Islami Bank Bangladesh Limited promoted three high officials as deputy managing director (DMD) to the bank recently.

The newly appointed deputy managing directors are--Muhammad Abul Bashar, Syed Abdullah Mohammad Saleh, Md Habibur Rahman Bhuiyan, said a press release.

Prior to his assignment as DMD, Muhammad Abul Bashar was discharging as the head of information communication and technology division of the bank. He joined IBBL in 1983 as principal officer.

He served at different important ranks of the bank including head of Dhaka south and central zone. He obtained B.Sc Engineering degree in 1980 from Chittagong Engineering College.

Syed Abdullah Mohammad Saleh was discharging as the head of corporate investment division-1 of the bank. He joined IBBL in 1983 as senior officer.

He served the bank as manger of different branches of the bank in Feni, Comilla, Anderkilla, Khatunganj and Nawabpur. He was also the bank’s head of Chittagong zone and head of establishment, general investment, project investment, and corporate investment division-2 of the bank’s head office. He obtained his masters degree in economics from Chittagong University.

Abdullah started his banking career with Janata Bank as probationary officer in 1979.

Md Habibur Rahman Bhuiyan, FCA was discharging as the head of financial administration division. He joined the bank in 1984 as probationary officer.

News: Daily Sun/Bangladesh/17-Apr-2011

Dutch-Bangla Bank Limi- ted recently arranged a managers’ conference to review the bank’s performance in the January-March period of 2011.

KS Tabrez, managing director of the bank, presided over the conference, said a press release.

Branch managers and deputy managers from 96 branches of the bank attended the conference.

Deputy Managing Directors----Abul Kashem Md. Shirin, Md Sayedul Hasan, Khan Tariqul Islam Md. Mosaddiqur Rahman and the divisional heads of the bank, were also present on the occasion.

KS Tabrez congratulated the concerned managers and their colleagues in their respective branches who have achieved their target set for the period.

The managing director urged the bank’s branch managers to make continuous improvement in their services and to put up their all out efforts in achieving the business targets as set forth for the year 2011.

He also emphasised on taking advantages of the largest on-line banking network as well as the unique image of the bank for opening retail deposit accounts.

News: Daily Sun/Bangladesh/17-Apr-2011

Sajjadur Rahman

Riding on fast-growing technologies, banks are working to identify new business niches; to develop customised services, to implement innovative strategies and to tap new market opportunities. Mobile phone banking is one of those technologies that have been changing the scenario across the globe -- from South Africa to Latin America and Asia.

With the number of mobile phone subscribers skyrocketing in Bangladesh, mobile banking is becoming a channel that no bank can ignore. Bankers and analysts predict, the service, if runs successfully, will have greater social impacts in terms of enhancing efficiency and transparency.

It is a banking process that provides financial services such as deposits, withdrawals, utility payments, salary disbursement and channelling foreign remittance, through any mobile phone set.

Limited personal computers and broadband internet penetration in the country have made data access on mobile the first online experience for many. This delivers key opportunities for meaningful and low-cost engagement with the customers.

The number of mobile phone subscribers and availability of the technology have encouraged both the bankers and mobile phone service providers to tie up with each other and deliver the fully technology-driven service that the country has never seen before.

“There are around 70 million mobile phone subscribers in the country. Of them, only 13 percent have bank accounts,” said Abul Kashem Mohammad Shirin, deputy managing director of Dutch-Bangla Bank, the bank that launched mobile banking last week.

“Many potential customers are still unbanked. Mobile phone banking can bring them into the services,” said Shirin. Any Banglalink or Citycell subscriber can enjoy the service of DBBL.

Trust Bank is the first one to introduce the service in December at all its 60 branches and nearly 40 pay-points.

BRAC Bank, which has tied up with Robi to launch the service soon, holds high hopes about the new technology-driven banking services.

“Money is not the driving factor. It is going to have a massive social impact,” said Kamal Quadir, chief executive officer of bKash that will handle the mobile phone banking of BRAC Bank. bKash is a joint venture company between BRAC Bank and Money in Motion LLC, USA.

The regulator, Bangladesh Bank, has allowed 10 banks to operate mobile banking in the country. Of them, Dutch-Bangla started the trial service last week, and BRAC is in the pipeline to launch the service in a few months.

But, still there are confusions and concerns on how the service will be delivered. Banking through phone, from deposits to withdrawals, sounds unclear to many. Although the bankers say it is as simple as operating a mobile phone, and cost effective and timesaving.

