Myanmar's central bank is poised to win independence to set monetary policy, its deputy governor said, in what would be a major economic reform by a government seeking to attract foreign investments.

"If we have monetary stability, investors can be encouraged to enter the country with greater confidence," Maung Maung Win told AFP in an interview.

An independent central bank is seen as a hallmark of a modern free-market economy.

The move is not expected to come overnight, however, and the Central Bank of Myanmar (CBM) needs to recruit more staff to expand its capacity, Maung Maung Win said.

A new draft of the central bank law is now with the Attorney General's Office waiting to be reviewed, and must pass parliament before the institution can break free from government control over monetary policy. "The CBM law would be amended to become more relevant for a system of an independent central bank," said Maung Maung Win, one of two CBM deputies.

The CBM is seeking overseas help to train its staff. Earlier this month it signed a memorandum of understanding with Thailand's central bank on technical cooperation.

"The status of independence could not be given immediately as the bank needs to meet the requirements, including infrastructure, to become independent," said Maung Maung Win.

In a report published in May, the International Monetary Fund noted that the CBM is a department within the finance ministry and "does not have a monetary policy framework".

It added: "The CBM should be given full operational autonomy and proper accountability, with the clearly defined primary objective of domestic price stability."

According to the CBM's website, the main objective of its monetary policy is "to maintain macroeconomic stability in the economy while promoting domestic savings", using interest rates as its main instrument.

The Daily Independent/Bangladesh/ 29th June 2012

Bangladesh’s commercial banks’ exposure to the stock market came down to almost four-fifth of their legal limit—in a sign of avoiding risky investment on stocks which remain extremely volatile over the years. As of March this year their total investment stood at around Tk 160.0 billion (Tk 16,000 crore) or 2.30 per cent of their total liabilities, according to statistics of the Bangladesh Bank.

The figure is far below from legal 10 percent limit of the banks’ total liabilities allowed by the central bank to invest in stock market.

About two years back when the market was booming, the exposure scenario was a much different.
Of then 44 banks, 12 invested more than 10 percent of their liabilities in stocks.

The exposure of three banks was more than 20 percent of their liabilities, while another three banks exceeded 15 percent. When the stock market was at its peak in December 2010, investment by the
banks was Tk 230 billion (Tk 23,000 crore) in terms of market value.

An official of a private bank said his bank's investment decreased in the last two year, as stock prices experienced sharp fall.

He however said their real investment remained almost same.

A high official of a state-owned commercial bank said though stock market is risky; they are still investing cautiously since it is depositors’ money.

They invest in companies that give profits to their share-holders and have a good price earnings ratio.
Massive fall in stock prices over the years also put a lid on the bank’s profitability. Since its peak in 2010, the benchmark index lost more than half of its value as of June 26, 2012.

The market capitalisation declined 35.59 per cent to Tk 2,370 billion during the period.
From stock market in 2011, the private commercial banks made a profit of Tk 8.56 billion, down 69 per cent to Tk 27.371 billion a year earlier, the BB figure showed.

As of March this year, the four state-owned banks held 3.13 percent of their liabilities in the stock market, and 4.31 percent of the 24 private commercial banks' liabilities was invested in the market.

The total exposure of the two specialised banks to stock market declined to 4.22 per cent and of the foreign banks, exposure was to the tune of 0.07 per cent in March.

Former finance adviser to the caretaker government Mirza Azizul Islam said the banks avoid risky investment in stock market that is on the slide for long time.

“As they manage depositors’ money, they invest cautiously,” he said.

He, also the ex-chairman of Securities and Exchange Commission, said return from stock market is not good right at this moment as the market continued to slip.

“But bank as institutional investor can invest at the fundamentally strong companies as price earning ratio comes down to investable level,” he said.

The Daily Independent/Bangladesh/ 29th June 2012

AAM Zakaria, Managing Director of FSIBL, inaugurates a branch at Konapara in Dhaka Wednesday.

First Security Islami Bank Limi-ted (FSIBL) opened a branch at Kona-para in Dhaka Wednesday.

AAM Zakaria, Managing Director of the Bank, inaugurated the branch, said a press release.

Kazi Md Amanullah, Head of General Services Division, Azam Khan, Head of Marketing and Development Division, Branch Managers of FSIBL and local elites were present on the occasion.

The Daily Sun/Bangladesh/ 29th June 2012

KATHMANDU: The World Bank is increasing its efforts in Nepal at helping authorities and communities improve the nutritional status of the country's most vulnerable populations.

This is one of the first World Bank assisted multi-sector nutrition project in the South Asia region, according to Rajib Upadhyaya, Senior External Affairs Specialist of World Bank in Nepal.

The project will engage a wide range of actors across government and civil society in the areas of health, poverty reduction, social protection, water and sanitation, agriculture, local development and education in the planning and implementation.

A 40 million US dollars grant and credit has been approved by the World Bank Board of Executive Directors Wednesday to complement Nepal's ongoing programs in nutrition.

"The high rates of under nutrition nearly two in every five Nepali children under the age of five are stunted with nearly a third underweight require urgent and coordinated action by multiple institutions to attack this silent killer," according to Tahseen Sayed, the World Bank Country Manager for Nepal.

Earlier this month in the capital Kathmandu, the World Bank organized a Knowledge Forum where nearly 200 leading nutrition experts and practitioners from governments, civil society organizations development partners across the South Asia region shared lessons and experience in improving infant and young child nutrition.

The Daily Sun/Bangladesh/ 29th June 2012

Muhammad A Rumee Ali, Chairman of BRAC Bank Limited, presides over the Bank's 9th EGM at Army Golf Garden in Dhaka Thursday.

BRAC Bank Limited approved 50 percent rights share or one rights share against two shares at the rate of Tk 25 each including premium of Tk 15 for raising paid-up capital of the Bank.

The approval came at the 9th Extra-ordinary General Meeting (EGM) of the Bank held at Army Golf Garden in Dhaka Thursday, said a press release. Muhammad A Rumee Ali, Chairman of the Bank, presided over the meeting.

Shib Narayan Kairy and Dr Hafiz G A Siddiqi, Directors, Syed Mahbubur Rahman, Managing Director and CEO of the Bank and Rais Uddin Ahmad, Company Secretary and a large number of shareholders attended the EGM.

Addressing the EGM, Rumee Ali expressed his gratitude to the shareholders, stakeholders and management for their continuous support to the company.

The Daily Sun/Bangladesh/ 29th June 2012