ADB has awarded three of its top performing project teams in Bangladesh in an effort to recognise efficient project implementation, it said in a statement yesterday.

The awardees are Dhaka Water Supply Sector Development Project by Dhaka Water Supply and Sewerage Authority (WASA); Participatory Small Scale Water Resources Sector Development Project by Local Government Engineering Department; and Secondary Education Sector Development Project by Directorate of Secondary and Higher Education.

M Teresa Kho, ADB country director in Bangladesh, presented the awards to the winners at a ceremony in Dhaka on Sunday. Senior government officials, project directors of various ADB-assisted projects, members of the winning project teams, and ADB staff attended the ceremony.

The best project team recognition program, initiated in 2001, is part of an ongoing effort by ADB to improve effectiveness of the projects finances.

“The awards recognised the project teams' efficiency, results delivery, transparency in procurement, effective project implementation, efforts to empower women, and other criteria”, Kho said.

The Dhaka Water Supply Sector Development Project, with $202.5 million in ADB assistance, works to improve water supply services in Dhaka, for better health and sustainable economic growth. It also supports rehabilitation and optimisation of the water distribution network of the Dhaka WASA to minimise losses and allow for 24-hour pressurized water supply and assure water quality.

The Participatory Small Scale Water Resources Sector Development Project, with a $55 million ADB loan, is improving small-scale water services to help cut rural poverty, improve food production, increase access to water, and address the adverse impacts of climate change. It works on improving flood management, drainage, water conservation, irrigation, and developing water management cooperative associations.

The Secondary Education Sector Development Project, which ADB is financing with $89.05 million, supports implementation of policy reforms, helps improve efficiency and quality of secondary education, while enhancing equitable and inclusive access including establishing schools in under-served areas, furnishes and equips schools, updates the curricula, and helps the government modernise madrasah education.

As a major development partner of Bangladesh, ADB is currently supporting a wide range of development programs under 60 government projects worth more than $5 billion.

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

The central bank has strengthened its supervision on banks to check fraud in the banking system in settling bill purchases following the Hall-Mark scam.

In a notice yesterday, Bangladesh Bank asked banks to turn in applications in 15 days for settling import payment against back-to-back letters of credit using local sources -- fully or partially.

"It has come to the notice of Bangladesh Bank that authorised dealers are making inordinate delay in forwarding the applications for approval."

The banks are advised to submit the applications to the offices of Bangladesh Bank for approval within 15 days of the following month of effecting the payment, the central bank said.

In another circular, the regulator said starting from January 1 next year, ADs would have to report all types of their foreign exchange transactions through its web portal on daily basis.

Bangladesh Bank has taken initiative to receive online statement through its web portal. As part of the programme, its Foreign Exchange Operation Department has already started monitoring export transactions through online reports submitted by authorised dealers.

The central bank has developed online reporting system for all types of cross border foreign exchange transactions, including foreign exchange transactions, through inland back to back letters of credit.

The measures came as Bangladesh Bank tries to strengthen its supervision on banks following unmasking of the Hall-Mark scam, which unfolded that a number of state-run banks settled local LCs on forged documents.

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

Bangladesh is projected to meet the United Nations' millennium development goal of eradicating extreme hunger and poverty by 2015, according to a survey of the Asian Development Bank.

Though poverty has declined remarkably, the prevalence of malnourishment in 25 million or 16.8 percent of its population is still a major concern, the country being in the third position among its South Asian neighbours.

The study, which was released yesterday, went into each value chain segment of two main food and vegetable -- rice and potato.

It looked at these chains linking Naogaon and Bogra districts, the rural centers that are major producers and suppliers of these food commodities to the megacity Dhaka.

The study -- The Quiet Revolution in Staple Food Value Chains: Enter the Dragon, the Elephant and the Tiger -- was produced by the ADB and the International Food Policy Research Institute in response to the 2008 spike in food prices.

It analysed domestic rice and potato supply chains in Bangladesh, India and China.

“Asia faces a formidable challenge of feeding five billion people by 2030,” said Bindu Lohani, ADB's vice president for knowledge management and sustainable development.

“Rising populations and incomes, resource degradation and climate change will keep putting upward pressure on food prices, requiring vast improvements to ensure adequate, affordable food supplies.”

The study said achieving food security is one of the priority agendas of the government in Bangladesh, with modernising the food staples value chains being one of its action agendas.

A structural transformation is occurring and changing the conduct, performance and structure of the rice and potato value chain segments quite rapidly.

Village traders are playing a greatly diminished role in sourcing rice and potatoes. In rice, village traders garnered only 7 percent share of farms and sales in the upstream segment. In potatoes, the village traders were the source of only 16 percent of the Bogra-Dhaka chain, it said.

Two thirds of the rice farmers interviewed were bypassing middlemen and were selling their rice directly to wholesalers or mills.

