BRAC Bank's new SME SMS Alert Service

Posted by BankInfo on Sun, Feb 06 2011 07:33 am

BRAC Bank, one of the largest private banks in Bangladesh has recently introduced their new service SME SMS Alert service. This service has surely opened a new window to the consumers. Through this service BRAC Bank's consumers can now get alerts about their loan updates regularly. This service will alert the small and medium business holders about their payment date of installments and the confirmation message of the deposit. In this era of technology this initiative is a worthy one as people remain busy in their work most on the time. An SMS alert will make the consumers aware about their loans and bank can collect loan deposit from the customers more easily.

For more help and 24 hour service they have also started their customer care line and the number is 16221. BRAC is already providing its consumers the Evening Banking service in more than one branches. Besides, they have multiple card facilities amongst which Travel Prepaid card, VISA card facilities are mentionable.

BRAC Bank also established a Kidney Research Institute in Mirpur, Dhaka which is dedicated to help the poor people. This institution has been inaugurated in 2010 as a non profitable institution. Amongst so many social activities these are very popular and BRAC Bank is extending its activities nation wide.     

Banks Head into Deep Credit Risks

Posted by BankInfo on Sun, Feb 06 2011 07:23 am

Banks' capacity to protect depositors and promote financial stability is waning, according to a quarterly Bangladesh Bank (BB) report released last week. The report shows risk-weighted capital asset ratio (RWCAR), which is an important cushion against unexpected shocks, shrunk to 7.91 percent in June 2010 for all banks, from 11.68 percent in the same period a year ago. The present ratio is much lower than the minimum regulatory requirements of 10 percent under Basel II capital adequacy framework. RWCAR or capital adequacy ratio determines the capacity of a bank in terms of meeting the time liabilities and other risks, such as credit risks and operational risks.

Simply put, a bank's capital is the backing for potential losses that protects the bank's depositors or other lenders. Banking regulators in most countries define and monitor the ratio to maintain confidence in the banking system. Local bankers blamed the rise in risky investments on infrastructure constraints, particularly the gas crisis that has turned many lending bad. A foreign banker linked the current risky situation to a dramatic credit expansion without a corresponding increase in capital. “Banks' money borrowed by industries, which are not getting gas connections for months, became risks for those banks,” said Touhidul Alam Khan, executive vice president, corporate banking division of Prime Bank.

Latest BB data shows the RWCAR for all banks came down to 7.91 percent in June 2010 from 11.68 percent in the same month of 2009. The ratio was 11.67 percent in December 2009. State-owned commercial and specialised banks are in the worst condition in maintaining the capital ratio. For state-owned commercial banks the RWCAR has gone down to 5.67 percent in June 2010 from over 9 percent six months ago. It was negative 2.56 percent for specialised banks. The ratio for private commercial banks (PCBs) stood at 8.69 percent in June 2010, down from over 12 percent a year ago. It was 10.38 percent for PCBs in June 2004.

Although the ratio for foreign commercial banks (FCBs) still remains well above the minimum regulatory requirements, it went down to 16.71 percent at the end of June 2010 from 28.13 percent six months ago and 28.26 percent a year ago. “Any credit expansion without the corresponding rise in capital will increase the risk,” said a senior banker. He said banks' volume of lending has increased without supporting the adequate capital requirement. “The gas crisis cannot be the only reason. It has been a problem for the past few years and banks were lending considering the issue,” said the banker requesting anonymity.

Monzur Hossain, a research fellow of Bangladesh Institute of Development Studies, said: “Banks should strengthen the credit risk management, which is yet to get momentum."

News: Sajjadur Rahman/The Daily Star/Bangladesh/06 Feb 2011

BRAC Bank's online shopping facility in Bangladesh

Posted by BankInfo on Tue, Jan 25 2011 06:38 pm

For the first time ever in Bangladesh, BRAC Bank Ltd. (BBL) has launched Bangladesh's first e-commerce banking platform in alliance with Visa, thereby opening an opportunity for Bangladeshi citizens to use Visa cards for shopping online. Any Bangladeshi with internet access now can shop online with a Visa card or any card issued by BRAC Bank. Attending as the chief guest, Dr. Atiur Rahman, Governor of Bangladesh Bank, inaugurated the country’s first e-commerce banking system at a city hotel.

