Bangladesh Bank should exercise its authority to ensure merchant banks do not pose any operational risk to their parent companies through their involvement in the stockmarket, said a top IMF official yesterday.

“Banks have exposure to the capital market. It has to be ensured that Bangladesh Bank is doing its part to properly manage the exposure,” said David Cowen, chief of the International Monetary Fund's delegation to Bangladesh.

“We will encourage Bangladesh Bank to truly develop a supervisory framework with the Securities and Exchange Commission.”

On merchant banks' roles as subsidiaries of banks, Cowen said they are perhaps falling outside the regulatory reach of either Bangladesh Bank or SEC.

“Bangladesh Bank does have the authority and it should exercise that authority to ensure these institutions do not pose any operational risk to their parent banks.”

“We do see there is a need for considerable capacity building at SEC. We are looking more closely in this area.”

The comments came at a roundtable discussion on “Medium-Term Macroeconomic Outlook and Reform Priorities” at the Policy Research Institute of Bangladesh (PRI) in the city.

On the much-talked-about public private partnership, Cowen said: “PPP is not going to be a panacea. The experience about the issue is mixed around the world.”

“I think it does have a place in Bangladesh. But PPP is going to face a number of the same challenges like those seeking to bring foreign direct investment into the country face.”

“We are encouraged by the fact that the government has set up a PPP cell. It will however take sometime before it makes any meaningful contribution to infrastructure development in the country.”

Cowen also said the government should pay attention to the quality of the spending. “Our new managing director says IMF should not only talk about growth. When you talk about inclusive growth you cannot avoid talking about quality of spending.”

Former Finance Secretary Siddiqur Rahman Chowdhury said the government should revisit quality of spending of its annual develop programme. “It is not just about spending; it is poor implementation.”

“There is a pressure on a line ministry to have the money released and spend. It is wasteful expenditure,” he said.

PRI Executive Director Ahsan H Mansur said he is really concerned about the government finance this year. “Despite the very high level of bank borrowing last year, the domestic financing was within the planned target of the budget.”

He said in the last two months last year a lot of money was injected into the economy. “We will be seeing that down the line this time around.”

“What is going to happen this year is a matter of concern because there is very serious lack of action on the subsidy front. We will see a huge government borrowing if something is not done very quickly.”

Mansur said if fiscal policies are not corrected without further delay the country will face trouble in macroeconomic front in the coming days. “There are serious challenges ahead they need to be addressed now. Or things will really go bad.”

Former finance minister M Syeduzzaman said: “Although monetary policies seem to be loose I think they are moving in the right direction.”

He said the balance of payment is in the negative territory for the first time for a decade, which warrants sincere attention as it would put pressure on exchange rates.

Former caretaker government finance adviser AB Mirza Azizul Islam said there is a debate whether the country would allow private sector borrowing from international sources amid credit crunch. “Recently, Bangladesh Bank has moved in that direction to some extent. It is a policy issue that needs to be addressed.”

Former Bangladesh Bank governor Salehuddin Ahmed also spoke.

News: The Daily Star/ Bangladesh/ 15-Sep-11

Bangladesh Bank managing committee yesterday decided to honour 10 experienced officials for their outstanding contributions to the banking sector for the years 2009-2010.

Bangladesh Bank Governor Dr Atiur Rahman will distribute gold medals and certificates to the officials for recognition to their outstanding role to respective fields.

Kamal Hossain, deputy director, money laundering protection division, played an important role in enhancing Banglade- sh’s rating in six recommendations out of 10 at a survey on Mutual Evaluation Report by conducted by Asia Pacific Group (APG) on Money Laundering. Among others, Khandker Millat, Md Rafiqul Islam, Md Osman Gani, Munir Ahmed Chowdhury, Md Julkar Nayen, Hosne Ara Shikha, Md Shahriar Sddiqui, Nurul Alam, and Md Aminur Ahman Chowdhury were nominated for the awards.

News: Daily Sun/ Bangladesh/ 15-Sep-11

National Bank Training Institute of National Bank Limited has arranged a foundation training course for its probationary officers in the city recently.

Neaz Ahmed, managing director and CEO of the bank addressed the inaugural function as chief, said a press release. A total of 27 probationary officers participated at the training programme.

News: Daily Sun/ Bangladesh/ 15-Sep-11

The World Bank (WB) is likely to provide US $172 million more to raise the number of solar power users and lend further support to the ongoing Rural Electrification and Renewable Energy Development project, WB sources told The Independent on Monday. At present Bangladesh has 11 lakh solar energy users.
WB will provide financial support to the energy and infrastructure financing firm, Infrastructure Development Co Ltd (IDCOL), which will install a testing laboratory, solar energy systems and other support facilities to popularize the use of renewable energy.
The Economic Relations Division has recently completed negotiations with the WB in this regard.
“Such funds are needed to support Bangladesh's efforts to raise levels of social development and economic growth by increasing access to electricity in rural areas," WB energy specialist Zubair K M Sadek said.
He said it would also help finance the scaling up of the project's renewable energy components, which are improving off-grid electricity supply in rural areas through the installation of Solar Home Systems (SHSs).
According to Zubair, the Bangladesh SHS project is the largest of its kind in the world and the WB is providing funds at a cheaper rate than those for other countries.
“We want to install the SHSs where Rural Electrification Board (REB) has not gone to supply power. We are giving a subsidy of $28 for each SHS in Bangladesh and the cost of installing an SHS is $430 for generating 50 Watt of electricity, while the same  costs $800 in an African country,” Zubair said.
Zubair further said the WB wanted to contribute to sustainable development through the provision of renewable solar electricity to households.

News: The Independent/ Bangladesh/ Aug-30-2011

Dutch-Bangla Bank and ICB Islamic Bank Limited signed an agreement for installation of co-branded ATM booths at the branch premises of ICB Islamic Bank in the city yesterday.K S Tabrez, managing director of Dutch-Bangla Bank and Mamoon Mahmood Shah, managing director and CEO of ICB Islamic Bank, signed the agreement on behalf of their respective organisations, said a press release.

Under the agreement, DBBL will install ATM booths at the premises of ICB Islamic Bank branches from which, customers of both the banks and other partner banks of DBBL will be able to withdraw money and get other banking services.

Among others, Md. Sayedul Hasan, Khan Tariqul Islam and Md. Mosaddiqur Rahman, deputy managing director of DBBL and Engr. Rafiqul Islam, senior vice president and head of information technology, Arif Ahmed, senior assistant vice president and head of alternative delivery channel and cards of ICB Islamic Bank and other senior executives of both the organisations were also present on the occasion.

News: Daily Sun/ Bangladesh/ Aug-30-2011