The Asian Development Bank (ADB) Wednesday signed an agreement to lend $25.1 million to Bangladesh's largest food manufacturer, the PRAN group, to help the firm build three food manufacturing plants.

"The new plants will source as much raw material as possible from local farmers, and this will help boost agricultural growth," said Martin Lemoine, Investment Specialist in ADB's Private Sector Operations Department. "The majority of Bangladesh's poor still live in rural areas, and agriculture remains their main source of employment and income."

PRAN has set up Sylvan Agriculture Limited to build a liquid glucose plant in Olipur, 120 kilometers northeast of Dhaka, and a flourmill producing fortified flour and a frozen food processing plant, both in Danga, 30 kilometers east of Dhaka. The new plants are scheduled for completion by 2015. The three plants will cost $35.8 million to build. The Chowdhury family, PRAN's controlling shareholders, will provide the balance.

The plants will directly employ around 1,000 workers, and provide indirect employment for about 50,000 farmers who will supply maize and wheat to the plants under a contract farming model. Sylvan has committed to ensuring at least 30% of its workforce is women.

The investment is ADB's first private sector agribusiness loan since 1985 and ADB's first private sector loan in Bangladesh since 2004. It is part of ADB's efforts to promote productivity and competitiveness in Bangladesh's agriculture and food processing sectors. The project will help push the country's agribusiness sector up the food value chain, increase food exports and improve food security and nutrition in Bangladesh. It is crucial to providing market linkages between farmers and food processing and export markets in the country.

Sylvan will have an annual production capacity of 45,000 tons of liquid glucose, 90,000 tons of flour and 180 million units of flour-based frozen foods. Annual sales are expected to exceed $50 million by 2016.

News: The Daily Financial Express/Bangladesh/15-Nov-12

The Bangladesh Bank (BB) has proposed a string of measures to the Ministry of Finance (MoF) to shore up the troubled state-owned commercial banks (SCBs).

Putting an end to the practice of sanctioning loans under pressure from powerful quarters and stopping the purchase of loans of questionable quality from private commercial banks (PCBs) -- are two major steps suggested by BB to help four SCBs to strengthen their financial base and overcome their image problem, a central banker said.

"Our suggestions to MoF to revive the status and image of four SCBs need special attention of the finance ministry officials as directives from them to senior bankers of state-owned banks matter most," a top BB official told the FE on Wednesday.

He said the BB is also serious about enforcing the measures, submitted to the ministry, in all four SCBs -- Sonali, Janata, Agrani and Rupali.

The proposals of central bank said the SCBs must bring an end to all fraudulent activities involving the sanctioning and disbursement of loans.

The BB in its proposals said the SCBs have to comply with the directives of BB on managing their loan portfolios and asset quality to avert any debacle in the future. The banks under no circumstances should exceed the approved limit of large non-funded loan and they must secure approval from their chief executive officers in the process of sanctioning large amount of non-funded loan. The banks also should undertake special drive to recover their huge classified loans, BB proposals said.

Furthermore, the proposals said without meeting the credit risk grading and due diligence no new loan should be sanctioned. Besides, the SCBs should fully comply with the conditions set in the Memorandum of Understanding (MoU) signed with the BB and initiate special audit of its all branches, if needed.

The BB officials said the major problems lie with SCBs in granting loans being influenced by powerful quarters of the government ignoring the basic fundamentals and requirements in lending criteria.

"In many cases, we have to entertain requests or orders from top policy makers of the government in sanctioning bank loans to undeserving entities or individuals," a general manager of an SCBs told the FE.

"We are threatened with dire consequences like termination or transfer from powerful quarters in case we express inability to sanction loan or refuse to provide any unethical loan rescheduling facility," he added.

News: The Daily Financial Express/Bangladesh/15-Nov-12

Bangladesh Krishi Bank (BKB) opened its 990th branch at Solakuri bazaar of Madhupur Upazila under Tangail district on Wednesday. Food Minister Dr Abdur Razzaque, MP, inaugurated the branch as chief guest.

