Mir Mominul Huq, Head of Mobile Banking Division of DBBL, and Rubaba Dowla, Chief Service Officer and Head of m-commerce of Airtel, exchange documents after signing an agreement at the bank’s Head Office in Dhaka recently.

Dutch-Bangla Bank Limited (DBBL) signed an agreement with Airtel Bangladesh Limited on mobile banking services at the bank’s Head Office in Dhaka recently.

Mir Mominul Huq, Head of Mobile Banking Division of DBBL and Rubaba Dowla, Chief Service Officer and Head of m-commerce of Airtel signed an agreement on behalf of their respective organisations, said a press release.

As per the agreement, Airtel will collect and disburse various payments via including periodic rent payments through DBBL mobile banking system.

News: The Daily Sun/Bangladesh/12-12-12

The United States yesterday again called for selecting a highly qualified managing director for Grameen Bank who will ensure the integrity and effectiveness of the Nobel-winning microcredit lender.

“We have also long noted our strong support for a timely and transparent selection of a highly qualified MD who will ensure the continued integrity and effectiveness of Grameen Bank as an institution,” said US Assistant Secretary of State Robert O Blake.

The new MD will also ensure that the interests of all of its shareholders, particularly women, are protected, he said.

Blake arrived in Dhaka on Saturday on a four-day visit to attend the South Asia Women's Entrepreneurship Symposium.

He said Bangladesh is a natural host for this gathering because the country is an example for the entire world of the positive impact of a vibrant civil society.

“The world has especially been inspired by the work of BRAC and Grameen Bank, which have unleashed the potential of millions of women in Bangladesh and around the world.”

These women not only improved their own livelihoods but also contributed to long-lasting economic growth in their communities and countries, Blake said in his pre-departure press meet at the Westin Dhaka yesterday morning.

He said the US is working with the Bangladesh government to improve labour conditions.

Referring to his meetings with the government, manufacturers and buyers, he said he expressed US condolences for the devastating fire at the factory of Tazreen Fashions.

Mentioning a fire incident in US, he said, “Just over a century ago in New York City, a fire at the Triangle Shirtwaist Factory killed 146 workers and galvanised public support for stronger worker protections.”

That fire was a turning point for the American workers, he said. Blake said, in his meetings he emphasised the hope that Tazreen can be a similar transformative opportunity for Bangladesh to sign on to a better work programme with the International Labour Organisation and International Finance Corporation.

The incident will also pave the way for allowing independent labour unions to be formed, making durable changes to improve workers' safety, and signing a Trade and Investment Cooperation Framework Agreement with the US, Blake said.

“These actions will help Bangladesh brand itself as a country committed to worker rights and worker safety, and thereby attract new investments in its garment and other sectors,” he added.

Bangladesh is demonstrating leadership in developing constructive relationships with its neighbours, working with them to resolve long-standing and complex issues, and developing new areas of mutual cooperation, he said.

After reaching important agreements on boundary issues, Bangladesh doubled exports to India over the past year. As Myanmar opens its borders and markets, he said Bangladesh has made helpful offers of expertise and access to support Myanmar's emergence onto the global economic stage.

The US welcomes these steps towards greater regional connectivity and economic integration. Everyone stands to benefit when ideas, goods, and people move more freely and efficiently across borders, he said.

“The people of Bangladesh are some of the most dynamic and innovative the world has had the privilege to know. Their energy in tackling both the challenges and opportunities facing their nation is an inspiration to so many around the world,” the US official said.

About the symposium, he said the action plan developed here in Dhaka will be used to identify additional investments aimed at promoting women's entrepreneurship and contributing to regional economic growth, peace and stability.

News: The Daily Star/Bangladesh/12-12-12

In line with an IMF prescription, the government has decided to set the exposure limit of a commercial bank in the stockmarket at 25 percent of the bank's total capital.

A finance ministry official said the changes will be included in the draft amendment to the Banking Companies Act.

However, the government wanted the exposure limit to be at 40 percent of a bank's total capital. The existing exposure limit of a bank is 10 percent of its deposits.

A team of the International Monetary Fund came to Dhaka recently to review the implementation of the lender's conditions tagged with the release of the second instalment of its $1 billion loan.

The finance ministry official said the amendment to the Banking Companies Act will be passed in parliament in March.

Once the amendment gets passage in parliament, the central bank will give the banks two years' time to reset their stock exposure limits.

Various quarters blamed the stockmarket debacle in 2011 on the banks' higher stock exposure.

Banks saw falling profit and rising defaulted loans this year.

Several bank officials said higher stock exposure of banks has caused their defaulted loans to go up, which ultimately pulled down their profit.

