Bangladesh Electronic Funds Transfer Network (BEFTN) will start function from February 20 next year.

The Bangladesh Bank in a recent circular announced the date of starting the BEFTN activities and asked all participating commercial banks for taking necessary preparation enabling them to conduct transactions through the network.

With the introduction of BEFTN, the fully automated cheque clearing process would be completed in the country. Earlier on October 7 this year, the activities of the Bangladesh Automated Cheque Processing System (BACPS) started at the Dhaka clearing zone.

The activities of this modern high value national payment system have now been expanded at all branches of the central bank across the country.

All the branches of the banks that are members of Dhaka Clearing House are members of the regular value clearing, but the high value service is only activated at few branches of commercial branches at Motijheel and Dilkusha.

This high-value service will be extended to all branches in the city from January 5, next year, according to the Bangladesh Bank circular.

The automated clearing house activities will start in Sylhet on January 20, and in Chittagong on February 3 next year.

The central bank has asked all branches of member banks to send all instruments on clearing to BACPS Data Centre in Dhaka. The net-settlement would be completed through integrating all accounts of participating banks preserved at the central bank.

Bangladesh Bank in partnership with the UK Depart-ment for International Develop-ment (DFID) embarked on a project to modernise Bang-ladesh’s national payments system.

All commercial banks who are members of the Dhaka Clearing House will be required to submit their list of selected branches and to finalise their "point of transaction" for submission of their outward cheque images and data to BACPS and be prepared to handle cheque image and data as part of their inward clearing operations.

Source: Daily-Sun, Bangladesh/20th Dec 2010

Bangladesh Bank (BB) yesterday extended the deadline for banks to adjust investment exposure to non-productive sectors by a month to February 15.

The decision came hours after the Dhaka Stock Exchange suffered the biggest fall in its history.

“We have decided to extend the deadline to ensure a congenial environment for stock investors,” Ziaul Hasan Siddiqui, deputy governor of Bangladesh Bank, after an emergency meeting with the chairman of the Securities and Exchange Commission (SEC).

Also, the central bank extended the deadline from December 31 to January 15 for banks to submit statements on diversion of loans to the stockmarket.

SEC Chairman Ziaul Haque Khondker said yesterday's index fall was a 'massive correction'.

The SEC holds a meeting with stakeholders today to discuss the market situation.

Source: The Daily Star, Bangladesh/20th Dec 2010

The inter-bank call money rate recorded an unprecedented rise at 190 per cent on Sunday, the second day after enforcement of the new cash reserve requirement (CRR) rules for the commercial banks to contain inflation.

The call rates were swinging between 55 and 190 per cent on the day against 50 per cent and 175 per cent a day earlier. However, most of the deals were settled at rates ranging from 100 per cent to 150 per cent, treasury officials said.

One non-bank financial institution borrowed loan at 190 per cent from the inter-bank call money market yesterday, another official also said.

The call money rate rose to 175 per cent on Thursday last, marking a historical high, as some lending banks suddenly raised their call rates to cash in on the liquidity crunch in the market.

Earlier, the call money rate increased up to 150 per cent in 2006 during the BNP-led four party alliance regimes.

The central bank raised CRR by fifty basis points to 6.0 per cent for the commercial banks on December 1 last to help curb inflationary pressure on the economy.

Under the new CRR rules, the banks are required to maintain the reserve at 5.50 per cent instead of 5.0 per cent earlier on daily basis, but the bi-weekly average has to be 6.0 per cent in the end.

An analyst of the Bangladesh Bank said there would a positive impact on inflation due to increase of CRR, which would help decline prices of local commodities during December-January period.

The declining trend of food prices has already contributed to a drop in inflation, which slipped to 6.86 per cent in October from 7.61 per cent in September, according to the official data of the Bangladesh Bureau of Statistic which released on Sunday.

The food inflation decreased to 8.43 per cent in October from 9.72 per cent in September.

Director General of Bangladesh Institute of Bank Management Dr Toufic A Chowdhury told daily sun that the call money rates surged to another historical high due to lack of proper liquidity management by the local banks.

“Most of the commercial banks have invested their funds in the share markets for quick gains, but those were blocked as the share prices fell sharply during the past two weeks,” he added.

