Bangladesh Bank (BB) on Sunday introduced Environment Risk Management (ERM) guidelines to assist the financial sector in assessing environmental risks before making credit decisions.  The ERM guidelines were inaugurated by the central bank’s Governor Atiur Rahman.  Atiur was chief guest at the seminar titled “Environment Risk Management Guidelines,” which was held at a hotel in Dhaka.
The guidelines were developed by BB in collaboration with the International Finance Corporation (IFC), UKAID and Norad.  The Banker’s Association and financial sector stakeholders also provided input about how to manage environmental risks in the financial sector.
BB governor also urged the Chief Executive Officers (CEOs) of the  banks to pay attention to green banking, by investing in energy efficiency and renewable energy projects.
Among others, the launching ceremony was attended by Ian Crosby, manager of IFC advisory services in Bangladesh, Kyle F. Kelhofer, IFC’s country manager for Bangladesh, Bhutan and Nepal, as well as high executives from financial institutions.
BB’s governor said, “These guidelines will help standardise the approach to environmental risk management and it will facilitate banks operating on a level playing field.”
He added that financial institutions will be encouraged to adopt the guidelines to promote their reputation and manage risk efficiently.
“Banks who comply with the instructions stipulated in the ERM guidelines will become a part of the Green Banking Policy,” he said.
“Financial institutions must be proactive. In addition to identifying and understanding the risks in financing in the Bangladeshi business climate banks should actively considering investment opportunities in energy efficiency and renewable energy projects,” the central bank governor said. He requested IFC to continue its work in the sustainable energy finance sector and to advise banks about sustainable energy finance deals.
Ian Crosby said, “The ERM guidelines, if adopted by local banks, will encourage sustainable project financing.”
The guidelines can be found on BB’s website, under Regulations and Guidelines: http://www.bangladesh-bank.org.

News: The Independent/ Bangladesh/ 18-Apr-2011

Islami Bank Bangladesh Limited (IBBL) has distributed Tk 3.10 billion in Cox’s Bazar and its adjoining areas to develop local economic sectors.

Zobaer Azam Helali, assistant vice president and manager of the Cox’s Bazar branch of IBBL, disclosed it in a meeting at Cox’s Bazar press club on Friday.

The meeting was arranged by IBBL to mark the Bangla New Year 1418.

News: Daily Sun/ Bangladesh/ 18-Apr-2011

Rejaul Karim Byron

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The remittance flow is losing its momentum as the exchange rate of the dollar against the taka has gone up in the informal market, Bangladesh Bank said in a report.

Among other causes of the diminishing flow, the report cited low interest rates in case of expatriates investing their money in various savings instruments.

As per the decision of the central bank board of directors, the causes of plummeting remittance were identified.

In fiscal 2008-09 the remittance growth was about 22 percent, which came down to 13 percent last fiscal year.

In the first few months of the current fiscal year, the growth was negative. Although the amount has marked a slight increase recently, it is still below 4 percent in the nine months of the current fiscal year.

The central bank report said the unofficial exchange rates are higher than the official rates in an import-dependent country like Bangladesh. So the remittance inflows through illegal channels are high.

The central bank said the huge difference -- almost Tk 4 -- between official and unofficial rate during May 2010 to November 2010 had a negative impact on the remittance flow. Ideally the difference is around Tk 1.

The BB in its study said, from May 2010 unofficial exchange rate of the dollar was on the rise and it crossed Tk 73 against the taka. The official rate was slightly over Tk 69.

The report said the remittance inflow slowed down as the rate of interest was slashed in different savings instruments, including wage earner development bond, and due to the imposition of tax at source.

From July 2010, the rate of interest on wage earner development bond was lowered from 12 percent to 10.5 percent.

From July to February in the current fiscal year, the investments in wage earner development bond stood at 0.95 percent of the total remittance which was 1.5 percent during the same period last fiscal year.

During the recession, people's trust in banks and financial institutions throughout the world sagged and the expatriates send their earnings instead of depositing with the banks and financial institutions there.

However, the BB found no link between the fall in manpower exports and the slow pace of remittance inflow.

