Deposit rate of banks has dramatically plummeted recently as banks have got huge idle money. Due to fall of interest rate, small depositors who are solely depended on bank’s interest are badly affected as they have no alternative to invest other than depositing in banks.

Now deposit rate is hovering around 5% and inflation rate is 6%. So deposit rate is well below the inflation rate which means depositors practically having insignificant or no return against theirs deposit money. Meanwhile government imposition of various taxes has reduced expected return.

Due to fall of interest rate small investors are buying government savings certificates which bear high yield.  The government has already sold savings instruments above the projection in this fiscal year. Consequently, the government reduced savings certificates rates and levied taxes on interest income.  

Against this backdrop, the regulatory authority has instructed all the commercial banks to cut down non-performing loan and administrative cost.

 Aim of this move is to narrower the gap of interest spread. Bank has to earmark huge chunk of money as provisions against their non-performing loans which has a negative impact on interest rate shrink. Bangladesh bank has warned the scheduled banks to lower of classified loans and high administrative costs. Moreover, Bangladesh bank easing of foreign currency loans for local companies helped to local banks stagnant of ample idle money. Foreign currency loan interest rate is minimal compared to the domestic loans. So, local well-known companies are having credit line from foreign banks. In this dilemmatic situation, the regulatory authority should come forward with a more inclusive approach so that interest of depositors, banks and borrowers is protected.

 Mohammad Zonaed Emran, MNC Banking Unit, Mutual Trust Bank Ltd

Seven directors of Islami Bank have threatened to resign from their posts if pressure was mounted by the management for the forced resignation of the bank’s vice chairman, Prof Syed Ahsanul Alam. The threat was issued in a statement signed by the seven directors, including Ahsanul. The other signatories were Prof Shahidul Alam, Ahsan Uddin Ahmed, Abdul Mabud, Major General (retd) Abdul Matin, M Saiful Islam, and Helal Ahmed Chowdhury.
Talking to the Independent, Ahsanul said they would have no alternative but to resign one by one if any director was forced to put in his papers. Though only seven directors signed the statement, Ahsanul claimed 12 directors were on the same page on the matter.
On the other hand, Islami Bank chairman Aroosto Khan countered that the allegation made in the statement was baseless and there was no pressure on Ahsanul to resign.
“Ahsanul is telling a lie. Why will I remove him from his position? It is very unfortunate that he does not have minimum ethics,” the chairman told The Independent. “He wants to gain political favour from the Prime Minister,” he added.
Khan confided that Ahsanul had placed some proposals that involved Sheikh Hasina’s name. “If the board members were to take up the proposals, it would have cast a shadow on the PM’s image,” he said.
The chairman further said that last week, Ahsanul had disclosed certain classified information which he was bound to keep confidential in his capacity as the vice chairman of Islami Bank.
Following a meeting of the board of directors, Ahsanul had told some media outlets that a decision was taken to deposit the bank’s funds for zakat, amounting to Tk 450 crore, to the PM’s zakat funds.
Another fund for iftar, Tk 13 crore, would be distributed via the social welfare ministry, the vice chairman told media persons. Additionally, a list of beneficiaries of corporate social responsibility (CSR) would have to be submitted to the home ministry.
The purported decisions were criticised by several quarters. Khan said, “After Ahsanul’s press conference, I received a call from the Prime Minister, who talked to me for 40 minutes. The PM was not happy about the matter. She asked me, ‘What happened to you? I didn’t ask for zakat money from you. Who asked you to give it?’ I assured her that no such decision was taken.”
The chairman added: “Ahsanul does not even know how much money there is in the zakat fund. He does not know which one is the zakat fund and which one is profit money.”
Khan also said one has to follow certain conditions while signing the papers to become a director. According to those conditions, no one can disclose any classified information. “But Ahsanul flouted the conditions. We will take a decision about him in the next meeting of the board of directors,” he added. An amount of Tk 347 crore has been deposited in the zakat fund, of which Tk 173 crore has been distributed. Tk 28 crore has been kept aside for tax.
Khan said, “Ahsanul told the board of directors that he has been asked to resign, and to sign a blank sheet. We protested against that, condemned it, and informed the central bank. He arranged a press conference after going home. That is really unfortunate.”
In a Facebook post on May 11, Ahsanul had alleged that the members of the board of directors were involved in a “plus-minus” conspiracy. “It has become almost impossible for me to run my duties in a situation like this. It is only a matter of time before I were to resign from this post,” Ahsanul’s post added. Ahsanul, who is a professor of Chittagong University, had joined Islami Bank as an independent director on May 6, 2016. He became the vice chairman after the bank’s former chairman, vice chairman and managing director resigned on January 5. He was running the bank in the changed circumstances, which put him at odds with the other directors and authorities.

Md Mustafa Khair, Deputy Managing Director of First Security Islami Bank Limited, inaugurating an agent banking outlet at Nayergaon Bazar, Matlob Dakkhin, Chandpur recently. Ali Nahid Khan, Head of Agent Banking and Mobile Banking was also present.

Business Desk :
The First Security Islami Bank Limited (FSIBL) has started its Agent Banking Outlet at Nayergaon Bazar in Matlab (Dakkhin) of Chandpur district.
FSIBL Deputy Managing Director M Mustafa Khair recently inaugurated the outlet, said a press release on Saturday.
Ali Nahid Khan, Head of Agent Banking & Mobile Banking, Faridur Rahman Jalal, FVP of Agent Banking & Mobile Banking and M Billal Hossain, Manager of Chandpur Branch of the FSIBL, among others, were present on the occasion.

Business Desk :
A team of 41 bankers from 17 commercial bank attended a meeting at International Chamber of Commerce (ICC), Headquarters in Paris recently, says a press realese.
The Meeting with ICC Officials and ICC Banking Commission was chaired by Mr. Philip Kucharski, Chief Operating Officer, ICC, Paris.
ICC Bangladesh Banking Commission Chairman Muhammad A (Rumee) Ali and ICC Bangladesh Secretary General Ataur Rahman led the Bangladesh Delegation which left Dhaka on Monday.
The team will be attending the ICC Austria Global Trade Finance Week being held in Vienna on 17-19 May. The three day event in Vienna will also be attended by more than 200 bankers from EU countries and provide an opportunity to discuss issues related to letters of credit, bank guarantees and credit risks, among other issues.
ICC Bangladesh President Mahbubur Rahman will be attending the concluding session on 19 May.  Helal Ahmed Chaudhury, Former Managing Director of Pubali Bank and Member of ICC Bangladesh Banking Commission is also attending the programme.
The delegation include Md. Hashem Chowdhury, Additional Managing Director & Chief Operating Officer, Mutual Trust Bank Limited, Amin Uddin Ahmed and  Tariqul Islam Chowdhury, Deputy Managing Directors, Sonali Bank Limited, Shah Md. Abdul Bari, Deputy Managing Director, EXIM Bank Limited, Md. Abdul Hye, Director (Commercial), BCIC, faculty member of BIBM among others.  
The Delegation will be returning to Dhaka tomorrow.

BRAC Bank Limited inked a deal with Aarong at the bank\'s head office on Saturday. Under the agreement, TARA Debit/Credit holders will enjoy Aarong membership card with a purchase worth of BDT 1,000 only and will also enjoy 5pc extra reward points on thei