Azam Khan, Head of Marketing and Development, First Security Islami Bank Limited (FSIBL), exchanges documents with Mohiuddin Khan Khokon, Director, Sales and Marketing of Hotel The Cox Today.

First Security Islami Bank Limited (FSIBL) signed a corporate agreement with Hotel The Cox Today on providing hospitality service.

Azam Khan, Head of Marketing and Develop-ment, First Security Islami Bank Limited and Mohiuddin Khan Khokon, Director Sales and Marketing, Hotel The Cox Today signed the agreement recently.

Employees and clients of the Bank will enjoy various privileges under this agreement.

Syed Waseque Md Ali, Deputy Managing Director, First Security Islami Bank Limited, Sumon Shariar, Assistant Manager, Sales and Marketing, Md. Arif Hossain, Senior Executive Sales and Marketing, Hotel The Cox Today were present on the occasion.

The Daily Sun/Bangladesh/ 25th July 2012

Mahbubul Alam, Managing Director of Southeast Bank Limited, inaugurates an ATM Booth at Hathajari, Chittagong recently.

Southeast Bank Limited expanded its own ATM network by opening a new ATM Booth at Hathajari Branch, Chittagong recently.

Managing Director of the Bank Mahbubul Alam inaugurated the ATM Booth as the chief guest, said a press release.

Anwar Uddin, Executive Vice President and Head of Agrabad Branch, Md. Mojibul Hoque, Senior Assistant Vice President and Head of Hathajari Branch, other high officials and local individuals were present.

The Daily Sun/Bangladesh/ 25th July 2012

The central bank has refuted the concerns of the banking sector over a jump in non-performing loans (NPL) due to enforcement of the new rules on classification, provisioning and rescheduling of loans.

“NPL may go up to 8.5 percent from around 6.5 percent now due to the new loan rules,” SK Sur Chowdhury, deputy governor, told The Daily Star, quoting an impact assessment study on the new rules.

Bangladesh Bank (BB) carried out the study following bankers' concern that the banking industry would negatively be affected by the new rules that became effective from July 1.

Under the new provisions, an ongoing loan operation will be classified in the event of non-repayment of any installment within three months instead of earlier-fixed six months.

The base for provisioning has been set at a minimum level of 20 percent of the outstanding balance of the credits, while strictly limiting the rescheduling facility of any default loan, up to three times.

According to new rules, non-repayment period against a term-loan for more than two months will be treated as a "specially mentioned account" and the non-repayment period between 3-6 months will be classified as substandard. If the non-repayment period is more than six months, it will be treated as default loan.

The Association of Bankers Bangladesh, a forum of chief executive officers, requested the BB to extend the deadline for the implementation of its new instructions on loan classification and provisioning up to January 1, 2014, instead of July 1.

Otherwise, the bankers said the NPL would jump in the next quarter. Some top bankers said the NPL would double or more due to the new rules.

Not only bankers, manufacturers and exporters also expressed their concern saying that the new loan rules would hurt their industries. But the central bank does not agree with the bankers with their concern.

“Banking industry may face trouble for the time being, but in the long run it will establish credit discipline,” said the BB deputy governor.

Chowdhury said some people in Bangladesh take loans from banks with an intention not to pay it. These borrowers get defaulted and reschedule their loans to get new loans, he said.

“We want to stop this bad intention of borrowers,” he said.

The Daily Star/Bangladesh/ 25th July 2012

The agriculture sector contributes more than 20 percent to Bangladesh's gross domestic product.

Bangladesh Bank (BB) yesterday said banks that fail to disburse targeted farm loans would be penalised.

Bankers also demand an impact assessment study against their farm loans to the economy.

“We will cut 3 percent of undisbursed farm loans from the respective banks' accounts,” BB Governor Dr Atiur Rahman told top bankers at the launch of the Agriculture and Rural Credit Policy and Programme for fiscal 2012-13 at the bank's office.

If a bank fails to disburse Tk 20 crore out of its annual target of Tk 100 crore, the BB will cut Tk 60 lakh (Tk 3 lakh per Tk 1 crore) from the bank's accounts with it. The BB introduced the measure last year and 13 banks failed to disburse their targeted loans.

These banks requested the governor to reconsider the punishment and vowed not to repeat the failure.

Rejecting the bankers' requests, Atiur said: “We should maintain it… After all, non-compliance has a cost.”

The central bank has set the farm loan disbursement target for all the 47 banks operating in Bangladesh at Tk 14,130 crore for fiscal 2012-13, up by only 2.39 percent from the previous year.

All the banks collectively disbursed Tk 13,137 crore or 95 percent of the target at Tk 13,800 crore in farm loans by June of fiscal 2011-2012, according to the BB.

“The punishment measure of keeping 3 percent of non-disbursed loans will be maintained to keep pressure on the banks,” said SK Sur Chowdhury, deputy governor, who briefed the media after the meeting.

Chowdhury said this year's loan disbursement target was set in line with the GDP (gross domestic product) growth rate. He said the meeting also discussed priority and new areas for farm loans.

He said private and foreign commercial banks that were reluctant to given farm loans a few years ago have performed relatively better in 2011-12 than the state-owned banks.

“Many private banks disbursed 100 percent of their targeted loans,” he said. Foreign banks are also coming forward despite limited branch network, he added.

The farm sector plays a key role in Bangladesh's economic development as it contributes more than 20 percent of GDP. On an average, the country's GDP growth rate has been 6.35 percent in the past three years.

After Rahman became the governor of the central bank in May 2009, he kept pressing the banks to go to rural areas with funds. Rahman also introduced several refinance schemes, including cultivation of spices and lending to sharecroppers, to encourage the banks in this regard.

“Agriculture plays a significant role in creating domestic demand. A good harvest also helps contain food inflation,” said Rahman.

The governor urged the private banks to open accounts for the poor people.

Responding to the central bank's measures, the bankers said they want to see how their loans impact the rural people.

“We have requested the central bank to carry out an impact assessment study on our farm loans in the economy,” said Nurul Amin, managing director of NCC Bank and chairman of Association of Bankers Bangladesh.

The Daily Star/Bangladesh/ 25th July 2012

National Bank Limited recently took over Worldlink Payment Foundation SA, Greece to facilitate Bangladeshi expatriates send their hard earned money in a faster, safer and secured way.

With this, Worldlink has become NBL’s subsidiary exchange company, said a press release.

Parveen Haque Sikder, Director and Chairperson of Executive Committee of the Board of National Bank Limited was present at the function as chief guest.

Lisa Fatema Haque, Director and Theudorus Venetanasos, Executive Director of Worldlink Payment Foundation SA, Greece, and Neaz Ahmed, Managing Director and CEO, Shamsul Huda Khan, Deputy Managing Director and Divisional Head and Mir Mosharref Hossain, Senior Assistant Vice President of National Bank Limited were present at the ceremony.

The function was also attended by the leaders of Bangladeshi community in Greece.

The Daily Sun/Bangladesh/ 23th July 2012