KS Tabrez, Managing Director of the Dutch-Bangla Bank Limited (DBBL) inaugurates Manda branch of the Bank in Dhaka Tuesday.

The 121st branch of Dutch-Bangla Bank Limited (DBBL) equipped with on-line facilities was opened at Uttar Manda, Dhaka Tuesday.

KS Tabrez, Manag- ing Director of the Bank inaugurated the branch, said a press release.

News: The Daily Sun/Bangladesh/07-Nov-12

Sean Wallace

Sean Wallace, group head for origination and client coverage for Standard Chartered Bank, is scheduled to arrive in Dhaka today for a two-day official visit.

Venkataramanan Anantharaman, regional wholesale banking co-head for South Asia, and Vinod Aachi, global head for regional markets, will accompany Wallace.

They will meet regulators, clients and senior officials of the bank during the visit, StanChart said in a statement yesterday.

“Bangladesh is a core footprint market for the corporate banking business of Standard Chartered Bank. We have been here for more than a century," said Wallace.

"It is a matter of great pride that we have been able to bring world-class banking solutions to this market and grow with our global and local client base.”

Wallace is based in Singapore and is responsible for management of the bank's relationships with its corporate and institutional clients globally.

He joined Standard Chartered Bank in March 2008 as group head of corporate finance business. Prior to StanChart, Wallace had previously worked at JPMorgan.

News: The Daily Star/Bangladesh/07-Nov-12

HSBC has been recognised as the 'Best Domestic Cash management Bank' in Bangladesh at the Euromoney Cash Management Poll 2012, the bank said in a statement yesterday.

The Euromoney survey recognises leadership in cash management across a range of markets and criteria. Respondents of this survey rated HSBC in terms of its effectiveness and excellence in providing cash management solutions, the quality of its service and secure banking system.

“I would like to thank our valued clients for their continued support which has helped to make HSBC the best choice for meeting their cash management needs. I am very proud of this achievement, and my colleagues who have worked so hard to make it happen," said Andrew Tilke, chief executive officer of HSBC Bangladesh.

"Recognition by Euromoney will serve as further motivation for all of us to work even more closely with our clients to help them realise their business potential,” he added.

“Euromoney Award is a recognition and reflection of the confidence of our customers. We are very proud of this achievement,” said Md Mahbub-ur-Rahman, head of commercial banking of HSBC Bangladesh.

"We are honoured to be voted as the Best Domestic Cash Management Bank in Bangladesh it's a recognition to our unparalleled products and services and client orientation,” said Syed Javed Noor, division head of global payments and cash management at the bank.

In addition to the local recognition, HSBC has also been recognised as the 'Best Regional Cash Management Bank in Asia' and 'Best Global Cash Management Bank'. HSBC's global reach and local expertise, coupled with best-in-class cash management solutions, have set it apart from its peers to win this accolade, the statement said.

News: The Daily Star/Bangladesh/07-Nov-12

Financing the small enterprises in the country is apprehended to be affected badly if the central bank's newly announced loan provisioning policy comes into effect, ultimately hindering the inclusive banking, according to a top official of a SME-focused bank.

"The small businesspersons mostly take term loans for two-three year. Provisions of such collateral-free small loans will considerably rise under the new policy, discouraging the banks to finance this particular sector," Syed Mahbubur Rahman, Managing Director of BRAC Bank, told the FE in an interview recently.

Appreciating the Bangladesh Bank (BB)'s initiative in terms of the whole banking sector, Mr Rahman, however said the small businesses will be affected by the new policy.

Comparing the small enterprise sector to a child, he said, the child is now creeping; it should be given a certain period of time for the sake of its survival so that it can stand on its own foot.

He urged the central bank to continue earlier loan provisioning policy for the small business for at least more five years so that both banks and customers are structured and prepared within the period.

Tightening rules for classifying and rescheduling the loans, the central bank recently issued directive, under which the banks will have to treat the loans, which is overdue for nine months and above, as 'bad or loss' loan. Earlier, the timeframe was 18 months or above.

Thus, the timeframe of categorising the loans as 'substandard' and 'doubtful' was reduced considerably at the new policy.

