Banking
BB for steps to expedite manpower export
BB announces monetary policy today, focusing on how to address possible setback in BoP in the days ahead
Bangladesh Bank would urge the government to take measures in increasing manpower export to offset a possible setback in the country’s foreign exchange balance.
It is going to propose the measure while announcing the Monetary Policy Statement (MPS) for the second half of the current fiscal year today, said a Bangladesh Bank official.
The central bank is apprehending the setback in the Balance of Payment (BoP) as it foresees a possible pick up in the import payments in the days ahead with the apparently stable political situation.
The import payments have been substantially slowed down during the first half of the fiscal due to the political unrest ahead of the national election held on January 5.
“Bangladesh Bank sees risk in maintaining the BoP position for the next fiscal year because of slower remittance growth,” Chief Economist Hassan Zaman told the Dhaka Tribune yesterday.
He said the slow-moving remittance inflow did not put any pressure on the BoP and exchange rate this year due to lower import payments. “But, if imports pick up next fiscal year and remittance inflow remains still negative, it will put pressure on the BoP.”
Amid the apprehension, he said, the central bank in its MPS is going to propose increasing the manpower export at a faster rate. It apprehends the negative remittance growth would have an adverse impact on the BoP in the next fiscal year.
The MPS would also slightly increase the credit growth target for the second half of the current fiscal year from its earlier target of 16.5% as the growth was much short of the target for December 2013.
“We have changed the credit growth target slightly as there is little chance to extend it considering the existing achievement,” Zaman said.
The MPS would also forecast the economic growth to range between 5.8% and 6.1%.
News:Dhaka Tribune/27-Jan-2014Foreign loans squeeze local banks' lending
The foreign loans approved by the central bank are significantly cost-effective for entrepreneurs, but lending by local banks is getting squeezed by the move.
A panel approved $1.19 billion in foreign loans in 2013, which was $1.49 billion in the previous year and $819 million in 2011, according to data from Bangladesh Bank.
“We are losing good clients who are now borrowing foreign currencies and paying back local loans with the funds,” a chief executive of a private bank said, asking not to be named.
The trend of allowing foreign loans also continues this year with the BB's approval for $106.6 million for 13 projects in the private sector yesterday.
Taking foreign loans by Bangladeshi companies started on a small scale in 2010. Now local enterprises, be it apparel, telecoms, power plant, pharmaceutical or cement, have been borrowing from foreign markets.
For foreign loans, borrowers have to pay London Interbank Offered Rate (LIBOR) plus a 4.5 percent interest, meaning the total cost would be around 5 percent, which is almost a third of local borrowing costs.
Bankers said the local banking industry is now sitting idle on surplus liquidity—more than Tk 80,000 crore—because of non-utilisation of funds. In this backdrop, some local companies took loans from foreign sources and paid back their loans in the local market.
Private sector credit growth came down to a 13 years' low at 11 percent at the end of November last year and banks' loan-deposit ratio reached around 71 percent in December, which means a bank can lend a maximum of Tk 71 against a deposit of Tk 100.
“A rise in foreign loans is a reason behind the sluggish demand for private credit,” said Nurul Amin, managing director of NCC Bank.
If the local firms had not borrowed $1.19 billion from foreign sources last year, local banks could have lent the equivalent amount, Amin said.
Helal Ahmed Chowdhury, managing director of Pubali Bank, said taking low-cost foreign loans is nothing bad, but there is a risk when these loans will be matured and payment pressure is huge.
Bankers, however, said foreign loans would not significantly impact the banking business if the economic activities are boosted and communications, particularly road network, remain uninterrupted.
City Bank signs deal with TVS
Mashrur Arefin, DMD and COO of City Bank and Reaz Ahmed, Chief Operating Officer, TVS Auto exchange documents after signing an agreement in Dhaka recently.
City Bank recently signed an agreement with TVS Auto Bangladesh.
Under the agreement, City Bank American Express card members will enjoy installment facility in buying Motorbikes from TVS Auto Bangladesh. This offer will be available in selected TVS Auto dealer outlets across the country.
NCC Bank holds annual branch managers’ confce
Md. Nurun Newaz Salim, Chairman, NCC Bank Limited, speaks at the executives and branch managers’ annual conference 2014 at a hotel in Dhaka on Thursday.
The two-day long executives and branch managers’ annual conference-2014 of NCC Bank Limited ended at a hotel in Dhaka on Thursday.
Md. Nurun Newaz Salim, Chairman of the bank inaugurated the conference as chief guest, said a press release.
Mohammed Nurul Amin, Managing Director and CEO presided over the conference while Vice Chairman ASM Mainuddin Monem, Chairman of the Audit Committee Md. Amirul Islam, Directors Khairul Alam Chaklader and Sohela Hossain were present.
EXIM Bank MD hailed as new GEF-B President
Managing Director of EXIM Bank Dr. Mohammed Haider Ali Miah has been elected as the President of United Nations Special Consultative Status Organisation “Global Economist Forum”- Bangladesh Chapter (GEF-B).
Managing Director of EXIM Bank Dr. Mohammed Haider Ali Miah has been elected as the President of United Nations Special Consultative Status Organisation “Global Economist Forum”- Bangladesh Chapter (GEF-B).
The forum elected Dr. Miah today in its Biannual General Meeting held at Dhaka on Saturday, said a press release.
The newly-elected President Dr. Mohammed Haider Ali Miah said in his speech, the forum will work for poverty alleviation, increasing of employment, young entrepreneurs and production as well as economic development of the country.