The Asian Development Bank (ADB) has extended its support to speed up the inflow of remittance from Bangladeshi people living abroad.

The project named ‘Institutional Support for Migrant Workers Remittance’ will facilitate expatriate Bangladeshis and their family members at home get the most benefit of the remittance, an official at the Expatriate Welfare and Overseas Employment Ministry said.

It said Bangladesh Bank (BB) will implement a component of the US$ 2 million project to assist banks and financial institutions establish a convenient network for quick disbursement of remittance.

The BB’s component will cost US$ 1.2 million when the rest US$ 0.80 will be spent by the respective ministry for motivation and awareness building programme for potential migrant and remittance earners, the official said.

“The project will help increase remittance inflow”, Secretary of Ex-patriate Welfare and Overseas Employment Ministry Dr Zafar Ahmed Khan told BSS yesterday.

Senior Assistant Chief of Expatriate Welfare and Overseas Employment Ministry Abdul Matin said the ADB approved a grant for the project in January this year and indicated last week that it would disburse the fund soon.

Source: The Daily Sun/ Bangladesh/ 1st  Dec 2011

Eastern Bank Ltd. (EBL) has come up with a lending proposal for the small and medium leather product manufacturers to reduce the financial constraint of the sector. To this end, a bilateral loan agreement of Tk 10 million between EBL and Small and Medium Enterprise Foundation (SMEF) was signed at a city hotel on Sunday.

At the signing ceremony, EBL launched a loan project, EBL-Udoy, with a single digit rate of interest for leather goods manufacturing clusters in Dhaka. 

Syed Rezwanul Kabir, managing director of SMEF, and Ali Reza Iftekhar, managing director and chief executive officer of EBL, signed the loan agreement. Industries minister Dilip Barua attended the event as chief guest where governor of Bangladesh Bank Dr Atiur Rahman was also present as special guest. Under the loan agreement, SME Foundation disbursed Tk 10 million to EBL at 4 per cent interest rate.EBL, in association with USAID-Price and Aarong, will disburse Tk 10 million with 9 per cent rate of interest to nearly 23 small and medium leather goods manufacturers.

Terming access to finance as a major roadblock to the SME sector, Dilip Barua said many potential SMEs  cannot move ahead due to poor access to bank finance.“It is deplorable that the banking and financial sectors feel more comfort in disbursing loan to the industrial sector than the SME sector,” he said. Industrial economy is essential instead of trading economy for creating employment opportunity, economic growth and better livelihood, he said.

The flourishing of SME sector would help in inflating industrial productivity, foreign investment and employment opportunity as well as strengthening the economic activities, the minister said.“SME sector is a wheel of economic growth and working as a catalyst of poverty alleviation,” the central bank governor said.

Source: The Independent/ Bangladesh/ 21th Nov 2011

The tax revenue collection from the largest corporate taxpayers might drop significantly in the current fiscal, following a decline of operating profits of private commercial banks (PCBs) in the first quarter.

Large Taxpayers Unit (LTU) of the National Board of Revenue (NBR) feared a revenue loss of Tk 10 billion in the current fiscal year (FY) due to a sharp fall of operating profits of most banks, both public and private.

Banks, financial institutions, insurance and leasing companies contribute about one-fourth of the revenue earnings by the income tax department.

Tax officials said they have collected, on an aggregate basis, the expected level of revenue earnings in the first quarter of the current fiscal but they are worried about next three quarters, particularly in the wake of a markedly declining trend in operating profits of banks.

If the situation of the first quarter of the current fiscal persists for a relatively longer period in the country's financial sector, the revenue loss will lead to further widening of the fiscal deficit unless there is a matching move to curtail public expenditure, particularly the recurring one, some analysts feared. 

Elaborating further, they noted that a larger fiscal deficit in the context of the current inflationary pressures in the economy and also because of an increasing amount of deficit of its balance of payments, will further compound the problems.

During July-September period of FY 2011-12, the revenue board collected Tk 10.53 billion as income tax only from banks. The aggregate tax collection target of the LTU from different sources for the first quarter of the current fiscal was Tk 18.15 billion. The unit has, however, exceeded its aggregate revenue collection target by Tk 10 million.

"We are concerned over the drop in income tax collection in the next quarters. Time for the next installments of such collections will be due in December, March and June. If financial condition of banks remains the same, then tax collection will be affected severely," said a senior tax official.

Plunging prices of listed issues in the country's stock exchanges, increased cost of fund and lower returns on investment have caused a sharp decline in operating profits of the PCBs, sources said.

