Bangladesh Bank yesterday asked banks to comply with the revenue authority's rule to pay 10 percent source tax on their commission earnings from sales of government issued-prize bonds and savings certificates.
The National Board of Revenue said the selling of prize bonds and savings certificates is a service and 10 percent source tax is payable on commission earnings from the service as per income tax law.
The provision of source tax on commission earnings from such service was payable since July 2011, according to the NBR.
The central bank, citing the NBR letter issued in March, asked banks to ensure deduction of 10 percent tax at source on the commission earnings from sales of savings certificates and prize bonds at all their branches.

Most listed banks saw an upward trend in net profits during January-March, as economic indicators improved on the back of a relatively stable political situation following the national polls.
Of the 30 banks in the stockmarket, the net profits of 25 banks rose in the first quarter, compared to the same period last year.
Two banks suffered a net loss, while two others posted a fall in their net profits between January and March, according to the banks' first quarterly disclosures made public recently.
Last year was a tough year for banks as business was ravaged by political unrest in the run-up to the January 5 polls. Since then, the political situation was moving towards stability.
Political calm also helped private sector credit growth, imports, remittance and exports improve in the first quarter.

Private sector credit growth at the end of March was 11.46 percent, compared to the same period last year, while overall import growth was 54.47 percent, remittance 3.58 percent and exports 4.79 percent, according to central bank data.
In addition, the central bank's move to relax the loan provisioning rules at the end of last year helped banks generate more income, a banker said.
A provision, essentially, is an expense for banks to account for future losses on loan defaults. Bangladesh Bank had asked lenders to reconsider loan rescheduling and down payments until June on a case-by-case basis for borrowers in all sectors affected by political instability.
With the BB move, banks saw a big jump in their earnings in the fourth quarter of last year and first quarter of this year compared to the previous three quarters.
“All economic indicators are moving in a positive direction,” said Muhammed Ali, managing director of United Commercial Bank.“The business community has regained confidence.”
Banking shares were unable to draw investors' attention in the past few months, as corporate declarations from the sector failed to cheer retail investors.
Banking shares declined yesterday. Concern over reducing banks' exposure in the capital market, following the central bank's pressure, pulled the banking shares down, LankaBangla Securities said in its analysis.

Bangladesh Bank has included 26 new products under its revolving refinance scheme for solar energy, biogas and effluent treatment plants to give loans at low interest.
The banking regulator incorporated renewable energy, energy-efficient technology, waste management, alternative energy and non-fire block brick in the scheme.  
The loan limit for the products range from Tk 1.5 lakh to Tk 30 crore, the central bank said in a notice yesterday.
The inclusion of the new products came as part of the BB's efforts to expand renewable energy and environment-friendly technology.
Currently, 18 products are getting the low-cost loans under the scheme.  
Large solar photovoltaic plants and wind energy projects will get loans at single digit interest, according to the notice.
Assemblers of LED lights and auto-sensor power switches can borrow up to Tk 3 crore and Tk 2 crore respectively at 9 percent interest.
Manufacturers of compressed block-bricks and concrete block-bricks will be able to borrow up to Tk 4 crore and Tk 10 crore.  
The central bank set up a Tk 200 crore revolving fund in 2009 for banks and financial institutions to give loans at low interest in solar energy, biogas and effluent treatment sectors.
The central bank provides funds to banks and financial institutions at 5 percent interest, so they can provide loans on soft terms.
Banks will keep the interest rate below 10 percent for loans to customers.

AAM Zakaria, Managing Director of First Security Islami Bank Limited, is seen along with participants of a foundation course at the bank’s training institute in Dhaka on Monday.First Security Islami Bank Limited (FSIBL) organised the 23rd foundation course for its newly-recruited trainee assistant officers at the bank’s training institute in Dhaka on Monday.

AAM Zakaria, Managing Director of the bank, inaugurated the course, said a press release.

M Fakhrul Alam, Managing Director of ONE Bank Limited, and Anwar-ul-Alam Chowdhury, Managing Director of Argon Spinning Limited, exchange documents on syndicated loan at a function in Dhaka recently.

ONE Bank Limited will arrange syndicated loan worth Tk 2110 million for financing Argon Spinning Limited for setting up a specialised spinning mill.

M. Fakhrul Alam, Managing Director of ONE Bank Limited and Anwar-ul-Alam Chowdhury, Managing Director of Argon Spinning Limited exchanged documents on syndicated loan under lead arrangement of ONE Bank.

Other senior officials of both the organisations were present at the ceremony held in the city recently. ONE Bank, one of the leading commercial banks of the country, is equipped with an experienced syndication unit and has so far led a number of syndicated finance for country’s leading groups like BSRM, MI Cement, PRAN, Sinha, Sunman, Aman, Alltex and Northeast Medical, a press release said.

Evince Group, one of the fastest growing business conglomerates of the country having concentration in textile and clothing, has undertaken an initiative to set up a specialised spinning mill in Hobigonj, namely Argon Spinning Limited to meet its captive yarn requirement.

In this connection, the company has mandated ONE Bank to act as lead arranger, facility agent and security agent of the proposed syndicated finance of Tk 2110 million for the project. The project is expected to come into commercial operation by September 2015.