Bangladesh Bank (BB) Governor Dr Atiur Rahman pledged to promote banking services with the major objective of boosting the ongoing financial services so the poor segment of the society gets the most benefit out of it, according to a BB statement issued on Sunday.
"We want to do more for the people, particularly for the poor, in future through boosting our ongoing financial inclusion programmes across the country," Dr. Rahman said on the eve of his seventh year as the BB governor. He was appointed the 10th governor on May 1, 2009 for a four-year term, which was extended last year for another term.
Recalling his first working day on May 3, 2009, the governor said that he expressed his commitment towards promoting pro-poor economic growth with a view to creating fresh employment opportunities through expansion of the industrial base across the country.
He also started promoting inclusive economic growth through innovative and multi-pronged financial inclusion initiatives, channelling more credit towards socially and environment friendly business activities.
BB under the leadership of Dr Rahman updated its loan classification and provisioning structure in line with the international standard to ensure good governance in the country's banking sector.
"Loan classification and provisioning structure have been upgraded to the international standards. Risk management including strict internal audit and control has been enforced to ensure good governance through heightened supervision," the governor explained.
BB's pragmatic monetary and financial policies also contributed towards attaining content economc growth, maintaining lower inflation, competitive par value of Bangladesh Taka and comfortable foreign exchange reserve position despite episodes of global economic recessions.
Foreign exchange reserves crossed the $ 24 billion-mark for the first time on April 29 following steady growth of both export earnings and workers' remittance inflows.
Besides, refinancing, modernisation of the information and communications technology (ICT) and payments system, environmental risk evaluation guidelines, and other policy supports have been extended to facilitate inclusive and environment friendly financing.
"Risk weighted capital adequacy, liquidity and leverage ratio of banks have been kept as par BASEL-II guidelines, creating avenues for smooth transition to BASEL-III guidelines which will come into effect in 2015," Dr. Rahman added.
Regarding Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT), the governor said modernising Bangladesh Financial Intelligence Unit (BFIU), information exchange/sharing related cooperation with international FIUs has been strengthened to combat money laundering, terror financing and illicit money transfer activities.

Local banks last year made Tk 10,363 crore of cash recovery from the classified loans, which provided them a spot of respite from their runaway default loans. 

Of the amount, the private commercial banks made the highest recovery of Tk 6,381 crore, followed by state-owned commercial banks at Tk 2,126 crore, according to Bangladesh Bank statistics. 

The specialised banks recovered Tk 1,705 crore and the foreign commercial banks Tk 151 crore.

Default loans rose in the first three quarters of last year to Tk 57,291 crore, which prompted the concerned parties to take up wholesale loan rescheduling, loan write-offs and cash recovery in the last quarter.

Subsequently, the total default loans at the end of 2014 came down to Tk 50,155 crore, which was 9.69 percent of the total outstanding loans.

Banks could recover 20.66 percent of the bad loans as of December 31 last year, with private banks leading the recovery. 

Default loans at private banks stood at Tk 18,426 crore and of the amount, 34.62 percent has been recovered.

Specialised banks recouped 23 percent of their total bad loans of Tk 7,259 crore. 

State banks got back 9.25 percent of their default loans of Tk 22,763 crore, while foreign banks realised 8.79 percent of their total bad loans of Tk 1,706 crore.     

A central bank high official said, of the three measures, the banks fared best with cash recovery.

As default loans increased substantially in the second half of last year, the Bangladesh Bank governor directed all chief executives of the banks to take intensive measures to rein it in.

A high official of Sonali Bank said a task force was formed to increase recovery; the task force continuously monitored the branches so that the loan recovery increases.

An official of Pubali Bank said the private commercial bank's board gives profit targets to them. Even after that, if the classified loan could not be brought down, they were forbidden from transferring the interest accrued on bad loans to income. So, the bank rescheduled loans and also made recovery against those, he added.

An official of Agrani Bank said they not only made recovery against classified loans, they also made cash recovery against the written-off loans.

One of the reasons for falling bad loans is the rescheduling of default loans. They rescheduled bad loans worth Tk 6,216 crore in the last quarter of 2014 alone.

The central bank allowed a relaxed loan rescheduling policy between December 2013 and June 2014, under which banks rescheduled around Tk 20,000 crore.

