Finance Minister AMA Muhith on Monday reiterated its firm decision to retain power with the Ministry of Finance (MoF) in relation to the removal of directors of state-owned banks (SoBs).

The Muhith's stance is opposed to a suggestion made earlier by the International Monetary Fund (IMF) to transfer the same authority to the Bangladesh Bank (BB).

The IMF had asked the government to empower the BB to dismiss errant bank directors of SoBs through amending the Bank Company Act (BCA), 2003, to create a level-playing field in the banking sector. The BB is authorised to fire directors of private commercial banks (PCBs) for any wrongdoing.

"The consent of the government (MoF) in removing bank directors from SoBs should be a must since the government appoints them," Mr Muhith, responding to a question, told a group of reporters coming out of a closed-door meeting with the visiting IMF team at his office.

A team of Extended Credit Facility (ECF) mission of the IMF arrived in Dhaka on November 27 last on a 10-day visit. The mission members are now busy reviewing the reform measures undertaken by the government in the financial, banking and revenue matters.

"We held a very effective meeting between ourselves as issues like amending BCA, containing subsidy, enacting Value Added Tax (VAT) Act and adjusting fuel prices were the topics of discussion," Mr Muhith told the reporters.

AMA Muhith when asked about the reasons for not transferring power to BB said, "Because, we appoint them (directors), so the issue of their removal should require our involvement."

On the issue of price hike of petroleum, the finance minister said the issue was discussed with IMF.

"We did not mention any specific time-frame to increase the price of petroleum," Mr Muhith told the reporters.

"We will adjust the fuel prices at a suitable time. What we feel is --- the appropriate time for price hike of petroleum is the winter season," the finance minister elaborated.

News: The Daily Financial Express/Bangladesh/4th-Dec-12

Doha: Qatar, which makes huge investment abroad, has agreed to deposit US$1.8 billion in the Bangladesh Bank, Governor Dr Atiur Rahman said here on Monday.

“I had a meeting with acting governor of Qatar central bank…we discussed the matter in details. A memorandum of understanding (MoU) will soon be signed in this regard,” Atiur told UNB in Doha after a meeting with Sheikh Fahad Faisal Al-Thani.

The meeting was held at 10 am (local time) at the central bank office of Qatar in Doha.

Dr Atiur said a technical team of Bangladesh Bank will visit Qatar in January to finalise the terms and conditions in this regard.

He said if Qatar deposits the money with the Bangladesh Bank, its reserve will increase and it will have a positive impact on the balance of payments.

An official at the central bank here said the BB will share profits with the Gulf nation from investing the fund abroad if things get finalised.

The BB official said the central bank makes a handsome amount of profit every year from the investments it makes abroad.

News: The Daily Sun/Bangladesh/4th-Dec-12

The country’s single-month inward remittance in November this year witnessed a sharp fall as wage earners remitted $1098.25 million compared to $ 1330 million in October.

Bangladesh bank (BB) data shows the trend of remittance inflow maintains a steady growth in the current financial year (FY) 2012-13 with $ 1 billion. The rising trend continued till October, but fell drastically last month.

With the latest amount received, the country’s total remittance in last five months reached $ 6.1 billion from July to November period.

In October this year, the inward remittance hit the single-month highest at $1.33 billion, Bangladesh bank (BB) data shows. Fabulous flow of remittance during October surpassed the previous single-month highest of $1.22 billion posted in January this year.

The central bank data showed the country received the amount in a period between 1-26 October. With the latest development, total inward remittance stands at $4.89 billion from 1st of July to 26th October.

In September, the flow of remittance marked a steady growth though the month is considered to be the lean season, according to official statistics.

From 1st to 28th September, expatriate Bangladeshis remitted $ 1.05 billion (Tk 82 billion) in the country from different destinations across the world, the Bangladesh bank (BB) data shows.

The remittance flow rose in September 2012 as remitters sent extra pennies to near and dear ones during Eid-ul-Azha and Durga Puja.

News: The Daily Sun/Bangladesh/4th-Dec-12

The amount of 'doubtful loan' (DL) in the country's banking sector increased substantially in the July-September period of this year due to the recent scams.

An official of the Bangladesh Bank (BB) attributed the rise in the DL to sluggish business activities, especially after the recently detected loan-related irregularities in some public sector banks.

On the other hand, a former BB high official told the FE Sunday that one of the possible causes behind the rise in the DL could be aggressive loan disbursement by the commercial banks without evaluating feasibility properly.

The DL is usually non-performing loans, on which interest is overdue and whose full collection of principal is uncertain.

The amount of the DL increased by Tk 16.25 billion in the third quarter of this calendar year (July-Sept 2012) than that of the previous quarter (April-June).

By the end of this September, the total DL in the banking sector was Tk 51.78 billion or 1.25 per cent of the total outstanding loans. The amount was Tk 35.535 billion or 0.88 per cent of the total loans in June.

