DHAKA-Bangladesh Bank (BB) Governor Dr Atiur Rahman has remembered the memories of those workers and rescuers who lost their lives in Rana Plaza collapse and prayed for peace of their soulsm, reports AP.
“Let’s all of us work together to avoid such a tragedy,” the governor said in a statement today on the first anniversary of Rana Plaza tragedy.
“Bangladesh Bank expects banks and all other financial institutions and the affluent of the country to extend their helping hands in national crises and the civil society to create awareness among the mass people to avoid such untold miseries of Rana Plaza victims,” he added.
The statement said the governor has always emphasized deepening and broadening of social responsibility in corporate ethos and objectives of the scheduled banks and non bank financial institutions of the country visioning a humane central bank.
The financial sector was sufficiently enthused with this motivation and came forward to standby the victims of the Rana Plaza tragedy.
One year ago, on this day of April 24, “The Rana Plaza” housing five apparel factories on the outskirts of Dhaka collapsed, killing around 1,130 people mostly women, it said, adding that the RMG sector which is the lifeline of Bangladesh economy was badly affected by this and suffered a huge reputational loss.
The governor asked all financial institutions to play a due role in any crisis period and his call led to a donation of nearly Tk 90 crore possible on behalf of the banks to the Prime Minister’s Relief and Welfare Fund for the victims.
The donation comprised Tk 80 crore from Bangladesh Association of Banks (BAB), Tk 4 crore from Association of Bankers Bangladesh (ABB), Tk 3 crore from 28 non-bank financial institutions (NBFIs), Tk 31 lakh from 1 day salary of officials of NBFIs and nearly Tk. 30 lakh from one day salary of officials of Bangladesh Bank.
In addition, bankers working in Savar area and BB medical officials rushed to the spot with medical aids.
On November 9, 2013, BB honored 135 rescuers of Rana Plaza victims for their heroic contribution to the rescue of 2438 workers from the debris with certificates, prize bonds of Tk 5000 to each rescuer. The governor also asked managing directors of commercial banks to create jobs for rescuers based on their merit.
The central bank has asked all banks to open accounts for apparel workers with an initial balance of Tk 100 and all commercial banks to spend 5 percent of their operating profit on corporate social responsibility to help develop the apparel sector.
Moreover, BB itself has created a fund of Tk 100 crore with the assistance of Japan International Cooperation Agency (JICA) to improve safety standards in the sector to help factory owners receive loan from commercial banks at a maximum of 10 percent interest for rebuilding and relocating factories and equipment purchase.
In addition, BB has provided Tk 10 million from its own CSR fund to Fire Services and Civil Defense to enhance its capacity to conduct such rescue operations.

United News of Bangladesh . Dhaka

Bangladesh Bank governor Atiur Rahman on Saturday said the ceiling on tax exemption for corporate social responsibility activities by banks and financial institutions should be raised.
‘For enjoying the income tax rebate, I think, the minimum limit for expenditure on CSR by banks or financial institutions should be more than the existing ceiling of Tk 8 crore,’ he said while addressing a roundtable discussion.
According to the income tax regulation on CSR, the banking sector enjoys a 10-per cent exemption of income tax against the money spent by them on CSR activities.
The roundtable discussion on policy support to CSR was jointly organised by the Management and Research Development Institute and the BB at the Bangladesh Institute of Bank Management auditorium at Mirpur in the city.
Atiur said the central bank was formulating a detailed CSR policy and hoped that the National Board of Revenue would accept it.
Stressing that a huge number of skilled manpower will be needed in the future, he called on the banks and financial institutions to focus more on skills building under their CSR activities.
In his keynote paper, central bank deputy governor SK Sur Chowdhury said the tax legislation on CSR should be formulated in such a manner so that the flow of government revenue is not hampered, and at the same time, contribution of banks and financial institutions towards sustainable development is not hindered.
‘The rate of tax exemption on CSR activities needs to be reviewed, too. It would be more logical to devise a progressive tax exemption structure that encourages increased involvement in CSR activities by the banks and FIs (financial institutions),’ he added.
He also said that terms and procedure of seeking tax rebate for CSR activities should be simplified so that banks and FIs can avail of the facilities.
NBR member Sayed Md Aminul Karim, said, ‘I personally think that the ceiling for tax exemption on CSR should be increased.’
The roundtable was moderated by Financial Express editor Moazzem Hossain.

