WASHINGTON: The International Monetary Fund announced yesterday an extension of a two-year loan window to Iraq by seven months to allow the authorities time to get policy measures on track under the program.

That means Iraq has extra time to borrow from the $1.96 billion in IMF financing that currently remains available.

The loan, initially for $3.6 billion, had been scheduled to expire on July 23 and will now expire on February 23, 2013, the IMF said in a statement.

The IMF executive board approved the extension on July 20 following a request by the Iraqi authorities, the global lender said.

The IMF said the extension will provide the Iraqi authorities with more time to implement the policy measures needed to complete the fund’s combined third and fourth reviews under the so-called Stand-By Arrangement (SBA) program.

“The extension will, in particular, provide time for discussions on fiscal policies for the remainder of 2012 and on measures to improve the functioning of the exchange regime,” it said.

The Daily Sun/Bangladesh/ 5th Aug 2012

WASHINGTON: The International Monetary Fund yesterday issued a $2 billion loan for Jordan to steady the country’s battered economy and protect it from external “shocks” in the region.

The IMF executive board approved the three-year loan, making $385.35 million immediately available, the fund said in a statement.

The remaining amount will be phased in, subject to quarterly reviews of the economy’s performance under the so-called Stand-By Arrangement.

The IMF noted that the loan, requested by the Jordanian authorities, represents “exceptional access” to the fund’s resources, amounting to 800 percent of Jordan’s financial commitment to the institution.

Flanked by a circle of instability, Jordan has been ravaged by spluttering natural gas supplies from revolutionary Egypt and a flood of refugees crossing the border from war-torn Syria.

In addition, large financing needs to protect consumers from the increase in energy prices in 2011 were further deepened in 2012 by the need to provide housing and medical services to refugees from Syria.

The Daily Sun/Bangladesh/ 5th Aug 2012

K S Tabrez, Managing Director of DBBL, hands over the key of an ambulance to Jaynul Bari, Deputy Commissioner and President of Beach Management Committee of Cox’s Bazar recently.

Dutch-Bangla Bank Limited (DBBL) donated an ambulance to the Beach Management Committee (BMC) to ensure emergency support in rescuing visitors in case of any incidents at the longest beach Cox’s Bazar.

K S Tabrez, Managing Director of the bank handed over the key of the ambulance to Jaynul Bari, Deputy Commissioner and President of Beach Management Committee of Cox’s Bazar, said a press release.

Nasir Uddin Yousuf Bachhu, Central President of Shammilito Shangskritik Jote, senior officials of Deputy Commissioner’s Office, executives of advertising firm MAATRA and local journalists were present on the occasion.

The Daily Sun/Bangladesh/ 5th Aug 2012

The Bangladesh Bank (BB) has provided licence to a new credit rating agency to assess the financial health of bank companies operating in the country.

The newly licensed Alpha Credit Rating Limited (ACRL) would start functioning soon by maintaining the International Convergence of Capital Measurement and Capital Standards (June 2006) under Basel II, a BB circular reads.

With the ACRL, the number of External Credit Assessment Institutions (ECAIs) rose to six in the country. Others are-- CRISL, CRAB, NCRL, ECRL and ACRSL.

ECAIs usually scan a bank’s financial status by analysing risks and capital allocation against credit risk, market risk and operational risk.

These risks covers liquidity risk, residual risk, interest risk in the banking book, legal risk, strategic risk, reputation risk and any other risk associated with the business activities of a bank.

From now on, the central bank would map the rating scales on banks by all six ECAIs with its own rating grades to measure financial health of banking companies.

The Daily Sun/Bangladesh/ 5th Aug 2012

The government will have to form a special tribunal to deal with capital market related cases, in line with the conditions the Asian Development Bank has attached to a $215 million credit offer for Bangladesh.

The government will also have to limit banks' exposure to the capital market.

The credit under the lender's Capital Market Development Programme is accompanied by a total of 26 strings that an ADB mission put forward in a draft last month.

The Banking Division of the finance ministry has already sent the proposal to different agencies for their opinion.

Of the $215 million fund, $120 million is special fund resource and $95 million is ordinary capital resource, according to the draft.

If the government accepts the conditions, the amount will be disbursed in two equal tranches of $107.5 million each.

However, the government has requested the ADB to raise the amount to $300 million and the proposal is under a review of the lender, the draft said.

The ADB said the conditions are “to strengthen stabilisation measures of the securities markets following the history of booms and busts characterising the markets”.

Another objective is to make the capital market more effective in mobilising resource to support the economy's financing requirement and to better promote growth and development.

The ADB said the capital market tribunal will help the stock regulator detect trading irregularities and market abuse, leading to a rise in investor confidence.

Before releasing the first tranche of the funds, an amendment to Securities and Exchange Commission Ordinance 1969 regarding the formation of the special tribunals has to be placed in parliament for passage.

And before the second tranche is released, the amended act has to be passed in parliament, according to the conditions.

Banks' exposure to the stockmarket will not exceed 25 percent of their capital, the ADB said. Now rules permit the banks to invest up to 10 percent of their deposits in the stockmarket.

For this, the lender said, the government will have to amend the banking company act.

The amended bill should go to parliament before the first tranche is made available and the bill should get a go-ahead before the release of the second instalment.

The ADB has also attached a condition that the demutualisation act for stock exchanges has to be placed in parliament.

The ADB draft said the demutualisation would segregate ownership, management and trading rights of members and convert the two exchanges into commercial and more professionally-run organisations.

The stock exchanges will then be able to pursue their strategic interests including market development with more vigour, the lender said.

The exchanges will also be less susceptible to the members' vested interests, it said.

A finance ministry official said they are likely to place the demutualisation act in parliament by December.

Another major condition is about the passage of financial reporting act in parliament.

Once the act gets through, the lender said, the accounting and auditing standards will be upgraded to enhance market confidence and allow for informed investment decisions.

The ADB set some other conditions related to strengthening the SEC, and to develop the bond market.

Of $215 million funds, $15 million is for market stability (for SEC's additional staff work time, coordination committee staff time maintenance and operation cost of SEC surveillance equipment), $100 million is for market facilitation (cost of demutualisation and establishment of capital market tribunal, operation cost of financial reporting council), $5 million for supply measures, and $95 million is for demand measures.

The Daily Star/Bangladesh/ 5th Aug 2012