The government should immediately void the amendment made to the Grameen Bank Ordinance as the changes are out of touch with reality, a group of professionals said yesterday.

In a joint statement, 160 people from different professions yesterday expressed grave concern over the future of Grameen Bank.

They said the government move to gain control of the Noble-winning organisation by way of the amendment has not only surprised the country's conscientious citizens but also people the world over.

“We think it has tarnished Bangladesh's image on the international level.”

People from all walks of life, including intellectuals, eminent citizens, politicians, teachers, women leaders, have criticised the government move, according to the statement.

"It proves the government move is far removed from people's perceptions. The government should annul the amendment without further ado," it said.

The group highlighted the fact that 84 lakh poor women had 97 percent ownership of the microcredit organisation, while the government had only a 3 percent stake.

"Given these conditions, amending the Grameen Bank Ordinance to give sole power to the government-appointed chairman to pick the managing director of the bank seems ill-intended.”

“The participation of the rural women in running the bank was not given any importance -- they have been made peripheral to the organisation by the amendment," it said.

Favouritism is bound to creep into the selection of managing director, just like it has happened in the case of state-run banks, the statement reads.

“It has not yielded good fruits [in case of state-run banks] -- and the results are not satisfactory.”

The statement said the procedure through which the managing director was selected and the board was run in the last 30 years is what has made Grameen Bank a Nobel Peace prize-winning organisation.

"Then what is the point of this amendment?" it asked.

"Why do the organisation's 97 percent stakeholders not have the liberty to choose their chief executive? The amended ordinance is totally conflicting with other existing laws of the country, as well as around the world, and hence, is questionable."

The group of professionals said a top audit firm, appointed by the central bank, properly inspected the accounts of Grameen Bank every year, in line with the country's audit standards.

Bangladesh Bank, too, conducted the audit, from branches to head offices, every year with its skilled officials.

“Those audit reports are testament to the transparency of Grameen Bank's accounts and its financial management,” it said.

The signatories in-clude AFM Yusuf Haider, a former vice chancellor of Dhaka University; Rumana Parvin, assistant professor of Dhaka University; Imdadul Haque FCA; Advocate Afajalul Haque; Prof Yakub Ali and Engineer Nurul Haque.

News: Daily Star/Bangladesh/30-Aug-12

The board of directors of Sonali Bank yesterday claimed they were not guilty of a recent loan scam involving more than Tk 3,606 crore.

The board also passed the responsibility of the scam on to the officers and "their collaborators".

“The board is very much active, competent and judicious,” KM Zaman Romel, a director of the Bank, told journalists after a meeting at the Bank's headquarters in Dhaka.

Though Romel is the chairman of the Bank's audit committee, he denied his failure to carry out the audit work of the Bank properly.

“The then managing director (Humayun Kabir) of the Bank did not inform the board of the financial frauds at the Bank's Ruposhi Bangla Hotel branch,” said a statement issued by the Bank.

“If the board was informed on time, the fraud could be averted,” said the statement.

On the suspension of 32 officers identified in the fraud, Pradip Kumar Dutta, managing director of the Bank, said, “It's a process and we've started it.”

“We'll inform the central bank of it tomorrow (today),” said Dutta.

In May 2012, a central bank investigation revealed massive irregularities in sanctioning and disbursing loans worth Tk 3,547, mostly to little-known Hallmark Group, by the Sonali Bank's Ruposhi Bangla Hotel branch.

The Bangladesh Bank also instructed the bank to take necessary action.

An audit conducted in June found that the top management of the Bank had remained “mysteriously silent for a year” since February 2011, although the signs of irregularities came to light through various internal inspections.

Some central bank officials said the Sonali Bank management was asked on several occasions to take drastic action against the officials involved in the scam -- but the instructions fell on deaf ears.

BB Governor Atiur Rahman in a letter on Monday requested Finance Minister AMA Muhith to restructure the board of directors of the state-owned bank, saying it failed totally to deal with the Tk 3,547 crore loan scam.

Of the amount, Hallmark Group alone pocketed Tk 2,686.14 crore.

However, a day after the governor's letter, the finance minister questioned the central bank's jurisdiction of dissolving the Sonali Bank's board to be expired next month after a three-year full term.

Meanwhile, the BB in its board meeting yesterday discussed the Sonali Bank's irregularities and the matters of the governor's letter.

“Bangladesh Bank explained the entire issue before the board,” Prof Hannana Begum, a BB director, told the journalists after the meeting.

