Food Minister Dr Abdur Razzaque, addresses a special meeting of the governing board of SAARC Food Bank at a city hotel on Sunday.

Food Minister Dr Abdur Razzaque on Sunday sought cooperation from the SAARC member countries to make the SAARC Food Bank a real success.

The minister made the call while talking to reporters after attending the 5th special meeting of the governing board of SAARC Food Bank at a city hotel.

“Political promises have turned into a hollow as some issues relating to the food bank are yet to be settled,” the minister said.

Therefore, SAARC member nations should come forward to make it fully functional, he added.

Established in 2007, SAARC Food Bank aims to help the member states with food deficit to meet their emergency needs.

For this, every member state pledged to create a certain food reserve for the bank.

Abdur Razzaque also expressed dissatisfaction as prices of foods, concession rate and operational modalities are yet to be finalised for the food bank, since the member nations did not take any unilateral stance over those issues.

The cross-cutting issues will set an appropriate threshold for a member country to access the food bank resources as well as determining the prices and methods for movement and delivery of food grains.

Once the food bank becomes functional, it would open up new opportunities for the SAARC members during any emergency and production shortfall,” Dr Razzaque added. “Bangladesh can keep a reserve of 0.2 million tonnes of food grains, against its total capacity of 1.7 million tonnes,” he said.

A World Bank-funded project to build up a giant silo would increase the country’s food storage capacity in future, the minister added.

Presided over by Food Division Secretary Barun Dev Mitra, the opening session of the meeting was also attended by a representative of SAARC Secretary General and members of the governing board of SAARC Food Bank.

The Daily Sun/ Bangladesh/ 14th May 2012

Regulatory bindings have forced private commercial banks to roll out more money to the farm sector in the current fiscal year, according to data from Bangladesh Bank.

Agriculture credit disbursed by private banks, both local and foreign, rose 42.68 percent to Tk 3,471 crore in the 10 months through April from Tk 2,433 crore in the same period a year ago.

“We have made farm credit compulsory and set an annual target for banks,” SM Moniruzzaman, an executive director of the central bank, told The Daily Star yesterday.

If any bank fails to achieve the target, it will have to deposit the same amount to the central bank that will pay only 5 percent interest on the fund.

It means an interest loss to a bank if it does not provide agriculture credit at 10 percent rate. “It might compel the banks to speed up farm credit disbursement,” Moniruzzaman said.

As the local private and foreign banks have a limited number of branches, the BB has allowed them to take help from microfinance institutions to disburse the loans across the country.

Farm credit disbursed by state and private banks combined increased 5.67 percent to Tk 10,200 crore during July-April against an annual target of Tk 13,800 crore, which is 9.4 percent higher than the previous year's target, the data shows.

The total disbursement will stand at Tk 10,853 crore if loans for sharecroppers disbursed through BRAC and credit provided by state-owned BRDB are taken into account.

The central bank has adopted a new agricultural credit policy, strengthened the monitoring system and opened help desks to boost farm credit that remained ignored for years.

According to the policy, no report from the Credit Information Bureau is required for a bank to lend up to Tk 1.5 lakh in agriculture loans. A sanctioned loan must be distributed in 10 days, the policy says. The loan can also be distributed through a farmer's account opened with Tk 10.

If anybody faces difficulty getting the agriculture loan he can lodge complaints with the central bank's help desk at its headquarters or regional offices.

An inspection team has been deployed at the BB headquarters to monitor hassle-free disbursement of loans and help the farmers use the money properly.

The Daily Star/ Bangladesh/ 14th May 2012

Finance Minister AMA Muhith yesterday signalled a further hike in fuel and power prices in the next budget to reduce the subsidy burden on the government.

Muhith sat at a pre-budget meeting with the editors and other senior journalists of the print and electronic media at his ministry.

“A price adjustment is a political decision of the government but the timing will be fixed after considering political environment, summer and irrigation season,” said Muhith, when asked about the timing.

The government had to borrow from the banking system to subsidise fuel oils, which eventually increased inflation, Muhith said.

“Subsidy cuts will now tackle that,” he said.

The minister replied to the editors' queries on amnesty for black money, reducing tax on newsprint, and the World Bank's corruption report about the Padma bridge project.

In the current fiscal year, the government hiked fuel and power prices several times, resulting in inflation, especially non-food inflation reaching double digits.

But the finance minister told the editors that subsidy cuts would tame inflation and it may come down to 7.5 percent next year.

Inflation comes down to the single digit level not only because of cuts in subsidy but also due to an improved supply situation and an increase in income, Muhith said.

About amnesty for black money in the next budget, Muhith said the government has not decided on the matter yet.

On foreign aid, Muhith said the government failed to utilise foreign aid due to its inefficiency.

“Though commitment increased, we have not been able to spend the fund. It is a failure,” Muhith said.

