Md. Enamul Haque Chowdhury, Chairman of Sonali Investment Limited and Director of Sonali Bank Limited, presides over the 3rd AGM of the company at its head office in Dhaka on Sunday.

Sonali Investment Limited organised its 3rd Annual General Meeting (AGM) at its head office in Dhaka on Sunday.

Sonali Investment Limited is a subsidiary company of Sonali Bank Limited, said a press release.

Md. Enamul Haque Chowdhury, Company Chairman and Director of Sonali Bank Limited presided over the meeting.

Among others, Director ASM Nayeem, Md. Nazibor Rahman, Professor Farid Uddin Ahmed of Dhaka University, Managing Director and CEO of Sonali Bank Limited Prodip Kumar Dutta, Deputy Managing Director Khondokar Md. Iqbal, Md. Khorshed Hossain and CEO of Sonali Investment Limited Md. Ali Arshad were present.

Aminul Islam, Managing Director, Bank Asia is seen among the participants of an orientation programme on 'Salamah Islamic Banking Service' at the opening session at Bank Asia Institute for Training and Development at Kawran Bazar in Dhaka on Saturday.

A day-long orientation programme on 'Salamah Islamic Banking' service was held at Bank Asia Institute for Training and Development at Kawran Bazar in the city on Saturday.

A total of 32 officers of the bank took part in the programme, said a press release.

The programme was arranged to provide brief idea about Islamic Banking, its products as well as `Salamah Islamic Banking' service of Bank Asia among the officers.

The government will create a refinance fund to the tune of Tk 1.0 billion (Tk 100 crore) for Islamic small and medium enterprises (SMEs), mainly rural area-based units including agro-processing ones.

The issue was discussed in a board meeting of the Bangladesh Bank (BB) on September 25 with BB Governor Dr Atiur Rahman in the chair. As per the decision, eight Islamic banks will take the fund from the central bank for distribution in the rural areas at a reduced interest rate.

The fund will be operated truly on the basis of Islamic Shariah as the rural areas have a great demand for Shariah-based banking.

When asked, a high BB official said each of the banks would get a revolving fund on the basis of their demand.

He also said different Islamic banks sought such funds. So the central bank decided to create it. He said they were expecting the fund to be available from January 2014.

The BB board memorandum on requirement of the fund said in a long term perspective the banks were gradually helping create a section of entrepreneurs across the country through proper financing and training. But many people were not interested to access the formal banking on the religious ground. In view of that factor the fund would help bring those people under the banking network.

"SME loans have a good demand in the growing rural economy where entrepreneurs are running small-scale industrial units. Some of these groups of people want to operate their business in a fully Sariah-based banking, for which this product will be helpful," a high official of a Shariah-based bank told the FE Saturday.

He said not only the SMEs but also rural economies had a great demand for Shariah-based banking products. 

According to BB statistics, eight Islamic banks distributed 42 per cent of the entire SME funds distributed by all commercial banks in the fiscal year (FY) 2012-13.

The credit flow to SMEs during the second quarter of the current calendar year (CY) increased 16 per cent from that of the first quarter, BB sources said.

According to the BB data, the loans disbursed to the SME sector rose to Tk 225 billion in the April-June period last from Tk 194 billion in the January-March period.

In total, the SME sector received Tk 419 billion during the first half of the CY.

For the year, the SME loan disbursement target was set at Tk 742 billion by the central bank. It shows that over 56 per cent of the targeted figure has already been distributed in the first half.

Foreign banking company Standard Chartered Bank (SCB) is charging the highest rate of interest for lending to consumers and small industries and against credit cards, defying the regulatory directives. 

The July 2013 data of Bangladesh Bank (BB) show the bank is not complying with a regulatory directive for bringing down the lending rates though the central bank is pursuing for the last couple of years.

The bank’s spread (the weighted average gap between lending and deposit rates) is still the highest in the banking sector. As per the BB directives, banks must bring down the spread within 5 percent at the soonest. 

But, this bank is deliberately defying the regulatory directives with regard to maintaining spread. The BB authority has been pursuing the banks to strictly maintain the spread within 5 percent for the last one year so that the interest rate for industrial growth could be conducive. 

As per July 2013 data, this bank’s spread is still 10.03 percent, the highest among all the banks operating in Bangladesh. 

According to BB statistics, SCB’s lending rate for term-loan to small industries is 18.50-21.50 percent, which is the record highest in the country’s banking sector. For credit card, it charges 30-33 percent interest while the same for consumer credit at 19.50-22.50 percent.

On the other hand, the interest rate for deposit this bank offers starts from 2.50 percent. For term deposit up to three years and above, it offers an interest rate between 6.50 and 11.00 percent only.

Meanwhile, the central bank on September 24 published a yearly report on customers’ complaints, in which the SCB was put on the list of top five banks that often humiliate clients. Majority of the complaints against this bank are related to credit cards as it charges illogical interests from the consumers. 

Comments from the bank management over these issues could not be obtained immediately.

In a recent development, it has been disclosed that the SCB defies a BB request to take necessary actions with regard to a High Court (HC) directive to make payment to a private firm amounting to Tk 32, 07, 025 against six cheques for executing a public work. 

Bangladesh Bank governor and another BB official had to face a High Court (HC) rule due to BB’s failure in compelling the SCB to clear the payments as per a court directive. 

The HC had directed the central bank on February 11 this year to enforce its authority to realise the payments from Standard Chartered Bank (SCB), former American Exchange Bank (AEB), in favour of the complainant. But, the central bank authority didn’t follow up with the court about the consequent developments on the matters.

The complainant, managing director of International Designer and Contractor (IDC) MA Mazid, in the complaint stated that the AEB did not pay him against six cheques he received from the Power Development Board against a construction work. 

The complainant’s record shows the AEB drew the cheques amounting to Tk 32, 07, 025 from the state-owned Agrani Bank’s Chatteshawri Road branch between October 1986 and February 1987. But, the IDC deceived of the payments as that money had not been not disbursed to Mazid even in the last 28 years. 

An aggrieved Mazid appealed on November 29’ 2012 before the BB authority seeking its intervention to get the payments from SCB. Failing to receive any cooperation, Mazid then filed a writ petition with the HC.

The HC issued the rule on September 24 following non-response of the central bank authority. 

However, governor Dr Atiur Rahman and his colleague KM Abdul Wadud are likely to submit clarification to the court claiming that the central bank has acted in response to the court directive and served a letter to the SCB management on April 11’ 2013. 

Dr Rahman discussed the issue with the central bank board members in its meeting held yesterday (Wednesday), meeting sources said.

The SCB acquired the commercial banking business of AEB in Bangladesh in 2006 with assets and liabilities.

Meanwhile, the SCB grew its business tremendously in this country though its interest rates for term and SME lending are the highest among state-owned, local and foreign banks operating here.

SCB’s profit after tax was Tk 741.59 crore in 2012 and Tk 620.13 crore in 2010.

The decision has come as the specialised banks are facing difficulty in providing agriculture loan due to fund shortage