The Bangladesh Bank Governor Dr Atiur Rahman has said the regulator has been promoting socially responsible banking in Bangladesh to avoid financial crisis.

For doing so, the central bank took lessons from the most recent global financial crisis, what he said, “was in part caused by excessive risk taking and a narrow focus on short-term profit maximisation on the part of key financial institutions.”

The governor was speaking at a discussion at World Bank heaqquarters in Washington on Friday.

The event was organised on the sidelines of 2013 annual meeting of the World Bank Group and the International Monetary Fund.

He said BB has already formulated a CSR guideline that indicates the type of activities that banks can classify as CSR and which also excludes elite club contributions.

The annual CSR report launched in by all banks created healthy competition in the banking sector, he added.

News:The Daily Sun/13-Oet-2013

Bangladesh is the 7th largest remittance receiving country in the world and now it accounts for about 11% of GDP

Bangladesh Bank Governor Dr Atiur Rahman said Bangladesh is now one of the five least costly corridors of remittances across the world because of efficiency enhancing activities in Bangladesh.

He said Bangladesh is the 7th largest remittance receiving country in the world which has been growing at double digits since 1980s, and now it accounts for about 11% of GDP.

He was delivering a speech at the Boston University Center for Finance, Law & Policy, USA on “Role of Remittance in Enhancing Inclusive Growth and Macroeconomic Stability” On Thursday.

The governor said mobile banking/smart cards, drawing arrangements, exchange houses, MFIs, Post Offices and uses of ICT is playing important role in collecting and distributing the remittances at low cost.

“Remittances are being increasingly used in investment rather than consumption creating significant impact on inclusive growth and macroeconomic stability,” he said.

As policy steps to smooth remittance inflow, separate savings instruments have been created for non-resident Bangladeshis, such as a non-resident foreign currency deposit, USD premium bond, wage-earners’ development bond, according to Bangladesh Bank.

Off branch remittance delivery to beneficiaries through smart card/mobile phone banking have been introduced and thirty seven banks have set up 1,084 drawing arrangements with 288 exchange houses all over the world to bring down remittance cost.

Consumption is the initial use of remittance funds by recipients. Loan repayments and home building and home renovation are also important uses. In the second round, families may utilise remittances for investments in micro to medium enterprises, such as grocery stores, poultry farms, beauty saloons, fish processing, hotels, and restaurants.

According to Bangladesh Bank data, in 2008-09, the remittance inflow was $9.7bn against the 650,059 migrant labour and it rose to $14.5bn in 2012-13 despite the number of migrant workers dropped to 441,301. Global Diaspora remittance flows projected to reach $550bn in 2013.

Remittance have contributed significantly to growing foreign exchange reserve of Bangladesh, which now stand at a historical high of more than USD$16bn.

Despite being a trade deficit country, Bangladesh has been enjoying a positive balance in the current account during the last five years because of the favorable impact of remittances.  

The banks and financial institutions must develop an effective management information system (MIS) to supply information to the integrated supervision system

The banks and financial institutions must develop an effective management information system (MIS) to supply information to the integrated supervision system

Dhaka, Oct 7: Bangladesh Bank governor Dr. Atiur Rahman hoped that the high rate of bank interest would come down gradually with decline of inflation rate which he has already scaled down substantially in recent days. The rate of inflation came down to 7.13 last month as against about 13 per cent in last year. “Nothing to be worried. Keep patience. The interest rate will come down as the rate of inflation slowed down,” said the governor while addressing a seminar on “Bank interest rates and Charges” at Bangabandhu International Conference Centre (BICC) conference room in Dhaka.
Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) organised the seminar to discuss the issue of high bank interests and charges which, the businessmen said, are hampering their trade and business seriously. Speakers at the seminar strongly protested the high rate interest and urged government intervention.
Finance Minister AMA Muhith, who attended the meeting for a short while, also admit the allegation adding that the interest rate spread should not be more than 4 percent. He tactfully avoided the businessmen’s demand for cut the bank interest rate adding that the government is still in power until announcement of the election schedule.  “Many think, the government’s authority to take any policy decision will be over this month, but I think we’ll have such authority until the next election’s schedule is declared. So, discuss the issue, send your proposal, we will think and 
take decision,” said the minister who leaves Dhaka Monday night for Washington DC to attend IMF annual meeting.
The governor also instructed the banks to reduce their cost of operations by cutting unnecessary expenditures and thus help reduce the spread of interest rate.  Despite the global economic meltdown, he said, the country’s economy still remains steadfast and doing well. “We are trying to reduce the service charges,” he added.
Attributing the reason behind high bank interest to huge accumulation of bad loan, the governor urged the bankers to be more cautious about lending loan and concentrate more on quality lending. Provisioning against bad loan is increasing the interest rate, said the governor.  Although the amount of debt loan has decreased substantially in recent days, still it is higher than any neighbouring countries.
Banking division secretary Dr. Aslam Alam, who attended the programme as a special guest, also urged the banker to reduce operational cost, introduce online banking and bring the huge unbanked people under banking network which he said would help reducing the interest rate.
Presided over by FBCCI president Kazi Akram Uddin, the programme was also addressed among others by former FBCCI president AK Azad, BAB chairman Nazrul Islam, industrialist MA Hashem and BGMEA president Atiqul Islam. Olicy Research Institute Executive Director Ahsan H. Mansur presented the key note paper on the subject.
Dr. Mansur in his paper said that the high interest rate and charges had adversely affected investment and domestic economy. He discussed in details the issues that control the rate of interest and structural aspect of the economy and the banking system. 
Dr Ashan H Monsur said that bank interest rate is high in Bangladesh because of increasing default and non-performing loans (NPLs) in the banking sector. “It’ll be very difficult to lower the interest rate until the NPLs are decreased,” he added.
Earlier, Kazi Akram Uddin and AK Azad urged government to take immediate measures to reduce bank interest rates and other charges. They also criticised the government for increasing the rate of interest in the case of savings certificates.