The historic high in call money rate on Sunday was mainly due to aggressive dealings by few banks, managing director of Pubali Bank Limited Helal Ahmed Chowdhury told daily sun Sunday evening.

He also said that the Bangladesh Bank should set a ceiling for call money rate as the local market has remained volatile for last few days.

“Higher call money rate may push the interest rates on deposits up in the near future to meet the growing demand for liquidity and as a result the banks are raising the interest rates to attract more deposits from their clients,” he added .

The Bangladesh Bank injected Tk 32.79 billion in the money market under a special repurchase agreement (Repo) on Sunday, which seemed to be inadequate, fund managers said. The total demand for money in the call money market stood at Tk 120 billion on Sunday.

Source: Daily-Sun, Bangladesh/20th Dec 2010

Dhaka, Dec 18: The World Bank (WB) will provide Tk 1027.50 crore, (equivalent to $ 150 million) to Bangladesh, aimed at creating jobs for 100 days in the rural areas for the extreme poor during two lean seasons a year. The programme covers one lean season from October to December and another from March to May when rural day labourers are often out of work.

The households, where the head is a manual labourer and which have less than half an acre of land will be eligible for the programme. It is estimated that over 600,000 men and women will benefit from the programme during each lean season.

The disaster management and relief division of food and disaster management ministry will implement the programme from January 2011 to December 2013.

A credit agreement between the government and WB was signed for the “Employment Generation Programme for the Poorest” at the economic relations divisions (ERD) at Sher-e-Banglanagar in the city yesterday, ERD secretary, M. Musharraf Hossain Bhuiyan and WB country director Ellen Goldstein signed on behalf of their respective sides at a ceremony held at the ERD. It was attended by senior officials of the ERD and WB.

After the signing ceremony M. Musharraf Hossain Bhuiyan told reporters  the programme would create two crore person-days of employment over a three year period. “The Government is committed to extend the safety net to protect the poorest and the vulnerable population, while ensuring a more efficient, accountable and transparent system”  Bhuiyan said.

Wages to the day labourers will be paid through formal financial channels to ensure the efficiency and transparency of the system, the ERD secretary observed.

The programme will generate employments for the day labourers, particularly for the vulnerable women, who are often out of work during the lean season, he added.

Despite considerable progress in poverty reduction during the past 20 years, many of the poorest women are still without employment, Bhuiyan said, adding that the programme would ensure that the poorest women make up at least one-third of those employed.

“Our mandate is to reduce poverty, which  requires shared growth, in which the poorest are not left behind” said Ellen Goldstein after signing the agreement and added “The WB will provide funds for the  wage-earners, but will also help ensure that funds are well-targeted to those who are most in need,” she noted.

“Building upon the government's earlier employment generation interventions, the programme will target both the poorest upazilas and the poorest households,” she noted adding that “it will address seasonal poverty by allowing the poorest to have an income, which can be scaled up if the situation demands.”

The credit from the International Development Association (IDA) has 40 years to maturity, including a 10-year grace period, and carries a service charge of 0.75 per cent.

Source: The Independent, Bangladesh/19th Dec 2010

Dutch-Bangla Bank Limited (DBBL) inaugurated Fast Track ATM at Sher-e-Bangla Agricultural University campus in the capital recently.

Professor Dr Md Shah-E-Alam, vice-chancellor of the university, inaugurated the service by withdrawing cash from the booth, said a press release.

Through this Fast Track ATM, customers including students and teachers of the campus would be able to avail themselves of banking services for round the clock and 365 days a year.

The customers would also be able to deposit money through a cash deposit machine installed there, collect and replace debit and credit cards.

Reporting of lost card, collecting cheque books, PIN (personal identification number) collection and reissue, internet banking, SMS and alert banking would be among the other services of the Fast Track.

Officials of the bank would be present at the booth from 9 am to 9 pm every day to assist the customers during cash withdrawal and deposit funds, fill-in the account opening forms and retail loan application forms and credit card application forms.

Mohammad Ali, registrar of Sher-e-Bangla Agricultural University, KS Tabrez, managing director of the bank, and students of the university, among others, were present in the function.

Source: The Daily Sun, Bangladesh/19th Dec 2010