Sonali Bank authority has expressed concern as the Bangladesh Sugar and Food Industries Corporation (BSFIC) failed to repay installment of loan in September last, official sources said.

“We have received a letter from the Sonali Bank authority requesting for measures against the corporation, as the BSFIC did not respond to the Bank’s call to repay loan installment, said a senior official of the banking division.

The official also said that the division would inform the matter to the industries ministry.

Hasan Iqbal, General Manager of Sonali Bank sent a letter to the chairman of the BSFIC last week regarding repayment of loan installment but the BSFIC yet to respond, the letter read.

As per the letter, the last date of repayment of loan has already expired on September 30. The amount of classified loan stands at Tk 5611.9 million out of total loan of Tk 8788.4 million as on September last.

After rescheduling the loan of 2007 to 2012, the BSFIC borrowed further loan worth Tk 3072.5 million in September 13, according to the letter. The letter also said the image of the corporation will be tarnished because the BSFIC authority has failed to repay any installment of the rescheduled loan.

News: The Daily Sun/Bangladesh/27-Nov-12

Iqbal Mahmood, Senior ERD Secretary, and Ellen Goldstein, WB Country Director in Dhaka, exchange documents after signing an agreement at ERD office in Dhaka Monday.

The World Bank will provide US$ 70 million in loan to Bangladesh for ICT expansion and employment generation.

A financing agreement between the global lender and the government was signed yesterday to implement the Leveraging ICT for Growth, Employment and Governance Project aiming to create an estimated 30,000 direct jobs in the IT and ITES sectors.

Senior Secretary of Economic Relations Division (ERD) Iqbal Mahmood and the WB Country Director Ellen Goldstein struck the deal on behalf of their respective sides.

The project will also open an avenue to create up to 120,000 indirect jobs, and increasing IT and ITES industry revenue by over $200 million, officials said.

“The project would directly benefit 30,000 youths who will gain marketable and globally recognised IT and ITES skills. Among them, 9,000 will be women,” said Ellen Goldstein.

“Bangladeshis will benefit from increased incomes due to upgrading of and enhanced employment opportunities in a growing global IT industry,” she added.

The project will also establish basic e-government foundations to support governance reforms and significantly improve the government’s efficiency and effectiveness.

Specifically, the proposed technology foundation will enable all ministries and agencies to host their systems and information on a shared datacenter; exchange information and collaborate using standardised frameworks; and protect data through information security policies and standards.

The credit from the International Development Association (IDA), WB’s concessionary arm, has a maturity period of 40 years with a 10-year grace period. There will be a service charge of 0.75 percent.

Studies indicate that Bangladesh possesses significant comparative advantage in the IT and ITES industry due to the availability of a large English-educated talent pool and competitive labor costs.

News: The Daily Sun/Bangladesh/27-Nov-12

The government and the World Bank (WB) yesterday signed a $70 million agreement for an ICT project meant to drive growth, employment and governance.

The project aims to create an estimated 30,000 direct jobs in the information technology and IT-enabled services sectors.

Senior Secretary of Economic Relations Division Iqbal Mahmood and WB Country Director Ellen Goldstein signed the deal for the project that will start in December this year and end in December 2017.

The project's total cost will be $71 million, of which the global lender will provide $70 million at an interest rate of 0.75 percent to be paid back in 40 years, including a grace period of 10 years.

Bangladesh needs targeted programmes to develop its potential in the IT and ITES industries and to build the necessary e-government foundations, Mahmood said.

“The project would directly benefit 30,000 youth who will gain marketable and globally recognised IT and ITES skills. Among them, 9,000 will be women,” Goldstein said.

Bangladeshis will benefit from increased incomes due to the en-hanced employment opportunities

in the growing global IT industry,

she said.

Ten thousand non-computer science graduates will be trained as software developers, said ERD's Additional Secretary Arastoo Khan.

Besides, 20,000 more will be trained in computer language, customer services and other trainings on computer literacy, he said.

News: The Daily Star/Bangladesh/27-Nov-12

City Bank yesterday launched CityMaxx American Express Card first time in Asia, which allows customers to gain interest on money up to 15 days after it has been spent.

“Using CityMaxx card, customers could keep on earning interest as usual for 15 days even after the money has been spent form the account,” said Mashrur Arefin, deputy managing director and chief operation officer of City Bank.

The card offers 5 percent cash back on all spending at major grocery outlets in the country, 1 percent cash back on any spending at any shop and restaurant, said Arefin.

News: The Daily Star/Bangladesh/27-Nov-12

Banks' scope to invest in the stockmarket will remain high despite a proposed amendment to the Banking Companies Act, as the banks have a strong capital base now.

The amendment will allow the banks to invest 40 percent of their capital in stocks though the present law allows them to invest 10 percent of their total liabilities in the stockmarket.

After the amendment, banks will be able to raise their stock investment up to Tk 23,000 crore from Tk 16,000 crore recorded in September.

According to Bangladesh Bank 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 below Tk 20,000 crore.

Though as per the draft amendment, the scope for banks' investment in the stockmarket will decrease, the remaining scope is still much higher than the global standard, said a BB official.

The International Monetary Fund also suggested that banks' investment in the stockmarket should be 25 percent of their capital.

The central bank official said the banks' capital has grown much in the recent time as per the Basel-II requirements, but their capital will increase further when Basel-III will take effect soon.

According to the central bank 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.

As per Basel-II requirements, banks need to maintain their capital at 10 percent of their risk weighted assets. But in reality, the banks have been able to maintain their capital at 11.31 percent, which is more than the required level.

The BB official said, this was mainly due to the transfer of a large portion of their profit to capital. As a result, the base of the banking system has become stronger, he added.

News: The Daily Star/Bangladesh/26-Nov-12