A bumper output of rice has eased pressure on import.

Food grain imports have fallen by 56 percent in the current fiscal year, cutting the country's import bills by $1 billion, thanks to a rise in production of rice at home.

Rice and wheat imports slumped to 2.24 million tonnes between July and mid-June of the outgoing fiscal year, from 5.15 million tonnes in the July-June period a year ago, according to food ministry data.

During July to June 9 of the outgoing fiscal year, import payments for rice and wheat fell by $1.02 billion or 55 percent from $1.87 billion during the same period a year ago, according to Bangladesh Bank data.

The drastic fall in imports provides much relief to the policymakers at a time when export growth slows but the pressure on the balance of payments remains high due mainly to import of fuel to generate electricity through 'quick rental' power plants.

"The dip in food imports has helped curb a further depreciation of the taka," said economist Mahabub Hossain, attributing the reduced import to a rising rice output.

Rice yield rose by around 1 percent to 33.73 million tonnes in the current fiscal year from 33.54 million tonnes the previous year, enabling Bangladesh to become almost self-sufficient in its staple food, thanks to favourable weather, availability of fertiliser and its balanced use.

The reduced import of food grain has saved a good amount of subsidy, which the government can use in the power sector, said Hossain, who follows agriculture and rural economy.

"If the subsidy for food was needed, the government had to borrow more funds, which might make the economic situation of the country worse," said Hossain, also executive director of BRAC, a development organisation.

So, the condition of economy remains better because of the fall in food grain imports, he said.

He said import requirement for food for the next fiscal year would not be high unless there is any natural disaster.

Food and Disaster Management Minister Muhammad Abdur Razzaque said the government did not open fresh letter of credit (LCs) to import rice in the current fiscal year.

"We took delivery of rice against the contracts we signed the previous fiscal year," he said.

Razzaque said rice is in surplus now because of higher production in the past three harvests.

The government will review the overall production and stocks situation in November based on the production outlook of rain-fed aman rice, he said.

"We may need to export if we have surplus at that time," said Razzaque, explaining that export might be required to help prices of rice increase from the current low level to encourage farmers to stay with the cultivation of the crop.

A lack of space in public warehouses is another factor, said the minister, adding that import requirement for food grain would not be high the next fiscal year, beginning in July.

The government has cut its target for importing food grains by 15.4 percent to 1.1 million tonnes for the next fiscal year. Of the amount, wheat and rice import has been planned at 0.8 million tonnes and 0.3 million tonnes respectively, according to budget documents.

Till mid-June of the outgoing fiscal year, the government's imports fell by 52 percent to 1.01 million tonnes from 2.12 million tonnes the same period a year ago.

However, imports of wheat by the private sector may rise the next fiscal year, said Abul Bashar Chowdhury, chairman of BSM Group, a Chittagong-based commodity importer.

Including the government's planned wheat import, the total imports of the grain may rise to 2.3 million tonnes the next fiscal year from nearly 1.9 million in the outgoing year, said Chowdhury.

The Daily Star/Bangladesh/ 28th June 2012

The remittance inflow is set to cross $13 billion mark at the end of the current fiscal year as the amount has already reached $12.54 billion till June 22 this year, Bangladesh Bank (BB) sources said.

The country, however, fetched $11.6 billion as remittance in 2010-11 fiscal.

A BB official said the growth in remittance was driven by a couple of factors including migration of a large number of workers and also some regulatory measures.

“The inward remittance is expected to exceed $13 billion mark at the end of June 2012 as banks are relentlessly working to mobilise more foreign currencies from Bangladeshi workers abroad by offering hassle-free and low-cost money transfer,” said the BB official, seeking anonymity.

He also informed that BB governor Atiur Rahman himself is constantly monitoring the situation.

“If any single remitter faces problems with any bank, the governor has constant directives on us to resolve the problem rapidly,” the official said. BB data shows that migrant workers have so far remitted $767.49 million this month.

