Scheduled bank branches in the capital, the port city and elsewhere in the country have experienced a low turnout of customers Wednesday, the first day after a seven-day-long vacation to mark celebration of the Eid-ul-Fitr.

The attendance of officials and employees were also low in the head offices and branches of different banks though they reopened Wednesday as the vacation ended Tuesday.

However, the bank branches that deal with overseas trade and commerce have passed the day with a moderate pressure of work to facilitate essential banking activities relating to export and import.

“In fact, we have taken tremendous pressures before Eid to complete export and import procedures relating to banking services. The pressure is relatively low today,” said Md. Shajahan Alam, manager of Chittagong Customs branch of Sonali Bank.

As per Bangladesh Bank (BB) directives, commercial banks provided banking services to clients on August 16 and 18, which were public holidays.

A top official of a state-owned bank said the bank branches saw lower crowd mainly because of proactive measures taken as per the central bank directives on providing sufficient financial services during public holidays before Eid.

“Banks have provided financial services to their clients even in holidays. That’s why, adequate cash were supplied to people of all walks,” said the official, seeking anonymity.

“Customers’ low turnout would also continue Thursday,” he said.

A central bank official said bank branches across the country will see usual banking next week as many officials and employees have taken leave for Wednesday and Thursday (August 22 and 23) so that they can enjoy a longer vacation to mark the festival.

Perhaps, banks and other public and private offices will return to full-swing operations from next Sunday (August 26), said the BB official.

Virtually, the public holidays began on August 15, the national mourning day.

News: Daily Sun/Bangladesh/23-Aug-12

Finance Minister AMA Muhith said that the government has been continuing talks with the World Bank on financing the Padma Bridge project and it will place a proposal after it gets confirmed that it would not be turned down.

He, although, declined to comment on how was the government hopeful

of getting the fund from the donor organisation for the project. The minister was replying queries from journalists at his secretariat office Wednesday.

"All I can say now is that we are continuing our talks with the World Bank about financing the Padma Bridge project. We are hoping that they will fund it,” he added.

The Minister further said he did not want to comment on the matter when it was under discussion. “I can say this much that their scrapping of the deal was wrong,” he, however, said.

The Washington-based lender in June last cancelled its promised loan of $1.2 billion for the country's biggest-ever infrastructure project alleging corruption. After that, the government decided to construct the bridge over the river Padma with its own resources. But the Finance Minister has been trying to bring back the global lender to finance the infrastructure project.

Before the Eid holidays, Muhith had commented that the allegation the World Bank raised tarnished Bangladesh's image in the international arena. "We have to recover it (the image). It would be easier to recover it if the World Bank finances the project," he added.

When asked whether any letter was sent requesting the global lender to reconsider its decision, Muhith said, "We will issue a letter when we will realise that our proposal will not be turned down."

News: Daily Sun/Bangladesh/23-Aug-12

The newly appointed Finance Division Secretary Fazle Kabir was co-opted into the board of the Bangladesh Bank.

Kabir was appointed as BB board member under section 9(3) (D) of Bangladesh Bank Order-1972.

The Banking and Financial Institutions Division of the Finance Ministry issued a notification Wednesday to this effect.

Kabir replaced immediate-past finance division secretary Dr Muhammad Tarek, who left the position recently and joined the World Bank.

The nine-member BB board is headed by its governor.

The board is to determine the central bank duties by approving, reviewing and amending various financial sector policies.

News: Daily Sun/Bangladesh/23-Aug-12

About one million Indian bank employees began a two-day strike on Wednesday to protest against reforms that could ease mergers rules and allow more private capital into the sector, hitting banking transactions and some market trading operations.

The strike, involving mainly the staff of state-run banks that make up around 70 percent of the sector, came a day ahead of an expected parliamentary approval to some changes in rules to allow bigger role for investors in banks.

Foreign ownership of Indian public sector banks is capped at 20 percent, and some global banks have been pitching for a hike in their holding limit to help them expand their presence in Asia’s third-largest economy by acquiring the smaller regional banks. India has struggled to reform and liberalise key sectors such as banking, retail and insurance, partly because of political opposition and fears of the exploitation of domestic interests by foreign investors.

The strike, which forced No. 1 lender State Bank of India to halt trading in onshore spot foreign exchange markets, comes as another blow to the economy that faces its worst slowdown in almost a decade.

“Any move towards increasing the private sector role in the banking sector is a big fear for the unions and that makes them oppose it,” said D.H. Pai Panandiker, the head of New Delhi-based think tank the RPG Foundation.

“The changes in the banking laws can improve the health of the banks quite considerably,” he said. “The unions fear if the government continues with the reforms their positions will weaken and it will lead to job losses.”

Parliament is likely to approve on Thursday amendments to banking laws that include raising shareholders’ voting rights limit in private banks to 26 percent from 10 percent, a senior government source said.

The amendments, which were earlier expected to be approved on Wednesday, will meet a major demand of foreign investors seeking more say in the country’s financial system, though it is unlikely trigger fresh private investment in the sector and the 20 percent cap on foreign ownership in public sector banks will not change.

Analysts say the approval by parliament of the banking legislation amendments would be seen as a positive step by investors and would ease fears of “policy paralysis” in a government that has seen its free market reforms stall.

It was not immediately possible to assess the financial losses due to the strike, though trading volumes in government bonds were thin at 23.6 billion rupees as against the average 40-50 billion rupees in the first hour of trade.

Public sector State Bank has halted trading in onshore spot foreign exchange markets as its settlement operations’ staff have not yet shown up for work, sources said, adding the bank could start trading later in the day if the situation improves.

News: Daily Sun/Bangladesh/23-Aug-12

State Bank of India has so far halted trading in onshore spot foreign exchange markets because of the nation-wide banking strike, three sources at India’s biggest lender told Reuters on Wednesday. SBI is staying away from trading because staffs at its settlement operations have not yet shown up to work, one of the sources added. “So far we are not bidding nor are we offering. There is a huge counter-party risk in a situation like this and if we cannot honour settlements due to our other branches being on strike, we have our image at stake and cannot risk that,” a senior trader with the bank said. However, all three sources said the bank would be reviewing the situation later in the day and could start trading if there is any improvement.

News: Daily Sun/Bangladesh/23-Aug-12