In spite of having remarkable changes in the banking sector, the state-owned banks failed to gain significant im-provement because the governments failed to keep the banks free from political influence, former adviser to care-taker government Dr. Wahiduddin Mahmud told a seminar Saturday.

Dr. Mahmud was addressing a seminar on CSR activities in banking sector, orga-nised by the Banker’s Forum.

Managing Director of Islami Bank Bangladesh Ltd. (IBBL), Mohammad Abdul Mannan and Managing Director of Pubali Bank Ltd., Md. Helal Ahmed Chow-dhury attended the seminar as special guests.

President of the Forum Abdul Khaleq presided.

The Daily Sun/Bangladesh/ 8th July 2012

Bangladesh Bank (BB) will neither revoke nor defer the enforcement of its two latest circulars that tightened the conditions for classification, provisioning and rescheduling of term loans, according to a central bank top official.

“We stand by our circulars,” central bank deputy governor SK Sur Chowdhury said replying to a question on the issue. In circular no-7 and 8, issued by the banking regulation and policy department (BRPD) of BB on June 14, the time limits for term loans were curtailed by three-month each.

It implies that banks will have to reduce the time limit for assessing probability of recovery of loans on the basis of qualitative judgments for three categories of classified loans—sub-standard (SS), doubtful (DF) and bad/loss (BL)-- from 1st of July. As per the new rules, non-repayment of loans from one to three months will be treated as sub-standard, from three to six months as doubtful and six to nine months as bad or loss accounts.

The previous rules had allowed six months of time limit for SS, 12 months for DF and 18 months for BL, according to BB. Meanwhile, the business community opposing the rules strongly terming that the industry entrepreneurs are not able to absorb the pressure right now.

Those opposed the issue includes leaders of the Federation of Bangladesh Chambers of Commerce and Industry, Bangladesh Garments Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association and Bangladesh Textile Mills Association.

The association leaders said a large amount of loan will turn classified and borrowers will not get a second chance to obtain short-term loans from banks after enforcement of the rules.

Leaders of the Bankers Association, Bangladesh (BAB) have met BB Governor Dr Atiur Rahman on last Monday, demanding a revision on this circular.

They said the volume of classified loans will rise abnormally due to enforcement of the new circular.

The Daily Sun/Bangladesh/ 8th July 2012

Foreign investors went on a buying spree in the first six months of the year, exploiting the depressed state of the stockmarket.

Foreign investors' market purchases between January and June amount to Tk 770 crore, while their selling, in that period, stood at only Tk 263 crore, according to data from Dhaka Stock Exchange.

The lower value of securities following the stockmarket crash last year tempted foreign investors, most of whom are global fund managers, to hoard stocks, local brokers say.

Although foreign investment, also called foreign portfolio investment, accounts for less than 1 percent of the total market capitalisation, their investment movements tend to carry great weight.

“They are not like our local investors. They do a lot of research before taking any decision on buying or selling,” a local broker said.

The banking shares were most in demand by foreign investors, while power, pharmaceuticals, life insurance and multinational companies were also attractive.

“The foreign investors were in buying mood in the first half of this year, as they took the market positively,” said Khaled Yusuf Farazi, chief executive officer of BRAC-EPL Investment, one of the prime brokerage service providers to foreign fund managers.

“The foreign investors are long-term investors and their investments have a positive impact on the market.”

The month-wise portfolio or foreign investment figures showed that the global fund managers were most active in March and April and relatively quiet in January and June.

In 2011, the foreign investors bought shares worth Tk 1,216.83 crore, an increase of around 12 percent from 2010. Sell-offs fell 35 percent to around Tk 1,138.40 crore in 2011 from a year ago.

The Daily Star/Bangladesh/ 8th July 2012

Atiur Rahman, governor of Bangladesh Bank, attends a seminar on 'IT security in today's global banking' arranged by Bankers' CTO Forum, IBM and TISL at Sonargaon Hotel in Dhaka on Thursday. Anil Menon, director of marketing and communication at IBM Software Group, was also present.

The Daily Star/Bangladesh/ 8th July 2012

HBM Iqbal, chairman of Premier Bank, attends the Bank's half yearly managers' conference at the Radisson Blu hotel in Dhaka yesterday. KAM Majedur Rahman, managing director, was also present.

The Daily Star/Bangladesh/ 8th July 2012