Israeli borderguards and undercover police detain a Palestinian protester during clashes at the entrance of the West Bank city of Bethlehem yesterday. AFP Photo

NABLUS: Israeli troops arrested two Palestinians overnight on suspicion of involvement in a clash that led to a settler shooting dead a Palestinian in the West Bank, officials said yesterday, reports AFP.
The settler opened fire after his car was surrounded and stoned by Palestinian protesters when he attempted to drive through their demonstration near a military checkpoint in the northern West Bank on Thursday. Muataz Bani Shemsay, 23, was killed and an Associated Press news agency photographer wounded before the army arrived and dispersed the Palestinians. Police said the settler was let go on Thursday after giving a statement and was not being investigated as a murder suspect.  "The mob almost lynched me, I looked death in the eyes," the settler said in a video recording distributed to the media.
Israeli troops arrested Yussef Derieh, an ambulance driver from the village of Aqraba, near the main northern West Bank city of Nablus, who veered his vehicle to the opposite lane and blocked the settler's car.

Implementation delays galore

 Some 23 ongoing projects, funded by the Asian Development Bank (ADB), are facing various hurdles that have led to long delays in their implementation, officials said.

The issues include delay in procurement, failure to disburse and spend money in several years after their approval, lack of environmental monitoring reports, implementation delays due to delay in handing over of sites to contractors and in consultant selection.

 The ADB and the Economic Relations Division (ERD) have jointly identified the 23 projects that will come under scanner during the tripartite portfolio review meeting in Dhaka scheduled for next week.

Of the projects, seven are of energy sector, three on urban development, four on transport sector, five on public and finance, three on agriculture and natural resources, and one on education.

According to officials at the ministry of finance (MoF), until April last of the current fiscal year (FY) contracts of projects worth US$444 million were awarded to the executing agencies against the target of $1.021 billion.

During the period, the volume of fund disbursement was $618 million against the target of $771 million.       

Presently, some 51 ADB-funded projects are ongoing.

The project performance is evaluated on five criteria-- contract awards, disbursement, technical soundness, safeguards compliance, and financial management.

The ADB allocates Ordinary Capital Resources (OCR) and the Asian Development Fund (ADF) resources on the basis of project performances.

Documents show that the Gas Transmission and Development Project is facing three problems. These are non-availability of gas in Khulna city gate station, $9.0 million remaining un-contracted and $20.15 million un-disbursed despite expiry of grace period and lack of environment monitoring report.

The Natural Gas Access Improvement Project is yet to make any headway in the southwestern region despite completion of procurement, $40.41 million remaining un-contracted and $54.59 million un-disbursed even six years after the loan approval.

 In the Power System Efficiency Improvement Project, $109.3 million remained un-contracted and $153.33 million un-disbursed almost seven years after the loan approval.

The change order for piling remained pending for two years and the development project proposal for solar PV is yet to be approved.

The procurement for the Dhaka Environmentally Sustainable Water Supply Project was delayed while $174 million fund remained un-contracted and $208 million un-disbursed for 3.5 years after the project approval.

The land acquisition and resettlement for the SASEC Rail Connectivity Project are yet to be completed alongside delay in reviewing the design.

The project's $145 million remained un-contracted and $434 million un-disbursed for 2.5 years after the loan approval.

The establishment of an environmental safeguards unit in the Bangladesh Railway is yet to be completed, documents show.

 Officials said even after 1.5 years of loan approval, the government could not award contract for the Railway Rolling Stock Project.

 Documents also show that work on the Second Small and Medium-Sized Enterprise Development Project is yet to start even after 1.5 years of its approval and the loan effectiveness is now delayed.

 It was found that even some grant-funded projects also could not make any headway.

The submission of well-defined capacity development plan of 'Pilot Project on Weather Index Based Crop Insurance' remained pending for long. Some $127,000 of the project remained un-contracted and $784,000 un-disbursed even 4 years after grant approval.

 When contacted, a senior MoF official said efforts are there to improve capacity in quick project implementation.

 "We will review performance of the projects identified in the next week's meeting and take steps to remove the shortcomings," he said.

Country's credit-rating firms are allegedly giving higher ratings to SMEs mainly in a rat race for their own survival as the number of raters has far outstripped the requirement.

Commercial banks that rely on such ratings for the clients' creditworthiness were inevitably lulled into a comfort zone in lending to the small and medium enterprises (SMEs).

People both in the rating companies and the banks admitted that such practice is on and that it would impact on the banking sector. Many believe it is a "serious concern for the banking industry".   

Credit rating for the SMEs began just a couple of years back in the country under the guidelines of the central bank. The country's eight rating firms, believed to be quasi-regulatory bodies, are authorised to do the rating of the units in the booming SME sector.

A website-based analysis conducted by this scribe shows that a number of rating companies gave SME-3 rating, equivalent to "A", to around 60 per cent SME clients.

This was done during the period between April -2016 and March 2017. They need to publish ratings on their respective websites.

Some agencies gave more than 70 per cent category "A" to the SMEs, which is believed highest investment grade. Under this category, banks need 6.0 per cent capital requirement.

Capital requirement, also known as regulatory capital or capital adequacy, is the amount of capital a bank has to hold, as required by its financial regulator.