KAM Majedur Rahman, managing director and chief executive officer of Premier Bank, in a recent interview with New Age has talked about the current situation of the country’s bank sector. Interviewed by AKM Zamir Uddin

New Age: What is the present situation of the country’s bank sector?
KAM Majedur Rahman: The country’s bank sector is still going through a tough time as businesspeople are yet to change their approach to business expansion. They had adopted a wait-and-see policy to business expansion during the political unrest in the run up to the January 5 national polls and they still maintain the attitude. The advance-deposit ratio, which is one of the key indicators of profitability for banks, has been declining over the year. Loan disbursement by banks to the small and medium enterprises has recently decreased, creating an alarming situation. Against the backdrop, the private sector credit growth has failed to avoid a plunge after the general elections.
Moreover, private sector foreign loans approved by the government have also put an adverse impact on the bank sector as such type of loans pushed up surplus liquidity in banks.
The authorities concerned should seek alternative way to avoid foreign loans.
NA: What are the main reasons for the increase in financial scams in the bank sector in recent times?
Majedur: Financial scams in the bank sector have recently increased due to lack of good governance in the sector. The boards of directors of banks have recently increased their interference in the daily activities of their management committees. The practice is harmful to good governance. Under such practice, management will not be able to stay away from corruption. Corruption in the bank sector will decrease if banks’ boards do not make unwanted interference in the management’s decisions in sanctioning and disbursing loans. Besides, banks are still facing crisis of mutual understanding among them due to the Hallmark Group and Bismillah Group scams.
NA: What is the cause of the high rate of interest in the bank sector?
Majedur: Banks’ interest rate on lending has already dropped between one per cent and two per cent, but the deposit rate is yet to decrease due to the high rate of interest on the government’s savings certificates and bonds. Moreover, a high inflation pushed up the interest rate as banks have to give their depositors two per cent to three per cent interest more than the existing inflation rate. For this reason, the interest spread rate between lending and deposit has not decreased expectedly.
NA: Will BASEL III create any tough situation for banks in raising their capital basement?
Majedur: The majority of them will face pressure in raising their capital basement initially in accordance with the BASEL III recommendations as they will have to maintain 2 per cent buffer capital along with 10 per cent minimum capital against their risk-weighted assets. Besides, banks will have to maintain adequate capital to fulfil the pillar II in line with the BASEL compliances. Under the circumstances, banks should expedite their business in a bid to fulfil their new capital basement. The country’s banking sector will be able to keep the required capital if the ADR in banks increase in the coming days.
NA: What is your opinion about the recent trend in the country’s macro-economic situation?
Majedur: The country’s trade deficit narrowed in the last few months and it enjoyed a surplus current account balance in the period due to higher export earnings against lower import payment. The trade deficit declined in the last few months as the import of capital machinery and industrial raw materials dropped significantly due to the political unrest. For this reason, the country has failed to get anything to be complacent from the narrowed trade gap. More time will be needed for the country’s macro-economic situation to rebound as a huge number of foreign buyers have pulled out their business from the country. However, I hope that the country’s economy will start to get its pace at the beginning of the next fiscal year.
NA: What is the focus of Premier Bank in expanding its business operation?
Majedur: We are now trying to expand our lending programme in the small and medium entrepreneurs and the agriculture sector. We will give more importance to the export sector financing. We are going to introduce internet, SMS and mobile banking to attract more clients. Our bank will bring more products in card-based transaction services in the quickest possible time.

Bangladesh has sought $8 billion from the $52 billion pot that the World Bank is set to dispatch over the next three years, Finance Minister AMA Muhith said yesterday.
The disclosure came at the press conference called in at his secretariat office about his recent official visits to Washington DC and Mexico City for the WB-IMF spring meetings and Global Partnership and Economic Development Cooperation (GPEDC) respectively.
In the last cycle, the country received around $6.5 billion, and Muhith said a higher amount was sought this time as the country has proved that it can utilise foreign assistance well.
“In various sectors such as health, education, water and sanitation, the country's performance is better than its peers.”
The finance minister said the relation with the WB took a turn for worse over the Padma bridge issue in 2012 but it has improved much now, while citing the $2.8 billion committed by the global lender for the current fiscal year, the highest in the country's history. The level of assistance from the International Finance Corporation and Multilateral Investment Guarantee Agency, too, increased.
Meanwhile, Mesbah Uddin, secretary of the Economic Relations Division, said the GPEDC meeting has been very successful in the context of Bangladesh.
The joint statement published after the Mexico meeting said the least-developed countries succeeded in pushing forward their demands, he said.
“We projected our demand for more foreign assistance to the infrastructure sector as it plays a significant role in poverty alleviation,” the ERD secretary added.
Arastoo Khan, additional secretary of ERD, said the increase in GDP-tax ratio in the last five years was lauded in the WB-IMF spring meeting.

The government considers taking action against the BASIC Bank board in accordance with the suggestions made in a central bank report, Finance Minister AMA Muhith said yesterday.
“Bangladesh Bank has not directly recommended disbanding the BASIC Bank board, but it pointed the finger at the board for various irregularities,” Muhith said at a press briefing at his secretariat.
The press briefing was called to share the outcomes of the finance minister's visits to Mexico and WB-IMF spring meetings in Washington. Muhith said the BB has sent him a report on various irregularities committed by the board of BASIC Bank. “You will see the action,” the minister said without elaborating.
Giving an example of Sonali Bank, Muhith said the central bank earlier recommended disbanding the board of the state-owned bank and the ministry took action accordingly.
The BB can take any action against the managing director of a bank as per the new banking companies act, he said.
Serious irregularities have allegedly been taking place in BASIC Bank for the last two and a half years. But neither the government nor the central bank has taken any tough action against the bank.
A central bank official said the BB on different occasions sent reports to the government about BASIC Bank.