The report said the government has data of Bangladeshi nationals going abroad for job but the exact information on their income is not available. However, general observation is that if the manpower exports slow down, and expatriates come back from some countries, and it deals a negative blow on remittance, the BB report said.

The central bank has made a number of recommendations to increase remittances, including the introduction of pound and euro bonds alongside the dollar bonds. The foreign currency bond has achieved much popularity and is playing a role in increasing remittance.

Alongside increasing manpower exports to the existing labour markets, new markets should be explored, the BB said. Manpower exports to some African countries like Algeria, Angola, Nigeria, Botswana, and South Africa have started but the process needs to be expedited, it said.

Knowledge of language is very important for workers holding jobs abroad. Bangladeshi workers are lagging behind the Indian, Sri Lankan and Nepali workers in the labour market due to their inadequate language skills. Alongside work, training on language should be given equal importance.

As sending workers abroad is costly now, the government should take necessary steps for keeping the migration costs at logical level, the central bank said.

The BB disagreed with some experts' apprehension that remittance inflow will fall due to the political turmoil in Egypt, Libya and some other Middle East countries and natural disaster in Japan.

The central bank said the remittances from these countries were very small. However, projecting a bright prospect it said, due to a hike in oil prices on the international market, the economy of the Middle East has the prospect of being buoyed. On the other hand, the ME countries have been announcing different incentive packages to calm down the political flare.

The BB said, due to increasing development works the wage of the workers and their demand will increase.

Taking into consideration that the economies of the US and the UK are also likely to improve, Bangladesh economy will grow faster, the BB report said.

News: The Independenty Sun/Bangladesh/17-Apr-2011

The special credit programme of Rajshahi Krishi Unnayan Bank (RAKUB) for boosting fish production has started gaining popularity everywhere in the country’s northwest region for the last couple of years. The bank has been operating the special loan programme styled “RAKUB fisheries village” for extensive fish cultivation in the northwest region of the country. The main objective of the programme is to encourage small farmers in fish farming so that they could produce more fish in the small ponds and other water- bodies using modern and scientific technologies instead of traditional ones.
The programme gives emphasis on forming fisheries village with at least 10-12 small ponds at potential places.
Talking to the agency, Managing Director of RAKUB Pradip Qumar Dutta said that there was a bright prospect for increasing fish production in all the northern districts with optimum uses of the existing natural resources.
Taking about the advantages of the situation, he said the bank has selected the fisheries sector on priority basis for supplementing the government’s efforts to attain the millennium development goals (MDGs).
At the preliminary stage, the RAKUB chief said 56 upazilas and union-level branches of the bank in Rajshahi, Natore, Naogaon, Pabna, Sirajganj, Dinajpur, Bogra, Rangpur and Kurigram districts have been disbursing the special loan successfully.  A total of Taka 9.77 crore has so far been disbursed among the interested fish farmers during the first eight months of the current fiscal.

News: The Independent/Bangladesh/17-Apr-2011

Eastern Bank Limited (EBL) with Grameenphone and GPIT Ltd have recently launched Express Card, an innovative cash solution for their employees working across the country.

This "smart plastic wallet" will replace the employee's business expenditure reimbursement platform, the bank said in a statement yesterday. The organisations will deposit the business expenditure reimbursements to the individual card instead of physical cash handover.

The card will facilitate the employee to 24/7 cash access from any VISA logo ATMs and to swipe at over 10,000 visa merchant outlets countrywide. This will also enable the organisations free from the hassle of managing payments through traditional cheques or cash and also reducing the paper usage.

EBL Managing Director Ali Reza Iftekhar and GP Chief Executive Officer Tore Johnsen signed the agreement at the GP head office in Dhaka. Among others, EBL Deputy Managing Directors Muklesur Rahman and M Fakhrul Alam, EBL Head of cards Nazeem A Choudhury and Grameenphone Deputy CEO Raihan Shamsi were also present.

The card-based employee payment management system is unique in Bangladesh, EBL said. Apart from saving time and costs of fund management, the card will give discount offers at various merchant locations to the employees.

News: TheDaily Star/Bangladesh/17-Apr-2011