Southeast Bank Limited launched its Mobile Financial Services, named 'TeleCash' at the board room of the Bank at Banani in the city Thursday. Chairman of the bank Mr. Alamgir Kabir FCA accompanied by others Directors of the Bank inaugurated the new service. Advisor, Managing Director, Additional Managing Director, Deputy Managing Directors of the bank were also present at the launching ceremony. According to the guidelines of Bangladesh Bank, 'TeleCash' Mobile Financial Services (MFS) is committed to providing secured and fast mobile banking facilities to the customers.

Through 'TeleCash' MFS customers will be able to enjoy facilities like cash-in, cash-out, fund transfer, utility bill payment, salary and remittance disbursement and mobile top-up service etc. 'TeleCash' MFS is committed to adding new services in Mobile Banking Service for its customers for making their life easier and simpler.

Bangladesh Bank (BB) will continue its support to the country’s stock market, Governor Dr Atiur Rahman said on Thursday while unveiling the monetary policy statement (MPS) for the second half of the current 2014-15 financial year (FY15).
He said BB attached special importance to deeper cooperation with Bangladesh Securities Exchange Commission (BSEC) and took special initiative to provide a refinance line to the Investment Corporation of Bangladesh (ICB) as a support for improving capital market, which helped stabilize the market, reports BSS.
“Such initiatives regarding financial stability and capital market development will be continued and strengthened”, the governor said.
He said the first half of the FY15, BB introduced a number of new investor friendly regulatory reforms facilitating external transactions of foreign and local businesses including investors in the capital market. 

Bangladesh Bank plans to frame a policy to provide incentives to good borrowers, as there has been an allegation that the central bank stands by only defaulters.

"I have instructed the concerned department to prepare a rebate policy to provide facilities and incentives to borrowers who have repaid their loans in time," Bangladesh Bank Governor Atiur Rahman said yesterday.

The response from the regulator came at the launch of the Monetary Policy Statement for the second half of the current fiscal year after the BB formulated a large loan restructuring policy for bad borrowers.

Defending the policy for the large but bad borrowers, he said, "We have formulated it for the sake of the economy and job creation."

"If we don't address the issue, banks will not be benefitted. But if we can introduce it, banks will get more money. Which one is better?" he said.

The central bank has formulated the large loan restructuring policy after studying the experience of countries such as India, Sri Lanka and Malaysia, Rahman said.

Bangladesh Bank got mixed results while analysing the impact of pay scales on inflation, according to the new monetary policy statement released yesterday.

“Our analysis did not indicate any clear or near one-to-one relationship (between pay scale and inflation),” the BB said in its policy stance for January-June of 2015.

The central bank has analysed the causative factors of inflation around different pay hikes since 1982 after the proposed eighth pay scales triggered controversy centring its possible effects on inflation.

Some economists and policymakers argue that it will create inflationary pressures on consumers while another section says it will not.

The BB analysis found that inflation rates after the third (in 1985) and fourth (in 1991) pay scales showed downward trends though it was rising before the announcement.

The fifth (in 1997), sixth (in 2005), and seventh (in 2009) pay scales, on the other hand, were followed by rising inflation rates.

“Despite the rising trends in inflation rates after three pay scales, it would be unwise to conclude that the eighth pay scale would also follow suit,” the BB said.

The central bank found that higher inflation rates were caused by a variety of factors during the different pay scale periods. The major factors reported were higher prices of oil and food items in international markets, distortions in supply side factors, natural calamities and disasters, political instability, and disruption in domestic and global food production.

Other factors included the effect of private credit expansion, high government borrowing, sharp depreciation of the taka, disruption in industrial production, food supply shortage, and pay hikes.

It is difficult to clearly attribute the factors that led to higher inflation, except for a few well-documented factors such as oil price hike, high food prices in the international market, supply shortage, and political instability.

"A strong relationship between the announcement of the pay scales and inflation cannot be established," the BB said.

Last month, the Pay and Services Commission proposed a new salary structure -- a hike of up to 100 percent -- for government employees.

Inflation extended its declining trend in December, coming down to 6.11 percent -- the lowest in 25 months -- mainly due to falling commodity prices in the global markets. The overall inflation rate, which has been on the decline in the last several months, was 6.21 percent in November. In October 2012, inflation was 5.86 percent.

Governor Atiur Rahman announces conservative monetary policy for second half of fiscal year

The central bank will continue to follow its restrained monetary policy in the second half of the fiscal year in a bid to contain inflation and move to a higher growth path amid the prevailing political unrest.

Bangladesh Bank cited three reasons: the annual average CPI inflation is still above the targeted ceiling, core inflation continues to be trending upward and the political unrest is not subsiding even after 25 days.

“The cautiously restrained monetary policy stance of the first half will be continued in the second half, without any new loosening or tightening,” Bangladesh Bank Governor Atiur Rahman said while announcing the Monetary Policy Statement yesterday.

In the second half, a monetary growth path that would bring down the average annual inflation to 6.5 percent while ensuring sufficient credit growth to stimulate inclusive economic growth will be pursued.

The BB expects economic growth in fiscal 2014-15 to be a “respectable” 6.5-6.8 percent, which is below the government's target of 7.3 percent but in line with the development partners' forecasts.

Accordingly, the ceiling for private sector credit growth has been kept at 15.5 percent, which is sufficient to accommodate any substantial rise in investment and trade finance over the next six months, it said.

The business community views the existing average lending rate of 12.5 percent to be high enough to dampen investment, so the central bank will also endeavour to bring down the cost of funding by narrowing the existing spread of 5.2 percent.

It has also urged the commercial banks to devise ways to reduce the lending rates, which did not come down in line with the inflation trend over the last three years.

Inflation dropped almost 5 percentage points since the end of 2011 but the average lending rate fell only 1 percentage point in that time, empowering banks to earn high real rates of interest and making investment costlier than before.

Subsequently, the BB has left the repurchase rate unchanged at 7.25 percent and the reverse repo rate at 5.25 percent.

The regulator pledged to shore up banking governance to clamp down on loan delinquencies. While the cases of credit-worthy borrowers will be reviewed, habitual defaulters will face lawful consequences, it said.

The central bank will also look to further consolidate the country's external sector stability. It will continue to support a market-based exchange rate while seeking to avoid excessive swings.

The central bank will continue to maintain a comfortable amount of foreign currency reserves to cover imports of five to ten months.

This safety net is required to avoid any sudden collapse in the value of taka and to ensure a healthy growth of imports of productive inputs, the BB said, adding that it anticipates a further build-up in foreign exchange reserves in the second half.

The pace though would be more moderate than in fiscal 2013-14, as its projection suggests there will be a correction in export growth.

In the best-case scenario, the overall export growth in fiscal 2014-15 will be 8 percent, import growth 15 percent and remittance growth 12 percent, to yield a “reasonable” balance of payments surplus of $642 million.

The BB said Bangladesh evidenced the highest amount of stability in inflation and economic growth in the South Asian region over the last 20 years.

During the period, Bangla-desh's growth performance was the second best (5.73 percent) after India (6.77 percent) in the region and its inflation was the lowest (6.45 percent).