This is usually defined as a capital-adequacy ratio of equity that must be held as a percentage of risk-weighted assets.

These requirements are put into place to ensure that these institutions do not take on excess leverage and become insolvent.

However, a number of rating companies rated 10-plus-category SME-2, equivalent to "AA", for the SMEs.

Under this category, as per the regulator guidelines, banks need to hold 2.0 per cent capital requirement.

The analysis shows that trading house, rice mills, agro-firms, furniture makers, cement and rod traders, and jute-product producers are among the SMEs who take rating services from the agencies.

On the other hand, SME-4 that stands for "BBB" was also given to the SMEs, which is not preferable to the banks as it needs 8.0 per cent capital requirement.

One rating firm gave only 3.0 per cent to this category in the year under review.

However, none of the rating firms did give the highest rate, that is, SME-1 or risk-free category during the year under review.

And none of the raters did give SME-5 which believed to be risky investment by the banks.

Some rating firms' top executives said major rating agencies are in competition among themselves and some have a "shortfall" in terms of understanding the risks of the SMEs.

The rating agencies used to rate only corporate bodies earlier but now extended their arms up to SMEs in view of their roles in the economy.

These rating agencies also did not undertake sufficient branch-level investigation and interaction with clients while assigning their worth, they said.

While talking to the FE, Prof Muzaffor Ahmed, CEO and President at the country's oldest rating firm-CRISL--said many have been giving higher ratings to the SMEs for their survival. But, he claimed, his firm does not compromise on quality.

He, however, said: "Banks are gaining benefits by this high rating as they need less capital requirement for good-rated SMEs."

The rating-agency CEO said banks should not allow selective rating firms as it is 'clear conflict of interest'.

He said regulators should monitor as to whether the agencies are following the guidelines of the central bans properly.

Md Momin Ullah Patwary, managing director of NCR (National Credit Ratings Bangladesh), told the FE that they were hearing about such higher ratings on the SMEs.

This practice, he believes, will ultimately impact upon the banking industry.

Muhammed Asadullah, managing director of Alpha Ratings, told the FE that sometimes banks try to influence the rating companies for good ratings as it helps them keep lower requirement.

Up to SME -3 the banks could invest in the SMEs. The rating firms which work as 'external credit-assessment institutions according to the central bank are authorised to do the rating of the SMEs.

Mr. Asadullah, who served many UN agencies-UNDP, UNHCR, UNDCP and UNOPS--across the world, told the FE that the recovery of SME credits is not so high.

"Banks want high ratings as a means of requirement but we give proper assessment," he told the FE.

According to BASEL-II standards, banks are required less capital for lending to good clients as the risk involved is less.

On the other hand, people in the banking circles said banks prefer good ratings for investment. But they also believe that many ratings are not properly done.

Nurul Amin, managing director and CEO at Meghna Bank, told the FE that the practices of the rating agencies are sometimes just similar to that of the auditing firms

He said there is need for regulatory intervention if any rating agency did not rate properly as wrong rating will ultimately impact on the banking industry.

Currently, there are two organisations that monitor the activities of the rating agencies - the Bangladesh Bank and the Bangladesh Securities Exchange Commission.

Bangladesh has now eight rating agencies: CRISL, CRAB, ECRL, Alpha, NCR, BDRL, WASO and URGUS. They are treated as external credit-assessment institutions as per the Bangladesh Bank guidelines.

During the period under review, five firms rated 2605 SMEs. The average fees for assessing the SMEs are just over Tk 10,000.

The second recruitment test of Agrani Bank, scheduled to be held on Friday afternoon, has been postponed over allegations of question paper leakage.
Prof Abu Taleb, chairman of Banking and Insurance Department of Dhaka University, said the test has been postponed, as the authorities found the question of the test matched with the leaked question available on social media.
He also added the decision about the first phase test which was held in the morning will be taken later.
Several examinees who took the first phase examination confirmed that they found the question paper on social media on Thursday night.
Earlier, similar allegations were raised during Janata Bank’s recruitment test for its executive officer position which was held on April 21.

The school banking has started becoming well-liked among students as it is creating their savings habit which will ultimately help them to ensure economic security in future.
Speakers made the comments while addressing a discussion prior to 'School Banking Conference' held at Panchagarh government auditorium on Friday.
District School Banking Conference Committee with assistance of Bangladesh Bank and National Bank Limited (NBL) organised the event.
The main objectives of the event were to properly run the school banking activities, opening school banking accounts of the students at Taka 50 for each as well as enhancing financial education.
Deputy Commissioner of Panchagarh Amal Krishna Mandal inaugurated the conference releasing pigeons and attended it as the chief guest.
The chief guest said education always makes life enlightened, stronger, meaningful and enjoyable.
"So, the youngsters should acquire knowledge and adopt good human qualities from their student life," he said.
Deputy General Manager of the Financial Inclusion Division of Bangladesh Bank Anwarul Islam, Sadar Upazila Nirbahi Officer Abu Wadud, District Education Officer Sankar Kumar Ghosh and Manager of Panchagarh Branch of NBL Pradip Kumar Sarker, addressed the programme as special guests.
Rajshahi Regional Chief and Vice-President of NBL Ali Haider Mortuza presided over the conference participated by students, teachers, guardians and officials of all 11 banks involved in school banking activities in the district.