Probashi Kallyan Bank will set up 13 liaison offices in different foreign missions to help increase remittance from workers abroad through the legal channel and introduce the banking services among the non-resident Bangladeshis.

Officials hoped that the remittance will increase with establishment of link offices.

The 13 link offices will be established by December this year, said CM Koyes Sami, Managing Director of Probashi Kallyan Bank (PKB).

He said through the liaison offices, they will encourage the Bangladeshi workers to send money through legal channel.

"The liaison offices will sell government sponsored wage earner development bond to the migrants," the PKB MD said and added the Bangladeshi outbound people will feel interested when they get the bond through PKB foreign offices.

"Many of the overseas workers are not familiar to the bond properly," he said.

Mr Sami said they have also planned to open exchange houses in those offices for collecting remittances with minimum service charge. "With cooperation of Bangladeshi workers we will set up such house."

For establishing the link offices, PKB has already submitted proposal to the Bangladesh Bank for permission, said the PKB chief.

He said the liaison offices will be established in the three phases.

In the first phase, the special bank will launch five offices in Saudi Arabia, United Arab Emirates (UAE), Kuwait, Lebanon and Malaysia by June.

The PKB will set up offices in Qatar, Oman, Bahrain, Singapore and Korea by September and Iraq, Japan and Jordan by December. Mr Sami told the FE.

He viewed the authority should reduce service charge on remittance to inspire sending money through the official channel.

He also suggested waving service charge on a limit of remittance worth US$ 500 and sending money to the beneficiaries in a short time.

Bangladeshis working abroad sent over US$ 1.13 billion last month despite current political crisis in the Middle East and economic slowdown in the United States and Europe. The amount is up by US$ 144 million, or 14.58 per cent compared to the corresponding month last year.

With this amount, the country received a total of US$ 8.420 billion as remittances from expatriate Bangladeshis during the first eight months (July-February) of current fiscal year.

According to official figures, more than seven million Bangladeshis now work abroad and they remitted a record $11.65 billion in the last fiscal year (2010-11).

Probashi Kallyan Bank officially started operation on April 20, 2011 for providing migration loan to Bangladeshi outbound people for protecting themselves from traditional money lenders (Mahajon).

The specialised bank distributes credit at 9 per cent interest among the overseas job seekers.

The PKB provides loan amounting to Tk 84,000 for going with employment to Middle East, South-East Asian countries and Malaysia and Tk 120,000 to Europe and African countries.

Financial Express/Bangladesh/ 28th March 2012

The Ministry of Food and Disaster Management has sought the central bank's intervention to ease opening of letters of credit (L/Cs) in banks for wheat imports, officials said.

"We seek your personal intervention so that SCBs (state-owned commercial banks) and PCBs (private commercial banks) give priorities in opening L/Cs and settlement of L/C-related matters for wheat imports," the food secretary wrote to the Bangladesh Bank (BB) governor.

The recent request came following a drastic fall in wheat import in the country which pushed the prices of wheat-related items up significantly in the market recently.

The food ministry and private importers have blamed the banks for their refusal to open LCs for importing wheat to overcome the crisis.

According to the letter, the country has imported only 0.786 million tonnes of wheat during July-February period of the current fiscal year (FY 2011-12) against a demand of 4-5 million tonnes yearly. Local production of wheat is about 1.0 million tonnes.

The amount of wheat imported during the period is equivalent to only 21 per cent of total import of such items of the corresponding period of FY 2010-11, the letter said.

The food secretary wrote, "Following price increase of atta, maida and other items related to wheat, the government has initiated to sell atta in open market to stabilise the market but all the initiatives have gone in vain due to the shortage of such items in the market."

Chairman and Managing Director of S Alam Group Md Saiful Alam said, "banks, specially the government ones, are responsible for the situation."

"The banks were refusing to open LCs, showing the reason of scarcity of the US dollar in their stock. Some banks are suggesting that the importers should open LCs for comparatively small quantity to lower the pressure on the greenback," he alleged.

"Government banks are widely responsible for creating the crisis as most of the time they directly refuse the importers to open LCs," Alam added.

A high official of Meghna Group, preferring anonymity, said, "Our import of wheat has come down drastically which has thrown us into an embarrassing situation with our wholesalers."

Meanwhile, a high official of Dhaka Bank Ltd told the FE Sunday, "We have been given strict instructions not to spend the greenback, as demanded by the importers, due to its limited stock in the banks".

The banker said, "The stock of greenback is much lower than that of demand from the importers which made us bound to refuse opening of most of the LCs."

However, an executive director of the central bank said, "Immediately after receiving the request from the food ministry, we have given verbal instructions to all the banks to be liberal in opening LCs for such essential items."

Due to the decline in import of wheat, prices of atta, maida and other items related with wheat have gone up by 60-70 per cent within a couple of months," according to market sources of city's Karwan Bazar and Fakirapool area.

"We used to buy 50 kg atta at around Tk 1,000 four months ago but today I bought it at Tk 1,500," Mannan Bhuiyan, proprietor of Mannan Traders at the city's Karwan Bazar area said.

