The central bank has issued directives to the non-bank financial institutions (NBFIs) to raise their paid-up capital to Tk 100 crore  with immediate effect.
Bangladesh Bank (BB) has served a circular to all the NBFIs in this regard on Sunday. According to the previous BB circular, the paid-up capital for NBFIs was Tk 50 crore. "This decision has been taken to increase the risk management capabilities of the NBFIs," said a high official of the central bank's Department of Financial Institutions and Market, wishing not to be named. He said the central bank has taken a number of measures to institutionalise good governance in the NBFIs in order to build better management capacity with skilled and professional personnel, and ensure transparency, accountability and dynamism. Besides, in order to strengthen the financial base of such institutions, the central bank is working on  implemention of Basel-II.
"Hence, the BB has decided that the minimum equity base (paid-up capital + reserve) of any NBFI licensed under the Financial Institutions Act 1993 should be doubled from Tk 50 crore to Tk 100 crore," he said.
In the latest circular, the central bank has advised the NBFIs to collect paid-up capital by taking initiatives for issuance of IPO (Initial Public Offering) or right share or bonus share, in case of shortage of funds. 
According to the circular, the NBFIs were given a timeframe up to June 30, 2012 for full compliance to the central bank directives.
In the circular, the central bank has imposed an embargo on disbursement of profit in cash without fulfilling the paid-up capital requirements.
Under the central bank directives, the paid-up capital for the NBFIs was last raised from Tk 25 crore to Tk 50 crore in November, 2009.

News: the Independent/ Bangladesh/ 25-Jul-2011

The four-week long 33rd training course for the officers of Dutch-Bangla Bank Limited (DBBL) began in the city on Saturday.

Managing director of the bank K S Tabrez inaugurated the course at the Bank’s training wing in the city, said a press release.

The course is designed aiming at familiarising the participants with the concepts, principles, rules, regulations, laws and practices of banking. A H M Zahurul Islam, executive vice president was present.

News: Daily Sun/ Bangladesh/ 25-Jul-2011

Al-Arafah Islami Bank Ltd opened its 79th branch at Shahjadpur in Sirajganj on Sunday.

Member of the Board of Directors of Al-Arafah Islami Bank M Harun-Ar-Rashid Khan inaugurated the branch as chief guest while Director of the Bank Abdul Malek Mollah was present as special guest.

Managing Director of the Bank Ekramul Hoque delivered welcome speech in the opening ceremony, said a press release.

Among others, Senior Vice President Syed Masodul Bari, Vice Presidents of the Bank Engr. M Habib Ullah, Abed Ahmed Khan, first assistant vice president Jalal Ahmed and Manager of the branch A B M Abdul Baten were present on the occasion.

News: Daily Sun/ Bangladesh/ 25-Jul-2011

The central bank does very little to redress customer grievances relating to poor service of banks and the hidden costs that come with banking in Bangladesh.
It is alleged that the majority of complaints that pour in every day are not addressed properly or, if at all, get a delayed response. Sources in Bangladesh Bank say the apex bank has identified reasons for the deterioration of the banking service and that include, among other things, reluctance of top management of banks to address complaints, lengthy process of redressing injustices and obscure role of its own officials in dealing with banking grievances.
Between 15th and 30th June, the newly introduced BB help desk received 40 complaints through emergency phone calls, e-mail, faxes and its official website, but only 15 of them have been dealt with till date, BB sources said.
Most of the complaints are related to humiliating behaviour of bank officials and realization of hidden charges from clients for approval of loans, rendering credit card service and even for operation of accounts, the sources said. “From 1st to 11th of July, the number of complaints received by the apex bank may be the same as in June, but in reality 10 times as many incidents go unreported.
Not many are keen to lodge a complaint with the central bank,” a top BB official said preferring anonymity.
“Our duty is to send those complaints to the department concerned of the central bank and its governor. In many cases, we don’t get a feed back,” he said.
BRAC bank, a leading private bank, is realising a 15 per cent “sales tax” over credit card check processing fee, according to documents sourced from a complainant by this correspondent.
According to tax laws, a seller can realize sales tax of only 1.5 per cent of value of goods purchased. When contacted, a BRAC bank official of the credit card division claimed that the 15 per cent charge slapped on the
complainant was actually VAT (Value Added Tax).
“It means that the bank is charging its customers VAT in the name of sales tax, which is in violation of law, and not depositing the money to the treasury," said the complainant, a private firm employee. Recently, a private commercial bank deducted Tk. 2,000 from the account of an individual in the name of 'Account Authenticity Charge' when the account holder applied for a credit card to the same bank.
“I went to Eastern Bank Limited where I have a savings account and applied for a credit card. A few days later, I found that the balance in my account is Tk. 2,000 less than what it was after my last transaction.”
“I was surprised and enquired about it. The bank management told me that the 'Account Authenticity Charge' had been deducted from my account before issuing the credit card," he said adding, "It is unfair and I was not aware of such charges earlier." He said realising account management charge twice a year by banks was not fair.
Abdus Salam Murshedy, president of Bangladesh Exporters' Association, said banks are extorting money in the name of service charges in addition to higher rates of interest.
“There is no rule of law. The banks are charging their clients exorbitant fees and are getting away with it. The regulator does not bring errant banks to book. There must be some regulatory intervention to put a stop to this practice,” he said.
The BB spokesperson Jahangir Alam declined to comment on the issue.
Meanwhile, the central bank has issued a circular asking the banks to put up on their notice boards a list of service charges.
During visits, this correspondent found that some banks in Motijheel and Old Paltan areas had complied with the central bank directive while some others had not.

News: The Independent/ Bangladesh/20-july-2011

The Inter-national Finance Corporation (IFC) will provide $80 million short-term liquidity facility to the banks in Bangladesh for working capital and trade financing purposes.
The short-term liquidity facility will help meet funding needs of local banks and small businesses, says an IFC release today.

News: The Independent/ Bangladesh/20-july-2011