BSEC, DSE push each other to press BB

Bangladesh Securities and Exchange Commission and Dhaka Stock Exchange at a meeting on Thursday pressed each other to discuss with the central bank on relaxation of rules connected with banks’ capital market investment, sources said. BSEC chairman M Khairul Hossain presided over the meeting held at its office where BSEC commissioners Md. Helal Uddin Nizami, Md Amzad Hossain, Arif Khan, DSE chairman Siddiqur Rahman Miah, managing director Swapan Kumar Bala, directors M Kaykobad, Md Shakil Rizvi, Mohammad Shahjahan, Khwaja Ghulam Rasul and Sharif Anowar Hossain were present. Representatives of DSE at the meeting said if the Bangladesh Bank allows the banks to calculate capital market exposure excluding long-term equity investment, the banks will get a chance of increasing their stock market investment. Besides, it will automatically pull down some banks’ capital market exposure within the BB-set 50 per cent of consolidated investment limit and put a positive impact on the market accordingly, they said. As the market regulator, BSEC should talk with the central bank in this regard, they said. Following the DSE plea, the capital market regulator asked the premier bourse to press Bangladesh Bank to relax its latest directive regarding banks’ capital market investment. At the same time, the market regulator asked the stock exchange to hold meetings with the central bank in a bid to explain the prolonged market fall and suffering of investors due to banks’ inactively at the capital market. Although the premier bourse has already written a letter to the BB to discuss about banks’ capital market related issues. Despite the fact, BSEC asked the bourse again to discuss with BB regarding the issue. The commission at the meeting also said the DSE and DSE Brokers’ Association as a representative of the brokers should raise their voice regarding the negative impacts of banks’ inactivity on capital market. A BB circular issued in February last year had asked the banks to calculate capital market exposure on consolidated basis scrapping its earlier circular of counting capital market exposure on solo-basis. The central bank, asking the banks to bring down capital market exposure limit within the stipulated limit gradually by July 21, 2016, said the market value of total investment of a banking company in the capital market on consolidated basis could not exceed 50 per cent of the sum of its consolidated paid-up capital, balance in share premium account, statutory reserve and retained earnings as stated in the latest audited financial statement. DSE representatives at the meeting also requested the BSEC to take measures in reducing limit-free share prices movement of newly listed companies for the existing scope of five days, listing newly listed companies under ‘Z’ category in case of none-holding of annual general meeting in the immediate past year and not to allow margin loan for newly listed companies shares. Siddiqur Rahman Miah expressing concern over the prolonged fall in share prices requested the capital market regulator to take proper measures to remove obstacles which are hampering investors’ confidence over the market, a DSE press release said. Swapan Kumar Bala at the meeting said that the government should withdraw the capital gain tax on banks, non-bank financial institutions, merchant banks and brokerage houses under the newly imposed section 53 (0) of income tax ordinance. Bala also raised the role of Bangladesh Bank regarding banks’ capital market investment. Khairual Hossian said that the commission will discuss with the proper authorities for the continuation of existing facilities, the DSE press release said. The commission will also try to remove the obstacles for the investors, he said. 

Says female officials face ‘gender harassment’

A file photo shows a branch of a private commercial bank in Dhaka. Bangladesh Bank on Thursday asked schedule banks not to give extra burden on their staff

Bangladesh Bank on Thursday asked scheduled banks not to impose extra pressure on their officials to collect deposits and not to keep them (officials) in banks’ branches for extra hours after closing the daily work. The central bank found allegations that the female officials of the banks are facing ‘gender harassment’ as management of the banks stuck them (female officials) till 7pm to 8pm after closing the daily work of the branches without any reason, said BB deputy governor SK Sur Chowdhury. The central bank said it would take punitive measures against the banks if they continue to impose extra pressure on their officials to collect deposits and perpetrate gender harassment to their female officials. The directions came from a quarterly bankers meeting between the BB and the banks at the central bank headquarters in the capital. BB governor Atiur Rahman presided over the meeting while managing directors of the banks were present. BB governor at the meeting said that competition among the banks had increased recently as they (banks) were now trying to collect more deposits from the clients by imposing extra-burden on their officials. The central bank asked the banks not to impose any deposit collection target for their probationary officers as such type of target are not in conformity with human banking. The clients are deprived of getting adequate services from the banks as the officers are busy to collect the deposits in a bid to increase the banks’ profit, Atiur said. He asked the banks to recruit more female officials and to appoint women bankers as deputy managing directors. BB deputy governor SK Sur Chowdhury after the meeting told reporters that some banks had recently sacked their officials without issuing any show-cause notice saying that their performance was not satisfactory. The BB asked the banks not to sack massively and to give more chance to improve their performance, he said. Some banks are dilly-dallying to pay the provident and gratuity fund if any official wants to leave the bank, he said. The BB asked the banks to make payment against the provident and gratuity funds in due time, otherwise the central bank would be compelled to take action, he said. The BB asked the banks to reschedule the defaulted loans following the existing circular as they (banks) frequently sought no-objection certificate to do it by giving extra rebate to the defaulters, he said. The banks should follow the existing circular for loan rescheduling as 200 applications, where the clients sought to give lower down payment to the banks, are now pending in the central bank, according to a bankers’ meeting minutes. The BB asked the banks to set a minimum service charge ceiling for issuing their debit card as some banks are imposing excess charges on the products, Sur said. He said the BB had asked the banks to continue their efforts to decrease the rate of interest on lending adding that the rate, however, decreased two per cent in the last two months. The BB asked the banks to increase their loan disbursement to the real-estate sector as the entrepreneurs of the sector alleged that they did not get adequate loans from the banks. The central bank asked the banks to increase the job-age limit of the sons and daughters of the freedom fighters to 32-yea.

Shaikh Md Wahid-uz-Zaman, Chairman of Janata Bank Limited, presides over the 8th Annual General Meeting (AGM) of the bank at the bank’s head office in Dhaka on Thursday.

Janata Bank Limited organised the 8th Annual General Meeting (AGM) of the bank at the bank’s head office in Dhaka on Thursday. Shaikh Md Wahid-uz-Zaman, Chairman of the bank, presided over the meeting, said a press release. Government’s representative Md Fazlul Haque, Additional Secretary, Bank and Financial Institutions Division, Directors of Janata Bank Md. Emdadul Hoque, Nagibul Islam Dipu, Dr. RM Debnath, Syed Bazlul Karim, BPM, Prof. Mohammed Moinuddin, Md Abu Naser, Sangita Ahmed, Dr. Nitai Chandra Nag, AKM Kamrul Islam, FCA, Md Mahabubur Rahman Hiron, chief executive officer and managing director Md Abdus Salam and company secretary Md Mosaddake-Ul-Alam, Deputy Managing Directors and General Managers were present on the occasion. During the AGM, the bank approved the audited financial report of 2014 and appointments of auditors for 2015 including other relevant matters.