Dhaka, Dec 20: BRAC Bank Ltd. (BBL) on Sunday launched Bangladesh's first e-commerce banking platform in alliance with Visa, thereby opening an opportunity for Bangladeshi citizens to use Visa cards for shopping online. Any Bangladeshi with internet access now can shop online with a Visa card or any card issued by BRAC Bank. Attending as the chief guest, Dr. Atiur Rahman, Governor of Bangladesh Bank, inaugurated the country’s first e-commerce banking system at a city hotel on Sunday.

Md. A. (Rumee) Ali, Chairman of BBL, Syed Mahbubur Rahman, Managing Director and Chief Executive Officer of BBL and Uttam Nayak, Group Country Manager (India and South Asia) of Visa were present along with senior officials, leading merchants and clients.

“The central bank has continuously been facilitating bringing banking to the doorsteps of the general mass. This online shopping is another milestone in that journey. I am happy to inaugurate this service brought first time in Bangladesh and that too by a Bangladeshi bank,” the Banglaesh Bank Governor said.

Md. A. (Rumee) Ali, said, “I think this will pave the way for many companies to start doing business online. This hopefully will be the start of online business revolution for Bangladeshi companies enabling them to keep up with the rest of the world and innovate how they interact with their customers.”

Uttam Nayak in his speech said that e-commerce would not only reduce cost of transaction but also save couple of hours rather than shopping physically.

E-commerce facilitates remote payments which are better than face-to-face payments, he said and adding it will give an opportunity to include more people in banking transaction, one’s who buying goods and other’s who selling goods. Firoz Ahmed Khan, Head of Retail Banking, while demonstrating the new service features at the launching ceremony said that the new shopping platform would work just any other developed online stores work.

Consumers can browse and choose their products on either the online super-stores or individual shops and then they can add the products to their cards through checking out finally, they simply need to put their details from BBL or Visa card. Online ticket booking with ones credit card and general retail purchases online have been something many credit card holders have been waiting to be able to do for years while many working Bangladeshis facing problems as the shops are normally closed at 8 pm., he said.

BRAC Bank online shopping is open for 24 hours making it possible for retail products, companies and stores to keep earning long after shopping hours are over, he added.

Source:The Independent

The central bank yesterday capped the call money rate at 50 percent to ease money market volatility.

“Bangladesh Bank has directed us verbally to maintain the rate until further instruction,” said a fund manager of a private bank.

But top bankers questioned the rationale for the ceiling, which they believe too high compared to bank rates.

The call money market witnessed abrupt swings for the past two weeks and soared 180 percent on Sunday.

Bankers had been demanding central bank intervention, but it kept mum for what Bangladesh Bank (BB) officials said curbing the inflationary pressure by reducing money flow into the market.

“I don't know on what logic the central bank has set the ceiling at 50 percent. Still, the rate will contribute to increasing the cost of fund,” said a private bank chief executive officer.

The CEO said some banks borrowed money and lent at higher rates. He suggested a probe by the central bank.

Anis A Khan, managing director of Mutual Trust Bank, however, welcomed the BB move, which he said would help cool down the market.

The central bank has given Tk 7,825 crore through repo yesterday to help banks meet demand for cash, said Mizanur Rahman Zodder, BB's general manager.

Source: The Daily Star

Bangladesh Electronic Funds Transfer Network (BEFTN) will start function from February 20 next year.

The Bangladesh Bank in a recent circular announced the date of starting the BEFTN activities and asked all participating commercial banks for taking necessary preparation enabling them to conduct transactions through the network.

With the introduction of BEFTN, the fully automated cheque clearing process would be completed in the country. Earlier on October 7 this year, the activities of the Bangladesh Automated Cheque Processing System (BACPS) started at the Dhaka clearing zone.

The activities of this modern high value national payment system have now been expanded at all branches of the central bank across the country.

All the branches of the banks that are members of Dhaka Clearing House are members of the regular value clearing, but the high value service is only activated at few branches of commercial branches at Motijheel and Dilkusha.

This high-value service will be extended to all branches in the city from January 5, next year, according to the Bangladesh Bank circular.

