RANGPUR: The monthly divisional business assessment and views-sharing meeting for July- 2014 for officials of the principal, regional and corporate branch offices of Sonali Bank Limited (SBL) was held here on Friday.

General Manager of Rangpur General Managers’ Office AFM Ali Asgar presided over the meeting at his conference room in the city.

All regional chiefs, chiefs of all six principal offices, regional offices, corporate branches and senior officials of the SBL from all eight districts in Rangpur division participated.

The meeting assessed business achievements of all regional, corporate, principal offices and branches of the bank during the month of July last and put maximum emphasis on achieving all fixed business indexes during the current fiscal.

Expressing satisfaction on achieving the fixed business targets during the last fiscal, the General Manager asked the field level officials for achieving all set business targets of the bank during the current fiscal year.

He suggested for ensuring full proof security at the strong rooms of all 113 branches in Rangpur division as per directions of the Head Office of the bank and strengthening internal control and compliance in every branch.

The General Manager directed the SBL officials for having adequate knowledge about money laundering, increasing capitals and profits through providing best services, realising classified loans, disbursing loans in the agriculture, SME and other exploring prospective sectors for speeding up poverty alleviation activities.

 EXIM Bank Limited shifted its Sylhet branch to a new location at Mujtaba Tower, Zinda Bazar in Sylhet on Saturday.

Dr. Mohammed Haider Ali Miah, Managing Director of the bank inaugurated the branch as the chief guest. Md. Fariduddin Ahmed, Adviser, M. Sirajul Islam and Md. Sirajul Haq Mia, Deputy Managing Directors as well as senior executives of Exim Bank and local elites were present at the programme.

The central bank’s move for maintaining higher cash reserve requirement (CRR) to absorb access liquidity from the banking system would fail to contain inflationary pressure rather it would adversely hamper private sector investment in the country.

The monetary policy for the first half of current fiscal (2014-15) may fail to achieve the target of taming inflation to 6.5 percent and ensuring the private sector credit growth of 16.5 percent, set for the first half of FY2014-15.

The Unnayan Onnesha (UO), an independent multidisciplinary think-tank, made the observation in its August issue of Bangladesh Economic Update released on Saturday.

The UO made the observation of the Monetary Policy Statement announced for the first half of the current fiscal year by the Bangladesh Bank recently.

“Funds are becoming costly for the private investors resulting in continuation of decline in private investment. On contrary, the government depends more on banks for financing budget deficits and non-development expenditure, which is causing inflationary pressure in the economy,” the UO added.

Besides, debt-instrument-based deficit financing of the budget results in inflation and along with high interest rates on government savings stifle investment demand, which ultimately decelerate the rate of growth in gross domestic product (GDP), cautioned the think tank.

A review of the previous monetary policy statements indicates that the targets set for inflation and private sector credit growth were not achieved. Actual inflation was calculated at 7.35 percent, 7.35 percent and 8.05 percent against the target of below 7 percent, 7 percent and 7.5 percent in second half of FY14, first half of FY14 and second half of FY13 respectively, whereas the actual private sector credit growth was 15.7 percent, 11.1 percent and 11.4 percent against the target of 16.5 percent, 15.5 percent and 18.3 percent, the UO mentioned.

The research organisation evinces that the CRR has been raised by 50 basis points in order to address the increased reverse repo operations with consequent costs to central bank, while the interest rates on national savings certificates and bonds are between 12.6 percent and 13.5 percent causing the sales of national savings certificates and bonds to increase by 4.21 percent in the FY14 over the FY13 and cashing of savings tools to decline by 44.12 percent during the corresponding period.

Meanwhile, the interest rate spreads have on average increased from 4.99 percent in January 2014 to 5.22 percent in May 2014, implying that the deposit rates have fallen faster than the lending rates, says the Unnayan Onnesha.

