Bangladesh Bank Governor Dr. Atiur Rahman, seen with the students who received scholarships awarded by Southeast Bank, at a function in Dhaka Monday.

Bangladesh Bank Governor Dr. Atiur Rahman Monday urged scheduled banks to spend at least one-third of their Corporate Social Responsibility (CSR) funds for helping the poor but meritorious students.

The key to attain sustainable growth of a populous country like Bangladesh lies with the development of human resources and its root is education, he said.

Dr. Atiur was addressing a function to distribute education scholarship and accord reception to 75 scholarship receivers at bachelor level, organised by Southeast Bank at a city hotel.

Referring that the government has identified human resources development as an integral part of overall uplift planning in view to building a technology and knowledge based digital Bangladesh, Governor said today’s learners will emerge as the driving force of knowledge, information and economic growth of the country in course of time.

Emphasising the need for distributing credit among the poorest segment of the population Atiur said the central bank has been working for building a humane banking system, side by side, implementing the government’s poverty eradication and job creation oriented programme.

He said in CSR activities the scheduled banks invested only Tk 550 million in 2009 while the expenditure was raised to Tk 2.33 billion in 2010.

He urged the banks to expand their CSR heads by investing in renewable energy, bio-gas plant, solar power driven irrigation, providing solar lights to the students of char and haor regions etc.

Dr Atiur advised them to add conditions to the credit holders for participating in CSR activities.

Governor said a big portion of the country’s meritorious section of students does not have opportunity to take higher education, and as a result they are dropped out at a stage of their education. Now, time has come to take steps in finding them out and check this in the greater interest of the nation.

Managing Director of Southeast Bank Mahbubul Alam presided over the ceremony while Chairman of the bank and also Chairman of Southeast Bank Foundation, Alamgir kabir FCA, was present as special guest.

Vice Chairman of the Bank, Raghib Ali, Executive Director of Southeast Bank Foundation, M Nurun Nabi, Director Azim Uddin Ahmed, Adviser of the Foundation Zakir Ahmed Khan and Project Director of the Foundation Ayesha Shirin Rahman also spoke on the occasion.

The Daily Sun/Bangladesh/ 17th July 2012

The new loan classification and provisioning rules of the Bangladesh Bank may give rise to default loans in the short-term, but will ultimately reduce the number of wilful defaulters and benefit both banks and borrowers, according to a BB study.

The central bank in the study said, if the rules are followed strictly, the amount of default loans as well as the banks' insolvency will fall in the long run.

The study found that the amount of default loans may increase by only 2.38 percent over the existing amount under the new rules.

On March 31, the total default loans in the banking sector stood at 6.57 percent of their outstanding loans. The percentage could be 8.95 percent on the same day if the amount was calculated under the new rules, the BB found in the study.

The central bank presented the study report to the heads of credit departments of all banks yesterday.

The BB also organised a workshop at its head office where its Deputy General Manager Anwarul Islam showed the study results through a presentation.

BB Deputy Governor SK Sur Chowdhury at the workshop said some influential borrowers have repeatedly got their huge amount of default loans rescheduled.

The workshop was organised to remove misunderstandings created among the bankers regarding the new decision.

the new policy does not provide scope for rescheduling loans for more than three times, new entrepreneurs will get more access to loans and the banks will also overcome their liquidity crisis, Chowdhury said.

Islam said the new rules were issued to ensure accurate asset valuation in financial reporting and maintain the appropriate asset quality of banks in the changing global economic environment.

According to the changes in rules the central bank brought in June, if a loan remains in default for three months, it would be classified as substandard.

It means the borrower will not face any difficulty in getting new loans but the bank will have to keep 20 percent provisioning of the sub-standard loan.

Also, in line with the new rules, no loan can be rescheduled for more than three times.

After a new circular was issued in this regard, both business community and banks have requested the central bank to reconsider the decision.

However, BB officials said the impact of the new decision would be minimal.

According to Islam, the new decision will ensure better recognition of losses at banks, proper calculation of their income, and avoidance of overstatement of capital.

He also said the new rules will increase the banks' resilience, ensure better management efficiency, and bring transparency in financial reporting and discipline in the industry.

Islam said good borrowers will not face any adverse impact; instead, credit flow will increase to new entrepreneurs and productive sectors.

The number of habitual defaulters will fall and depositors' interest will be better protected, he said.

The Daily Star/Bangladesh/ 17th July 2012

Trust Bank disbursed Tk 30 million loans on spot for weaving cluster at Sirajganj Saturday.

Dr. Atiur Rahman, Governor of Bangladesh Bank was present at the function as the chief guest while Managing Director of Trust Bank Shah A Sarwar presided over the programme at Shaheed M. Mansur Ali auditorium, Sirajganj.

An amount of Tk 30 million was disbursed among 220 micro entrepreneurs under the mode of group financing.

Sukomol Sinha Chowdhury, GM, SME of Bangladesh Bank, TIM Rawshan Zadeed, Head of SME, Trust Bank, Cluster Manager Motaleb Patwary, SM Mahbub Hasan, Manager, KYAMCH branch, MA Matin, Representative of EDCL were present.

The Daily Sun/Bangladesh/ 16th July 2012

Bangladesh Bank (BB) will allow rescheduling of loans without down-payment for apparel exports, especially stock-lots caused by non-shipment of goods or cancellation of export orders, BB Governor Dr Atiur Rahman said Sunday.

“Apparel exporters will enjoy loan rescheduling without down-payment if the non-repayment was genuinely caused from stock lots,” Dr Atiur Rahman told daily sun.

Besides, the regulator would also relax the rules on loan rescheduling considering the national priority on the basis of individual case study, the governor said.

The central bank last month asked the banks to enforce the new rules on classification, provisioning and rescheduling of term-loans with a provision of allowing maximum three-time rescheduling of a term-loan with effect from July 1.

The new rules had panicked the apparel exporters who pursued the central bank authority for not enforcing such tightened rules that reduced the time-limit by three-month for classification, provisioning and rescheduling.

According to new rules, non-repayment period against a term-loan for more than two months will be treated a specially mentioned account (SMA) and the non-repayment period between 3-6 months will be classified as substandard. If the non-repayment period is more than six months, it will be treated as default loan.

Atiur said the central bank inspectors will monitor the supervisory activities of banks regarding the loan classification, provisioning and rescheduling as per the new rules.

The governor also asked all the banks and financial institutions to strengthen respective supervisory strength in this regard.

He said banks must follow the provisioning of respective capital in accordance with the new rules.

“It was necessitated because of adopting internal best practices by banks so that the country’s banking sector become stable,” he said.

The Daily Sun/Bangladesh/ 16th July 2012

Bangladesh Bank yesterday released a new banknote of Tk 50 denomination with the portrait of Bangabandhu Sheikh Mujibur Rahman in it, the central bank said in a statement.

On the back of the banknote, 'Moi Deya' Jolrong, Shilpacharya Zainul Abedin will be written in place of 'Moi Deya' Jol Rong Chitro, Shilpi Zainul Abedin, Bangladesh Bank said.

All other security features of the banknote remain unaltered, it said.

The Daily Star/Bangladesh/ 16th July 2012