The Securities and Exchange Commission allowed two more institutions to roll out full-fledged merchant banking operations in the stock market. On Wednesday, the SEC gave nod the two institutions -- IL Capital Limited and CAMP Advisory Ltd --to begin operations.

The new permits bring the number of merchant banks to 52. The responsibilities of a full-fledged merchant bank include underwriting, issue management, portfolio management and lending to stock investors.

The new merchant banks may boost liquidity flows into the market and ease entry of new exchange listings.In 2009, finance ministry asked the SEC to increase number merchant banks to 65. Official sources said, 20 more institutions are awaiting SEC approval for getting merchant banking licences.

The Independent/Bangladesh/ 6th April 2012

Towhid Samad, Chairman, Board of Trustees, Independent University of Bangladesh (IUB), inaugurates two ATM booths of the Bank at the IUB campus at Bashundhara residential area in the city on Thursday.

Mutual Trust Bank Limited (MTB) opened two new ATM booths at the Independent University of Bangladesh (IUB) campus at Bashundhara residential area in the city.

Towhid Samad, chairman of IUB Board of Trustees, formally inaugurated the booths as chief guest yesterday, says a press release.

Prof M Omar Rahman, vice chancellor of IUB, and Dr Arif Dowla, chairman of MTB, also attended the function as special guests.

The Daily Sun/Bangladesh/ 6th April 2012

A Jabbar Mollah, Vice Chairman of Social Islami Bank Limited, inaugurates an ATM booth at the Bank’s Khulna branch recently.

Social Islami Bank Limited opened an ATM booth at its Khulna branch recently.

A Jabbar Mollah, Vice Chairman of the Bank inaugurated the ATM booth as chief guest, said a press release.

Among others, Muha- mmed Ali, Managing Director of the Bank, AMM F Farhad and Md. Mohashin Miah, Deputy Managing Directors and Head of Khulna Branch Shaikh Magfar Uddin and local elites were present on the occasion.

The Daily Sun/Bangladesh/ 6th April 2012

Bangladesh Bank Governor Dr Atiur Rahman yesterday stressed the need for developing insurance products, particularly health insurance and crop insurance, for the poor and urged all concerned to work together so that poor households can insure themselves against health shocks and crop losses.

“The biggest gap in microfinance is in developing insurance products for the poor, particularly health insurance and crop insurance,” he said while addressing a seminar on ‘Towards a Public Policy on Microfinance in Bangladesh.’

“Let us work together- microfinance regulators, program managers, development partners and the private sector so that poor households can insure themselves against the most common type of shocks - health shocks and crop losses - which often cruelly reverses the steady gains that our hard-working country men and women achieve,” the governor added.

The Daily Sun/Bangladesh/ 6th April 2012

The International Monetary Fund (IMF) has sought a report on implementation of the 16 conditions the multilateral lending agency tagged with releasing $1 billion credit to Bangladesh.

The IMF in a letter to Bangladesh has asked to know about the progress report within Monday, sources said.
The progress report was sought just few days before the global lender would place the Extended Credit Facility (ECF) loan proposal of the government to its board meeting on April 11.

“We have already sought every detail on the progress of the implementation of the conditions to concerned government agencies”, a top central bank official said.

He also said the progress in execution of conditionals including price hike of fuel oil would also be place at the board meeting.

The ECF fund will come in six tranches, of which the first $167 million installment will land by the end of current fiscal year if the board approves the proposal next week, finance ministry sources said.

Prime Minister’s energy adviser Tawfiq-E-Elahi Chowdhury told daily sun that the price hike of fuel oil, tagged with the release of the ECF fund, will also be placed at the board meeting of IMF next week.

Energy Division is likely to increase fuel oil prices again before the announcement of next budget in June, he said, adding that the process might begin from next month.

The 16 IMF conditions include containing budget deficit within five per cent of GDP, but a finance ministry report indicated that it may increase to 5.1 percent at the end of current fiscal.

Budget deficit may also widen due to drastic fall in receiving foreign assistance. In the original budget, the deficit was estimated at 5 percent of the GDP.

Meanwhile, different government agencies have already made various strides in implementing the conditions entwined with the IMF loan facilities. The draft value added tax law has already been approved by the cabinet and will be placed in the next session of parliament as a bill to meet the conditions.

Dr AB Mirza Azizul Islam, former adviser to a caretaker government, told daily sun that the ECF fund will help ease the foreign currency crisis of the government.

“We need foreign currency to strengthen local currency taka,” he said adding that the government should not take IMF loan accepting the painful conditions that may go against the interest of the country.

The list of IMF conditions also include demutualisation of Dhaka and Chittagong bourses by December.
The government will also have to introduce a system of automated taxpayer identification number and automatic price adjustments of domestic fuel oils with their international rates.

The Banking Companies Act (amendment) has to be placed in parliament by June to give Bangladesh Bank (BB) sole regulatory authority over the commercial banks, and to reduce the number of bank directors as per the conditions.

The IMF also asked the government to design a new set of regulations on loan classification and loan-loss provisioning by June 2014, following international best practices.

The IMF said a new organisational structure of the National Board of Revenue to support VAT collection has to be approved by the finance minister by September.

It also asked the central bank to issue another order by September to adjust the new amended banking law, setting a ceiling on commercial banks’ shareholdings in the stock market to 25 percent of their individual regulatory capital.

Cut in subsidy, rise in repo rate of Bangladesh Bank, withdrawal of cap on commercial banks’ lending rates, are the other conditions of the global lender.

The IMF’s $1 billion credit, which would be given to Bangladesh in three-year duration, is aimed to help Bangladesh tackle its balance of payments (BoP) problems. The country’s BoP is already under tremendous pressure.

The Daily Sun/Bangladesh/ 6th April 2012