Bangladesh Bank governor Atiur Rahman has asked the commercial banks to reduce their interest rates to accelerate industrialisation.

The governor gave the directive in a meeting of bankers at Motijheel on Sunday.


He said the ceiling on interest rates, except that on export and import of essentials, term industrial loan and farm loan, had been withdrawn as it was felt necessary due to the global economic meltdown.

"Allegations have it that many banks were imposing 14-15 percent interest on industrial loan after the withdrawal of the ceiling," Atiur told the meeting.

"Allegations are also there that some service charges are being realised at much higher rates," the governor said urging the banks to rationalise those.

He said a directive had been given to take action against those who were defying the order in this regard.

News: The Independent/Bangladesh/ Apr-11-2011

Bangladesh Bank (BB) has asked the chief executives of all commercial banks not to get deeply involved in non-banking activities, including investment in the stockmarket.

At a meeting with the chief executives yesterday, the central bank said punitive actions will be taken against the banks involved in irregularities in the stockmarket.

After the meeting, BB Deputy Governor Nazrul Huda told reporters that they are yet to receive the report on the recent share market probe. He, however, said the central bank will conduct a separate investigation after getting the report.

On the basis of the investigation, actions will be taken against the banks according to the gravity of the offence, if any.

"We have read stories published in newspapers and are saddened to learn about manipulation by the banks," Huda said.

He said the central bank has taken steps to amend the rules that govern the amount of money the banks can invest in the share market.

Citing a study by the central bank, Huda said that if any bank invests 10 percent of its deposits and if the share price slides by 25 percent from its purchase price, the bank's capital will be reduced by a minimum of 2 percent.

In a meeting, BB Governor Atiur Rahman said they had earlier expressed concerns over the banks' non-banking activities, especially risky investments.

The “precariously off-balance situation” has been created in the banking sector as these banks did not take the corrective measures on time. The BB governor advised the banks to conduct banking activities cautiously in future.

News: Daily Star/Bangladesh/ Apr-11-2011

Bangladesh Bank (BB) has advised all commercial banks and financial institutions to disburse profits to shareholders, through the Electronic Fund Transfer Network (EFTN). The central bank issued a circular on Thursday, in this regard, which was signed by AKM Fazlur Rahman, deputy general manager of department of currency management and payment system.
The circular mentioned that the EFTN system had been launched by the central bank, on February 28, in order to make financial transactions fast, efficient and safe. The system is cost-effective and saves time, the
circular noted.
Earlier, 40 private and state-owned commercial banks had joined the central bank's EFTN credit transfer initiative, by rolling out the service in branches across the country.
Under the programme, BB has provided the foundation for access to every banking and non-banking consumer, as well as business customers, to facilitate electronic commerce, inward remittance and salary payment, at lower costs and shorter time.
Terming the EFTN system a milestone for the country's banking history, central bank governor Dr Atiur Rahman said the network will have extensive reach by connecting, for the first time, all the banks in Bangladesh, for transfer of funds electronically.
He said creation of the EFTN system is the most critical component in the development of a modern payments system infrastructure.
"It (EFTN) is the electronic highway of digital banking. In the near future, I expect that all banks will begin processing electronic funds transfers through this network," he said.
The BB governor also maintained that the transaction volume on the network will grow slowly, as banks would have to explain the benefits of electronic payments to their clients.
He said education and marketing efforts are necessary to maximise capabilities of the network.
Dr Rahman added that EFTN is an integral component for reaching the goal of Digital Bangladesh, for financial services.

News: The Independent/Bangladesh/ Apr-06-2011

The Bangladesh Bank (BB), country’s central bank, launched an automated clearing house at its Rajshahi office to ensure faster settlement of transactions and payment systems.

BB’s Deputy Governor Ziaul Hasan formally inaugurated the system at function in Rajshahi city on Thursday.

General manager of BB Rajshahi Office Zinnatul Bakiya chaired the function. Executive director of the BB Dasgupta Asim Qumar and managing director of Rajshahi Krishi Unnayan Bank Pradip Kumar Dutta spoke at the ceremony as special guests.

In his speech, the deputy governor said the new system will enable the banks to exchange cheques automatically on the online. Physical cheques will not be needed to send to the clearinghouse at BB, he added.

Under the new system, payments will be settled using automated cheque clearing system and electronic fund transfer among all the public and private commercial banks in the region.

BSS adds: Addressing the opening ceremony, BB Deputy Governor Ziaul Hassan Siddiqui, said the banks branches are required to make arrangements and develop infrastructure to meet the requirements of the new system.

“We’re working to help the commercial banks adapt to the new system so that they can able to avail the total benefits of the modern system,” he added.

He also said the central bank has already asked the commercial banks to procure necessary software and hardware for establishing link between the bank concerned and the central bank.

Siddiqui said that the advent of the BACH moves the region to the forefront of modern payment processing and puts the country amongst the world’s leaders in the use of such solutions.

“We moved one step ahead of many other countries by introducing this modern technology-based payment and transaction system,” he added.

A large number of executives and senior officers of BB and different other scheduled banks were present at the ceremony.

News: Daily Sun/Bangladesh/ Apr-08-2011

Bangladesh Bank (BB) has appointed a spokesperson to deal with media and public inquiry, according to a circular issued by the central bank on Wednesday. As per circular, Executive Director (ED) of BB, Md Jahangir Alam will be discharging his duties as the spokesperson until further notice. The circular also directed other officials to abide by the rules and regulations of the central bank regarding “Secrecy”.
The spokesperson will provide information regarding the bank’s policy, day-to-day activities and other events.
The circular also directed all officials and employees of the central bank to cooperate him in discharging the duties.

 

News: The Independent/Bangladesh/ Apr-06-2011