Atiur Rahman, Bangladesh Bank governor, urged all bank executives to change their attitude towards farmers for the sake of agricultural development in the country. Rahman was speaking at a farmers' assembly at Silimpur village in Ishwardi upazila under Pabna district on Sunday after inaugurating a biogas plant in the residence of a local farmer Moyez Uddin.The country's industrial development depends on the progress of the agriculture sector, the governor said.

"Agriculture is the key to economic success here. The real development in economy and industry will be happened if we can ensure the real development in agriculture." "The bankers have to change their mind setup and have to be friendly to the farmers to reach the goal." He also asked the farmers to cooperate with the banks.

Farmer Moyez Uddin chaired the meeting where Shaikh Siraj, a founding member of Channel i, and Sayed Abdul Hamid, Agrani Bank managing director, also spoke.

News Source: The Daily Star/Bangladesh/11 Jan 2011

Bangladesh Bank has dismissed the Securities and Exchange Commission's claim that there is a shortage of liquidity in the market.

"We don't want to lock into a blame game, but some quarters are spreading wrong information about the central bank in the market," Bangladesh Bank deputy governor Nazrul Huda told a press briefing at its conference room on Monday.

SEC chairman Ziaul Haque Khandkar at a press briefing at his office on the same day said the market was going through a 'liquidity crunch'.

Both the press conferences were held on the heels of share market's biggest-ever fall in its history.

"There is enough liquidity in the market and the Bangladesh Bank has injected three times more money into the market than the amount it withdraws as CRR (cash reserve ratio)," Nazrul Huda said.

The central bank has increased cash reserve requirement by 0.5 percentage point with effect from December 15 and it mopped up about Tk 20 billion from the market due to that.

"It's totally wrong information that the market is experiencing liquidity shortage due to increase in CRR," he said.

"Money and capital markets are two different 'markets' and the Bangladesh Bank is responsible for money market while the SEC is responsible for the capital market," he explained.

"But we cannot sit idle considering the gravity of the issue and we sat with scheduled banks today (Monday) to discuss it," he said.

"The central bank has assured the banks that it will not deal harshly with the banks which have exceeded the single borrower exposure limit," he said.

According to regulation, a bank cannot give loan which is over 15 percent of its capital meaning if a bank has Tk 100 capital, it can give maximum Tk 15 as loan to a single borrower.

"Some banks have violated the rules and we'll handle it in a relaxed manner," Nazrul said.

"We've also asked the banks to provide information about their exposure to the capital market and they can adjust the exposure if they cross the legal limit," he said.

The Bank Company Act stipulates that a bank cannot invest in the capital market 10 percent of its total liabilities. Liabilities comprise total deposit and capital.

Nazrul said the central bank sought investment information from the banks in 2009 but 'in fact we became villains."

Deputy governor Ziaul Hasan Siddique said the banks have Tk 9.14 billion excess reserve with the central bank, which means its completely idle money.

Earlier, Association of Bankers, Bangladesh president Mahmood Sattar, chairman of Primary Dealers' Association Anis A Khan and Sonali Bank managing director Humayun Kabir held a meeting with governor and three deputy governors.

After the meeting, Mahmood told journalists that institutional investors will start their operations in full swing as market has enough liquidity.

Anis Khan said his bank bought Tk 1 billion of shares on Sunday.

Humayun Kabir said price is declining and it is giving a signal to the market that it is good time to buy.

Source: bdnews24.com/ Bangladesh/ Jan-10-2011

Analysts held the central bank's lack of control for the stock market's crash.

The Dhaka Stock Exchange fell by 555 points during the first week's trade in the year. But on Sunday the stocks came tumbling down with a record fall of 600 points, which is 7.75 percent.

The analysts indicated that the Bangladesh Bank should have contained the exposure of commercial banks in the stock market.

"This fall was imminent," said Zaid Bakht, research director of Bangladesh Institute of Development Studies.

According to him excess liquidity in the market coupled with the 'over exposure' of banks in the market compounded the problem making it overheated.

"And now there is a credit crunch in the market as the central bank has asked banks to limit their stock investment."

The central bank should have acted when the banks started to pour their funds into the market, said Bakht.

"Where were they (central bank) when the banks were investing heavily?"

Former DSE chief executive Salahuddin Ahmed echoed him.

"They [banks] had forgotten their responsibilities," he told bdnews24.com on Sunday.

It would have been effective if it was controlled beforehand, according to Ahmed, a finance professor of Dhaka University.

Regarding the crash, he said that it shouldn't have happened because all the sectors are not overpriced.

"I would say it's an abrupt correction."

He was echoed by a former chairman of the capital market regulator Securities and Exchange Commission, A B Mirza Azizul Islam.

"The fall is normal, but the extent in a single day is quite unnatural," he said while speaking to bdnews24.com on Sunday.

Also a former caretaker government adviser for finance and commerce, Islam, however, said that the index was still rather high.

"An index between 6000 and 6500 is reasonable."

Source: bdnews24.com/Bangladesh/ Jan-09-2011

Bangladesh Bank has urged the people not to invest in multilevel marketing companies that offer abnormal profit in a short period of time.

In a statement issued on Sunday, the central bank warned that investors can get deceived by these companies that come up with schemes offering 10 percent or more profit on monthly basis upon investments in gold markets abroad or foreign exchanges.

The anti-money laundering act deems such investments as offences, the statement added.

Source: bdnews24.com/ Bangladesh/ Jan-09-2011

Bangladesh Bank (BB) Governor Dr Atiur Rahman has said the fates of the farmers should be changed first for attaining the country's sustainable development.

Terming the farmers a lifeline of the country's economy, Rahman called upon all for coming forward to ensure and preserve interests and rights of the farmers in building a developed Bangladesh.

He was addressing a farmers' gathering and loan distribution ceremony on Friday night, jointly arranged by National Bank and Manoharpur Integrated Crop Management (ICM) Club at Manoharpur High School ground here.

Chaired by Tauhidul Islam Tuhin, president of Manoharpur ICM Club, the occasion was addressed by farmers Fazlur Rahman and Gulshan Ara Begum and Gangachara Upazila Chairman Majibar Rahman Pramanik.

Illias Sikder, general manager of BB's Rangpur branch, and Bodiul Alam, National Bank's additional managing director, and Hasanur Rahman, deputy director of Rangpur DAE, also spoke.

The speakers put emphasis on providing adequate easy and soft-term farm loans and latest technologies to the farmers to raise farm output.

Later, the central bank chief distributed checks for agri-loans and cows among 10 member- farmers of Manoharpur ICM Club under the initiative of Rangpur branch of National Bank.

Source: Bss, Rangpur