AB Bank Limited signed a Memorandum of Understanding (MoU) with Central Procurement Technical Unit (CPTU), Ministry of Planning on “Registration with Electronic Government Procurement (e-GP) System” recently.

The signing ceremony took place at the Ministry of Planning at Agargaon in Dhaka, said a press release.

Under the MoU, CPTU will provide e-GP Portal Dashboard and training to nominated focal persons of the bank on e-GP portal link as the e-payment service provider.

As a member bank, AB Bank will provide services like registration/re-registration of bids/tenders and sell tender documents on behalf of procuring agencies and procuring entities within the territorial jurisdiction of the bank.

News: Daily Sun/08-Nov-2013


Shamim Ahmed Chaudhury, President and Managing Director (Current Charge) of AB Bank Limited and Amulya Kumar Debnath, Director General, CPTU, Ministry of Planning, signed the MoU on behalf of their respective sides.

Mohammad Mejbahuddin, Secretary, IMED, Ministry of Planning, Government of Bangladesh attended the MoU signing ceremony and presided over this function.

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The country’s commercial banks are awash with idle money due to poor investment and lower credit demand, with almost all kind of business expansion remained suspended amid political uncertainty ahead of the upcoming general election.

The excess liquidity increased by Tk240bn or 40% during January-September period of the current year and stood at Tk840bn from Tk600bn in January, according to the Bangladesh Bank data.

The amount of surplus liquidity increased rapidly while credit growth dropped continuously.

The credit growth of the banks was 13.39% in January with surplus liquidity of Tk600bn, followed by 10.29% growth in March with Tk660bn in excess liquidity. The growth was 8.97% in June when the liquidity was Tk790bn and 7.40% in September as the liquidity rose to Tk840bn.

The banks burdened with the huge idle money were looking for alternative investment window as reflected from their rising investment in the government securities.

The banks’ investment in government securities increased by 26% to Tk1tn during the 9 months period till September from Tk990bn in January, according to the central bank data.

“The investment opportunities for the banks shrunk due mainly for political unrest, lack of gas and electricity. Besides, they have also barrier to invest in share market according to the amended bank company act,’’ said a senior executive of a private bank.

However, the banks were taking away investment from the capital market instead of reinvesting there as they are bound to keep their exposure limit at 25% of paid up capital and reserves, which also pushed the liquidity to go high, he said.

“As a election year, banks remained shy to disburse big loans throughout the year and in last two months, there will have no possibility to release big loans,” said National Credit and Commerce Bank Managing Director Nurul Amin.

He said credit growth also decreased due to inflow of low cost foreign loans in the private sector as provided by Bangladesh Bank.

“Banks already cut their lending rates slightly to attract the borrowers and the rate will go down further within December,” said Amin, also the President of Association of Bankers Bangladesh (ABB).

The deposit rate dropped to 8.5% in September from 8.61% in July as banks reluctant to take more public funds.

“Banks’ interest income against credit declined due to sluggish disbursement while their interest expenditure against deposit went up, adversely hitting the profit. As a result, banks cut the interest rate on deposits and also moved to reduce lending rates to stimulate credit,” said a senior executive of a private bank.

The advance-deposit ratio (ADR) in the overall banking sector also declined to 71.65% in September against 85% a year back.

The ADR is likely to go down further in the coming months, if the current sluggish trend of credit to the private sector continues and the political situation takes a turn towards further confrontational course again. 

News:Dhaka Tribune/07-Nov-2013

The LGRD ministry has asked Bangladesh Bank not to oppose the establishment of Palli Sanchay Bank (PSB), a bank proposed to encourage rural savings.

Rural Development and Cooperatives Division of the ministry recently wrote a letter to the central bank governor in this regard, said officials.

Bangladesh Bank is opposed to PSB as “such specialised banks already in operation have not succeeded in their objectives.”

Finance Division is also against the PSB since the country already has some of such banks.

The letter was signed by Patit Pabon Devnath, Assistant Secretary to the Rural Development and Cooperatives Division, which called for no-objection from the central bank to set up the PSB.

Today, Banking Division has called a meeting on the issue at its office in Dhaka.

Officials of Rural Development and Cooperatives Division will also be present at the meeting to be presided over by the Finance Minister AMA Muhith, said official sources.

Bangladesh Bank and Banking Division are suggesting the establishment of a microcredit institution instead of launching Palli Sanchay Bank.