Remittance inflow reached $1.15 billion in May this year, up by 15.30 percent compared to $998.42 million in the same period a year ago.

Traditionally, the Middle East countries are the major sources of remittance inflow to Bangladesh. During the July-May period of the current fiscal, the country received $3.38 billion as remittance from Saudi Arabia, $2.20 billion from United Arab Emirate (UAE) and $1.09 billion from Kuwait, according to BB data.

Islami Bank Bangladesh Ltd (IBBL) handled the largest amount of remittance among the country’s public and private commercial banks during the last few years.

The bank channeled $3.19 billion during the July-May period of 2011-12 fiscal.

In FY 2010-11 and FY 2009-10, the bank handled inward remittance of $3.0 billion and $2.9 billion respectively.

State-owned Sonali Bank Ltd, Agrani Bank Ltd and Janata Bank Ltd channeled $1.16 billion, $1.14 billion and $913.05 million respectively in July-May period of 2011-12 fiscal, according to BB data.

Sources said state-owned Rupali Bank is in the process to accelerate remittance by expanding its overseas operation and getting new agreements with authorised dealer banks in the destination countries.

Among the private banks, National Bank, BRAC Bank, Pubali Bank, South East Bank, Uttara Bank, The City Bank, NCC Bank, Bank Asia, Prime Bank and AB Bank also extended their efforts to secure bigger amount of remittance in the days to come.

Participation of foreign banks in remittance handling has been low over the years. In July-May period of the outgoing fiscal, all nine foreign banks together channeled only $205 million. Of the amount, the stake of the HSBC Bank is $103 million, followed by Standard Chartered Bank’s $90 million.

The Daily Sun/Bangladesh/ 27th June 2012

The government has prepared a roadmap to prevent money laundering and terrorism financing for a period up to 2013 with a provision of imposing restriction on cash transactions for some selected sectors.

The finance ministry has already prepared a strategy paper -- National Strategy for Preventing Money Laundering and Combating Financing of Terrorism 2011-2013.

Finance ministry officials said the paper was supposed to be placed in parliament during the budget session but finally it did not happen.

Finance Minister AMA Muhith in the strategy paper said the strategic planning initiative has used APG (Asia Pacific Group on Money Laundering) Mutual Evaluation Report and Bangladesh's self-assessment exercises in identifying the threats to anti-money laundering and combating financing terrorism efforts.

The strategy paper also incorporated stakeholders' recommendations.

Muhith said, after setting the medium term vision for fighting money laundering and terrorism financing, the document identifies 12 strategic objectives to be attained.

The strategy paper said Bangladesh is mainly a cash-based economy and most of the banks are concentrated in large towns, leaving the majority of population in remote areas deprived of banking services.

The paper also said there are limited banking facilities, a small banking network and less trustworthiness upon the formal financial system among the low-income people in Bangladesh.

As a result, most of the business transactions are made in cash instead of paper or electronic media such as cheque or e-money, it said.

The roadmap includes a provision of imposing restriction on cash transactions for selected sectors/ types/purposes/thresholds by December this year.

The finance and home ministries, Bangladesh Bank, Securities and Exchange Commission, Insurance Development & Regulatory Authority Bangladesh, and NGO Affairs Bureau will impose the restrictions.

The strategy paper said if these are done, combating money laundering and terrorism financing activities will be easier.

The government has also set a target to develop an electronic database by December next year for sharing information among law enforcing and regulatory agencies such as Anti-Corruption Commission, Bangladesh Bank, customs authority and police.

Connectivity among the regulatory agencies for sharing the database would be established by June next year.

The strategy paper said strong coordinated efforts are required to analyse and unearth the money laundering cases as criminals use sophisticated methods.

For ensuring transparency in the ownership of legal entities, personal information of the owners or controllers of licensed entities will be reviewed and collected by December next year.

The strategy paper said, in Bangladesh, generally the organisations or registered entities such as corporations, limited companies, partnership firms and trusts are licensed or registered under different authorities under different laws.

