Aziz Al Kaiser, Director and immediate past Chairman, and Mashrur Arefin, Deputy Managing Director and COO of the City Bank Limited, seen after receiving an award in Singapore recently.

 City Bank received the ‘Best Commercial Bank in Bangladesh-2014’ award.

FinanceAsia, a leading financial publication in the Asia-Pacific region recently conferred the prestigious award to the bank, said a press release.

This is for the second time City Bank has won this prestigious award after becoming the inaugural winner in this category in 2012.

The award was announced at an award giving ceremony in Singapore recently. More than 300 leading bankers from across the Asia Pacific region attended the ceremony. City Bank’s Director and immediate past Chairman Aziz Al Kaiser and Deputy Managing Director and COO Mashrur Arefin received the award on behalf of the bank.

A Dhaka Court yesterday accepted a case filed by Dotcom Sweater Limited seeking compensation of Tk 60.70 crore from Premier Bank Limited authorities. 
The first joint district judge court of Dhaka accepted the case and issued a notice against the Premier Bank to contest the case, Advocate Shah Md Munir Sharif told The Independent yesterday afternoon.  He also said that the court also fixed September 15 for the hearing on the case. Faizul Ahasan, chairman and managing director of the Dotcom Sweater Limited, filed the case on Sunday against Premier Bank claiming TK 60,70,28,118 as compensation.
In his case statement, he alleged that the Premier Bank has deducted huge amount of money from his account and damaged his business. The Dotcom Sweater Limited has been shut down after the Premier Bank has debited the money from the account, the plaintiff alleged.

Profitability of non-bank financial institutions is shrinking though their management strives to extract profits from a dull market this year, industry insiders said.

The situation is getting aggravated further due to early payoffs of loans by relatively good corporate clients.

“Banks, which are facing a dearth of business, are taking away our clients (credit lines). We cannot compete with banks as our cost of fund is higher than that of banks,” said Asad Khan, managing director of Prime Finance.

Khan, also the president of Bangladesh Leasing and Finance Companies' Association, said some of his company's borrowers paid off loans worth around Tk 100 crore so far this year.

Almost all the 31 non-banks, except for a few who were able to collect deposits directly, are facing the same challenge, due to a poor demand for money from businesses.

The dull business and sliding profit of the non-banks were also evident in the latest Bangladesh Bank report released last week.

Their return on assets (ROA) and return on equity (ROE) that give an indication of an institution's profitability fell by 28 percent and nearly 24 percent respectively in two years, according to the BB report.

The ROA was 2.5 percent in 2011, but it came down to 1.9 percent in 2012 and 1.8 percent in 2013.

In other words, a non-bank made a profit of Tk 1.8 for every Tk 100 it invested in its assets in 2013, down from Tk 2.5 two years ago.

The ROE, also known as return on investment, has also been declining since 2011. Their ROE slid to 9.2 percent in 2013 from 12.1 percent in 2011, meaning their net income returned as a percentage of shareholders equity fell by nearly 24 percent in just two years.

Industry players blamed the poor business on the tedious economic conditions that started with the stockmarket debacle in 2010 followed by last year's political crisis.

The investment situation did not improve much even after eight months of the national elections in January, they said.

In addition, nine new banks that started operations last year to take the tally of scheduled banks to 56 have further intensified the competition between banks and non-banks in netting new clients.

Stringent rules introduced by the regulator are also taking a toll on the business of the non-banks, officials said.

“We are struggling to survive. Our margin has gone down significantly and we are being forced to cut jobs,” said Asaduzzaman Khan, managing director of IIDFC.

Some clients, especially the good ones, are paying their loans off, he said. “We are trying to retain the customers by offering lower rates of interest.”

 IFIC Bank Limited signed a participation agreement with the Bangladesh Bank under the central bank’s refinance scheme for jute sector.

Shah A Sarwar, Managing Director and CEO of the bank, and Provash Chandro Mallik, General Manager (ACFID) of Bangladesh Bank, signed the deal on behalf of their respective organisations in Dhaka recently, said a press release.

Deputy Governor of Bangladesh Bank SK Sur Chowdhury and concerned officials of the organisations, among others, were present on the occasion.

The repayment rate under the “Ghore Phera” programme for slum dwellers has been very high, a development which prompted the central bank yesterday to put another Tk 2 crore into the scheme.

Introduced in 1999 by the Krishi Bank with the aim to rehabilitate slum dwellers back to their native villages, the programme has so far seen recovery rates of 87 percent, according to Md Abdus Salam, the bank's managing director.

The loan carries a 6 percent simple interest payable in 10 years in 120 instalments.

So far, 970 individuals have been rehabilitated in their own villages, he said, adding that 30 percent of them later returned to cities in search of employment.

At an agreement-signing programme yesterday at the Bangladesh Bank headquarters, Atiur Rahman, governor of the central bank, said more funds would be made available for the scheme.

Thanks to the fund injection, the guideline of the loan programme has been changed and the ceiling upped, Salam said. Earlier, a person could take a maximum loan of Tk 50,000 but now the ceiling will be raised to Tk 1 lakh.

Other ceilings too have been increased. For example, for house building a person can now take out a maximum loan of Tk 50,000 loan instead of Tk 7,000 as before.