Regional CEO for India & South Asia of Standard Chartered Bank (SCB) Sunil Kaushal and CEO of SCB Bangladesh Jim McCabe jointly inaugurating the refurbished Head Office Branch of the Bank at Gulshan in the city recently.

The renovated Gulshan Head Office Branch of Standard Chartered Bank (SCB) has been inaugurated. Regional CEO for India & South Asia of SCB Sunil Kaushal and CEO of SCB Bangladesh Jim McCabe jointly inaugurated the refurbished Head Office Branch of the Bank at Gulshan in the city recently.

The Bank's Head Office Branch was revamped under its Branch Retrofit project. Several other branches of the SCB will also be transformed into world-class banking premises under the project in the year 2012. The newly renovated branch possesses separate lobbies for account holders and their representatives to ensure superior service to customers.

Speaking on the occasion, CEO of SCB Bangladesh Jim McCabe said, "A key pillar of the bank's strategy is customer service and our customers are at the heart of everything the Bank does. This is yet another step in providing our customers with a superior banking experience at Standard Chartered".

Financial Express/Bangladesh/ 22th Feb 2012

Failure to boost power generation can hold back industrial expansion, and political instability can affect economic development in Bangladesh this year, said the Asian Development Bank (ADB), in its latest Asian Development Outlook (ADO) report.

The government should maintain close coordination between monetary and fiscal policies to ensure macroeconomic stability to facilitate rapid growth in 2012, controlling expansion of credit to contain inflation and balance-of-payment pressures, while ensuring a steady flow of credit to the private sector.

The government would also need to closely watch budgetary finance from the banking system, the report stated. The fiscal policy will stay expansionary with total expenditure likely to grow by 25.8 per cent. Supported by a strong revenue effort, the budget deficit is projected at 5 per cent of the GDP, a little higher than the 4.4 per cent in 2011.

The deficit is being planned to be financed by domestic borrowing (3 per cent of the GDP) and external sources (2 per cent of the GDP). The 2012 budget assumes 24.4 per cent growth in revenue (a 0.9 percentage rise in the revenue-to-GDP ratio). Higher tax effort, an outcome of the tax authority’s systematic effort to expand coverage and strengthen tax administration, including further automation of tax collection, is a crucial element in achieving the GDP growth target, the ADB report noted.

This update maintains the ADO 2011 average inflation projection of 8.5 per cent for 2012, which is lower than 8.8 per cent inflation in 2011, but higher than the Monetary Policy Statement projection of 7.5 per cent. To keep inflation within the rate projected in this update, the central bank will have to bring down the annual money and credit growth to at least 18.5 per cent and 20 per cent, respectively, as specified in the statement.

The projected likely decline in global food and commodity prices in the baseline assumptions is expected to dampen the price pressures.

The expected adjustments in domestic power and energy prices would, however, exert upward pressure. The import bill is expected to rise by 20 per cent in 2012, reflecting the effects of the tighter monetary policy and the expected stability in prices of raw materials, including those related to export industries.

The growth of export receipts is projected at 15 per cent, close to the historical average.
A rise in remittance is expected, with more people leaving for work abroad. Several million Bangladeshis, working outside the country, are a reliable source of remittance.

The government’s engagement with recruiting countries appears to be yielding results. Remittance is expected to grow by 12 per cent in 2012. But like recent years, they will be unable to offset the expected deficits in trade, services, and income accounts.

The current account is expected to move to a modest deficit of 0.3 per cent of the GDP in 2012, from a 0.9 per cent surplus the previous year.

The monetary policy stance may be compromised to meet the high growth target, or the attempted tightening may not control inflation or contain import demand.

The expected revenue and external financing may not be mobilised as planned, the ADB report noted.

The Independent/Bangladesh/ 22th Feb 2012

ONE Bank Limited has recently opened a booth at National Housing Authority (NHA) in the city.

GM Jainal Abedin Bhuiya, Chairman of NHA and Zahur Ullah, Chairman of ONE ONE Bank Limited jointly inaugurated the booth, said a press release.

The Daily Sun/Bangladesh/ 22th Feb 2012

Rupali Bank Limited has organised Dhaka divisional annual conference-2012 at Monisingh Forhad Trust Auditorium in the city recently.

Dr Ahamed Al Kabir, Chairman of Rupali Bank was present as chief guest while Arifur Rahman, General Mana-ger was in the chair, said a press release.

The Daily Sun/Bangladesh/ 22th Feb 2012

Commercial banks have brought down the interest rate on deposits quickly after a self-imposed cap earlier this month, but the lending rate is still above the ceiling.

The Association of Bankers Bangladesh (ABB) decided to offer an interest rate of 12.5 percent on deposits and charge 15.5 percent for industrial term loans and working capital to check unhealthy competition in the market.

However, loans for consumers, home loans and credit cards will be out of the purview.

On Monday, Bangladesh Bank (BB) released the bank deposit and lending rates for the month of February.

Except for one foreign bank, the highest interest on deposit of all other banks is 12.5 percent, according to central bank statistics.

In January, the interest rate on the deposits of many banks was as high as 14.5 percent.

In case of the lending rate among 30 private banks, the term loans of 16 banks were above 15.5 percent. The lending rate of many banks is between 17.5 and 18 percent.

The banks that still have interest rates higher than the cap on term loans and working capital are IFIC Bank, City Bank, United Commercial Bank, ICB Islamic Bank, South East Bank, Dhaka Bank, Mercantile Bank, One Bank, Exim Bank, Standard Bank, Mutual Trust Bank, Bangladesh Commerce Bank, Jamuna Bank and BRAC Bank.

An official of a private bank said the cost of funds of many of the banks is much higher and they will gradually bring down the lending rate within a limit.

On January 4, the central bank withdrew the 13 percent interest rate limit on bank loans, prompting the private banks to increase their lending rates.

After the limit was withdrawn, many banks increased the interest on industrial loans and working capital.

The hike in interest rate invoked sharp criticism from the business community, including the Federation of Bangladesh Chambers of Commerce and Industry, the country's apex trade body.

Following 'moral suasion' by the central bank, ABB itself imposed a cap so that no bank can abnormally raise the deposit and lending rates.

Until fiscal 2007-08, there had been no cap on the deposit or lending rates as the country introduced a liberalised policy in the banking system in 1992, a senior BB official said.

The immediate past caretaker government imposed a cap on the lending rates due to the global economic crisis.

While announcing the monetary policy statement in July last year, the central bank said it would withdraw the cap on lending to bring down high credit growth to check inflation.

The Daily Star/Bangladesh/ 22th Feb 2012