Md. A. (Rumee) Ali, Chairman of BBL, Syed Mahbubur Rahman, Managing Director and Chief Executive Officer of BBL and Uttam Nayak, Group Country Manager (India and South Asia) of Visa were present along with senior officials, leading merchants and clients.

“The central bank has continuously been facilitating bringing banking to the doorsteps of the general mass. This online shopping is another milestone in that journey. I am happy to inaugurate this service brought first time in Bangladesh and that too by a Bangladeshi bank,” the Banglaesh Bank Governor said.
Md. A. (Rumee) Ali, said, “I think this will pave the way for many companies to start doing business online.
This hopefully will be the start of online business revolution for Bangladeshi companies enabling them to keep up with the rest of the world and innovate how they interact with their customers.”
Uttam Nayak in his speech said that e-commerce would not only reduce cost of transaction but also save couple of hours rather than shopping physically.
E-commerce facilitates remote payments which are better than face-to-face payments, he said and adding it will give an opportunity to include more people in banking transaction, one’s who buying goods and other’s who selling goods.
Firoz Ahmed Khan, Head of Retail Banking, while demonstrating the new service features at the launching ceremony said that the new shopping platform would work just any other developed online stores work.
Consumers can browse and choose their products on either the online super-stores or individual shops and then they can add the products to their cards through checking out finally, they simply need to put their details from BBL or Visa card.
Online ticket booking with ones credit card and general retail purchases online have been something many credit card holders have been waiting to be able to do for years while many working Bangladeshis facing problems as the shops are normally closed at 8 pm., he said.
BRAC Bank online shopping is open for 24 hours making it possible for retail products, companies and stores to keep earning long after shopping hours are over, he added.

Auto loan is getting popular in Bangladesh

Posted by BankInfo on Sat, Jan 08 2011 05:28 pm

In a country like Bangladesh a personal vehicle is very necessary. Though insufficient traffic system and lack of enough road cause enormous traffic jam in the city of Dhaka more often and now a days in Chittagong, the capital of business. Even in this condition a vehicle of your own can become very handy and can save you a lot of time and hessel on the road. As a result people are getting interested to buy their own vehicle for transportation now a days. It's not even difficult anymore.

Most of the banks in Bangladesh have come up with multiple schemed car loan facility. Amongst those DBBL, AB Bank, Mutual Trust Bank, HSBC, One Bank etc are very promising. Starting from Tk. 200000/- one can get a loan of Tk. 2000000/- with different interest scheme. To pay back the loan different bank has their own range of time. As there are so many banks providing various facilities to pay the loan back, competition is getting higher. This opportunity is considered as a huge opportunity to make a dream come true. 

In addition, HSBC has come up with a different auto loan. The loan is know as Motorbike Loan. No bank has introduced such loan yet. Motorbike Loan could be very famous due to current traffic condition in Dhaka. Not only this but also the loan comes up with a very low interest rate. Anyone who gets a salary of Tk. 15000/- per month will be eligible for the loan. This loan starts from Tk. 50000/- and extends upto Tk. 1000000/- which has different payment range. One can pay back the loan in 12 to 36 months. 

Vehicle description along with approximate amount of money could be a good starter for proposal. For detail you can visit Auto Loan section.  

Citi backs central bank's monetary stance

Posted by BankInfo on Sun, Jan 02 2011 09:05 pm

A leading global financial services company has lauded Bangladesh Bank for its monetary intervention activities last year, terming the central bank's policy proactive. In conformity with the declared policy stance, BB's monetary policy operations during the early part of the year remained light fingered rather than heavy handed, said Citi in its annual monetary update.

