Bangladesh Bank has forced four banks to pay

Tk 523 crore to Sonali Bank after detection of financial anomalies among these banks regarding a transaction of Beximco Group.

The central bank yesterday deducted the amount from the accounts of Janata, Agrani, Rupali and Exim Bank and gave the money to Sonali Bank.

Two sister concerns of Beximco Group -- Beximco Ltd and Bextex -- transacted goods between themselves by opening letters of credit (LC) locally.

Bextex, which was the seller, opened a local L/C through Sonali Bank and traded goods with Beximco Ltd.

Beximco Ltd committed to pay the price of the goods through the four banks.

Though the transaction was completed last year, Beximco Ltd did not pay the four banks. As a result, the four banks did not pay the dues to Sonali Bank.

Sonali Bank wrote a letter to the BB last week requesting it to settle the matter, which resulted in the BB action.

A BB official said the amount will have to be made a 'forced loan' to Beximco on part of the four banks.

In effect, Beximco remains a defaulter to the four banks who were forced to pay for them.

An official of Sonali Bank said the four banks owed a total of about Tk 650 crore to it regarding the Beximco transactions.

The four banks have already repaid Tk 127 crore to Sonali Bank.

News: The Daily Star/ Bangladesh/ 09-May-2012

The National Board of Revenue yesterday directed banks to freeze three more accounts related to controversial multilevel marketing (MLM) company Destiny Group.

The tax administrator asked banks to freeze accounts of two officials of Destiny Group -- Shammi Akhter and Nimmi Akhter -- along with the account of Destiny Tree Plantation, a concern of Destiny, said an official of the NBR.

The NBR's Central Intelligence Cell sent a letter to all banks asking them to suspend all transactions, including withdrawal and transfer of money from these accounts.

This was the third time the tax authority moved to freeze bank accounts of Destiny Group to investigate whether Destiny has complied with tax laws or dodged tax.

Earlier, the NBR froze eight bank accounts, including that of Destiny Group's Chairman Mohammad Rafiqul Amin.

News: The Daily Star/ Bangladesh/ 09-May-2012

EXIM Bank, a Shariah-based Islamic bank, sets its eyes on taking the banking service to the doorstep of its customers.
It has the highest export and import volume among the third generation banks. In an exclusive interview with The Independent, Dr Mohammed Haider Ali Miah, additional managing director (AMD) of EXIM Bank, said that the bank's policy is to exceed customer expectations.
He said the bank aims to cater to its customers' needs as quickly as possible. He added that the bank is using world-class banking software, Temenos 24, of Switzerland.
He noted that the banking service is undergoing major changes with the development of online solutions.
“Consumers and businesses are becoming increasingly autonomous and are armed with the latest technologies and devices. They demand instant and self-service access to their accounts and data,” Miah said.
Currently, EXIM Bank provides internet banking, online banking, mobile banking and SMS banking services.
Miah, who has about three decades of banking experience, discussed the banks’ success story, current activities and future plans.
Established in 1999, Exim Bank has been contributing enormously to the country's socio-economic development.
The banker said that EXIM Bank is one of the best performing banks among the country's private commercial banks, with an excellent blend of working environment and corporate culture. “The bank's operating profit growth is very good,” he added.
According to AMD of EXIM, compared to the first generation or the state-owned banks in terms of overall performance, the bank’s business is much better and is increasing day by day.
In the current year, the bank expects to make a handsome operating profit, he said.
He vowed to bring the country's unbanked population under inclusive banking services through different innovative and technology-based products. “For this, we've opened a number of rural branches and more are in the offing,” he said. Miah estimated that about 55 per cent of the total population has still remained unbanked, and most of them reside in rural areas.
In villages, the bank has already started SME or Agri branches to help farmers cultivate high-quality crops, fisheries, poultry, Arabian date and mushroom, among others.
Currently, EXIM Bank has 62 branches. Of these, 15 are located in the rural area. The bank has also two overseas branches in London and Toronto.
Giving details of the branch expansion plans of the bank, he said, the bank planned to open 15 more branches this year and five of them would be in the rural areas.
To earn foreign remittance, it plans to open two new overseas branches this year—one in Sydney, Australia, and another in New York, USA.
“The sun will never set on EXIM Bank,” the banker asserted, pointing out the bank's growing presence overseas.
The bank, which already has a sizeable number of ATMs, is planning to team up with all other banks to increase its ATM presence in the shortest possible time, he said.
The new products of the bank include Mudaraba Cash Waqf Deposit, Mudaraba Denmohor or Marriage Deposit, Mudaraba Student Savings Deposit Account, Mudaraba Monthly Student Savings Scheme Account and E-corner, CDM & ATM services. “To attract more customers, the bank is always plays innovative. Customer response to our new products is very good,” Miah said.
He also said the uniqueness of the bank lied in its efforts to be a centralized online Islamic banking entity and popularise the Islamic mode of investment and deposit.
About the new nine banks approved by the central bank, he said the country needed more banks considering its current economic situation.
The veteran banker is for strictly maintaining a healthy spread between lending and deposit rates. Maintaining a five per cent spread set by the bank will add a fillip to industrialization, he said.
On corporate social responsibilities (CSR), he said at least 2 per cent of the bank’s annual profit was set aside for CSR programmes. EXIM Bank believes in ‘together towards tomorrow”. Since its inception, the bank has laid stronger emphasis on “CSR” than “maximization of profit
The bank has a positive approach towards lessening the desolation of the underprivileged and distressed sections of the population. It has established the EXIM Bank Foundation in 2006 to carry out CSR activities in the most planned and orderly manner.
The main CSR activities include health care through EXIM Bank Hospital, scholarships for brilliant poor students, education promotion schemes, helping people affected by natural calamities, helping slum people, sponsoring sports, cultural programmes and beautification of the capital city.
On how he became a successful banker, Miah said the first and foremost quality of a successful banker is that he should keep his doors open to all who needed banking help.
“An excellent attendance record and ability to complete tasks on time and problem-solving and leadership skills are of great value in banking.”
“The greater your skill sets and certifications, the more likely will you be able to advance your career and move up the ladder,” he noted.
He also mentioned continuous improvement of technical, professional and soft skills, networking, learning about own company and having a strong work ethic as other essential qualities.
The bank has taken a lot of steps to reduce its non-performing loans. “We have laws and monitoring division to reduce non-performing investments or loans. We are doing it by strengthening banking supervision by adopting international loan classification and recovery process.”
He put forward some suggestions for improvement of the country’s banking sector. A bank should follow policy guidelines set by the central bank, he said.
The IT sector needs to be modernized to put the banks on a firm footing.
Mobile banking, enabling banking through mobile phones, is now the demand of the hour, he said.
Transparency, accountability and maintaining corporate governance are keys to winning the confidence of the customer, he said.
“Customers should feel at ease and comfortable with you and the information you provide. The truth is always the best. Make your customer feel special,” he added.