The rural division letter said the future beneficiaries of PSB have already expressed grievance over the central bank’s decision.

It said the people will soon “demonstrate against the central bank” for allowing the establishment of PSB.

Cooperatives Division said principal secretary Sheikh Md Wahid Uz-Zaman talked to the central bank governor over phone on the issue.

The letter read cooperatives division has already taken preparation to turn “One House One Farm Project” to the PSB as the number of projects’ beneficiaries has exceeded 1m.

At an inter-ministerial meeting last month, Bangladesh Bank and Banking Division issued their oppositions to the setting up of the PSB.

Officials of Rural Development and Cooperatives Division were also present at the meeting.

The Cooperatives Division already prepared a draft Palli Sanchay Bank Act 2013.

But the central bank and the banking division officials ruled out the possibility of any such law to be made during the tenure of the present government.

The Cooperatives Division is however adamant at their stance to set up a specialised bank.

Bangladesh Bank said such specialised banks have not been successful in Bangladesh and the PSB would also not be viable.

Last month, Prime Minister Sheikh Hasina announced that the government will establish Palli Sanchay Bank to improve rural economy encouraging the people to rural savings.

She was inaugurating the digital banking service for the rural poor people. The function also distributed national awards on “One House One Farm” project.

“We’ll have to convince the Banking Division,” she said.

Sheikh Hasina added that the “One House One Farm Project” was showing a new path towards poverty alleviation. 

News:Dhaka Tribune/06-Nov-2013

The committee of secretaries on Tuesday submitted recommendations to the finance minister regarding a separate pay scale for the employees of the Bangladesh and the four other state-owned commercial banks.

Sources said after the finance minister has given his consent, the recommendations would to the prime minister.

The employees of these banks, however, have been strongly opposing the proposal for separate pay scale saying the general pay scale for the government employees is better for them.

An official of the banking division of the finance ministry said: “Most employees of the state-owned commercial banks Sonali, Janata, Agrani and Rupali and the Bangladesh Bank expressed fears that they would not be able to take enough money back home, resulting in a fall in their living standards. Because under the separate pay scale, they would have to pay income taxes and there would not be some of the key bonuses and allowances.”

Finance Minister AMA Muhith on Tuesday said the government would simultaneously implement the national pay scale for government employees and the separate one for the government banks.

Dr Aslam Alam, secretary of the finance ministry’s Bank and Financial Institutions Division, told Dhaka Tribune: “Implementing the separate pay scale will take time because of two reasons: firstly, most of the employees of Bangladesh Bank and the state owned commercial banks are opposing the move as they want to stay under the purview of the national pay scale.

“Secondly, the Bangladesh Bank is currently under the national pay scale. It will have to come out of that for enabling the implementation of the separate pay scale.

“I have talked to the employees of the state-owned commercial banks and the Bangladesh Bank. They have told me that they were wondering why the government was thinking about implementing a separate pay scale hastily.”

He added that the implementation would not be very easy because the proposed separate pay scale had some issues that needed to be solved.

The committee of secretaries, headed by Cabinet Secretary Musharraf Hossain Bhuiyan, last month decided that the employees of the government banks would have to pay income taxes and their salaries would rise by Tk2,000.

However, the finance minister had hinted before that the government bank stuffs would get a much bigger hike.

At present, the four government commercial banks have 90,000 employees, while the central bank employs about 6,000, sources said.

News:Dhaka Tribune/06-Nov-2013

Bangladesh Bank (BB) is preparing a guideline to help banks check forgery in online banking.

The new guideline is likely to be issued next month, a central bank official told BSS on Sunday.

The central bank is issuing the guideline against the backdrop of some incidents of credit card forgery and fraudulent transactions at ATMs.

Under the guideline, banks will be advised to follow a set of measures to protect their clients from fraudulent activities in online transactions.

Among the measures, the banks would be asked to develop a system from which their clients would get instant message (SMS) and email immediately after each and every online transaction.

Currently, some banks are providing similar services at their own initiatives to protect the interest of their clients and to ensure secured online banking.

“But, all banks should provide their clients with similar services after issuing the guideline,” the BB official said.

He said SMS and email should be sent to the respective clients against their transactions by using debit or credit cards at the ATMs (automated teller machines) or PoS (Point of Sales). 

News:Dhaka Tribune/04-Nov-2013