The central bank has introduced a compliant cell for bank clients for quick actions against any lapses in service by any official or employees of any bank branch.

All the banks will go under supervision of the complaint cell on its formal inauguration on January 19, according to Bangladesh Bank officials. A client of any bank aggrieved from non-cooperation could now call a five-digit number (16236) that is accessible from any land phone or mobile phone anytime from any location of the country.

A 14-member team of BB officials has been assigned to record the customer complaints over phone or mobile and pass on those to higher  officials for necessary actions.

“This initiative of the central bank is aimed at  providing hassle-free financial services to clients across the country,” said AFM Asaduzzaman, BB’s general manager, also a reporting official of the complaint cell.

He said the central bank has designated officials to look after complaints and initiate quick actions against non-compliance with regard to delivery of financial services to clients by banks.

He said as per directives of BB Governor Dr Atiur Rahman, letters were sent to CEOs (chief executive officers) of all the banks on Thursday conveying them of the new move.

As per B directives, a bank management shall introduce a call centre booth with the dial number 16236 at respective head office for rapid communication.

Besides, managements of all banks shall take initiative to hang a placard at every branch so that customers could easily contact the complaint cell in case of any hassle.

“A customer can lodge complaint over phone in case of harassment in getting any kind of banking service, including receiving remittance or loan,” Asaduzzaman said.

While giving a brief background, he said customers have been facing various harassments by bank employees and officials daily but there was no specific room for lodging complaints.

He said the cell would carry out duties under the direct supervision of the BB governor. “The governor is serious in providing banking service smoothly at the doorstep of clients and inquiring day-to-day progress of the cell activities,” he said.

The Daily Independent/Bangladesh/ 6th Jan 2012

The central bank yesterday increased its policy rates by around 50 basis points at the beginning of New Year when non-food inflation has been rising alarmingly.

Food inflation always increases more than the non-food inflation. But in December, non-food inflation crossed food inflation for the first time on a point-to-point basis and reached 11.38 percent as diesel and electricity prices went up.

Bangladesh Bureau of Statistics (BBS) yesterday released the inflation data for December, which shows food inflation stood at 10.40 percent.

In December, food inflation fell by 2.07 percentage points while non-food inflation went up by 1.19 percentage points in November.

The BB increased the repo rate from 7.25 percent to 7.50 percent and hiked the reverse repo rate to 5.75 percent from 5.25 percent.

The repo rate is an interest rate at which the central bank lends money to commercial banks. The reverse repo rate is the return banks earn on excess funds parked with the central bank.

In recent times, non-food inflation has been on the rise, and to cut back such inflation the repo rate was increased, said a central bank official.

The IMF mission that visited Bangladesh last month also advised to increase repo rate.

The BB official said they made the credit costlier by increasing the policy rates so that high credit growth takes place.

He said only a fall in private sector credit will not work. Government borrowing has to be cut at the same time, he added.

The central bank last year increased the policy rates four times.

According to the BBS, the overall inflation rate decreased by 0.95 percentage point from November and stood at 10.63 percent in December due to a fall in food inflation.

A good aman harvest and a fall in the prices of winter vegetables brought down the food inflation, said BBS Director General Shahjahan Ali Mollah yesterday.

Mollah said a hike in power prices increased the non-food inflation rate.

An official of the finance ministry said fuel prices were hiked in four phases last year, and power tariff was raised twice which impacted on the rise of non-food inflation. He also blamed fuel price hike on such inflation.

House rent went up by about 16 percent last year, according to the statistics of Consumers' Association of Bangladesh (CAB).

Besides, the taka was devalued by about 17 percent against the US dollar in last one year which also fuelled non-food inflation.

The Daily Star/Bangladesh/ 5th Jan 2012

The World Bank (WB) Wednesday lauded the government’s prioritised initiatives to build up a strong and effective regulatory and supervisory system for Bangladesh’s banking sector through automation.

