The central bank will encourage credit growth in the private sector in an effort to raise economic growth to 7.2 percent, the highest ever target set by the government for the current fiscal year.

The Bangladesh Bank will put all its efforts to achieve the GDP growth target, defying gloomy forecasts made by multilateral lending agencies in the backdrop of a financial crisis in the Eurozone.

The central bank on July 18 will announce the new monetary policy for the current fiscal year where it will raise the target of private sector credit growth over the existing monetary policy target to achieve the goal.

The BB announces monetary policy twice a year -- in January and July.

In the current fiscal year, the private sector credit growth target is going to be set at more than 18 percent, up from 16 percent in the existing monetary policy announced in January.

An official of the central bank said, alongside the higher growth target, a restrained policy stance will also be pursued and credit to unproductive sectors will be discouraged to curb inflationary and external pressures.

BB Governor Atiur Rahman on Wednesday told The Daily Star that the monetary policy will have three main targets: achieving employment-led growth, bringing down inflation to 7.5 percent, and ensuring inclusive growth.

Another BB official said economists on several occasions complained that monetary policy does not work in Bangladesh. But most of the monetary policy targets were met in the last fiscal year, he added.

The official said they will achieve the goals this year too.

The Asian Development Bank in its "supplementary outlook" released yesterday said a debt crisis in the Eurozone and a slow recovery in the US will cast a shadow on growth outlook in some South Asia countries including Bangladesh.

However, the BB official said if the monetary policy and the fiscal policy can be coordinated properly, the growth target will be met.

Inflation also could be brought down within the target, he added.

From the beginning of fiscal 2011, inflation has been increasing every month, and non-food inflation crossed double digit for the first time.

However, due to the restrained monetary policy, non-food inflation could be brought down by 1 percentage point in the last fiscal year, he said.

The BB official said they will ask the government to cut the target of government borrowing from the banking sector in the current fiscal year to increase credit flow in the private sector.

He said the government borrowed Tk 8,000 crore less than the target of borrowing from the banking system in the revised budget of the last fiscal year.

The official also said, besides inflation, the pressure on exchange rate has eased much because of the government steps taken under the monetary policy.

The balance of payments had been in deficit for several months before turning surplus by $11 million during July-May last fiscal year, compared to the same period a year ago.

Apart from this, the exchange rate, which had been increasing gradually in the recent times, has started to fall.

The central bank official said they are now buying foreign currency from the market to prevent much appreciation of the taka against the dollar.

The Daily Star/Bangladesh/ 13th July 2012

Hafiz Ahmed Mazumder, MP, chairman of board of directors of Pubali Bank Ltd, and directors have decided at its 886th meeting to invest further Tk 500 crore in the capital market on Wednesday, says a press release.

The Bank is still equally interested to continue to play its strong role amid present situation of the capital market and by complying all rules and regulations of Securities and Exchange Commission (SEC) and Bangladesh bank.

The Daily Independent/Bangladesh/ 12th July 2012

Small bank account holders who maintain their accounts’ balance up to Tk 100,000 will not be charged additional 5 per cent withholding tax on their interest earnings even if they do not have tax identification number (TIN).

A proposal to increase tax at source on bank interests to 15 per cent for those without TIN from the 10 per cent was made in the budget for the current fiscal 2012-13 (FY13). But the proposal was later amended in the final budget with lifting the additional tax for the small account holders.

“We have conveyed the amendment to the banks immediately after the parliament passed the budget so banks do not charge additional tax on small account holders,” a National Board of Revenue (NBR) official told the news agency.

Many banks, however, are sending SMS to their clients irrespective of their account balance advising them submit their TIN certificates to avoid the additional 5 per cent tax at source.

The NBR official said the account holders, who do not have a deposit of over Tk 100,000, need not to be worried about the SMS as they would not be charged theadditional tax.  He said the account holders, however, would be charged 10 per cent tax at sources as of previous years.

The Daily Independent/Bangladesh/ 12th July 2012

RANGPU: The divisional business assessment meeting of the officials of the divisional, regional, corporate and district offices of Sonali Bank Limited (SBL) was held here today.

General Manager of Rangpur General Managers’ Office ANM Mashrurul Huda siraji presided over the meeting at his conference room while General Manager of Rajshahi General Managers’ Office ATM Afzal Hosain was present as the special guest.

All regional chiefs, chiefs of all six principal offices, regional offices, corporate branches and branches and senior officials of the SBL from all eight districts in Rangpur division participated.

The meeting assessed business achievements of all regional, corporate, principal offices and branches of the Bank during the just ended fiscal year and put maximum emphasis on achieving all fixed business indexes during the current fiscal.

He suggested for disbursing maximum agri-loans, realizing classified loans.

The Daily Sun/Bangladesh/ 12th July 2012

Bangladesh bank Governor Dr Atiur Rahman along with senior officials of Western Union and its principal agents, seen at a function to celebrate Western Union’s 12000 agent locations in Bangladesh at a hotel in Dhaka Tuesday.

Western Union, together with its agents, has become the largest international money remittance network in Bangladesh, by exceeding a record-setting 12,000 agent locations across the country recently.

Four leading banks of the country – Agrani, Islami, NCC and Uttara have recently become Western Union agents, bringing a total of 2,000 additional locations to the network, said a press release.

Consumers in Bangladesh can now receive Western Union Money TransferSM transactions from overseas across all 64 districts and 509 thanas in Bangladesh, from Teknaf to Tetulia. Some Western Union agent locations open beyond traditional nine-to-five business hours and on weekends.

“Through our 12,000 locations operated by 20 principal bank agents in Bangladesh, Western Union is there to serve Bangladeshis receiving money from family and beloved ones working and living overseas, particularly 70 percent of the population who live in rural areas,” said Patricia Riingen, senior vice president, East and South Asia, Western Union.

“Western Union has been bringing the world to Bangladesh for 18 years, connecting it with a global network of 500,000 agent locations in more than 200 countries and territories, providing coverage of countries popular with the six million Bangladeshis abroad.”

“Over the years, we have enabled and participated in the growth of overseas immigration and the change in Bangladesh’s economy by offering convenience, reliability and speedy transfers of monies – majority of which are funds for regular financial support and living expenses.

The Daily Sun/Bangladesh/ 12th July 2012