Southeast Bank Limited signed a participatory agreement with Bangladesh Bank at the head office of the central bank to avail of refinancing facility for Small and Medium Enterprises Financing on Sunday. Mr. Mahbubul Alam, Managing Director of Southeast Bank Limited and Mr Sukamal Sinha Choudhury, General Manager, SME & Special Programs Department of BB signed the agreement on behalf of respective sides. Mr. Md. Harunur Rashid Chowdhury, Executive Director of Bangladesh Bank presided over the meeting.

Through this agreement Southeast Bank will be able to avail refinancing facility from an ADB supported fund amounting USD 95.00 million equivalent to Tk 6.67 billion. Bangladesh Bank has been entrusted with the responsibility to administer the fund. The fund will help Southeast Bank to widen and expand its SME lending program in rural and semi urban areas at a subsidized rate.

Senior officials of SME and Special Programs Department of Bangladesh Bank attended the ceremony. From Southeast Bank Mr. Mohammed Gofran, Deputy Managing Director, Mr. Panu Ranjan Das, Vice President, Mr. M.M. Khaled Omar, Senior Assistant Vice President & Head of SME, Mr. Donald Rosette, Assistant Vice President and Head of R&D were also present.

Source: Financial Express/Bangladesh/24 Jan 2011

Bangladesh Bank wants a proper investigation into the current volatility of stock market and it has decided, in principle, not to pump any money into the share market, BB sources said yesterday.

Repo auctions to ensure adequate supply of liquidity in the banking sector will, however, be continued, sources added.

On last Monday and Tuesday, the BB disbursed a total of Tk 4 billion in favour of Investment Corporation of Bangladesh (ICB) in two equal installments.

The BB acts as the money market controller as it mainly reins in the inflation through proper monetary policy while SEC regulates the capital market, but the central bank is being held responsible for the volatility in the capital market, which is irrational, the central bank said in a statement yesterday.

A stable and comprehensive stock market plays a very important role for a long-term financing source. For building up confidence among the investors and ensuring a stable share market, the BB took a number of supportive measures much earlier, it said.

The BB had to control the liquidity flow to rein in inflation for ensuring stability in the banking sector, and serve the depositors’ interests through monitoring, it mentioned adding that it recently took a growth supporting monetary policy.

The new policy ensures that low interest loans are not used as consumer loans or go outside the money market. In view of it, the BB specified some sectors like agriculture and SMEs for increased loan flow.

Bangladesh Bank Governor, Dr Atiur Rahman, at a meeting with the bankers in late 2009, warned that some banks were investing their excess liquidity in the capital market. “It won’t be an offence if they do it strictly following BB and SEC’s compliance guidelines,” he added.

The capital market, otherwise, might witness a very volatile situation and banks’ main capital might also be in danger, he warned adding: “This would affect both the depositors and the equity.”

In October 2009, BB issued a circular in line with Bank Company Act, 1991 instructing the scheduled banks to open separate subsidiary company by January 2010 for merchant banking, which is yet to be fully implemented.

Earlier, in July of the same year, the central bank issued another circular asking them not to exceed their share market investment limit, 10 percent of their total liabilities, according to the act.

Despite their failure to meet the January 2010 deadline of separating merchant banking from the mainstream banking activities, the BB did not take any actions against them. Instead, it kept on reminding them of share buying limit.

News: Daily Sun/Bangladesh/21 Jan 2011

The central bank has provided more fund to the state-run Investment Corporation of Bangladesh (ICB) to bring back stability in the share market, officials said.

Bangladesh Bank (BB) has disbursed a total of Tk 4.0 billion to the ICB through IFIC bank in the last two consecutive days to avert any massive slide.

"We've provided the fund to the ICB as short term loan," a BB senior official told the FE Tuesday, adding that the central bank would inject more fund as per the market requirement.

On Sunday, the BB sanctioned a fresh loan to the ICB amounting to Tk 2.0 billion, which was disbursed on Monday.

The BB further injected fresh fund worth Tk 2.0 billion to the ICB Tuesday as trading in both bourses was halted by the Securities and Exchange Commission (SEC) for the second time in eight days.

With 80 minutes remaining in Tuesday's trading session, the benchmark index of the Dhaka Stock Exchange, generally known as DGEN, was down by 3.29 per cent or 243 points when trading was suspended.

Earlier on Monday last week, the SEC suspended trading within the opening fifty minutes of trade when DGEN was down by 9.0 per cent or 660 points.

"We'll take all measures to bring back stability in the capital market," an ICB senior official told the FE, adding that the ICB is purchasing shares actively to inspire the investors and boost their confidence.

News: The Financial Express/ Bangladesh/ Jan-19-2011

Bangladesh Bank, Bangladesh Institute of Bank Management (BIBM) and Institute of Bankers today jointly hosted a reception in honour of former central bank governor AKN Ahmed.

“He (Ahmed) is a living legend in international banking arena who played a crucial role for the development of the financial sector since 1950s and particularly in rebuilding the post independence financial sector in the war torn country,” Bangladesh Bank Governor Dr Atiur Rahman told the reception.

Rahman said Ahmed steered several commercial and the central bank with his wise leadership during his six decades of banking career.

A Dhaka University post-graduate in economics, Ahmed made his debut in career joining the World Bank and subsequently worked for the International Monetary Fund (IMF) and later also served as Bangladesh ambassador to Japan and South Korea.

Deputy Governor of Bangladesh Bank Murshid Kuli Khan chaired the function at the Bangladesh Bank Training Institute at Mirpur, where Ahmed unveiled the plaque of an auditorium named after him.

Several bankers including Ibrahim Khaled spoke at the function.

Source: Daily Sun/ Bangladesh/ Jan-13-11

AB Bank Limited has recently distributed blankets and warm clothes to the deprived and winter stricken poor people to help them out in this fierce season of winter. Under this programme, AB Bank Limited distributed warm blankets at Chorforadi, Pakundiya. Kishoreganj recently.

Mr Mahfuzur Rahman, Executive Director of Bangladesh Bank and Mr Majedur Rahman, Additional Managing Director of AB Bank Limited distributed warm blankets among the winter affected people. Other high officials were also present during the warm cloth distribution programme at Pakundiya Upozilla.

News Source: Financial Express/Bangladesh/11 Jan 2011