Bangladesh dropped two positions to 174 in the World Bank's ranking of the ease of doing business due to stalled regulatory reforms.

Only Afghanistan (177) among the eight South Asian countries came in lower than Bangladesh in the report, “Doing Business 2016: Measuring Regulatory Quality and Efficiency”, which was released yesterday.

Bhutan topped the ranking (71) in South Asia, followed by Nepal (99), Sri Lanka (107), Maldives (128), India (130) and Pakistan (138).

Not only that, Bangladesh's competitors, such as India, Sri Lanka, Vietnam, Indonesia and Cambodia, have all improved in their rankings in the new report. 

Even Myanmar and Mauritania, which were below Bangladesh in the index last year, have moved ahead of Bangladesh now. War-torn Iraq (161) and Yemen (170) ranked above Bangladesh.

“This is a wake-up call for us to inject a new lease of life in regulatory reforms in order to increase the attractiveness of Bangladesh as a prolific investment destination vis-à-vis our international competitors,” said Zahid Hussain, lead economist of the WB's Dhaka office.

The movement in a country's ranking depends on the number of reforms it had implemented on various sub-indicators such as paying taxes, getting electricity and registering property, compared to the other 188 countries. Singapore topped the list, while Eritrea came in last.

This year, Bangladesh slipped because of lack of progress in implementing regulatory reforms while others moved fast forward, Hussain said.

Bangladesh's distance to frontier (DTF) score, which used to compile the rankings in the Doing Business report, improved on paying taxes because of reduction in the corporate tax rate. Bangladesh's DTF stood at 43.1 percent in the 2016 report, up from 42.71 percent a year ago.

“But our overall ranking still slipped because others did much better on this count,” said the WB economist.

Although the government has been trying to do a lot of positive things in recent years, they are slow in execution, said Shafiul Islam Mohiuddin, vice-president of the Federation of Bangladesh Chambers of Commerce and Industry.

Every year the WB's Doing Business report sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations.

The report tracks changes in regulations affecting ten areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Bangladesh lost grades on five indicators and remained unchanged on the other five.

The country dropped the most in the index for starting a business, slipping six spots to 117.

It dropped five positions in the getting credit index and one spot each in registering property, protecting minority investors and paying taxes rankings.

Its ranking remained unchanged in: dealing with construction permits (118), getting electricity (189), trading across borders (172), enforcing contracts (188) and resolving insolvency (155).

Starting a business in Bangladesh requires nine procedures, takes up 19.5 days and costs 13.9 percent of income per capita, according to the report. South Asia on average needs 7.9 procedures, 15.7 days and 14 percent of income per capita for starting a business.

Although the government has been saying for long that it would simplify the business process, the fact of the matter is that the procedures have become more complex over the years, said Hossain Khaled, president of the Dhaka Chamber of Commerce and Industry.

“We still have to run from one office to another for days to get trade licences. These harassments are unbearable for business people.”

Globally, Bangladesh stands at 189 in the ranking of 189 economies on the ease of getting electricity. India ranked 70th in the getting electricity indicator, Sri Lanka 81st and Pakistan 157th.

It takes at least 429 days to get electricity in Bangladesh, compared to the South Asian average of 141.7 days, according to the WB study.

“We are facing serious problems in getting gas and electricity supplies. We are very concerned,” Khaled said.

And if the factories do manage to get the connection, the quality of supply of electricity and gas tends to be poor, he said. “The supply of electricity would be irregular and the pressure of gas low.”

In such a situation, the government went ahead and raised the prices of gas and power, Khaled said.

Currently, the amount of idle money in the banking system is huge, as the investors have limited scope for either expansion or fresh investment due to the higher cost of doing business, Khaled added.

Bangladesh ranks one of the lowest (185) in registering property. It requires eight procedures, 244 days and costs 7 percent of the property value for registration.

On the South Asia level, the study found that six of the eight economies have implemented nine reforms in the past year, compared with six reforms in four economies the previous year.

India, the region's largest economy, which has a global ranking of 130, implemented two reforms last year.

For example, India eliminated the requirements for a minimum paid-in capital and a certificate to commence business operations, and in so doing, it significantly streamlined the process of starting a business.

