Bangladesh Bank on Sunday asked the scheduled banks to settle local back-to-back letters of credit by means of the US dollar instead of local currency taka in line with the guidelines for foreign exchange transactions. The BB issued a letter to managing directors and chief executive officers of all banks asking them not to use local currency in settling local export and import bills. A BB official told New Age on Sunday that majority of the banks were now settling local import and export bills using the local currency in violation of the foreign exchange guidelines. The central bank had issued a circular to all banks on May 25, 2008 asking them to settle local import and export bills by means of foreign currency, but they (the banks) frequently violated the rules and directives. The banks are now paying in the local currency to the exporters against the worth of their exported products and the exporters hold no foreign currency due to the practice. The banks, however, attach the value of imported products in the form of foreign currency with the LC form of the clients, but they (the banks) transact local currency to settle the import and export bills. The exporters usually receive loans from the export development fund of the BB and they have to repay the instalment of the loans by means of foreign currency. The exporters will find it easy to repay their EDF loans if they get foreign currency against the value of their exported products from the banks, the BB official said. Some exporters have recently filed allegations with the central bank saying that the banks paid them (the exporters) against the worth their exports by means of the local currency violating rules and regulations. Against the backdrop, the BB issued the letter to all banks to take measures in this connection, the official said. Besides, the financial corruption in the banking sector will be prevented if the banks transact the foreign currency to settle local bills. Hallmark Group and Bismillah Group embezzled huge amount of fund between 2010 and 2012 from different banks by settling local bills illegally, he said. The Groups could not embezzle such large amount of fund from the banks if they (banks) settled the bills using the foreign currency as the banks are not usually authorised to hold big amount of foreign currency. 

A file photo shows the Bangladesh Bank headquarters in Dhaka. The net profit of Bangladesh Bank decreased by 49.04 per cent to Tk 1,038 crore in the financial year 2014-2015 compared with that of Tk 2,037 crore in the FY 2013-2014 due to a dull situation in local and international business.

The net profit of Bangladesh Bank decreased by 49.04 per cent to Tk 1,038 crore in the financial year 2014-2015 compared with that of Tk 2,037 crore in the FY 2013-2014 due to a dull situation in local and international business. BB officials said declining gold price on the international market and devaluation of the euro against the taka were major external factors for the slump in the BB’s net profit. An internal factor was that the central bank had to pay huge amount of interest to the scheduled banks against their reverse Repo, through which the BB takes loan from banks to control money supply. The banks were compelled to invest their fund in the reverse Repo as they faced excess liquidity due to the dull business amid political unrest and uncertainty in the FY15. The interest earnings of the BB also declined massively from the government borrowing as it (government) did not borrow from the central bank in the FY15. Rather it repaid a portion of debts due to a rise in sales of savings instruments and slow implementation of its development projects. The government repaid Tk 6,870 crore more than the fresh borrowing it made from the banking system in the FY15. The board of directors of the BB on Sunday approved the financial balance sheet at a meeting which was presided over by BB governor Atiur Rahman. The central bank will deposit Tk 956.86 crore in the government exchequer from its net profit in the FY15. It deposited in the government exchequer Tk 1,562 crore in the FY14 and Tk 4,072 crore in the FY13. The total income of the central bank was Tk 10,038 crore in the FY15. BB board member Mustafa Kamal Mujeri told New Age on Sunday that the central bank’s profit declined in last fiscal year as the government borrowing dropped significantly during the period. The BB usually earns a good amount of profit by giving loans to the government, but it (government) did not borrow from the banking system in the FY15. He said that the BB had to pay huge amount of interest payment to the banks against investment in reverse Repo with the central bank that also played role in decreasing its profit. Another BB board member Sadiq Ahmed told New Age on Sunday that the government borrowing decreased in the FY15 as the net investment in government savings tools significantly increased in the period. 

Bangladesh Bank has appointed Faisal Ahmed as a senior economic adviser to its governor, to support the financial sector development and reform agenda, the central bank said in a statement yesterday.

Ahmed served as the International Monetary Fund's resident representative in Cambodia during 2011-15 and worked in the monetary and capital markets department prior to the new appointment, it said.

Ahmed was a core member of the IMF's emerging market surveillance team and led technical assistance missions on reserve and debt management.

Ahmed holds a PhD and an MA in economics from the University of Minnesota, an MFin in quantitative finance from Princeton University and is a CFA charterholder, the BB said.

Prior to joining the IMF, he worked as an actuary for a global reinsurance company for four years, as a research economist for the Central Bank of Turkey and as a visiting scholar at the US Federal Reserve Bank, according to the statement.

He has also taught at the Royal School of Adminis-tration in Cambodia, the University of Minnesota, and at the South East Asian Central Banks Research and Training Centre.

Premier Bank Managing Director Khondker Fazle Rashid seen, among others, at a photo session with members of VISA International and members of "Cards and Payments Association of Bangladesh"(CPAB).

The members of VISA International met the members of "Cards and Payments Association of Bangladesh" (CPAB) at the head office of The Premier Bank Limited, Iqbal Centre, Banani, in the city Wednesday, said a statement.

Managing Director of The Premier Bank Khondker Fazle Rashid inaugurated the meeting as the chief guest while Shiba Kumer, Director of VISA International, and Amitoj Showny were present as the special guests.

Head of Cards of Premier Bank and President of Cards and Payments Association of Bangladesh (CPAB) Omar Faruque Bhuiyan along with all heads of Cards of all commercial banks were also present in the meeting.

The meeting discussed different payment and risk management issues of Credit Cards (both VISA and Master) in Bangladesh.