It is learned that the branch is inaugurated in a remote village which is about 25 kms from Madhupur Upazila headquarter and 75 kms from district headquarter. A discussion meeting was held on the occasion.

The meeting was presided over by chairman of Bangladesh Krishi Bank Governing Body Khondoker Ibrahim Khaled.

Among other, Md Mizanur Rahman, deputy general manager of Tangail of BKB, Abdul Latif, regional manager, Dhoni Ram Mondol, audit officer, Khondoker Abdul Gafur Montoo, Upazila chairman of Madhupur, Dr. Meer Ferhadul Alam Moni, vice-chairman of Madhupur Upazila, Mohammad Habibullah, Upzila nirbahi officer of Madhupur, Azizul Hoque Lulu, convener of Madhupur Upazila Awami League, Yakub Ali, UP chairman, Bipul Chandra Kormoker, new manager of the branch, spoke on the occasion.

News: The Daily Independent/Bangladesh/15-Nov-12

Bangladesh Bank may not withdraw early warning regime from two private commercial banks because of their deteriorating financial statuses in every parameter.

The banks are Al-Arafah Islami Bank Ltd and Social Islami Bank Ltd (SIBL).

Meanwhile, BB has identified two other problem banks – ICB Islamic Bank Ltd and Bangladesh Commerce Bank Ltd. These banks failed to better their financial statuses and internal governance required to maintain market standard.

The central bank sources said, if any bank faces problems in financial operation, it is brought under early warning system and monitored very closely till the situation improves.

BB sources said the recovery status of non-performing loans by all the four banks is very poor, though these banks have substantially attained progress in some areas of respective financial operation.

The banking sector’s performance has been evaluated through CAMELS rating. The rating involves six crucial dimensions of analysis and evaluation of banking operations.

The dimensions include capital adequacy, asset quality, management soundness, earnings, liquidity, and sensitivity to market risk.

BB introduced Early Warning System of supervision from March 2005 to address the difficulties faced by the banks in any of the areas of required standards under CAMELS rating.

“The central bank’s assigned officials are closely monitoring improvement in the statuses of four banks so these banks can have good internal governance to ensure better performance,” said SK Sur Chowdhury, BB deputy governor.

He said the time of lifting early warning from the banks is yet to come, although concerned banks have improved output in some areas under the central bank’s supervision.

The managements of Al-Arafah Islami Bank and SIBL are trying to have ‘early warning regime’ lifted to show cleaning of bad image, said BB sources.

On the other hand, BB used CAMEL rating system to evaluate commercial banks analysing five indicators including capital adequacy, asset quality, management soundness, earnings, profitability and liquidity status.

The source added that BCBL and ICB Islamic Bank could not improve the capital base and asset quality as per requirement of CAMEL rating.

Five private banks earlier came out of problem bank category by improving in almost all necessary areas under CAMEL rating system, said the sources.

These banks included Pubali Bank Ltd, National Bank Ltd, United Commercial Bank Ltd, The City Bank Ltd and NCC Bank Ltd.

News: The Daily Sun/Bangladesh/15-Nov-12

Mahbubul Alam, Managing Director of Southeast Bank Limited, inaugurates the 89th branch of the bank at Bhulta in Narayanganj recently.

Southeast Bank Limited opened its 89th branch at Bhulta in Narayanganj recently.

Mahbubul Alam, Managing Director of the bank formally inaugurated the branch as chief guest, said a press release Wednesday.

Shahid Hossain, Addit-ional Managing Director, SM Mainuddin Chowd-hury, Deputy Managing Director, Mahbubul Alam, Head of Bhulta Branch, renowned businessmen, industrialists, customers, educationists, and local elites were present in the inaugural ceremony.

From now on, all modern commercial banking services will be provided to the customers from the branch.

Besides, the hard-earned money of the Bangladeshi expatriates working abroad shall be handed over speedily to their beneficiaries.

News: The Daily Sun/Bangladesh/15-Nov-12