Around 90 percent of small-scale potato farmers are storing their potatoes in cold storage facilities, and they use the facilities as intermediary venues for selling their produce to local traders, found the study.

It said Bangladesh is just starting its transformation to modern retailing. Rural wholesale markets displaced village traders, buying direct from farmers and selling direct to mills, who sell their produce to Dhaka's retailers.

The number of supermarkets in Dhaka was about 80 in 2009, from 4 in 2001, and they are catering to the middle to upper-income clients.

Small-scale rice and potato farmers producing for the Dhaka market are run as commercial businesses, responsive to technology and prices.

Helped by national agriculture research centres, farmers shifted from coarse to quality rice production, faster than their Indian and Chinese counterparts.

About 25 percent of seeds were also subsidised and sold by Bangladesh Agricultural Development Corporation.

More than 80 percent of the rice and potato farmers having mobile phones negotiate prices for their produce and obtain other information about the market, said the study.

More integrated rice and potato chains benefited urban consumers with affordable price for quality rice, and year-round supply of potatoes.

Farmers' incomes have also increased. Farmer's share of the retail price of rice is roughly 60 percent, while for potatoes their share is 50 percent.

The study said affordable and stable domestic prices for rice and potatoes can be achieved not just at improvements at the farm production level, which is often the focus on interventions, but more importantly, at the post harvest levels through more private sector engagement.

The ADB study also indicated that agriculture's share to gross domestic product has declined through the years, down to 20 percent in 2011, next to services and industry sectors. The sector still employs about 47 percent of the country's labour force.

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

The total of all commercial banks' Islamic assets is estimated to reach $1.55 trillion this year.

Islamic banks are set to expand as they compete increasingly with conventional lenders in attracting mainstream customers, according to a report by consultancy Ernst & Young released on Monday.

The total of all commercial banks' Islamic assets is estimated to reach $1.55 trillion this year, $1.8 trillion in 2013 and over $2 trillion mark, the report said. Gulf-based Islamic banks now have $450 billion in assets, about 30 percent of the total.

Islamic banks will grow as they focus on customers who expect more than just sharia-compliance in terms of products and service and have traditionally relied on conventional banks.

"Success will be defined in the core markets through the transformation of Islamic banks so they are able to compete with the much bigger, conventional boys for mainstream customers," Ashar Nazim, Islamic financial services leader at Ernst & Young, said.

Islamic finance follows religious guidelines such as a ban on interest and on pure monetary speculation, with its core markets in the Middle East and Southeast Asia.

The role of pure Islamic banks will also become important by comparison with banks that deliver products just through Islamic windows at their existing branch networks.

"There is no truly fully fledged Islamic bank (that stretches) across international markets or even regional," Nazim said.

He identified a group of 20 Islamic banks as likely candidates to become significant regional institutions. They now account for 55 percent of total Islamic banking assets after having grown over the past three years at an average rate of 16.2 percent a year, Nazim said.

"It is a lopsided industry at this point ... only 13 Islamic banks have $1 billion or more in equity," Nazim said, adding that the difference between small and large Islamic banks will widen.

Between 100 to 150 new financial institutions could be launched in the next five to seven years to cater to markets that are new to Islamic finance or have low rates of penetration including Egypt, Libya, Indonesia, Pakistan and Bangladesh, he predicted. Ten of the 25 fastest growing emerging markets have large Muslim populations.

PROFITABILITY LAGGING
Even while growing, Islamic banks have experienced a decline in profitability, and their average return on equity lags behind that of conventional banks by 20 percent, Nazim estimated.

Return on equity for both Islamic and conventional banks has deteriorated since 2008 in the wake of the financial crisis, dropping to 12 percent in 2011 for Islamic banks, compared with 15 percent for conventional banks, the report showed.

This 3 percent gap is much wider than the 1 percent difference observed in 2008-2010.

The return on assets for Islamic banks dropped to 1.3 percent in 2011 from 1.7 percent in 2008, while rising for conventional banks to 1.7 percent in 2011 from 1.5 percent in 2008.

Operating expenses are 50 percent higher for Islamic banks, while their cost of funds still remain more competitive than for conventional banks, the report said.

Some banks have started to focus on improving efficiency and reducing costs, which could boost their profit margins by about 25 percent within two to three years, Nazim said.

"The severity of this performance challenge has put many Islamic banks in a difficult place. They have taken the decision to transform the way their businesses work," Nazim said.

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

Standard Bank Limited opened an ATM booth at Malibagh in the city Thursday.

Mohammed Abdul Aziz, Director and EC Chairman of the bank inaugurated the ATM Booth as chief guest, said a press release.

SA Farooqui, Managing Director of the bank presided over the function.

News: The Daily Sun/Bangladesh/10th-Dec-12