A greater number of people in the country now have an access to formal financial services as Bangladesh Bank (BB) has undertaken a number of initiatives to bring the unserved and under-served under the umbrella of financial systems, said the bank's chief.

At present, around 87 percent of adults in the country have an access to formal financial services, which was around 78 percent three years back, BB Governor Atiur Rahman said at a seminar.

“This has been possible due to some milestone programmes initiated by Bangladesh Bank in recent years,” said Rahman.

The Institute of Chartered Accountants of Bangladesh (ICAB) yesterday organised a conference on “Alternative Financial System for Inclusive Growth and Sustainable Development” at its office in Dhaka.

The governor said these initiatives include sharecropper financing schemes; 'Ten Taka' accounts for farmers, students, and freedom fighters; online and mobile banking; directing banks to open bank branches in rural areas; green banking and banking automation.

Sharecroppers have long been excluded from the formal financial system because of a lack of collateral and the fact that they are treated as 'too small' by banks and 'too large' by the microfinance institutions, said Rahman.

As a result, they have long been left behind as the 'missing middle' and excluded from formal financial services, he added.

He said the BB launched a total of Tk 500 crore refinance lines for the sharecroppers.

Till November 2011, the central bank provided BRAC, a leading non-government organisation, with a refinance facility of Tk 310 crore, which has provided loans to 270,802 sharecroppers in 160 upazilas of 37 districts, said the governor.

He said another initiative that fosters financial inclusion is opening bank accounts for farmers with an initial deposit of only Tk 10. More than 90 lakh accounts have already been opened under this scheme and are being used for government transfers, such as diesel subsidies.

The BB has also issued guidelines for mobile financial services to reach out to the excluded population, particularly in rural areas. Many banks have already started their operations in partnership with telecom companies, said Rahman.

The Daily Star/Bangladesh/ 7th Feb 2012

Bangladesh Bank Governor Atiur Rahman yesterday strongly refuted the view expressed in some quarters of the country being mired in a macroeconomic crisis and said there are pressures on the country's economy but not the crisis.

He invoked Rabindranath Tagore to liken the Bangladesh economy to an autumn sky [shoroter akaash], filled with dark as well as silver clouds.

“Yes, there're pressures but no crisis of the sort being talked about. We're taking measures to make sure the silver clouds edge out the dark ones, and they are starting to bear results,” Rahman told the news agency in an interview at his office.

He revealed that the downward spiral in the exchange rate of the taka against the dollar had been “arrested” in the last two-three days. He and his team expect to see a further easing of the downward trend yesterday.

Styling himself “not your conventional central banker”, the former development economics professor signed off on a note of optimism that a difficult few months would soon give way to “a new equilibrium” for the Bangladesh economy.

"We've been going through a correctional phase. This has presented a number of challenges, but we've responded with appropriate measures, in conjunction with the government," he said.

"As a result, within a couple of months, we can look forward to the exchange rate, the rate of interest, and inflation settling at a new equilibrium."

The governor attributed the policy of cutting down to non-essential import items (luxury goods) in recent weeks, something he had advised to ease the pressure on the balance of payments while releasing the latest Monetary Policy Statement on January 26.

Back in office after his return on Saturday from a trip to India- where apparently other central bankers and economists from the region all had very positive things to say about the Bangladesh economy, some even branding it the “best-placed” under current circumstances in South Asia- the governor also sounded a positive note on inflation.

He said he expects food inflation, in particular, to decline during February.

Although that would be offset by an increase in non-food inflation spurred by increased fuel prices and electricity rates, he is confident that the overall inflation rate will start witnessing a slowdown in the coming months.

He also expressed his confidence over securing the $1 billion extended credit facility (ECF) loan from the Washington-based lender International Monetary Fund (IMF).

"The IMF mission arrives here tomorrow (yesterday) to finalise the details …things look positive. If we get the loan, it'll help a lot cut pressures on the Balance of Payments," he said.

He brushed off sugges-tions that availing of the loan would leave economic policymaking beholden to IMF conditions. “This is essentially a budget support for the government.”

“They don't advise anything that is outside the purview of our own reform agenda. They only want those to be implemented. Anyway the ECF (the scheme under which the loan would be disbursed) is different from the IMF's Structural Adjustment Policies of the past, as it doesn't attach any conditions.”

The continuous price hike of food, fuel, fertiliser and essentials on the international market, food price hike in the internal market, high growth of money supply against the target and depreciation of the taka were the reasons behind the rising inflation in 2010-2011 fiscal, he said.

"Given that situation, we've taken cautious monetary policy. It's corrective phase. Situation will improve."

