Sohail RK Hussain, managing director of City Bank, presents a dummy cheque as part of a CSR programme to Hasibur Rahman, executive director of MRDI, and Mobinul Islam Mobin, editor of The Gramer Kagoj, at a programme recently. Rokia Afzal Rahman, former caretaker government adviser, and Meher Afroz Chumki, state minister for women and children affairs, were also present.

Businesses can complement government efforts to empower women and ensure welfare of children as part of corporate social responsibility by helping vulnerable women become self reliant, said Meher Afroz Chumki, state minister for women and children affairs.

Chumki spoke at a function to mark the signing of the second phase of an agreement between City Bank, MRDI and Gramer Kagoj, at the head office of the bank in the capital. The bank also handed over a cheque for over Tk 67 lakh for the initiative, MRDI said in a statement yesterday.

Under the second phase of the initiative, another 160 women of the village will be trained and the educational expenses of 105 children of the members of the association will be borne in the next five years. The bank's total financial commitment to the programme is about Tk 1 crore and 25 lakh in two phases, according to the statement.

The first phase of the programme resulted in a successful women's livelihood programme at Basatpur, Jessore as a CSR intervention initiated by the Management and Resources Development Initiative with support of the City Bank.

Providing support to children's education is a positive step to ensure future impact of the initiative, Rokia Afzal Rahman, former adviser to a caretaker government, said at the programme.

The government is providing 10 percent tax rebate on CSR expenditure, said Mir Mustaque Ali, member (information management and service) of the National Board of Revenue. Such successful initiatives will open the possibilities of ensuring more policy incentives for CSR, he said.

Women trained under the first phase of the initiative are now applying their skills to earn money and support their families, MRDI said.

They have learnt to stitch and sew as well as developed capacity to run business through their registered association, according to the statement.

Their products are being retailed through Gaon Swapna, a marketing outlet of their own.

The Basatpur centre is a good example of a successful CSR initiative that could be replicated elsewhere, said Sohail RK Hussain, managing director of City Bank.

To ensure total welfare of the families, educational support is being provided to the children of the members of the association, Hussain said.

MRDI's advocacy for promoting CSR as a sustainable alternative source of development has demonstrated a sustainable impact through the success of this centre, Hasibur Rahman, MRDI's executive director, said at the programme.

From left, Debapriya Bhattacharya, distinguished fellow of Centre for Policy Dialogue; Towfiqul Islam Khan, research fellow; and Mustafizur Rahman, executive director, attend a media briefing on the think tank's recommendations for the upcoming budget, held at Brac Centre Inn in Dhaka yesterday.

The Centre for Policy Dialogue is not in favour of the government's move to seek budgetary support from the World Bank, as the amount is not significant and it would come with a host of conditions which would undermine the policy-making independence.

The need for budgetary support from the World Bank remains unclear, as the past two national budgets did not face any major resource constraints, the think-tank said, adding that the amount that is being sought, $500 million, is not significant.

CPD made the observation at an event in Dhaka to unveil its expectations from the upcoming budget, due in June.  

At present, negotiations are on the way between the government and the World Bank to receive Development Support Credit (DSC).

In order to receive the credit, the government has already agreed to undertake a set of policy reforms, said Finance Minister AMA Muhith in the last week of February.

The policy reforms would encompass nine areas including public fund management, banking, energy, transport, ICT, public-private partnership and migrant workers; and they would be implemented in three fiscal years, starting in 2015-16.

“The CPD has always maintained that reforms, whilst much-needed, must be domestically-owned and nationally-designed.”

If there is any shortfall in resources, funds may be mobilised from development partners including the WB, according to the CPD.

“Regrettably, both in case of International Monetary Fund-support and WB DSC, reform agendas are being imposed as conditionalities for receiving funds,” CPD said.

This undermines both the national cause of policy making independence and also the prospects of implementation of these reforms, said the CPD.

Most of the reforms identified by the government and the WB are related to adoption of new laws, rules and action plans, and timely implementation of various projects related to infrastructure and ICT and other sectors.