The new policy will increase both provisions and non-performing loans (NPL) against the funds disbursed to the small businessmen. As per rule of thumb, the NPL will be almost doubled. The increased provisions will reduce profit and distributable liquidity, the BRAC Bank MD said.

"BRAC Bank is a SME-focused bank but at the end

of the day it is a commercial bank as per the BB rules. Whenever, my bottom line will be impacted highly, I will try to get out of that particular segment and get into more profitable ones changing the current (SME-focused) banking model because our main responsibility is to protect the shareholders' interest," he said.

Others might also be discouraged to finance here, ultimately affecting the small business, he said.

Fall of the banks' profit may impact on the capital and consecutively the confirmation of letter of credit (LC) from the foreign banks will be hampered, negatively affecting the bank-business in the country, he apprehended.

While expressing vulnerability of small enterprises compared to other businesses, he said the small loan on the one hand is 'collateral free' and on the other hand has only one revenue-source, making this sector as more prone to bad-impact under the new BB move.

In a query, he said he BRAC Bank is gradually extending its focus to provide innovative services such as cash-cycle loan instead of traditional term loan based on the demands of particular industries and customers.

"We want to do business following demands of the customers so that they get a delightful experience with BRAC Bank," Mr Rahman, who is also chief executive officer (CEO) of the bank, said.

Evaluating the bank's performance, the MD said that BRAC Bank started business about 11 years ago focusing SME sector, which was not discussed at that time. After the bank moved in this connection, now all including the central bank are thinking about it and even an SME foundation was established that is a big achievement of the bank, he added.

News: The Financial Express/Bangladesh/04-Nov-12

Commercial banks or financial institutions (FIs) have been authorised to deduct Value Added Tax (VAT) from commission income on account of mobile banking services.

The National Board of Revenue (NBR) has issued a guideline recently empowering the banks and FIs to deduct commission.

Earlier, taxmen had to collect tax from commission income of each of the parties or agents involved in the mobile banking services.

The NBR recently framed the guidelines for collection of VAT from commission income of the mobile banking following popularity of the service.

According to the VAT law, the government collects 15 per cent VAT (inclusive method) from service charges of mobile banking. On Tk 100 service charges, VAT is Tk 13.04 and service charges are Tk 86.96.

The VAT wing of the revenue board recently issued the guideline for its tax offices and other stakeholders specifying the rules of tax collection from commission income of mobile banking services.

It also sent the guideline to the Bangladesh Bank (BB), the banking sector regulator.

Many parties are involved in the mobile banking including banks, telecom operators, agents at grassroots level and technical service provider.

Both tax officials and stakeholders were in a state of confusion about the way of collecting tax from commission of the mobile banking services.

A senior NBR official said the NBR found that mobile operators requested the banks to handover their part of commission of mobile banking services including VAT.

"It is difficult to collect VAT from each of the agents and parties of mobile banking services. The guideline has been framed to make the system simple," he said.

To obtain the services, mobile phone subscribers have to open accounts in their names with the local agents of banks. Account holders can deposit, withdraw and send money through mobile phones. Each subscriber or client gets a number with their respective mobile phone numbers.

Agents or technical service providers take a service charge from the clients for depositing and sending money. The service charge is distributed among the partners of the services according to the agreement.

Earlier, tax officials had to collect VAT from different points due to absence of specific guidelines.

From now on, only banks and FIs will pay the VAT on behalf of all other partners and give them a certificate of tax payment. The NBR will consider the agents under the VAT registration of banks.

Mobile banking service providers do not give any cash memo at the time of withdrawal of money. So accounts details of clients should include cash memo number, date and time, name and address of the service providers and service seekers, registration numbers, received commission including VAT and signatures, the guideline said.

Recently, bKash limited (a subsidiary of BRAC bank) has gained huge popularity of mobile banking services. It is a joint venture between BRAC Bank Limited, Bangladesh, and Money in Motion LLC, USA. The ultimate objective of bKash is to ensure access to a broader range of financial services for the people of Bangladesh. It has a special focus to serve the low income masses of the country to achieve broader financial inclusion by providing services that are convenient, affordable and reliable. The government also introduced mobile banking services through post offices. But its service charges are tax-free.

News: The Financial Express/Bangladesh/04-Nov-12