The Daily Star/Bangladesh/ 7th Feb 2012

AB Bank Limited arr-anged a day-long workshop on “Monetary Policy of Bangladesh Bank and Macro Economic Issues, AB Bank Perspective” in the city yesterday.

Dr Hassan Zaman, senior economic advisor to the governor of Ban-gladesh Bank (BB) was the keynote speaker at the workshop, said a press release.

Shameem A Raihan-uddin, CEO, Eshna management services conducted the discussion. M Wahidul Haque, chairman, BB Saha Roy, director and M Fazlur Rah-man, acting president and managing director of AB Bank were also present at the workshop.

The Daily Sun/Bangladesh/ 5th Feb 2012

Engineer Mustafa Anwar, acting chairman of IBBL addresses an orientation programme of RDS field officers at Islami Bank Tower in the city recently.

Islami Bank Bangladesh Limited (IBBL) has organized a day-long orientation programme for its RDS field officers at Muhammad Younus Auditorium of Islami Bank Tower in the city recently.

Engineer Mustafa Anwar, acting chairman of the Bank was present at the function as the chief guest, said a press release.

Mohammad Abdul Mannan, managing director, Syed Abdullah Mohammed Saleh, deputy managing director, Abdus Sadeque Bhuyan, Asheque Ahmed Jebal, Dr Mahmood Ahmad, executive vice presidents of the Bank addressed at the function.

The Daily Sun/Bangladesh/ 5th Feb 2012

Muhammad Ali

Muhammad Ali, managing director of Social Islami Bank Limited (SIBL), was recently interviewed by Ahammad Parvej Khan, Staff Correspondent of daily sun. He talked about the bank’s achievements over the years, future plans and the new strategy of introducing innovative banking system.

MD said SIBL has set its strategy of introducing a banking system through blending of both centralised processing unit (CPU) and effective branch operation, rather than mere traditional branch-based system. The new system is based on modern essence of banking. SIBL’s goal is to provide better and time-befitting services to the clients, Muhammad Ali added.

As an Islamic Shariah-based bank, he continued, SIBL always lays emphasis on employment generation and environment-friendly business for equitable distribution of resources over geographical territory. According to him, it will help to attain sustainable growth. Following is the details of the interview.

daily sun: As a second generation bank in the country, SIBL has made tremendous growth. Would you please tell us the success stories of the Bank?

Muhammad Ali: SIBL has a well-planned business strategy which eventually led to achieve the success as we maintained steady growth over the years with excellent performance. The Bank was able to have a solid banking foundation in 2011, resulting in a robust growth in 2012. It was possible because of strategic business policy the Bank had adopted. The pro-active management team has been working to make sure that the success continues.

The bank had many challenges to address when it was launching, but now SIBL is a successful bank in the country as it has been able to address almost all of those challenges. The Bank marked significant growth in all indices, as the officials could work without being exposed to any extraneous pressure. The Bank’s management team can approve the investment of up to Tk 100 million as well as appointment and transfer of officials.

The bank’s capital has now increased to Tk 9.70 billion by 2011 from the launching amount of Tk 126 million. It was Tk 4.68 billion in 2010, marking 107.32 percent growth. The total assets of the Bank now stood at Tk 84.37 billion as of 31 December, 2011, compared to Tk 55.17 billion in 2010, posting 52.92 per cent growth.
daily sun: Would SIBL be able to overcome the challenges which the banking sector has many challenges in the years ahead?

Muhammad Ali: The year 2012 is considered as a golden year for SIBL. For last one year, the management has been able to set an ideal investment portfolio catering to very dependable business houses involved in trade, commerce and industry through relentless effort. Meanwhile, the bank has diversified the services to the retail sectors, aimed at culminating their business with SIBL. Consequently, more and more people are being brought to the banking service through financial inclusion initiatives.

As a part of our business strategy, we started earning foreign currency from exports and remittance so that the bank can go for import business smoothly. For this, the bank has enough foreign currency, especially the US dollar to open letter of credit (LCs). But previously, it could not operate foreign trade due to shortage of foreign currency. The Bank had to depend on inter-bank currency market to open LCs for import. But last year, we could open a large number of LCs involving huge foreign currencies from our own source. i.e. export proceeds and remittance.

Nonetheless, SIBL has been boldly facing corporate challenges in a structured planned way in regard to competitive deposit market and market pressure to narrow the spread including implementation of Basel-II and III.
daily sun: What are other fields where SIBL has made success?
Muhammad Ali: We cannot deny that the fact that our economy is experiencing some perennial problems like power, fuel, energy and food shortages together with dearth of infrastructures. Additionally, unemployment is the worst problem for the economy. Given all these issues, we should solve the crises of our economy on priority basis.