While both sides have common positions with regards to a number of areas including PPP, setting up of special economic zones and infrastructure projects, there are differences in opinion over time-bound action plan to strengthen the financial sector and undertaking energy sector reforms.

As part of the reforms, the WB is also interested in including other tax-related issues including customs act and direct tax.

The multilateral lender is at one with the IMF over the introduction of a unified VAT rate instead of the existing multiple rates and automatic adjustment of energy price with international market. The research organisation said if the government and the WB reach an agreement in the coming months, the next budget will need to address a long list of reform-related issues.

The issues which are included in the first year's proposed activity list include formulation of an apex body to coordinate activities of different government agencies functioning in Dhaka city, prepare urban transport policy, finalise an action plan to integrate with regional and global markets.

A time-bound action plan will have to be drafted in to strengthen state banks along with preparation of a public fund management strategy and a formula for revenue sharing with local government.

It also has to update the telecom policy, design a strategy for increasing efficiency of existing thermal plants, revise the energy policy and prepare a strategy for reducing the cost of remitting funds from abroad.

“This is a long list and the needed activities will need to be reflected in fiscal 2015-15 budget if the support is approved in the coming months. The government will need to carefully examine the proposals before these are finalised,” said the CPD.

Meanwhile, the think-tank is of the belief that the budgetary and fiscal measures for the next fiscal year should take into cognisance the global economic outlook for the near-term future.

The potential channels of transmission of the implications of the emerging scenario will need to be considered in designing the budget.

It said developments in the global markets have important consequences for the Bangladesh economy when the budget is being prepared. Thus, care must be taken to mitigate the effects of the shocks arising from the fluctuations.  It said lower international oil and commodity prices will provide additional policy spaces.

The CPD said Bangladesh, a net importer of crude oil, stands to make formidable gains from low oil prices, as the plunge in the petroleum prices is providing opportunities to oil-importing countries to reduce subsidies associated with its import.

For Bangladesh, it is important that subsidies are diverted to Bangladesh Power Development Board in fiscal 2015-16, keeping the electricity prices unchanged, it said.

The government also needs to make the best use of the opportunity and complete the annual development projects related to electricity-production within the planned deadline to cut over-reliance on the high-cost liquid to generate power, said the CPD. In general, the lower commodity prices should result in lower inflationary pressure in the domestic market.

“Hence, the government will have some policy space for using expansionary fiscal and monetary policy instruments, which can then be used to catalyse private investment and promote economic growth.”

The think-tank said the upcoming budget should proactively pursue ways to generate new jobs in the domestic market by promoting private investment as overseas employment may remain subdued in the near future.

It called for prudent exchange rate management next fiscal year, as the current trend in the international currency market can reverse in the coming months.

The budget should also make allocations to promote trade facilitation measures in line with the Bali package of the World Trade Organisation.

It also said garment exports to the US are struggling, while shipment to the EU market is facing greater competition. The upcoming budget needs to consider these trends while coming up with fiscal proposals including incentives.

SM Abdul Hamid, Deputy Managing Director and CFO of IFIC Bank, and M Shamsur Rahman, Chief Executive Officer, Independent Television Ltd and also Editor of The Independent, exchange documents after signing an agreement at Independent Television�s office at Tejgaon in Dhaka recently.

IFIC Bank Limited and Independent Television Limited (ITV) signed an agreement for disbursing the company's district correspondents salary through IFIC Mobile Bank. SM Abdul Hamid, Deputy Managing Director and CFO of IFIC Bank, and M Shamsur Rahman, Chief Executive Officer, Independent Television Ltd and Editor, The Independent, signed an agreement on behalf of the respective organisations at Independent Television's office at Tejgaon in Dhaka recently, said a press release.

