Though the IMF downgraded Bangladesh’s growth estimation to 5.8 percent in 2012-13 fiscal due to sluggish exports and investment, experts opined that the country may maintain its 6 percent-plus growth by accelerated export performance in readymade apparels, leather products and increased expatriate remittance which is expected to be around $14 billion in the current year.

The editorial of ICCB (the International Chamber of Commerce, Bangladesh) news bulletin released Wednesday mentioned this quoting IMF’s latest World Economic Outlook (WEO) projections.

In the WEO projections, IMF said the 7.2 percent growth target set by the Bangladesh government seems to be unachievable considering the global context coupled with basic deficiency in infrastructure and utilities such as gas and power.

After its previous downward revisions in April this year, IMF again downgraded growth forecast for Bangladesh, India, South Korea and ASEAN-5 nations: Indonesia, Malaysia, the Philippines, Thailand and Vietnam due to Euro Zone crisis.

Growth in emerging nations is expected to moderate to 5.6 percent this year before picking up to 5.9 percent next year, according to IMF. The 2012 growth estimate for the Indian economy will be lower by 0.7 percentage points to 6.1 percent, the sharpest revision for any of the countries included in the IMF report, ICCB quoted IMF.

The global economy has reached a critical juncture, and is facing the arduous task of overcoming major difficulties standing in the way of recovering and ensuring steady growth. Europe’s debt crisis has festered for more than three years now, according to the ICCB editorial.

Analysts said Europe’s sovereign debt crisis, high commodity prices, the legacy of the financial collapse and tension between the world’s three biggest economies had soured the economic environment since the start of 2012, it added.

In the past three months, the global recovery, which was not strong to start with, has shown signs of further weakness. The scenario of a synchronised recession across the world loomed larger since the breaking news of shrinking in China’s factory output as well as intensified recession in Europe and the weakest quarter performance of the US manufacturing sector. In addition lower GDP growth in a number of major emerging economies has further aggravated the situation.

IMF projected, global growth will be 3.5 percent in 2012 and 3.9 percent in 2013, marginally lower than its April forecast. The World Trade Organization (WTO) has also warned about deteriorating global trade and has slashed its growth forecast from 3.7 to 2.5 percent, less than half of the previous 20-year average. According to WTO Director General Pascal Lamy, there is more risk of things getting worse than better, ICCB quoted.

Similarly, the Organization for Economic Co-operation and Development (OECD) predicted shrinking of UK economy by 0.7 percent, compared with its previous forecasts of 0.5 percent growth. Even though the US economy is expected to grow due to improvements in the housing market and some progress on tackling its debt, still, the OECD has reduced US growth forecast from 2.4 percent to 2.3 percent.

News: The Daily Sun/Bangladesh/18th-Oct-12

The central bank has sought cooperation from the Deputy Commissioners (DCs) of 65 districts to find out SME entrepreneurs and industry cluster across the country for the development of the sector, official sources said.

The Bangladesh Bank (BB) recently sent a letter to the DCs to take necessary steps in this regard.

General Manager (GM) of SME and Special Programmes Department Sukamal Sinha Choudhury told the FE that the central bank has been working relentlessly for increasing the country's financial inclusion.

As part of the BB's initiatives, "we have requested all the DCs for more financial inclusion for further positive growth."

"Identifying the SME entrepreneurs and industry cluster are very important to improve the sector," said the letter.

The DCs are the key persons in any district and also chief of district agricultural credit committee. So they will be able to select the genuine SME entrepreneurs easily, said the GM.

The letter further said, "We (BB) are drawing your attention to inform chambers, associations, women chambers, SME and women entrepreneurs within your jurisdiction about the SME credit and Japan International Cooperation Agency (JICA) fund."

The letter also said "you can discuss on SME financing in Agricultural Committee meeting at your own as head of the committee".

"We hope that your cooperation and help in this regard will march forward the initiative," the BB letter mentioned.

In the meantime, in a bid to improve the fund flow to some segments in the small and medium enterprise (SME) sector, the central bank has asked all banks and non-banking financial institutions (NBFIs) to attach top priority to cluster financing for the rest of the period of current calendar year, A BB official said.

The BB is working to enhance funding to manufacturing, service and woman entrepreneur segments through cluster financing, as their access to SME loans was far off the mark, BB sources said.

By following the cluster financing model, the BB aims to support small and medium-scale businesses for the export purpose and thus intensify SME activities at the field level.

The BB GM said, "In the current financial year we have planned to increase the field level activities by ensuring relationship banking to smaller SMEs."

"Disbursement of SME loans is increasing but we need to give more importance to identifying real entrepreneurs and woman entrepreneurs of SME across the country." the BB SME official said.

