The central bank has fixed office hours for all banks from 9:30am to 4pm for the month of Ramadan.

Transaction hours will be between 9:30am and 2:30pm with a prayer break from 1:15pm to 1:30pm, Bangladesh Bank said in a statement yesterday. Banking services will remain off on Friday and Saturday.

Earlier, the government set office hours for all its offices from 9am to 3:30pm with the same break for prayers.

The Daily Star/Bangladesh/ 19th July 2012

Bangladesh Bank aims to control credit flow to public and private sectors in such a manner that can both meet the government's GDP growth target and lower inflation.

“The monetary policy stance ensures that attaining the GDP growth target is not constrained by access to credit for productive purposes," BB Governor Atiur Rahman said yesterday.

The BB also wants to limit domestic credit growth to levels consistent with the inflation target in the current fiscal year,” Rahman said while announcing the monetary policy for July-December, at the central bank headquarters in Dhaka.

In the current fiscal year, the GDP (gross domestic product) growth target has been set at 7.2 percent and inflation at 7.5 percent on an average basis.

The target of the private sector credit growth to be achieved by December has been raised by 2.3 percentage points over the previous year's target and set at 18.3 percent.

In the previous monetary policy, a target was set to bring down private sector credit growth to 16 percent by June, but the central bank has estimated that it may be 18.5 percent during the period.

However, the public sector credit growth has been lowered by 17.5 percentage points and set at 13.5 percent by December.

In the previous monetary policy, a target was set to contain public sector credit growth at 31 percent by June, but the BB estimated that it may be 23.4 percent during the period.

In the new monetary policy, the target for the private sector credit growth by June next year has been set at 18 percent and for the public sector at 20.8 percent.

The BB governor said credit to the private sector is envisaged to remain at a healthy 18 percent, above that in other countries in the region, and enough to accommodate the GDP growth target for the current fiscal year.

This stance is being closely coordinated with the finance ministry, he said.

Ensuring that the government's borrowing from the banking system does not crowd out available liquidity for commercial banks will remain a key area of focus for the BB, the governor said.

Hassan Zaman, senior adviser to the BB governor, said the government's target for borrowing from the banking sector at Tk 23,000 crore for the current fiscal year has been included in the monetary programme.

But the growth in such borrowing this fiscal year is lower than that in the last fiscal year, he said.

The BB will also take steps to ease the liquidity pressure on a few primary dealer banks that are required to absorb government's securities, he added.

Allah Malik Kazemi, a senior consultant of the BB, said, whether the GDP growth target for the current fiscal year will be achieved depends on the world economy.

Kazemi said, given the ongoing global economic slowdown, there are significant downside risks for Bangladesh's export and remittance growth, and therefore for the GDP growth target.

“To overcome the risks, steps as far as possible have been incorporated in the monetary policy,” he said.

However, the BB governor said, due to different reasons including the Summer Olympic Games in the UK, orders for Bangladeshi garments have been on the rise. He said exports in the current fiscal year would be good.

In order to strengthen the financial system, new loan classification and provisioning guidelines are in place, Rahman said.

Banks will have to implement these within the period of the current monetary policy, and while these may make a one-off difference to bank profitability, they will not affect access to credit, the BB governor said.

Citing a study of the central bank, its Deputy Governor SK Sur Chowdhury said default loans in banks may rise slightly in the September quarter.

But in December, it will get adjusted, he added. "As a result, there will be no impact on banks' profitability."

Chowdhury said, if the banks follow the new loan rules properly, good borrowers will get more loans.

The Daily Star/Bangladesh/ 19th July 2012

Asoke Das Gupta, Vice Chairman, Shawket Jaman, Director of Board of Directors, Farman R Chowdhury, Managing Director, seen at the 13th founding anniversary of the Bank in Dhaka.

ONE Bank Limited celebrated its 13th founding anniversary at the Bank’s head office recently.

Asoke Das Gupta, Vice Chairman, Shawket Jaman, Director of Board of Directors, Farman R Chowdhury, Managing Director and other senior executives of the Bank were also present.

ONE Bank started its functioning in 1999 as a private sector commercial bank.

The Daily Sun/Bangladesh/ 18th July 2012

People will be discouraged to deposit their money with the banks as the government has imposed tax at source on profits and interests.

This will decrease the amount of deposits, which will ultimately lower investment in the country, affecting the country’s overall economy negatively, experts said.

Moreover, it is also not clear to the people whether the government will charge 15 percent tax on all fixed deposit accounts.

Economists opine, the government has imposed tax on deposits as it can be collected easily. What the government should do is to find out the persons who are able to pay tax. This kind of decision is not justified for all citizens, they said.

While placing the Finance Bill in the parliament for passage on June 27, the finance minister made a proposal to deduct 10 percent tax on profit and interests at source for depositors bearing TIN certificates and 15 percent for those who do not have the TIN.

The National Board of Revenue (NBR) has already taken initiative to deduct tax at source as per the provision. The NBR has issued circular to the banks about executing the provision from July 2012, which the banks have started informing their clients through letters.

The finance minister while placing the Finance Bill at the House said, “Those who have more than Tk 100,000 deposit but does not have any tax identifying number (TIN) will have to pay 15 percent tax at source. The clients having TIN will have to pay 10 percent tax.

Earlier in his budget proposal, the finance minister proposed to impose tax on all deposit accounts whatever the deposit amount was. Later, in face of criticism, Prime Minister Sheikh Hasina proposed to impose tax on clients who have at least Tk 100,000 deposit.

HSBC’s retail banking and wealth management chief Md Shafkat Hossain told banglanews24.com: “We are informing our clients about the government decision through letters, e-mails and SMSs. Using all kinds of communication system we have requested our clients to submit their TINs.”

Former Bangladesh Bank Governor Saleh Uddin Ahmed said, “According to my consideration, this kind of tax collection is not right and injustice to general clients.General people will be discouraged to deposit money in the banks. On the other hand, it is contradictory to another section of tax collection that states free income limit as two lakhs.”

The former BB governor observed that the government should reconsider the decision.

Non-government research organisation Centre for Policy Dialogue (CPD) Executive Director Dr Mostafizur Rahman said, “The decision will discourage small investors to keep money in the banks. Those who deposit pension money in the banks will be affected.”

“Due to this decision, those who are not under tax limit will also have to pay tax, creating discrimination among the people.”

The Daily Sun/Bangladesh/ 18th July 2012

Mahtabuddin Ahmed, Chief Financial Officer of Robi and Md Ahsan-uz Zaman Additional Managing Director of Mutual Trust Bank Limited (MTBL) exchange documents after signing an agreement at MTB head office at Gulshan in Dhaka Tuesday.

Robi Axiata Limited signed a corporate agreement on “Nationwide Collection Service” with Mutual Trust Bank Limited on Tuesday.

Mahtabuddin Ahmed, Chief Financial Officer of Robi and Md Ahsan-uz Zaman Additional Managing Director of Mutual Trust Bank Limited (MTBL) signed the agreement on behalf of their respective organisations, said a press release.

This online collection service system will benefit the Robi customers by updating their bill payment instantly.

Among others, from Robi, Dewan Nazmul Hasan, Vice President, Md Shahedul Alam, Head of Corporate Finance, VP – Legal and Compliance, Md Badar Uddin Sabery, Manager Treasury, Md.Abdur Rahim Khan were present at the deal signing ceremony.

The Daily Sun/Bangladesh/ 18th July 2012