“We've asked the central bank to devise a permanent mechanism and monitoring system so that the Sonali Bank-type irregularities can be avoided,” she said.

News: Daily Star/Bangladesh/30-Aug-12

Bangladesh Bank's net profits, buoyed by increased government borrowing and repo operations, shot up 105 percent to Tk 3,858 crore in fiscal 2011-12.

The financial results were disclosed after a board meeting that approved the annual accounts for the fiscal year, AFM Asaduzzaman, general manager of Bangladesh Bank (BB), said yesterday.

The amount payable to government coffers stood at Tk 3,481 crore, up 109 percent from the previous year's Tk 1,664 crore.

Operating profits, at Tk 7,031.74 crore, were 20.48 percent lower than last fiscal year's Tk 8,842.59 crore.

“Operating profits have gone down due to a significant loss in foreign currency revaluation,” a senior BB official told The Daily Star.

Income from foreign currency revaluation in fiscal 2011-12 was Tk 3,173 crore in fiscal 2011-12, when it stood at Tk 6,957 crore in the previous year.

Income from domestic sources jumped to 1,983 crore from Tk 441 crore a year ago. The growth rate was over 122 percent, thanks to higher government borrowings.

The central bank earned Tk 1,206 crore by lending to the government, up by nearly 148 percent from previous year's Tk 299 crore.

Income from foreign sources rose by over 13 percent from Tk 964 crore to Tk 1,091 crore, mainly due to higher interest rate.

The interest income from investment in local banks and the government is referred to as a domestic source, while the interest earned from investments of foreign currency reserves in commercial and central banks abroad is termed as earnings from foreign sources.

News: Daily Star/Bangladesh/30-Aug-12

Bangladesh Bank Tuesday gave a go-ahead to 10 private sector projects to take loans worth $109.2 million from foreign sources, the regulator said in a statement.

The loans include $25.1 million for Sylvan Agriculture Limited, $ 20.0 million for Banga Builders Limited, $ 15.0 million for Western Marin Shipyard Limited, $ 15.0 million MI Cement factory Limited, $ 5.0 million for Universal Menswear Limited and $ 4.0 million for DNV Clothing Limited. The rest of the amount was approved for the RR Imperial Electricals and Genesis Washing Limited.

The highest interest rate of the projects is three-month LIBOR+4.50 percent in a year. The effective interest rate will be within 4.94 percent per annum, the central bank said.

The tenure of these loan proposals are at least 5 years.

The approval came at the 67th meeting of the scrutiny committee of the BB presided over by its Governor Atiur Rahman at its office in Dhaka.

“This type of foreign financing will be helpful in keeping the foreign exchange rate stable and will impact positively on the balance of payments of the country,” according to the statement.

Officials said more foreign financing proposal is under processing and close BB consideration for the approval.

News: Daily Independent/Bangladesh/29-Aug-12

Loan disbursement to SME sector has witnessed a sharp rise during the first six months of 2012 as banks and financial institutions disbursed a total of Tk 32,255 crore, up by Tk 6,092 crore or 24 per cent from the same period of the last year. During the January-July period of the current calendar year, banks pumped Tk 31, 453 crore while other financial institutions Tk 802 crore into the SME sector, according to a Bangladesh Bank (BB) data.

Accords to BB, small entrepreneurs have been given Tk 17,829 crore while medium entrepreneurs Tk 14,427 crore.
BB has set a target of disbursing Tk 59,000 crore as loan in the SME in 2012 as the government has attached a priority to expansion of the small and medium enterprises as part of its plan to cut poverty through creating employment opportunity.

Of the total amount, entrepreneurs in manufacturing sector got Tk 10,463 crore while service sector Tk 1,639 crore.  Credit worth Tk 1,234 crores went to the female entrepreneurs, up by Tk 252 crore from the last year’s Tk 982 crore.

“Banks and other financial institutions have channeled more credit to the small and medium entrepreneurs than the larger entrepreneurs following the BB’s advices..flow of credit to service and manufacturing sector is on rise,” BB’s SME and Specialized Programmes Department General Manager Sukomal Singha Chowdhury told BSS.

As the central bank has a plan to ensure the availability of loan for genuine SME entrepreneurs, the BB officials are supervising the loan disbursement at the filed level, he added.

“We encourage banks and other financial institutions to provide more credit to manufacturing sector because this sector creates jobs,” said Sukomal Singha.

News: Daily Independent/Bangladesh/28-Aug-12