The formulation of monetary policies in recent periods by the central bank keeping the policy rate higher in order to contain inflationary pressure has not been effective in ensuring sufficient growth in private sector credit causing the private investment to decline from 22.50 percent of GDP in FY2011-12 to 21.75 percent in FY2012-13 and then to 21.39 percent in FY2013-14, shows the research organisation.

The think tank further finds that while the private investment is on declining trend in recent periods, the government has increasingly been borrowing from domestic sources in order to finance budget deficits. In FY2011-12, the government borrowed Tk. 20822.11 crore to finance the budget deficit, while government borrowing amounted to Tk. 24549.10 crore and Tk. 13173.10 crore in FY2012-13 and FY2013-14 (July-February) respectively, stifling the investment demand in the economy.

Besides, poor risk management, fraudulence driven by captured governance in the banking system resulting in lower profit to the stakeholders, adoption of contractionary monetary policy characterised by higher CRR would put the country’s banking sector in traps, says the research organisation.

“The risk of inflationary pressure and insignificant growth of private sector credit from domestic sources can be checked by a farsighted and creative harmonisation of both fiscal and monetary policies since increased private investment and employment creation will ensure the use of money in productive sectors and make money and fiscal multiplier effects work in the economy,” adds the UO.

BASIC Bank has progressively increased its single borrower exposure limit since 2009, which is a gross violation of banking rules, the finance ministry's latest report said.

Bangladesh Bank rules say a bank cannot grant more than 15 percent of its capital to a single borrower, but in 2012 and 2013 the state-run specialised bank's single borrower exposure stood at 22.86 percent and 21.07 percent respectively.

In 2009, its single borrower exposure stood at 15.58 percent, 10.67 percent in 2010 and 15.49 percent in 2011, said the report that looked in-depth at the bank's financial indicators over the past five years.

It found that all of BASIC's financial indicators deteriorated in the last five years due to irregularities.

The report, which was conducted at BB's behest, was handed to the parliamentary standing committee on finance ministry on Wednesday, and a discussion chaired by the committee's chief Abdur Razzak focused on it. Further discussions will be held on the matter at the committee's next meeting, a finance ministry official said.

The bank's return to equity was 18.79 percent in 2009, which dropped to -1.71 percent in June 2014, according to the report.

At the end of June, BASIC's loss against per share stood at Tk 1.77, but in 2009 it was Tk 18.79 in the earning. 

In 2013, the bank suffered a loss of Tk 53 crore for the first time in its history, and in June this year the loss stood at Tk 5.22 crore, the report.

At the end of June, 34 of its 68 branches were loss-making, whereas only three branches suffered losses in 2009.

The report said the amount of default loans at the end of June was 40.38 percent of the total outstanding loans. It was only 4.83 percent in 2009.

At the end of June, it had a capital deficit of Tk 1,675 crore, whereas in 2009 it was Tk 111 crore in the surplus.

 Standard Chartered Bank launched its global FX e-Commerce System S2BX in Bangladesh.

National Credit and Commerce Bank (NCC Bank) was the first bank who availed of this platform at a recent programme at National Credit and Commerce Bank’s Head Office.

The platform that has been introduced by Standard Chartered Bank is applicable only for partner authorised dealer banks.

Golam Hafiz Ahmed, Managing Director and CEO, and Ashim Kumar Saha, Executive Vice President, NCC Bank, Alamgir Morshed, Managing Director and Head of Financial Markets, Standard Chartered, Kazi Ziaul Islam, Director and Head of Banks, Financial Institutions, M Abid Hassan, Director, Financial Markets Sales, Standard Chartered and other senior officials from both the organisations were present on the occasion.

Mangal Chandra Falia, Principal Officer, NCC Bank, Akhtar Hamid Khan, Deputy Managing Director, Junaid Mahtab, Associate Director, Financial Institutions, Kazi Ziaul Islam, Director and Head of Banks, Financial Institutions, Alamgir Morshed, Managing Director and Head of Financial Markets, Standard Chartered Bank, were present at the launching of Standard Chartered’s global FX E-Commerce System S2BX.

News:Daily Sun/7-Age-2014