The praise came in a WB statement headlined “Automation of Bangladesh Bank (BB) to achieve excellence” issued here on Wednesday. With the WB’s support, the Central Bank Strengthening Project (CBSP) is supporting the overall strengthening of BB, including automation of its core functions, to enable Bangladesh Bank to effectively play its role as the country’s monetary authority and bank regulator.

In response to a request from the government, the WB has extended the project for one year, December 2012. The project was scheduled to end on December 31, 2011.

A source in the WB told BSS that the nine-year project is being implemented at a cost of US$37 million. The statement said the project has made significant progress with introducing automation system in Bangladesh Bank.
All Bangladesh Bank branches are now connected to each other online and also to the Bangladesh Bank’s Enterprise Resource Planning (ERP) and Banking systems.

The central bank’s IT organisation is now capable to conceptualize, procure and deliver large scale IT systems. The systems ERP and Core Banking Solution have gone live.

To achieve the project objectives, said the statement, complete implementation of the National Payment Switch and Bangladesh Bank’s Office Modernisation components have to be accomplished.

Once these two activities take off, the BB would be on its way to successfully achieve the objectives of this project.

The Daily Independent/Bangladesh/ 5th Jan 2012

The Asian Development Bank (ADB) will provide $300 million loan to replace old units at Ashuganj power plant and set up 12.5 megawatt renewable energy plants across the country.

An agreement in this regard was signed with ADB to address the nagging power crisis as well as efficient use of gas in the power sector at Shere-e-Bangla Nagar on Wednesday. According to the loan agreement, ADB will fund the replacement of five aging generation units at Ashuganj power station with a new energy-efficient combined cycle power plant using natural gas as the fuel source.

It will also finance a 5MW solar photovoltaic generating system that will connect to the national grid, along with a hybrid wind, solar and diesel system on the island of Hatiya.

Iqbal Mahmud, Secretary, Economic Relations Division (ERD), and Thevakumar Kandiah, Country Director of ADB's Bangladesh Resident Mission, signed the agreement on behalf of Bangladesh and ADB respectively.

"After the replacement of the units, the plant would produce 450 MW of electricity with the same amount of gas, which now produce 260 MW," ERD secretary Iqbal Mahmud said.

Streetlights will be installed or retrofitted with solar and light emitting diode technology in the cities of Barisal, Chittagong, Dhaka, Khulna, Rajshahi and Sylhet, under this project.

He said gas would be used at the Ashuganj plant in a more efficient manner.

The total project cost is $581 million, out of which Islamic Development Bank (IDB) is providing $200 million and the government $81 million, the secretary said.

ADB country director Thevakumar Kandiah said his organisation would help Bangladesh prepare proposal for Clean Development Mechanism (CDM).

He said the projects aim to assist Bangladesh in cutting carbon dioxide emissions by hundreds of thousands of tonnes a year and it is an eligible project for carbon financing under the CDM.

“Energy shortage is the most critical infrastructure constraint on Bangladesh's economic growth,” said ADB Country Director.

The Daily Independent/Bangladesh/ 5th Jan 2012

State-owned Agrani Bank Ltd will bring 450 branches, out of a total 877 branches, under online banking system by June 2012 with a view to providing better delivery of financial services to its clients, the Bank’s managing director  said on Monday.    

In an exclusive interview with The Independent, Hamid said the board of directors of the Bank is trying to enhance further the reputation of the Bank by providing hassle-free services to its  customers. 

“Currently, we have 51 branches under the online service delivery network and by the end of December the number should rise to 60, though mostly urban-based,” Hamid said.

He said though the Bank’s strength has weakened due to facilitating petroleum imports by BPC (Bangladesh Petroleum Corporation), it is still maintaining growth in basic banking business by providing better services to remitters.

“In receiving remittance, the status of our Bank is close to Sonali Bank, another state-owned scheduled bank, which has an established reputation in remittance mobilisation,”he said.