With the exception of Maldives, all economies in the South Asia region have now eliminated the minimum capital requirement, significantly reducing the costs of setting up businesses, the report said.

Bhutan and Sri Lanka also implemented two reforms each in the past year, while Afghanistan, Bangladesh and Maldives undertook one reform each.

The highest number of reforms came for starting business, paying taxes and getting electricity.

The report found that no reforms were recorded in areas of trading across borders, protecting minority investors, enforcing contracts and resolving insolvency.

                      Bangladesh Bank (BB) launches Real Time Gross Settlement (RTGS) with 55 banks.

Bangladesh Bank (BB) launched Real Time Gross Settlement (RTGS) with 55 banks today.

“Introduction of RTGS would enable instant transfer of funds between banks and institutions,” said Governor Atiur Rahman at the inauguration of the service at the BB headquarters in Dhaka.

Initially 5,000 branches of 55 banks will be able to render the service to its customers.

Rahman said the system will have a substantial impact on current operations in the banks, particularly in the area of treasury, payment division, corporate banking and cash management.

RTGS facilitates fund transfer worth Tk 1 lakh or more from one bank account to the other on real-time basis without any waiting time. In the previous system it took one day to settle the fund transfer.

BB implemented RTGS with the assistance of the Asian Development Bank.

In association with Bangladesh Bank’s initiatives under financial inclusion and Corporate Social Responsibility (CSR), for improving the lifestyles of the people of the former enclaves in Panchagarh, Mutual Trust Bank Ltd. (MTB) donated BDT Two Million (2 Million) for building a secondary school at Garati, a former enclave in Panchagarh. Dr. Atiur Rahman, Honorable Governor, Bangladesh Bank, handed over the cheque to Mohammod Shafiqul Islam, Upazila Nirbahi Officer, Debiganj, Panchagarh at the grand ceremony held recently at Dohala, Khagrabari, Debiganj, Panchagarh. Md. Hashem Chowdhury, MTB Additional Managing Director & COO, M. Mahfuzur Rahman, Executive Director, A.F.M. Asaduzzaman, General Manager, Governor Secretariat, and Md. Khurshid Alam, General Manager, Bangladesh Bank, Rangpur Office were present at the program along with a large number of residents of the former enclaves. 

The Bangladesh Bank Governor also inaugurated “Swapno Sarathi”, MTB’s CSR campaign of bicycle distribution amongst the underprivileged students, by handing over a token bicycle to a student of the former enclave. The MTB AMD handed over sanction letters of collateral-free loan to ten (10) farmers against their Ten Taka accounts.      

NRB Global Bank Limited formally opens its Rowshan Hat Branch (26th Branch) at Chittagong on October 27, 2015. Mr. Mohammad Hanif Chowdhury, Vice Chairman of the bank has inaugurated the operations of the branch as chief guest. Mr. Mohammad Fazlay Morshed, Chairman, Audit Committee of the Bank was Present as special Guest. 

Among others Managing Director Proshanta Kumar Halder, Managers of Chittagong region, Branch Manager, honorable & distinguished clients were also present on the occasion. It was expected that through the latest technological support, the bank will provide quality service to the customers & will expand its network in home & abroad to provide “Great Experience” to its stakeholders.

Bangladesh Bank is set to provide long-term foreign currency financing to small- and medium-scale manufacturers with funds from the International Development Association, the World Bank wing that offers concessional loans and grants to the poorest countries.

The amount to be lent to Bangladesh under the deal with the IDA is yet to be disclosed. The tenure will be up to 10 years, and the funds will be disbursed through financial institutions.

The refinance rate will cover the cost of funds, operating costs and other risks, and will be competitive with market rates. The pricing of the loan will be variable both in terms of LIBOR and spread as per the decision of the BB.

An indicative pricing range of six-month LIBOR + 3-4 percent will be applicable to the institutions, the BB said in a notice.  

The central bank said the institutions will determine their own loan interest rates for borrowers covering their borrowing costs and expenses, along with a reasonable risk-adjusted spread and profit margin, which would be 1 to 3 percent above the cost of funds.

The grace period will be determined by the institutions themselves based on the projected timing of the cash inflows of individual projects. But it will not be more than two years.