DHAKA : The central bank is likely to support a move to keep e-commerce transactions out of the purview of value added tax (VAT) for three to five years to encourage the country’s nascent digital economy, reports UNB.
An indication to this effect was made by the Bangladesh Bank governor Dr. Atiur Rahman on Sunday while he was addressing a function at Bangabandhu International Conference Centre in the city. The Bangladesh Association for Software and Information Services (Basis) and some online business firms engaged in e-commerce jointly organized the function on the occasion of launching their new alliance under the banner of Basis-e-Commerce Alliance. Dr. Atiur mentioned that Basis has been demanding the transactions under e-commerce be exempted from VAT for the next 3-5 years. “If it is allowed, it will help spread trading through e-Commerce. I think it’s possible for the government,” he said. The function was also addressed by FBCCI president Kazi Akram Uddun Ahmed and Basis president Shamim Ahsan and its vice president Russel K Ahmed.
The governor said many entrepreneurs have been showing their interest in e-commerce or online business. In recent times, online shopping or e-commerce trading have been gaining in popularity day-by-day. The buyers and sellers are choosing their products and making their transactions through credit or debit cards. This has brought about immense opportunities to enter into the global market for local firms.
“So it’s impossible to undermine the importance of the e-commerce for a country with a growing economy like Bangladesh,” the governor observed, adding that such online businesses have reduced the hazards of unnecessary movement.
He said that currently about Tk 200 crore is being transacted through e-commerce or online transactions annually. Bangladesh Bank has taken various measures to ensure their authenticity and security through introducing different systems and also giving appropriate instructions to banks. He observed that some 50 online or e-Commerce service portals are actively offering their services while about a hundred fashion houses are selling their products. More than 500 Facebook pages are engaged to promote the online products sale. It is mainly the young generation who are engaged in such businesses.

Bangladesh Bank on Sunday warned six new banks due to their aggressive banking as advance-deposit ratio of some banks increased abnormally in the recent months. The BB asked the banks not to go for aggressive banking as some new banks are not maintaining adequate mortgage against their disbursed loans which may put an adverse impact on their financial health. The directives came from a meeting between the BB and the six new banks at the central bank headquarters in the capital. Central bank governor Atiur Rahman presided over the meeting while managing directors of the six banks were present. The six banks are: The Farmers Bank, Midland Bank, Modhumoti Bank, South Bangla Agriculture and Commerce Bank, Meghna Bank and Union Bank. The central bank at the meeting expressed concern over the aggressive lending by the new banks in the recent months despite a dull business scenario caused by political unrest, a BB official told New Age on Sunday. He said the advance-deposit ratio of the new banks was yet to cross the lime, but it might cross shortly if they did not take cautionary measures in this regard. The BB data showed that as of February 26, 2015, the ADR stood at 74.50 per cent in South Bangla Agriculture and Commerce Bank, 78.88 per cent in Meghna Bank, 83.67 per cent in, 84.13 per cent in The Farmers Bank, 78.84 per cent in Union Bank and 53.96 per cent in Modhumoti Bank. As per the BB rules, the conventional banks are allowed to disburse maximum 85 per cent loan against their deposit position while the ratio for the Islamic banks are 90 per cent. The BB warned the banks as most of them are close to the highest level ADR ratio, the central bank official said. The central bank has asked the banks not to plunge under capital shortfall as aggressive banking fuels up the risk to face defaulted loans, the BB official said. The BB criticised the new banks due to their excessive expenses for their interior decorations asking them to avoid unnecessary expenditures. Some of the new banks have already set up huge number of branches although they failed to expand their expected business, the official said. Some banks did not follow the recruitment policy in line with the central bank’s directives which put a negative impact on their good governance, he said. The BB asked the banks to prepare recruitment policy before initiating fresh recruitment. Meghna Bank managing director Nurul Amin told reporters after the meeting that the central bank asked the new banks not to go for aggressive banking in a bid to maintain a sound banking operation. The BB has asked the banks to maintain their financial indicators accurately, he said. Amin said, ‘The BB may arrange one-to-one meeting with the banks which fail to maintain their indicators.’ The central bank issued licences to nine banks including three NRB banks in 2012 despite facing huge criticisms from different corners, he said. A good number of ruling party-backed politicians and businesspeople got the licences to operate the banking business, said the BB official. Experts and economists had expressed their concern at that time over the issuing fresh licences to the new banks as they thought that the initiative would create major indiscipline in the financial sector.