usually, the directors of the companies who are paying taxes under the LTU are the individual taxpayers.

News: The Daily Financial Express/Bangladesh/25-Nov-12

To promote country’s women entrepreneurship, the central bank advised all scheduled banks to disburse at least 10 per cent SME credit out of their total loan portfolio, according to Nazneen Sultana, deputy governor of Bangladesh Bank (BB).

Sultana on Saturday was addressing a seminar organized by Bangladesh Institute Bank Management.
BIBM faculties presented two research papers on “Information System Security in Banks” and “Role of Women Entrepreneurship Develop-ment in Bangladesh” when Sultana made this observation.

She said, “Banks assistance can offer a feasible solution to generate skilled women entrepreneurs for the betterment of the country.”
Addressing as chief guest she said banks have to take more steps to enhance the number of skilled women entrepreneurs in the country.
The deputy governor has underscored the need for more proactive roles so that women entrepreneurs flourish with their projects.

Fahmida Chowdhury, associate Prof. of BIBM presented a key note paper on “Role of Banks in Women entrepreneurship development in Bangladesh”. She observed that interest rate of SME loan was still high and entitlement to it was complicated.

Chowdhury said women in Bangladesh are employed in low income jobs and that most of the entrepreneurs are involved in farm business, forestry, fishery, boutique and beauty parlor business. Therefore, she said, business diversification is essential
and adequate and easy financial facilities can encourage them to diversify their traditional business.

However, Fahmida made some specific recommendations for banks to take the opportunity to work with women who have no previous experiences but want to start a new business.

Considering the growing demand for skilled entrepreneurs, banks can take initiative to provide training to the existing bosses.
She said, “Banks can also provide marketing financial facilities, product development information and define sources of fund at free of cost.

The seminar was also addressed by Prof. Dr. Prashanta Kumar Banerjee, director of BIBM, Dr. Toufic Ahmed Chowdhury, director general of BIBM, Md. Shihab Uddin Khan, associate Prof. of BIBM, A.H.M. Kai Khasru, executive director of the central bank, Zaitun Sayef, deputy managing director of IFIC Bank Ltd. and Mohammad Tazul Islam, Md. Masudul Haque, Md. Mahbubur Rahman Alam, Kaniz Rabbi, assistant professor of BIBM.

News: The Daily Independent/Bangladesh/25-Nov-12