Commercial Bank of Ceylon Ltd will create a scholarship fund for 30 poor but meritorious students of the city’s Notre Dame College as part of its corporate social responsibility (CSR).

S Prabagar, country manager of Commercial Bank of Ceylon in Bangladesh, recently handed over a cheque to the principal of the college for the fund, said a press release.

The Daily Sun/ Bangladesh/ 17th Dec 2011

Jamuna Bank Limited (JBL) has opened its 71st branch at London Plaza, Ashuganj West Bazaar of Ashuganj, in Brahmanbaria recently.

Md Belal Hossain, chairman of the Bank inaugurated the branch as chief guest and Al-Haj Nur Mohammed, chairman of the JB Foundation was present as the special guest, said a press release.

Md Motior Rahman, managing director of the Bank presided over the inaugural ceremony.

Md Zobaidul Islam, SEVP and zonal head of Chittagong, local elites and businessmen of Brahmanbaria were present on the occasion.

The Daily Sun/ Bangladesh/ 17th Dec 2011

MUMBAI: India’s central bank on Friday kept interest rates on hold as expected and raised the possibility of future cuts, as the country fights an economic slowdown, a weakening rupee and high inflation.

The Reserve Bank of India cheered business leaders and economists by making no changes to its repo rate at which it lends to commercial banks or the reverse repo rate that it pays banks for deposits.

They remained at 8.50 percent and 7.50 percent respectively.

The RBI has raised interest rates 13 times since March 2010, angering business leaders who said it has hit economic growth and investor confidence in the South Asian giant.

Governor Duvvuri Subbarao had indicated at the bank’s mid-quarter monetary policy meeting in October that the likelihood of another rise was “relatively low”.

The bank said in a statement on its website on Friday that in view of a slight dip in inflation, “further rate hikes might not be warranted” in the months ahead.

“From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth,” it added.

Subbarao told reporters that he could not speculate on when cuts might come.

The chairman of the Prime Minister’s Economic Advisory Council, C. Rangarajan, welcomed the pause but told CNBC TV 18: “Further action on the part of the reserve bank all depends on how inflation turns out.”

Finance minister Pranab Mukherjee also applauded the move and said it was necessary “to improve business sentiment and recover the growth momentum in the remaining months” of the current financial year.

Subbarao has maintained the 13 hikes were necessary to combat high inflation, which has been running at near double figures for months, even if it means growth takes a short-term hit. But he has been urged to change tack.

India’s government expects the economy to grow at a rate of 7.5 percent this year, down from its earlier estimate of 9.0 percent.

Private economists believe growth will be nearer 7.0 percent or lower.

The government announced on Wednesday that headline annual inflation had dropped to a year’s low of 9.11 percent in November from 9.73 percent in October.

At the same time, the Ministry of Commerce and Industry revised upwards its provisional inflation data for September from 9.72 percent to 10.0 percent—the first time it had hit double figures since July 2010.

Predictions of a rate pause mounted after the latest industrial output figures showed 5.1 percent shrinkage in September, including in key sectors like mining, manufacturing and capital goods.

The RBI called the decline in industrial activity “a matter of serious concern”.

Strong growth is seen as essential to help improve the lives of India’s 1.2 billion people, 75 percent of whom live on less than $2 a day.

High inflation has upped the pressure on a government already hit by a series of high-profile corruption scandals plus charges of ineffectiveness and policy paralysis.

Import costs have increased because of the depreciating rupee, which has fallen to record lows against the US dollar, as investors seek safe haven due to uncertainty caused by the eurozone debt crisis.

The rupee rebounded on Friday after the RBI stepped in, announcing measures to prevent excessive speculation in the currency.

Food inflation also eased in the week ending December 3 to a four-year low of 4.35 percent, down from 6.6 percent the previous week. The government has predicted it will be below 3.0 percent within a month.

The Daily Sun/ Bangladesh/ 17th Dec 2011

Standard and Poor’s downgraded Thursday the credit rating of 10 Spanish banks after applying new criteria, and warned it may lower their short-term scores further.

The 10 banks had their ratings lowered and remained in “creditwatch with negative implications”, indicating the risk of a further downgrade, Standard and Poor’s said in a statement.

The agency “reviewed its ratings on 10 Spanish financial institutions by applying its new ratings criteria and updated group methodology for banks,” it said.

“Various ratings on these 10 financial institutions remain on CreditWatch with negative implications.”

The change affected CaixaBank, Bankia, Banco Popular, Bankinter, Banco de Sabadell, the holding company Caja de Ahorros y Pensiones de Barcelona, Ibercaja Banco, San Caja de Ahorros y Monte de Piedad de Gipuzkoa y San Sebastian, Bilbao Bizkaia Kutxa and Banco Financiero y de Ahorros.

The Daily Sun/ Bangladesh/ 17th Dec 2011

International Monetary Fund has expressed concern over the increase in government borrowing from the banking system. The IMF suggested policy actions on both the macroeconomic and structural fronts in light of a recent weakening in the global economic environment and rapid rise in oil imports and subsidy costs.

The suggestion came during a series of meetings with Bangladesh’s government functionaries when a mission from the international lender visited Dhaka on a 14-day visit, according to a press rfelease.

The IMF team noted that well-coordinated policy adjustments were needed to mitigate balance of payments, fiscal and inflation pressures and contain macro-financial risks faced by Bangladesh.

The mission met with Prime Minister Sheikh Hasina, her economic and energy advisers, the minister of finance, finance secretary, Bangladesh Bank governor and other senior officials, as well as private sector, development partner and civil society representatives.

The talks focused on policy moves to engender moderate monetary and fiscal tightening, backed by greater exchange rate and interest rate flexibility.

Source: The Independent/ Bangladesh/ 16th Dec 2011