The automated clearing house activities will start in Sylhet on January 20, and in Chittagong on February 3 next year.

The central bank has asked all branches of member banks to send all instruments on clearing to BACPS Data Centre in Dhaka. The net-settlement would be completed through integrating all accounts of participating banks preserved at the central bank.

Bangladesh Bank in partnership with the UK Depart-ment for International Develop-ment (DFID) embarked on a project to modernise Bang-ladesh’s national payments system.

All commercial banks who are members of the Dhaka Clearing House will be required to submit their list of selected branches and to finalise their "point of transaction" for submission of their outward cheque images and data to BACPS and be prepared to handle cheque image and data as part of their inward clearing operations.

Source: Daily-Sun, Bangladesh/20th Dec 2010

Bangladesh Bank (BB) yesterday extended the deadline for banks to adjust investment exposure to non-productive sectors by a month to February 15.

The decision came hours after the Dhaka Stock Exchange suffered the biggest fall in its history.

“We have decided to extend the deadline to ensure a congenial environment for stock investors,” Ziaul Hasan Siddiqui, deputy governor of Bangladesh Bank, after an emergency meeting with the chairman of the Securities and Exchange Commission (SEC).

Also, the central bank extended the deadline from December 31 to January 15 for banks to submit statements on diversion of loans to the stockmarket.

SEC Chairman Ziaul Haque Khondker said yesterday's index fall was a 'massive correction'.

The SEC holds a meeting with stakeholders today to discuss the market situation.

Source: The Daily Star, Bangladesh/20th Dec 2010

The inter-bank call money rate recorded an unprecedented rise at 190 per cent on Sunday, the second day after enforcement of the new cash reserve requirement (CRR) rules for the commercial banks to contain inflation.

The call rates were swinging between 55 and 190 per cent on the day against 50 per cent and 175 per cent a day earlier. However, most of the deals were settled at rates ranging from 100 per cent to 150 per cent, treasury officials said.

One non-bank financial institution borrowed loan at 190 per cent from the inter-bank call money market yesterday, another official also said.

The call money rate rose to 175 per cent on Thursday last, marking a historical high, as some lending banks suddenly raised their call rates to cash in on the liquidity crunch in the market.

Earlier, the call money rate increased up to 150 per cent in 2006 during the BNP-led four party alliance regimes.

The central bank raised CRR by fifty basis points to 6.0 per cent for the commercial banks on December 1 last to help curb inflationary pressure on the economy.

Under the new CRR rules, the banks are required to maintain the reserve at 5.50 per cent instead of 5.0 per cent earlier on daily basis, but the bi-weekly average has to be 6.0 per cent in the end.

An analyst of the Bangladesh Bank said there would a positive impact on inflation due to increase of CRR, which would help decline prices of local commodities during December-January period.

The declining trend of food prices has already contributed to a drop in inflation, which slipped to 6.86 per cent in October from 7.61 per cent in September, according to the official data of the Bangladesh Bureau of Statistic which released on Sunday.

The food inflation decreased to 8.43 per cent in October from 9.72 per cent in September.

Director General of Bangladesh Institute of Bank Management Dr Toufic A Chowdhury told daily sun that the call money rates surged to another historical high due to lack of proper liquidity management by the local banks.

“Most of the commercial banks have invested their funds in the share markets for quick gains, but those were blocked as the share prices fell sharply during the past two weeks,” he added.

The historic high in call money rate on Sunday was mainly due to aggressive dealings by few banks, managing director of Pubali Bank Limited Helal Ahmed Chowdhury told daily sun Sunday evening.

He also said that the Bangladesh Bank should set a ceiling for call money rate as the local market has remained volatile for last few days.

“Higher call money rate may push the interest rates on deposits up in the near future to meet the growing demand for liquidity and as a result the banks are raising the interest rates to attract more deposits from their clients,” he added .

The Bangladesh Bank injected Tk 32.79 billion in the money market under a special repurchase agreement (Repo) on Sunday, which seemed to be inadequate, fund managers said. The total demand for money in the call money market stood at Tk 120 billion on Sunday.

Source: Daily-Sun, Bangladesh/20th Dec 2010