These entities often do not have minimum public disclosure of personal information on controlling interest and ownership.

Due to a lack of capacity of the government, the Registrar of Joint Stock Companies and Firms (RJSC&F) is the main authority to register these entities.

Financial institutions cannot properly identify suspicious transactions due to a dearth of transparency and thus hinders law enforcing agencies from investigating and prosecuting money laundering and terror financing cases.

By using these entities, money launderers and terrorism financiers may get access to financial systems.

The government has set a target to make the RJSC&F fully automated by December this year to block this access. At the same time, the government will use national identification number as a unified identity number.

In order to improve transparency in financial reporting on money laundering and terrorism financing issues, the government will issue directives to incorporate a separate chapter dedicated to compliance issues on financial statements of reporting agencies by December this year.

The Daily Star/Bangladesh/ 26th June 2012

Non-resident Bangladeshis (NRBs) have become one of the major targets for many commercial banks those are desperately looking for expanding their business beyond domestic squire to secure sustainable liquidity position.

Offering many products and services with lucrative return on deposits, remittance and other banking services, the banks are trying to fetch as much business as they can from the expatriate Bangladeshis. The products include different types of savings and investment schemes and bonds.

Many banks have opened exchange houses in different countries to take their services at the doorsteps of the Bangladeshi people living overseas. According to Bangladesh Bank (BB), there are 63 exchanges houses of Bangladeshi banks in different countries when some banks are awaiting BB’s approval to follow the suit.

Besides, some banks are regularly sending their senior executives to the major overseas labour markets to showcase their products and services to the NRBs and bring them in their clienteles’ lists. The bankers are encouraging the NRBs open accounts and send money home through the banking channel.

The countries those are getting major attention from the banks are Saudi Arabia, United Arab Emirate (UAE), Japan, Singapore, Malaysia, Kuwait, Qatar, Bahrain, the United Kingdom and the United States.

“It is good for the country’s economy if banks can get as much deposit as they can from external resources,” former governor and economist Dr Mohammad Farashuddin said.

He said banks are taking many steps besides introducing innovative products and services for NRBs, which would certainly bring a good yield for the country’s economy.

The Daily Sun/Bangladesh/ 24th June 2012

Bangladesh is committed to more inclusive green growth despite being the victim of climate change and climate change-related high carbon growth in the developed world, Atiur Rahman, governor of Bangladesh Bank, said yesterday.

Atiur spoke as a panel speaker at an event on 'Building Inclusive Green Economies: A New Development Partnership' on the sidelines of the United Nations Conference on Sustainable Development (Rio+20 Summit) in Brazil.

The Federal Ministry for Economic Cooperation and Development, Germany arranged the event.

The central bank chief urged the leaders of the developed world, including the ministers present at the event, to come up with creative options for more meaningful international cooperation and transfer of resources and technologies for inclusive green growth.

Atiur said Bangladesh has been successful in halving poverty over the past two decades and enhancing social development despite being on the receiving end of the climate change-related vulnerabilities.

He highlighted the complementary role of the central bank of Bangladesh in improving financial inclusion which has been providing necessary access to finance for the disadvantaged small entrepreneurs and marginal farmers.

Atiur also said Bangladesh is committed to pursuing low-carbon green development without compromising the imperative of faster economic growth and social development.

“Development strategies of the Bangladesh government laid down in the Perspective Plan and the Sixth Five Year Plan declare clear commitment to pursuing sustainable growth,” he said.

The country's vulnerability to floods, cyclones and inundation of large coastal areas from global warming driven sea-level rise makes sustainability a prime development concern.

Atiur appreciated the Rio+20 final document for reflecting the core aspiration of the people of the developing and least developed countries particularly as the place for inclusive green growth for poverty eradication. But he was not fully satisfied with the means of implementation as no firm commitment has been made for the transfer of resources and technologies for poorer countries.

World Resources Institute Interim President Manish Bapna moderated the event.

The Daily Star/Bangladesh/ 24th June 2012