He said the Bank operates two remittance companies, one in Singapore and the other in Malaysia, while for Europe and Middle East, the bank has several correspondent banks to collect remittances from Bangladesh expatriates.
He said Agrani Bank will soon get Tk 500 crore  as repayment from BPC against the outstanding loans to BPC which stand at Tk 2,100 crore.

“We wrote to the Ministry of Finance last week and the ministry assured me of giving Tk 500 crore by the current week,” Hamid said, adding that “the committed money, once released, would help the Bank in getting some relief in its liquidity position.”

Opposing permission for new banks, the Agrani Bank chief exeutive said allowing new banks will saturate the field. In that case performance of banking activities, with some 47 local and foreign banks already on operation in the country, could be affected.

Besides, over 3,000 non-governmental organisations are also conducting some sort of banking activities across the country, he added.

He said most banks are now suffering from deposit crisis.

About the performance of Agrani Bank he said the target of his Bank was to collect Tk 35,000 crore deposits in 2011 and Tk 42,000 crore deposits in 2012, while disbursement of loans and advances was Tk 19,200 crore in 2011 and Tk 21,100 crore in 2012.

In 2010, the bank’s achievements in deposit collection and loan and advance disbursements were Tk 20,633 crore and Tk 16,326 crore respectively.

He said his Bank’s present lending rate is not very high for growth of industrialisation.
“Present lending rate---around 13 to 14 percent---is slightly higher than the cost of fund at 8.5 to 9 percent,”
he said.

He, however, said the uniqueness of the Agrani Bank is 8 percent rate of interest for farm loans, which is 10 percent at other banks.

He said some 14.27 lakh villagers were brought under banking services across the country by Agrani Bank, as the Bank always gave due importance to rural people to provide them with financial services.

To reduce NPLs (Non Performing Loans), banks will have to enhance motivational campaigns throughout the country, he said adding that they will also have to rescheduled classified loans, waive some interest and some loans.

For raising productivity, the central bank should encourage banks in financing agro-projects, such as cold storage, agro-machinery and equipment and agro-based food industry by providing subsidies, he said.   

Speaking on the country’s overall macroeconomic position, the Agrani Bank MD said the basic indicators of the macro-economy are still good though some negative factors, such as high inflation, increased import cost, low foreign aid and remittance inflows.

He said the government should think of careful import of fuel and avoid stockpiling when the fuel price is high on the international market at present.

He said the inflation is basically on account of food and communication costs.
“We all should try to find ways to control such costs so that expenditure does not go beyond the affordability of the common people,” he said.

Turning to the unbanked population, he said Agrani bank is gradually trying to expand the areas of financial services to cover more people of the country by diversifying products.

“One unit of the Bank is Agrani Equity and Investment Ltd, which is a merchant bank and lends to small investors in the capital market,” he elaborated.

Meanwhile, the Bank has announced a new subsidiary company styled SME Financing Company on Tuesday, he said. “The main objective of forming the new subsidiary is to improve socio-economic conditions through creating employment opportunities,” he explained.

Hamid said the new subsidiary was a conversion of a project that covered 40 upazila in greater Mymensingh and Faridpur districts with financial assistance from the Norwegian Aid for Development since 1995 under which credit facilities were provided to small entrepreneurs.  

Syed Abdul hamid said the Bank has been spending a significant volume of money in implementing CSR (Corporate Social Responsibility) programmes every year. It had donated Tk 5 crore for CSR activities last year.

In 2009, the Bank received three awards in the categories of best Presented Accounts and Corporate Governance Disclosure Awards 2009 by South Asian Federation of Accountants, best Published Accounts and Reports 2009 by the Institute of Chartered Accountants of Bangladesh (ICAB) and National Award for Corporate Governance Disclosure 2009 by ICAB.

The Daily Independent/Bangladesh/ 5th Jan 2012