Higher sales of savings tools and slower ADP implementation help cut it

The government borrowing from the banking system turned negative in net terms during the just concluded fiscal year (FY17) as the repayments of loans were more than what it borrowed.

Higher sales of savings instruments and slow implementation of development projects had helped the government refrain from borrowing much from the banks, according to officials.

The government paid back Tk 180.29 billion to the banks in the FY 2016-17 as against its borrowing of Tk 48.07 billion in the FY 2015-16, according to provisional data of Bangladesh Bank obtained by the FE Tuesday.

The government's borrowing from the banking system stood at Tk 906.60 billion at the end of June 30 this year, declining from Tk 1,086.89 billion on the same day of the previous year, showing a negative balance in net terms.   

Initially, the government's bank borrowing target was set at Tk 389.38 billion for the FY 17, but was later revised down to Tk 239.03 billion.

The government's borrowing was, however, higher in the last month of FY 17 partly due to financing the budget deficit, a senior official familiar with the government debt-management told the FE Tuesday.

In June last, the government's net bank borrowing stood at around Tk 170 billion, he said.

Implementation of the development projects normally becomes faster during the last month of each fiscal year, he explained.

The government ministries and agencies spent Tk 1.06 trillion out of total Annual Development Programme (ADP) of Tk 1.19 trillion worth of outlay in the FY 17, according to the official figures.

On the other hand, net sales of national savings certificates jumped by more than 39 per cent to Tk 469.69 billion during the July-May period of the FY17 from Tk 336.89 billion in the same period of FY16.

A senior official of the BB said the government has already availed of ways and means advances (WMAs) partly to finance the budget deficit.

The government is now empowered to borrow up to Tk 40 billion from the central bank under the WMAs to meet its day-to-day expenditures without issuing any securities.

The Ministry of Finance had set a bank-borrowing target of Tk 282.03 billion for the FY18 to finance the budget deficit.  

Under the proposed arrangement, Tk 208.87 billion will be borrowed from the banking system by issuing long-term Bangladesh Government Treasury Bonds (BGTBs) while the remaining Tk 73.16 billion through auctions of short-term treasury bills (T-bills).

Currently, three treasury bills (T-bills) are being transacted through auctions to adjust the government borrowings from the banking system. The T-bills have 91-day, 182-day and 364-day maturity periods.

Furthermore, five government bonds with tenures of 02, 05, 10, 15 and 20 years are traded on the market.

The amount of money deposed in the Swiss banks by Bangladeshi citizens has not increased. Rather it saw a drop last year'

Bangladesh Bank has advised all scheduled banks to distribute relief and financial assistance among the flood-affected people in the country, especially those in the northern areas, under their corporate social responsibility activities.

The banks were asked to show such expenditure as spending in social projects or community investment sector, the central bank said in a statement yesterday.

Some 6.5 lakh people of 54 upazilas in 13 districts have been affected by floods triggered by torrential rains and the release of upstream water, according to the disaster management and relief ministry.

The ministry warned floods could affect five more districts Munshiganj, Manikganj, Chandpur, Shariatpur and Bhola.

Between July 3 and July 11, some 4,000 tonnes of rice, Tk 1.9 crore in cash and 18,000 packets of dry food were distributed among the flood victims, said the ministry.

ZURICH: Deutsche Bank AG is targeting the Middle East as a priority region in wealth management as the bank seeks to recoup assets that were lost late last year when concerns about its capital levels prompted some clients to leave.

The Frankfurt-based lender is seeking to hire relationship managers and expand the products it offers wealthy clients in the region to attract new money, Peter Hinder, head of wealth management in the EMEA region and the bank's Switzerland head, said in an interview in Zurich, reports The Business Times.

He plans to hire about 20 private bankers for his region, declining to give a more precise geographical breakdown for the Middle East.

"We have a clear growth agenda for EMEA and Middle East is our number one priority," he said.

"There will be more capital flowing into the region as Saudi Arabia is opening up," Mr Hinder said, adding that the economic reforms being undertaken by the country present "incredible potential" for the bank.

The wealth management unit's invested assets plunged 26 per cent in the fourth quarter to 216 billion euros (S$341.36 billion) as clients withdrew funds during a period in which investors questioned the bank's ability to withstand billions of dollars in fines.

Net asset flow at the unit turned positive in the first quarter and the bank has said it plans to hire about 100 private bankers over the next 18 months across Asia, Europe and the US Hinder oversees 56 billion euros in his unit.

While Deutsche Bank's recent strategy revamp emphasised corporate banking, the lender is also following rivals in seeking to reap the rewards from steadier wealth management which can also be used to offer investment-banking services to the rich.