Mercantile Bank Ltd. has appointed Faruq M. Ahmed as deputy managing director (DMD) of the bank, says a press release.
Prior to joining Mercantile Bank, Ahmed was DMD of AB Bank. The banking expert Ahmed started his career with AB Bank as probationary officer in 1984 after completing his Honours and Masters in Economics from Dhaka University.
During his services with AB Bank, he served in different capacities at home and abroad. He was posted at the Mumbai operation of AB Bank as Country Manager for about five years.
Thereafter he headed the SME division and Credit Risk Management division at Head Office of the bank.
Ahmed so far authored 12 books on economy and banking, share market, accounting, travel and literature.

News: The Independent/ Bangladesh/ May-16-2011

Talukdar Noman Anwar has joined HSBC Bangladesh as head of marketing and communications with effect from today, the bank said in a statement yesterday.

A marketing graduate from Dhaka University, he has over 15 years of professional experience including 10 years of marketing and brand management experience across diverse industries.

“It's exciting to see someone of Noman's calibre and diverse exposure joining our team. I am confident that his knowledge and experience will boost our marketing and communication plans,” said Sanjay Prakash, chief executive officer of HSBC, Bangladesh.

News: The Daily Star/ Bangladesh/ May-16-2011

Dutch Bank Bank Ltd (DBBL) has been sponsoring Mosabbir Cancer Care Centre (MCCC) for its palliative care programme for poor cancer patients. AS part of it, DBBL recently provided an ambulance for the marginally inn cancer patients.

The “Palliative Care” programme was inaugurated at a function at the National Press Club yesterday, said a press release.

News: Daily Sun/ Bangladesh/ May-16-2011

Rejaul Karim Byron

The Bangladesh Bank (BB) has detected various irregularities in commercial banks, including waiver of the principal amount of loans, and warned the banks against such malpractices.

The irregularities found through an investigation were presented at a meeting of the chief executives of all banks yesterday with the central bank Governor Atiur Rahman in the chair.

The irregularities were projected on the basis of the central bank's inspection to bank branches at different times.

The banks normally exempt the interest on loans but cannot forego the principal amount. The BB inspection also found incidents of waiving the principal amount.

Though the classified loans were not recovered, the banks were putting those as recovered to show a big amount of profit. Besides, the irregularities detected by the BB included granting loans to defaulters, and rescheduling classified loans without down payment.

The central bank also found that after giving fresh loans, the banks adjust the old loans, which is a big malpractice, BB officials said. The banks often declassify classified loans without following central bank rules, they said.

After the meeting yesterday, BB Deputy Governor Nazrul Huda said the real situation is not being reflected in the balance sheets of the banks due to such irregularities. He said: “We have asked the banks to be cautious in future; otherwise we will be tougher.”

In the meeting, various issues including the banks' liquidity and their exposure to the capital market were discussed.

Huda told journalists that the banks do not have any liquidity crisis now, though one or two banks are facing a little pressure. He said the amount of excess liquidity is about Tk 28,000 crore now and the rate of interest in call money market is between 4 percent and 6 percent.

The BB deputy governor said fresh money is being injected into the money market every day as the government's development expenditure is increasing now. The government has already released Tk 1,500 crore development funds, which gave a rise to liquidity in the banks.

Huda said export receipts are lagging behind export shipment by nearly $2 billion. Normally, the banks bring back the export receipts to the country within four months. “We have asked the banks to take initiative to bring back the export receipts in one month, giving special efforts to further improve the liquidity situation.”

In the meeting, the BB governor said: “I would strongly urge the bank CEOs to direct their export desk staffs in the respective branches to be active in timely collection of export bills from abroad.”

The governor also said the central bank will ease further the pressure on the taka-dollar exchange rate and interest rate.

Huda also said the credit-deposit ratio was beyond limit in different banks but it has come down. Now the ratio is above 85 percent in nine banks.

If the present trend continues, the credit-deposit ratio of these banks will come down below 85 percent by June, he added.

Huda said the ratio in 26 banks was above 85 percent only a few months back. He also said, another positive note was that the overall credit-deposit ratio of the banks is 82 percent.

The BB deputy governor said no bank has over-exposure to the capital market now.

The central bank has already started working on the basis of the share market debacle probe committee report. The BB will also form an investigation committee. If any irregularity is proved against any bank, the BB will take action.