News: The Independent / Bangladesh/ 09-May-2012

The shareholders of City Bank at the 29th Annual General Meeting of the bank held at Bashundhara Convention Center in the city on 6 May unanimously approved 25 percent stock dividend as recommended by the Board of Directors.

Rubel Aziz, who was elected Chairman of the bank recently, said that 2011 has been a solid and successful year for City Bank despite the overall uncertainties prevalent in the global and local economy.

City Bank has again reached another pinnacle in terms of both balance sheet growth and profitability - surpassing all its previous records.

The shareholders asked a number of questions regarding the performance and the direction of the bank, which the Chairman replied and explained.

Rubel Aziz, elected bank's Chairman recently, is also the Chairman of Janata Insurance Company Limited, Managing Director of Partex Beverage and Chairman, Executive Committee of IDLC Finance Ltd. He was also the elected President of Gulshan Club for two consecutive terms.

Also present at the AGM were Directors Aziz Al Kaiser, Deen Mohammad, Hossain Mehmood, Hossain Khaled, Rajibul Huq Chowdhury, Rafiqul Islam Khan, Mobarak Ali, Aziz Al Mahmood and Managing Director and CEO K Mahmood Sattar and senior executives of the bank.

A large number of shareholders attended the meeting.

News: Daily Sun/ Bangladesh/ 09-May-2012

Non-banking financial institutions (NBFIs) have welcomed the central bank move of relaxing foreign exchange regulations which would allow them providing term loans in local currency to foreign companies through authorised dealer (AD) banks.

"This is a great step taken by the Bangladesh Bank and it will widen our business further," chairman of Bangladesh Leasing and Finance Companies Association (BLFCA) Asad Khan told the FE Monday.

The new arrangements will help create an opportunity for the NBFIs to invest funds in foreign-owned companies.

"We have long been appealing to the bank regulator to withdraw all restrictions in investing our money in foreign companies," BLFCA chairman said.

So long AD banks were allowed to offer such loans to the foreign-owned companies after complying with the conditions set by the BB.

Asad Khan also said that he is confused regarding the Bangladesh Bank circular whether it is applied to fully-owned or partly-owned companies as NBFIs have already been financing in partly-owned entities since they started business in the country.

Under the conditions, the term loans in Bangladesh Taka (BDT) should not exceed, as percentage of total term borrowings, the percentage of equity of the firms/companies held by Bangladesh nationals and firms/companies, not owned or controlled by foreigners.

Besides, the total debt liabilities of the firms/companies must not also exceed the 50:50 debt equity ratio.

Terming it a good sign, Mofizuddin Sarkar, Managing Director of Bangladesh Finance Investment Company Ltd., said it seems that government wants that foreign companies have more involvement in the country.

Normally the foreign-owned companies do borrow funds in the term loans from external sources, he said, adding that the companies are also allowed to receive such loans in BDT from local banks, subject to compliance with specific regulations.

He said the move will certainly boost NBFIs business and help to come out from liquidity shortage-hit non-bankers.

Currently, 31 NBFIs are operating in Bangladesh.

According to the central bank circular, AD banks are also to ensure that the companies follow all provisions, in line with the existing guidelines for foreign exchange transactions (GFET) for the whole amount of financing.

"As per new rules, if the loan is in foreign exchange then transaction has to be under foreign exchange transaction guidelines," he added.

Financial Express/Bangladesh/ 8th May 2012