Mannan said, "Demand of atta and maida is high in the market but we are not allowed to buy as much as we want due to shortage in stock."

However, prices of almost all bakery items have also increased across the country due to the crisis, market sources said.

Financial Express/Bangladesh/ 28th March 2012

The government is going to increase bank borrowings substantially, to the extent of Tk 294 billion, to finance the budget deficit of the current fiscal year ending June affecting private investment.

"The figure of revised government borrowing from the banking system for FY'12 will be finalised at a meeting of the cash and debt management committee (CDMC) scheduled for Wednesday afternoon," a senior official told the FE.

The Ministry of Finance (MoF) had earlier set the target of borrowing around Tk 279 billion from the country's commercial banks and financial institutions against the original budgetary target of Tk 189.57 billion.

"The government could convince the last mission of International Monetary Fund (IMF) to raise the bank borrowing up to Tk 279 billion for FY'12 exceeding its original budgetary target," said the official who is close to the government's overall borrowing activities.

He also said the central bank has designed its revised monetary programme which was published in its latest monetary policy, considering the government's unofficially revised bank borrowing target for the FY'12.

Now the MoF is planning to borrow Tk 294 billion from the banking system instead of Tk 279 billion to meet the government expenditure.

A high-power committee on cash and debt management headed by the finance secretary is now working on mobilising fund at minimum cost with minimum risk.

The budgetary target for government borrowing from the banking system was originally set at an aggregate level of Tk 189.57 billion through issuing treasury bills (T-bills) and bonds.

Higher subsidy requirements particularly in energy, power and agriculture sectors and lower inflow of fund from the overseas sources have forced the government to borrow more from the country's banking system, said another official while explaining the main reason of higher government borrowing.

He also said higher import of fuel oil has pushed the pressures on subsidy in recent months.

The import of petroleum products increased by 48.61 per cent to $2.68 billion during the July-January period from $1.80 billion during the same period last year, according to the central bank statistics.

"The rising trend of fuel oil imports may continue until next month to meet the increasing demand of oil-based power plants and irrigation purposes," a senior official of the Bangladesh Bank (BB) said.

The government borrowing from banking system increased by nearly four times until March 22 this year compared to the corresponding period of the last year.

The government's net borrowing from banking system shot up to Tk 163.70 billion during the period under review as against Tk 46.49 billion in the same period of the previous year, the BB data showed.

During the period, the government borrowed Tk Tk 109.27 billion from the scheduled banks through issuing treasury bills (T-bills) and bonds during the period while Tk 54.42 billion from the central bank to finance the budget deficit.

Declining trend of net sale of national savings certificates has also forced the government to borrow more from the banking system to meet its budgetary expenditure.

The net investment in the saving certificates came down to Tk 1.14 billion during the July-January period from Tk 22.98 billion in the same period of the previous year.

The government earlier fixed the target to borrow Tk 60 billion through net selling of the savings certificates by the end of FY'12, officials said adding that the net sales witnessed a negative growth in January netting Tk 2.19 billion because of lower rates of return.

The government has raised the rates of return on all existing savings tools to the extent of 2.64 per cent, effective from March 1 to attract savers to the instruments and, thus reduce the government's borrowing from the banking system.

Net receipts of foreign aid during the July-January period of the FY'12 stood lower at $ 530.47 million against $647.10 million in the corresponding period last year.

Financial Express/Bangladesh/ 28th March 2012

India’s rupee hit a ten-week- low against the dollar yesterday but clawed back ground amid reports that the central bank had intervened in the foreign exchange market to boost the currency, traders said.

The central Reserve Bank of India (RBI) was believed to have stepped in to the market after the rupee hit an intraday low of 51.48 against the dollar, a level last seen on January 16 this year.

The rupee has been weighed down by weak local stock markets, foreign fund outflows and continuing
pressure from oil importers, who have to exchange rupees for dollars.

On Monday, the country’s benchmark 30-share Sensex index ended at a two-month-low of 17,052.78 points.
“The RBI is suspected to have intervened, selling dollars at around 51.37 levels,” a dealer told AFP, declining to be named. 

The Daily Independent/Bangladesh/ 28th March 2012

The Securities and Exchange Commission (SEC) on Tuesday warned the First Security Islami Bank for non-compliance of the Commission’s directives regarding dissemination of price sensitive information within the stipulated time.

“SEC has warned the Company, its directors, managing director and company secretary for non-compliance of Commission’s order given on December 19, 2000 (and gazetted on February 25, 2001) in connection with dissemination of price sensitive information within the stipulated time,” according to a web post of the Dhaka Stock Exchange (DSE).

On the other hand, the Bank informed that a meeting of its Board of Directors will be held on March 29 at 4 pm to consider, among others, audited financial statements of the Company for the year ended on December 31, 2011, said another DSE posting.

Meanwhile, Prime Islami Life Insurance Ltd has been placed to in ‘Z’ category from the existing ‘A’ category with effect from March 28 as no annual general meeting was held by the company in the year 2011.

The Daily Sun/Bangladesh/ 28th March 2012