Though Bangladesh is a newcomer into this technology-driven banking, the world is familiar with the service. Nearly 150 countries including the neighbours have adopted mobile banking to reach people even in the remotest areas.

The bankers said if customers know how to use mobiles, they will face no problems in doing mobile banking.

A customer has to register by filling in a prescribed form and then he will be given a personal identification number (PIN) and a check digit added to his mobile number as a security measure. Every user will need his mobile set, check digit and PIN to make any transaction.

“If we can make it easier for them, if we can make them understand that this is reliable, I don't think that there will be any problem,” said Shirin.

He said DBBL has initially started mobile banking in Dhaka and its surrounding districts -- Gazipur, Narsingdi, Narayanganj, Munshiganj and Manikganj. Later, the bank will roll out the service in other districts.

“We have a plan to cover every upazila in five years. It will create 6,000 jobs,” said the banker. “The overall estimated costs will be Tk 235 crore a year.”

The banker said they will not be able to make any profit in at least five years, but the bank is not bothered about profit. “It is a work under the corporate social responsibility,” he said.

DBBL has a massive plan to go to the union level that will create 18,000 jobs. BRAC Bank will also spend nearly Tk 150 crore for the mobile banking project.

"bKash presents a compelling business plan which capitalises on a ripe economy to dramatically expand access to formal financial services, both as an extension of BRAC Bank and as a full-scale mobile phone-based payment switch, said Muhammad A (Rumee) Ali, chairman of BRAC Bank and bKash.

The new initiative will benefit the country as 83 percent of its population lives under $2 a day and access to finance can help in improving their economic situation, he added.

Quadir, however, sees adaptation of technology and converting digital money into cash as two major challenges. “Customers need sufficient access points to convert their digital money into cash,” he said.

According to him, it is a risky business and was not successful in many countries. Kenya, the Philippines and South Africa are the success stories of mobile phone banking.

“If a service is not easy to access or costs too much to use, then the use will naturally be low,” said Rabiul Alam, an official of Trust Bank.

He said part of the equation here has to do with the technology in the mobile handsets available to the end-user but the other part links to the deployment of technologies from the banks' side.

On the risks and security issues, the bankers said the entire risks belong to the banks not the mobile operators.

“Customer's money is safe as no one can withdraw money without taking possession of the mobile set, PIN and the check digit all together,” DBBL Managing Director KS Tabrez said during the launch of the service last week.

“No one will be able to deposit unwanted money in a mobile banking account without knowing the check digit, although the mobile number is publicly known,” he added.