Dr. Atiur Rahman, Governor of Bangladesh Bank, has taken the right decision to put emphasis on SME and agro-finance. We believe the GDP growth and the employment generation largely depend on SME and agriculture. Reviving agriculture is must to ensure food security. SIBL, therefore, has started giving special importance on SME and agriculture sectors. After my joining, the bank increased 400 per cent SME investment and 150 per cent agro-financing. SIBL opened LCs worth more than Tk 10 billion for fertiliser. But adequate energy supply to the agriculture and industries still remains a big challenge, which needs to be addressed immediately.

daily sun: Would you tell about financial strength of SIBL?
Muhammad Ali: The Bank’s financial base is much stronger now. In 2011, SIBL’s deposit was Tk 67.13 billion against Tk 45 billion in 2010 while investment was Tk 36.68 billion at the end of 2010, which increased to Tk 53.90 billion by the end of 2011. Remittance through SIBL increased to Tk 5.13 billion in 2011 from Tk 2.11 billion in 2010. The bank’s operating profit jumped remarkably to Tk 3.02 billion by the end of 2011 against Tk 1.63 billion in 2010, indicating a growth of 84.19 percent.

Besides, our corporate strength is also remarkable, showing satisfactory capital adequacy, good asset quality, sound liquidity position, good financial performance, satisfactory operating efficiency and highly experienced proactive management team.

daily sun: How do you see the initiatives that Bangladesh Bank has taken for socio-economic development of the country?

Muhammad Ali: The Bangladesh Bank has given priority to the interests of farmers, lower and middle class people. Besides, its initiatives are contributing tremendously in smooth expansion of the SMEs and agro-based industries.

Bangladesh Bank took initiatives to open bank accounts of hardcore farmers with only Tk 10 for distributing SME credits among them. As I already said, SIBL has also laid due emphasis on SMEs and agro investment as part of its financial inclusion. Not only that, we also have plans to spend our CSR fund in developing human resources. As an Islamic bank, SIBL is quite conscious of its social business responsibilities and always trying to participate in various social programmes in the country. The Bank is committed to serve the society at large through its family empowerment.

daily sun: : How do you think the bank could serve people at grass root level?
Muhammad Ali: Currently, about 20 to 25 percent people in the county have been covered by banking services. SIBL has opened 12 branches in 2011 to bring more people under the banking service. The Bank has plans to open more branches this year. It will also introduce mobile banking, school banking and internet banking, among other new services.

The real-time on-line banking services have already been opened to provide IT services which has been providing to the clients through its core banking software. Internet banking service will be introduced very shortly so that our customers could be informed about the latest position of their account balances, statements, etc through internet. Besides, submissions of cheque book requisitions and LC opening applications will be made possible through internet.
daily sun: What is the vision and mission of SIBL?

Muhammad Ali: SIBL started functioning in November 1995 with a vision to help the country achieve economic growth. It began its functions with a three-tier banking system. Its goal was to alleviate poverty through micro-credit. After years of addressing challenges, the bank now stands on a firm footing. The bank presently has 76 branches. Besides, it has two subsidiary entities SIBL Securities Ltd and SIBL Investment Ltd.
The bank will soon be one of the leading private banks of Bangladesh. It will also be a leading Islamic Shariah-based bank of the country within next few years.

daily sun: Do you have business expansion plans this year?
Muhammad Ali: To continue the growth, the Bank has some new plans for 2012. It will start social and green banking and increase foreign remittance channeling and export business. It will also raise its expenditure in CSR, introduce mobile and SMS banking for rural and middle class people to bring them under banking service, open school banking for the students and some new branches at the areas where people are completely out of banking services till now.

The Bank has begun a three-month campaign with a theme slogan ‘Excellence Non-stop’, aimed at bringing about excellence in the Bank’s service delivery.

SIBL has now appeared with new appearance before the customers with some time worthy packages. The state-of-the-art banking software of the Bank will enable all branches provide real time banking service to the clients. SIBL is supported by core banking solutions and our products and services are strongly backed by IT infrastructure, which are upgraded and expanded time to time.

SIBL has also changed its brand logo recently. The new logo depicts a bird’s wing with nine feathers to represent its comfortable and safe flying in the economic sky of the country connecting it with the global sky beyond boundaries. The wings are coloured in red in a green background.

Red symbolises the vigour and enthusiasm of youth and the green symbolises love for the motherland Bangladesh. Moreover, nine feathers represent- honesty, transparency, efficiency, accountability, reliability, innovation, flexibility, security and technology flying towards continuous excellence. We take pride in our new logo.

Finally, I most humbly submit to the greatness of Almighty Allah (SWT) soliciting Thy’s mercy to pave the journey towards glorious success of SIBL in continuity.

The Daily Sun/Bangladesh/ 5th Feb 2012