The BB move did not impede pick-up in output, exports and new investment activities, it said. Purchases of foreign exchange inflows from the market to retain the taka on a slight undervaluation bias for export competitiveness were only partly sterilised by liquidity management operations. "Besides direct liquidity management operations, the permitted open exchange positions of banks were widened. Sectoral credit flows were promoted or discouraged eclectically, while credit flows to under-served productive sectors like agriculture and SMEs were promoted."

The BB policy also discouraged expansion in credit for unproductive ostentation, conspicuous consumption and speculative purposes, according to Citi. However, with the increase in inflationary pressure, the central bank was seen to gradually tighten policy measures. In August 2010, it raised the repo rate from 4.5 percent to 5.5 percent and the reverse repo rate from 2.5 percent to 3.5 percent. Earlier in May, it raised the cash reserve requirement (CRR) by 50 basis points (bps) to 5.5 percent, for the first time since September 2005, to mop up Tk 20 billion of excess liquidity.

In December, the CRR was further raised by 50 bps to 6 percent for the commercial banks to curb inflationary pressure on the economy, the Citi update said. The central bank moves also kept the taka under under depreciation pressure. The BB has regularly intervened in the dollar/taka market to maintain the competitiveness of the exchange rate, curbing tendencies for excessive volatility. The nominal exchange rate remained below 69.60 level until late August, with the BDT depreciating only 0.48 percent against the dollar from the opening level of 69.27.

However, increased demand of the greenback to meet import payments took the dollar/taka rate to break 70 level during late September. The taka depreciated 1.34 percent in September alone. With buoyant demand, and the central bank's stance to keep the taka undervalued, dollar/taka rates rose to 70.8450, the highest level during the year, by the end of October. After a moderation in November, the nominal exchange rate started to rise again in December, and hovered near 70.69 levels in direct trading during the middle of the month, registering a depreciation of 2.05 percent over the year.

Call money rates remained stable during most part of the year due mainly to the excess liquidity in the market, which stood slightly lower at Tk 345.0 billion at the end of June 2010, down from Tk 347.6 billion at the end of June 2009. However, the CRR hike in May, and increased seasonal demand ahead of Eid festivals during September and November led call money rates to rise to double-digit levels, the update said. "Although those increases were corrected within a short span of time, the second CRR hike of the year in December led the overnight rates to soar significantly."

On December 15, the first day of new cash reserve maintenance, call rates skyrocketed when some private commercial banks sought large funds to meet the reserve requirements. Call money rate rose as high as 180 percent, breaking the earlier record of 150 percent hit on March 30, 2006. However, the rates subsided over the following weeks to settle below 20 percent level. The downward shift in the yield curve during 2009 was reversed last year due to excess liquidity in the banking system, Citi said.

The yields for government securities of all tenors increased from their December 2009 levels. The yields of short-end bills with 91 days, 182 days and 364 days tenor rose by 225 bps, 120 bps and 89 bps respectively. On the other hand, rates of mid- and long-end government bonds with 5 years, 10 years, 15 years and 20 years tenor increased by 20 bps, 75 bps, 43 bps and 35 bps respectively. The increase in yield was highest in the 91 days bill, which added 225 bps. Citi in its update also put focus on international markets and major interest rates.

Central banks of the major economies had slashed rates to historic low levels by the middle of 2009 to push out liquidity to try igniting economic growth, it said. The Bank of England, European Central Bank (ECB), Bank of Canada, Swiss National Bank, Reserve Bank of Australia, Reserve Bank of India, all cut their benchmark rates by 25 to 175 basis points in 2009. The Federal Reserve (Fed) and Bank of Japan (BOJ) had already been at their record low levels of benchmark rates at 0 to 0.25 percent and 0.1 percent respectively after their December, 2008 rate cuts. While the central banks of Australia and Norway started hiking rates from late last year, 2010 witnessed the RBI, the Peoples' Bank of China and the Bank of Canada joining the group.

For most of 2010, the fundamental story behind Euro (EUR), when investors were actually looking at it, was all about sovereign credit risk, Citi said.

News: The Daily Star/03 Jan 2011

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