Bangladesh Bank had long been asking the government to tag the stock exposure limit of banks with their capital, instead of deposit.

But due to pressure from some vested groups, the government had been avoiding the central bank's suggestion.

After the debacle early last year, a stockmarket probe committee led by Krishi Bank Chairman Khondker Ibrahim Khaled had also suggested the banks' stock exposure limit at 25 percent of their capital, which is also a global standard.

The government-formed committee to scrutinise the draft amendment to the Banking Companies Act recommended such limit at 40 percent of the banks' capital.

However, the banks' scope to invest in the stockmarket will remain high despite the amendment, as the banks have a strong capital base now.

After the amendment, banks will be able to raise their stock investment up to more than Tk 14,000 crore.

According to BB statistics, the amount of total capital in the banks was Tk 56,201 crore in June.

When the stockmarket was booming in 2010, the banks' investment in stocks was around Tk 16,000 crore.

An official of the central bank said the banks' capital has grown much in the recent times in line with the Basel-II requirements, but their capital will increase further when Basel-III will take effect soon.

According to BB statistics, the total capital of the banks was Tk 20,578 crore in 2008.

The banking sector has witnessed an increase of Tk 35,623 crore in their capital in the last four years.

It means the overall capital growth has been 173 percent over the last four years with an annual average growth of about 49 percent.

News: The Daily Star/Bangladesh/12-12-12

HSBC Holdings Plc has agreed to pay $1.92 billion to settle a multi-year US criminal probe into money-laundering lapses at the British lender, the largest penalty ever paid by a bank.

HSBC admitted to a breakdown of controls and apologised in a statement on Tuesday announcing it had reached a deferred-prosecution agreement with the US Department of Justice, as was first reported by Reuters last week.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes," said Chief Executive Stuart Gulliver.

"Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters."

The bank said it expected to also reach a settlement with British watchdog the Financial Services Authority.

US and European banks have now agreed to settlements with US regulators totalling some $5 billion in recent years on charges they violated US sanctions and failed to police illicit transactions.

No bank or bank executives, however, have been indicted as prosecutors have instead utilized deferred prosecutions.

The deferred prosecution agreement, when detailed by US Justice Department officials later on Tuesday, could yield new information about a failure at HSBC to police transactions linked to Mexico, sources familiar with the matter said. Details of those dealings were reported this summer in a sweeping US Senate probe.

HSBC's settlement also includes agreements or consent orders with the Manhattan district attorney, the Federal Reserve and three US Treasury Department units: the Office of Foreign Assets Control, the Comptroller of the Currency and the Financial Crimes Enforcement Network.

HSBC said it would pay $1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities and take further action to strengthen its compliance policies and procedures. US prosecutors have agreed to defer or forgo prosecution.

The settlement is the third time in a decade that HSBC has been penalized for lax controls and ordered by US authorities to better monitor suspicious transactions. Directives by regulators to improve oversight came in 2003 and again in 2010.

News: The Daily Star/Bangladesh/12-12-12

All commercial banks in Bangladesh must report their foreign exchange (forex) transactions statements online from January to the central bank. Under the new system, a bank will have to report all types of its foreign exchange transactions, including inland bill purchase (IBP), to the Bangladesh Bank (BB) on a daily basis using the central bank’s web portal, said a BB circular issued on Monday. Currently, banks are allowed to submit various reports manually in physical paper formats.

The reporting entities however were asked to continue with the existing practice of submission of reports until further order.

The online reporting system will help check manipulative practices, frauds and scams, like Hallmark loan scam, said a BB official.

He also said the banks normally submit their reports relating to foreign exchange transactions on a monthly basis which makes it impossible for the BB to scrutinise the same properly. The central bank has taken different measures against the backdrop of rising trend of large-scale irregularities in purchasing and providing acceptance of the bills against local LC (letter of credit)-denominated foreign currency by various bank branches in recent months.

As part of the measures, the Foreign Exchange Operation Department of BB has already started monitoring export transactions through online reports submitted by the foreign exchange branches, officially known as authorised dealer (AD) branches of the banks. In addition to export transactions, the BB has developed an online reporting system for all types of cross-border foreign exchange transactions including foreign exchange transactions through inland back to back LCs, says the circular.

It has come to the notice of Bangladesh Bank that ADs are making inordinate delay in forwarding the applications for obtaining the approval on settlement of such payment, it also said.

“ADs are, therefore, advised to submit the applications to concerned offices of Bangladesh Bank for post facto approval within 15 days of the following month of effecting the payment,” said the circualr.

Currently, some 858 ADs of 47 scheduled banks are operating their businesses across the country.

News: The Daily Independent/Bangladesh/11th-Dec-12