Huda said the banks were advised to launch a new product to provide financial assistance to the Bangladeshi migrant workers who returned home from Libya.

The Association of Banks Bangladesh (ABB) will prepare the product after discussion.

Sajjadur Rahman

The school banking programme has recently been launched in Bangladesh. The scheme not only plans to help students and parents with a sizeable amount of savings after a certain period, it also aims to instil the habit of savings from an early age into students.

The scheme will teach kids money management skills that may be useful for the rest of their lives. Through the programme, kids can bank at school, with a hands-on banking experience in a simple way.

In a major decision in November 2010, Bangladesh Bank (BB) asked all banks to open school banking branches. It said students need to be brought under banking services to help them contribute to economic activities through savings.

“So far, the response is very good. Both students and their parents are quite happy with the initiative,” Ali Reza Iftekher, managing director and chief executive officer of Eastern Bank Ltd (EBL), told The Daily Star.

EBL was the first bank that came up with school banking after the central bank issued a circular in this regard. The bank has introduced 'EBL Junior', a savings account for students, aiming to include the young population of society under the umbrella of banking.

The bank has so far opened 500 student accounts. It has set a target to net another 500 by next month, according to Muhammad Musa, head of branches of EBL.

School banking is not new in Bangladesh. Some banks, including Muslim Bank, had introduced a school banking programme in the 1960s, but it did not last long. It was some time before AB Bank (formerly Arab Bangladesh Bank) launched the service in Sunshine Grammar School in Chittagong in 2003. But, that too did not work.

Finally, school banking got renewed impetus when the central bank issued the formal circular in late 2010.

Now, 17 banks have already introduced school banking, according to BB statistics. Another 24 are in the pipeline to open the scheme soon.

Any student, aged between 11 and 17 years, can open an account with banks supporting the service. The account can also be opened at ease with three copies of photo of the account holder and a parent. This is basically a joint account between the student and the guardian.

There are some advantages of opening this account, such as waivers of fees and charges, free internet banking, a waiver of minimum balance requirement, debit card at lower costs, etc.

Banking is not well accepted, particularly among average housewives in Bangladesh. Housewives have long been reluctant to accept banking services because of their poor standing on financial literacy.

But this generation will be different, said Iftekhar. “We believe that when it comes to a child's education, knowing how to manage money is just as essential as English, math, science or arts.”

He said EBL would soon take the service to Chittagong and Sylhet too.

The 'EBL Junior' scheme offers 6 percent interest on a daily balance to be paid semi-annually. This will help the fund in the account grow at a faster rate than conventional savings accounts. A parent can use the account to save for future expenses of the child, like higher education, marriage or any other purpose.

Mutual Trust Bank (MTB) is another bank that has introduced school banking. It launched two products -- MTB Junior and MTB Graduates -- for students.

“Our officials have educating students on banking, products and the financial management,” said Anis A Khan, managing director and chief executive officer of MTB.

SME-focused BRAC Bank has also launched savings products for students below 18 years.

The bank introduced the 'Future Star Account', which is a savings account for minors that offers an opportunity to save for one's child's future. The account is available for children below 18 years of age. However, the legal guardian of the child will operate the account on behalf of the minor.

'Future Star Account' offers an interest rate of up to 8 percent per annum. The interest is accrued on a monthly average balance and applied to the guest account yearly. The minimum account opening balance requirement is Tk 2,000, said a bank official.

Trust Bank has also opened school banking and set up an ATM booth at Rajuk Uttara Model School and College to render services to students. Over 500 accounts have already been opened there, according to Ruhul Amin, an accountant of the college.

“It is very easy to open a student account. Some accounts have even been opened with an initial deposit of Tk 100,000,” said Amin.

Shariah-based banks are also coming up with the service.

Shahjalal Islami Bank has a deposit product named 'Mudaraba Shikhkha (education) Deposit' that can help parents build a base for their children's future education.

Still, many banks are yet to launch school banking. The City Bank and the Prime Bank are two banks working to introduce the programme.

“We are excited and work is underway to launch school banking,” said Masrur Arefin, deputy managing director of The City Bank. But he did not specify the date when the programme would be launched in the market.

Banks do not see school banking as a profit making business. But they are hope that many of these students would become their customers in future.

“We're helping students build a 'savings-attitude'. They might be our future clients,” said Musa of EBL.

sajjad@thedailystar.net

News: The Daily Star/ Bangladesh/ May-12-2011