"In the present context, cluster financing is to be given the top priority. Monitoring and supervision at the branch level need to be strengthened so the entrepreneurs setting up cottage, small and medium enterprises are selected and no genuine entrepreneurs are deprived," the BB official said.

The disbursement of SME loans during January-June of this year was Tk 322.55 billion or 55.26 per cent of the annual target, according to the central bank statistics. The figures also showed that the overall SME financing kept going up over the years.

News: The Daily Financial Express/Bangladesh/17th-Oct-12

The commercial banks in the country have sought a clear directive from the central bank about settlement of payments against the 'inland bill purchase' (IBP) following the much-talked-about Hall-Mark loan scam involving a state-run bank.

Although the Bangladesh Bank (BB) verbally instructed the banks Monday to settle overdue payments against inland bills, some banks were not convinced.

"If the BB takes a step for settlement of all 'overdue' payments against inland bills, the confidence gap between the businesses and the bankers will be bridged promptly," a senior banker said.

The total number of overdue accepted bills in the banking sector stood at about 7,260 involving around US$ 363 million as of June 30 last. The large volume of unsettled bills needs to be settled urgently through direct intervention of the BB to restore confidence in the banking sector.

"The BB asked the banks verbally Monday to settle payments against inland bills without further delay. But it may not be effective if they do not take actions directly," a senior official of a leading commercial bank told the FE Monday.

Until settlement of those overdue bills, most banks might not be interested in accepting or buying fresh 'inland bills' from traders, he said.

He also pointed out that the BB should come forward with a comprehensive guideline to deal with the 'inland bills' for purchase or providing 'acceptance' against L/Cs (letters of credit) opened by the businesses in the country.

Bankers said in the absence of comprehensive guidelines on the 'inland bills' the bankers, especially the new generation ones, were getting confused about how to deal with such bills, as the business turnover is gradually increasing in the country.

The BB recently issued a circular giving a couple of instructions for the banks to follow while purchasing inland bills.

But they were not enough in the context of the prevailing situation, the bankers said.

In the latest circular the BB said any branch manager must take permission from their head office before providing acceptance against inland bills.

The branch manager also needs to be sure that the goods were supplied to the exporter, before accepting or buying an inland bill.

This circular in some cases was helping the banks verify authenticity of the bills. But it was not assisting the banks in settling overdue payments against inland bills, bankers said.

The move also could not address the banks' reluctance to purchase or provide 'acceptance' against new 'inland bills,' as the Hall-Mark Group and other five business entities swindled a large sum of money from the state-run Sonali Bank through fake bills and documents

Therefore, the supply chain, related with the country's ready-made garment industry, was highly disrupted over the last few days due to the banks' unwillingness to accept or buy such 'inland bills' from concerned traders.

While talking to the FE Monday, Bangladesh Krishi Bank (BKB) Chairman Khondokar Ibrahim Khaled told the FE: "The BB should come forward to negotiate the existing problem in relation to the payments against 'inland bills' for the sake of the country's economic benefit. It needs strong intervention in the banking sector to solve the problem."

The Managing Director and CEO of the state-run Agrani Bank Limited, Sayed Abdul Hamid, said the BB also should take a step to change the definition of 'Deemed Export' to solve the problem urgently.

"Perhaps, after the Hall-Mark loan scam, the time has come to change the definition of 'Deemed Export' for the sake of confidence-building between the bankers and the traders," Mr Hamid said.

As per the existing definition, the 'Deemed Export' refers to the transactions in which the goods supplied have not left the country and the payment for such supplies is received in local currencies, and in the case of Bangladesh it is taka.

The business confidence, especially in dealing with 'inland bills' among the bankers and the traders could be restored if the definition was changed, the Agrani Bank MD noted further.

News: The Daily Financial Express/Bangladesh/17th-Oct-12

AQM Safiullah Arif , member secretary of Exim Bank Shariah Supervisory Committee, took charge as secretary general of Central Shariah Board for Islamic Bank of Bangladesh (CSBIB) recently, says a press release.

He has been elected secretary general in the election on September 30. Besides, Mufti Abdur  Rhaman, founder director of Islamic Research Centre Basundhara, and Prof Dr Muhammad Mustafizur Rahman, has been re elected chairman and vice-chairman respectively of CSBIB.

News: The Daily Independent/Bangladesh/17th-Oct-12

Aminul Islam, Deputy Managing Director of Bank Asia, poses with the participants of a training course on credit management for its 7th batch of management trainees after handing over certificates at the Bank’s Training Institute in Dhaka Tuesday.

News: The Daily Sun/Bangladesh/17th-Oct-12