According to the BB statistics, the four state-owned commercial banks and two specialised banks saw the highest increase in the DL in the third quarter. Of them, Sonali Bank Limited topped the list.

The total DL at Sonali Bank stood at Tk 10.78 billion or 3.27 of the total loans in September, which was Tk 4.23 billion in June.

The BB high officials said the amount of DL has increased significantly because of the recent Hall-Mark incident and poor loan recovery rate.

The DL of Janata Bank Limited and Agrani Bank Limited stood at Tk 3.22 billion or 1.20 per cent and Tk 4.02 billion or 2.07 per cent respectively by the end of September.

News: The Daily Financial Express/Bangladesh/3rd-Dec-12

Bangladesh incurs 1.81 percent of GDP loss annually due to extreme weather events and over the period of 1962-1988, the country lost about 0.5 million tonnes of rice annually for floods, which accounts for nearly 30 percent of country’s annual food grain imports.

Since 1970, the country has experienced 36 cyclonic storms resulting on over 450,000 deaths and immeasurable economic losses.

Bangladesh Bank Governor Dr Atour Rahman made the observations while speaking at the ongoing UN Climate Change Conference– CoP-18 (Conference of the Parties) at Ezdan Hotel Conference Centre in Qatar Sunday.

Speaking at the conference, Atiur said Bangladesh falls into the group of most climate change vulnerable countries in the world despite her insignificant share of global greenhouse gas (GHG) emission in comparison with other developing and developed countries.

According to Intergovernmental Panel on Climate Change (IPCC), Bangladesh will be among the worst victims of climate change as its sea level is apprehended to rise due to escalating atmospheric temperature.

Mentioning that frequency of cyclone-storms is projected to increase, forcing millions of people to migrate, he said food and energy security will be threatened leading to rise in diseases and frequency of natural calamities. Besides, high density of population will make the problem worse.

Bangladesh will have to tackle these challenges despite the fact that her global share of GHG is only 0.25 percent in Bangladesh in comparison with 5.78 percent in India, 23.33 percent in China, 18.11 percent in USA and 14.04 percent in the EU, said Atiur.

The BB chief exchanged views with the central bank chief in Qatar on climate change issues and Bangladesh Bank’s green banking activities and various banking issues to strengthen Bangladesh’s banking sector.

United Nations Framework Convention on Climate Change (UNFCCC) recognised the special needs of developing countries, particularly those highly vulnerable to climate change.

According to UN Article 4.4, developed countries are to assist developing countries vulnerable to climate change in meeting costs of adaptation. Article 4.9 attaches special priority to LDCs in relation to funding, which includes funding for adaptation.

Cyclone Sidr in 2007 caused 3,406 deaths. Over 55,000 people sustaining physical injuries. 273,000 homes were destroyed and more than 900,000 were damaged. 855,000 acres of crops were damaged and nearly 30,000 acres were completely destroyed, he referred.

243,000 houses were completely destroyed and over 373,000 were partially damaged and more than 7,103 people were wounded and more than 3,928,238 people were affected by the cyclone Aila in 2009.

Almost 80 percent of the total area of the country is prone to flooding. South and South-eastern parts of the country were hit by tropical cyclones during the last few years.

Almost the whole coastal belt along the Bay of Bengal is experiencing salinity problem. North and North-western regions of the country are suffering from extreme temperature problem.

Around 75 percent area of mangrove forest, Sundarban (60007 Sq. km) will submerse if the sea level increases 45 cm. If the sea level rise 1 m then the islands of Bay of Bengal and whole Sundarban will be destroyed, said Atiur.

Bangladesh, as a LDC, is not obligated to mitigate or reduce GHG emission (in UNFCCC negotiation terms). However, the government considered to maintain a low carbon development path. Bangladesh has made notable contribution towards establishing 'Green Climate Fund' and extending 'Second Commitment Period of Kyoto Protocol'. ‘Bangladesh Climate Change Strategy and Action Plan, 2009 has been drawn out to tackle challenges of climate change. 'Climate Change Trust Act, 2010' has been enacted.

Bangladesh government has already invested $ 10 billion over the last three decades to make the country’s climate resilient and less vulnerable to disasters. Over the past three fiscal years (FY10 to FY12), the government has allocated $ 300 million (USD 100 million every year), for projects largely focused on adaptation. Another Fund called Bangladesh Climate Change Resilience Fund (BCCRF) has been established in 2010 with funds provided by the development partners, Dr Atiur said.

Besides, the central bank of Bangladesh is actively responding to climate change through policy formulation and implementation for green banking, creation of refinance programmes for financing environment-friendly projects through banks and financial institutions and ensuring environment friendly business practices in the financial sector through adaptation of automation and digitization.

News: The Daily Sun/Bangladesh/3rd-Dec-12