In the next budget, steps will be taken to increase efficiency, he said.

Responding to the editors' queries about good governance and decentralisation of administration, the minister admitted there is politicisation in the administration.

“Personally I feel that finding a solution to this problem [politicisation] is difficult,” he said.

“Change is not possible without changing the political atmosphere,” Muhith said.

On public private partnership, the minister said it is not true that nothing has been done for implementing PPP projects.

He said the power projects have been implemented in line with the PPP model. Various flyover projects are being implemented through PPP initiatives, according to the minister.

The editors strongly recommended lowering tax and duty on newsprint import.

Abdul Qayyum, joint editor of the Prothom Alo, said the cost of production of a copy of a daily newspaper is Tk 20 but it is sold at Tk 8. The cost cannot be recovered from advertisements alone, he said.

Newspapers pay 23.5 percent duty, VAT and advance income tax on newsprint imports. Qayyum proposed a waiver of 3 percent duty and 15 percent VAT on newsprint imports.

He urged the government to consider the recommendation, keeping in mind the media's social contribution.

To a question about US Secretary of State Hillary Clinton's comments regarding Grameen Bank, Muhith said he read about them in newspapers.

He said his position regarding the issue was clear. He dispelled the rumours about the government taking over the bank, and said: "It's a government enterprise, and it is clear who owns how much of the bank."

"Legally, the government of Bangladesh owns 25 percent of Grameen Bank," Muhith added.

Grameen Bank is not the only microcredit providing institution of the country, he said.

Muhith said there are around 3,000 microcredit institutions, many with good recovery rates.

“Microcredit is wonderful, but there is no point in fussing about it,” he said.

Reazuddin Ahmed, editor of the News Today, asked whether a sack full of money recovered by border guards will be included in the revenue earnings. A smiling finance minister said there is no scope to include it in the revenue.

Shah Husain Imam, associate editor of The Daily Star, suggested strengthening the Implementation Monitoring and Evaluation Department for the implementation of the annual development programme.

Moazzem Hossain, editor of The Finance Express; Syed Fahim Munaim, the chief executive officer and chief editor of Maasranga Television; Manzurul Ahsan Bulbul, chief editor of Baishakhi TV; Shykh Seraj, director of Channel i; and Khondaker Muniruzzaman, acting editor of the Dainik Sangbad, were also present.

The Daily Star/ Bangladesh/ 14th May 2012

Dinesh Weerakkody, chairman of Commercial Bank of Ceylon, and Ravi Dias, managing director, arrived in Dhaka today for a four-day visit, according to a statement of the Bank.

This is their first visit to Bangladesh after taking over their respective offices on the retirement of MJC Amarasuriya as chairman and Amitha Gooneratne as managing director.

Weerakkody and Dias will meet the Bank's high officials and corporate customers in Dhaka and Chittagong and attend the annual customer's get together organised by the Bank's Bangladesh office.

The Daily Star/ Bangladesh/ 14th May 2012

Britain expects its flagship banking reforms to remain on track after European Union talks next week, a government source said on Friday, despite opposition to its demand for more freedom from Brussels to choose the level of banks’ capital defences. Chancellor George Osborne has said he will see through recommendations from the Independent Commission on Banking (ICB) for banks to be split into retail and investment arms and to hold more loss-absorbing bonds as a defence against crises.

Those rules, where UK institutions would have to hold enough capital to cover a fifth of their assets as a safety net, go beyond international standards and are opposed by some EU nations - and many in the City of London - who fear they could affect the marketplace for savers, investment and lending.

Finance ministers from across the 27-nation bloc will meet in Brussels on Tuesday to vote on a deal for new bank rules - the second attempt to reach agreement.

“We are confident that we will be able to implement the ICB’s recommendations,” a government source told Reuters.

Osborne warned his EU counterparts earlier this month that any watering down of bank capital rules would make him “look like an idiot”.

The row over who has the power over how banks are regulated could further isolate Britain from the European Union mainstream after Prime Minister David Cameron opted out of an EU economic pact aimed at shoring up the crisis-hit euro zone last year.

EU lawmakers are expected to give nations some flexibility on what bank buffers they impose but Britain wants Brussels to have even less of a say - a demand that may not find a sympathetic audience on the continent.

Britain’s Conservative-Liberal Democrat coalition government is expected to push through its own reforms one way or another.

Osborne is under pressure from an unruly faction of his Conservative party who want Britain to pull out of the EU or at least reduce the hold Brussels has over British laws and regulations, especially those that affect the City of London. London’s bankers have been unhappy with the stricter capital rules Osborne wants to impose, warning that the financial services sector - crucial to Britain’s recovery prospects - will suffer as a result unless they are adopted globally.

Some Europeans worry, however, that higher capital ratios will make British banks appear safer and more attractive to depositors than their European competitors.

The Independent/ Bangladesh/ 13th May 2012