sajjad@thedailystar.net

News: The Daily Star/ Bangladesh/ 13-Apr-2011

The growth in GDP (Gross Domestic Product) in the next financial year (FY) would cross 7 per cent and the real GDP achievement will be nearer to 7 per cent in the current FY, Bangladesh Bank (BB) governor Dr Atiur Rahman said on Tuesday. He said Bangladesh's macro economy now is in the 'qualitative growth phase' and it is standing on better foundation resulted from multiple initiatives including policy support jointly by the government and central bank.
"Our growth is participatory and sustainable," Dr Atiur claimed at a roundtable discussion on "Financing Agro-based Small and Medium Enterprises (SMEs)" organised by apex trade body Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) at its conference room in association with BRAC Bank.
The governor said Bangladesh is likely to obtain the same ranking this year by the US-based Moody's Investors Service, one of the world's major global rating agencies which last year ranked Bangladesh as an emerging economy in Asia.
"Primarily, I have received indications that Bangladesh's ranking by Moody will not be downgraded this year. Vietnam was ranked above Bangladesh but the country likely to downgrade from its previous position," he said.
He said the rating is meant for Bangladesh's macroeconomic fundamentals were on better footing and it had less chance to encounter severe stress on
creditworthiness.
Terming the share market debacle and liquidity crisis as 'Growth Pains', the central bank governor in reply to a question by a discussant said, "Every growth has some pains and we must overcome the pains through patience and abiding by the rule of law."
"The prime concern of us right now is to create employment. We need 30 lakh employments every year to accommodate the jobseekers and only the manufacturing sector could play a big role in this regard," said the governor while commenting on flow of liquidity.
He said SME financing is important to create employment for elimination of income differences at the rural areas.
He said the central bank has achieved 65 percent of its total target to disburse agricultural credit for SMEs in the current FY. "The target this year was set to disburse Tk. 13,000 crore while the target last year was Tk. 11,000 crore," he said.
He said the country's agricultural sector is emerging as an industry. The central bank is in process to initiate several schemes for value addition to agricultural products by Asian Development Bank's association.
He also underscored the need to increase production of both the agricultural and industrial sectors in order to create employment. "We have to walk on both the legs. Agriculture and industry…..because manufacturing would play a big role to create employment," he said.
Regarding inflation, he said the central bank alongwith the government have been working together to keep inflation tolerable for poor.
"Inflation is the biggest enemy of the poor. We will pull it out and won't let it go up. Thus, we have to increase our manufacturing. The positive indicator is that our agriculture is once again likely to give us bumper harvest this year," he said.
He said Inflation in the neighboring country is high enough than Bangladesh. "Give us some time. I expect association from you (trade Bodies) all to step up with our own initiatives to control inflation," he said.
Speaking on rate of interest against industrial credit, Dr Atiur said the central bank as a regulator has limitations in curtailing the interest rate. "You have informed me about your concerns but I have limitations in this regard. However, it has creates a scope for mutual discussion in the coming days. Please send us notes of this meeting and I would discuss the issue with other high officials of the central bank and other banks to find way out what to do?," he said. He said, "The central bank, as a regulator, always played a role of a 'referee'. It couldn't play the role of an operator."
As chair of the roundtable, FBCCI president AK Azad expressed grave concern over uptrend of food price inflation.
"As latest reports till January, food price inflation reached 11.91 percent while non-food inflation was only 3.85 percent.
It is very disappointing," Azad told the meeting.
Azad has urged the BB governor to reintroduce the interest rate ceiling for industrial credit, taking into consideration the importance of expansion of the country's industry and investment.
"We cannot accept realisation of interest rate over 13 percent. Please, consider the demand of the business community as all of them are looking towards you," Azad told the central bank governor. "If needed, impose ceiling on the rate of interest for both the borrowing by banks and credit," he said.
The roundtable was addressed by joint secretary of agriculture ministry Md. Kaykobad, BRAC bank managing director Syed Mahbubur Rahman, FBCCI vice presidents Jashim Uddin and Mustafa Azad Choudhury Babu, FBCCI directors Abul Hossain and Golum Mostafa Talukder, BB general manager Sukumol Sinha Chowdhury, director of Bangladesh Chamber of Industries Priti Chatterjy, secretary of Bangladesh Fertilizer Association Abdus Salam Khan, former FBCCI president Akram Hossain and former vice presidents Dewan Sultan Ahmed and Abu Alam Chowdhury, among others.

News: Daily Sun/ Bangladesh/ 13-Apr-2011

Three multinational banks have offered US$250 million loans to the Bangladesh Petroleum Corporation (BPC) as hard term credits.

A consortium of three banks — HSBC, Standard Chartered and Citi Bank —offered the loan proposal to BPC for importing petroleum fuel with a 5.3 percent interest rate, a senior official of the Energy and Mineral Resources Division told daily sun.

“The consortium of the banks tagged a condition of paying an advance payment of 0.87 percent, which is so high,” he said.

Besides, they also showed their interests to arrange a road show regarding the loan, according to him.

The government, recently, got an Islamic Development Bank loan with an interest rate of 5.3 percent, he said, but it advance payment is only 0.07 percent.

The Energy and Mineral Resources Division will write a letter to the consortium to reduce advance payment and withdraw the condition of arranging the road-show, he said.

“If these banks could not withdraw the conditions then it would be difficult to gain approval from the hard term loan committee,” he said.

The government, last week, approved nearly Tk 15 billion to Bangladesh Petroleum Corporation (BPC) as subsidy.

The BPC required Tk 44.30 billion for importing over six million tonnes of fuel in the present calendar year, BPC chairman Md Muktadir Ali said.

“We have a requirement of Tk 17.30 billion between March and December this year while it would require Tk 26 billion from July to December next,” he said.

The consumption of petroleum fuel rose to over six million tonnes this calendar year, BPC chairman Md Muqtadir Ali told daily sun.

“We have a target of petroleum consumption of 4 million tonnes diesel, 1.8 million tonnes of furnace oil and over half million tonnes of petrol, octane and jet fuel,” he said.

News: Daily Sun/ Bangladesh/ 13-Apr-2011