According to available statistics, fifteen PCBs, out of 20, earned around Tk 13.74 billion as operating profits in the first quarter of FY 2011-12 against Tk 31.18 billion in January-March and April-June period of the last fiscal.

The operating profits of PCBs declined by Tk 1.85 billion -- taking the average figure of earlier two quarters into account -- in the third quarter of the current calendar year, compared to the situation during its first six months.

LTU collected 62 per cent of its tax receipts from banks, financial institutions, leasing and insurance companies. Out of this collection, banks alone contributed to 58 per cent of the aggregate income tax.

This fiscal, the government set an ambitious target for the LTU at Tk 92.40 billion, projecting a 24.86 per cent growth.
The official said improvement of the situation in the stock market and overall economic condition, can only reduce the risk about achieving the target during the current fiscal for income tax collections.

LTU received 13 per cent tax from telecom operators while 17 per cent of its tax collections came in the form of withholding tax.

Officials said banks are regularly depositing 10 per cent tax on interest payments to deposits at source. But there is also concern now over the collection of this tax, in view of the prevailing liquidity strains of the banks.

- Doulot Akter Mala

Source: The Financial Express/ Bangladesh/ 15th Nov 2011

The government is likely to issue Tk 25.04 billion bonds for Agrani Bank to pay dues of cash crunch Bangladesh Petroleum Corporation (BPC) and arrange further credit for procuring fuel oil from the international market.

“Agrani Bank will arrange further credit to the country’s lone fuel oil importing corporation if the government issues bonds for the said amount,” said a senior official of the Agrani Bank.

Finance Minister AMA Muhith on September 10 this year directed the authority concerned to issue bond for mitigating the financial risk of Agrani Bank.

BPC in a letter to finance ministry sought minimum fund requirement of Tk 10.49 billion to overcome its liquidity shortage. The corporation at a meeting at the finance ministry last week was asked to inform the ministry about its fund requirement.

The corporation has also submitted a ‘Cash Flow Statement’ till June 30 this year on the basis of consensus among BPC and four state owned commercial banks. Meanwhile, the corporation has projected import of around 6.50 million tonnes of oil in the current fiscal year (FY 2011-12) at a cost of Tk 460 billion (US$ 6.21 billion), up by 53 per cent from the previous fiscal year's Taka 300 billion.

Total loss of BPC during last fiscal year (2010-11) stood at Tk 81.98 billion while the finance ministry disbursed Tk 57.91 billion as soft credit. The corporation’s total outstanding with the finance ministry amounted to Tk 24.07 billion during last fiscal year, according to the finance ministry.

After retuning from Washington, finance minister would hold a meeting at the finance ministry to discuss cash crises of BPC and state-owned commercial banks. The proposals of raising price of fuel oil and electricity would be discussed at the meeting.

BPC also sought loans directly from overseas lenders to meet its mounting oil import bill.

The HSBC, Citibank and Standard Chartered Bank would be the lead arrangers of loan, BPC chairman Md Muktabir Ali earlier told the press last week.

News: Daily Sun/ BAngladesh/ Oct-04-2011

The US dollar rallied this week, mainly driven by risk-aversion investments at a time when eurozone countries were mired in a deadlock over solutions to the worsening Greek debt crisis.

Reflecting its view that there’s a significantly higher likelihood of one or more defaults of Greek debt, Standard and Poor’s on Monday downgraded Greece’s sovereign rating by three notches from B to CCC, marking it the lowest rating the agency give to a country currently.

But the euro only dipped slightly against the greenback during Monday’s trading as concerns over the US economic prospects offset the Greek debt worries.

As EU members failed to agree on a new Greek bailout plan at a meeting held Tuesday in Brussels, the bloc’s single currency retreated broadly in the next day’s trading session.

As the meeting turned out, the main division ran between the European Central Bank and Germany. While the bank opposes any form of Greek debt restructuring or other moves that could be perceived by the market as default, Germany hopes to restructure Greek’s debts and bring in private participation.

In addition to the lack of unity among Greece’s lenders, a 24-hour strike in Greece against the government’s new austerity plan also pushed the investors to sell euros, which resulted in euro’s nearly 2-per cent decline against the dollar in Wednesday’ s trading session, to the lowest level in a month.

However, the International Monetary Fund (IMF), another lender, weighed in Thursday, saying Greece can count on its help if it continues to reform its economy. European Union economics commissioner Olli Rehn also said he is confident that eurozone

would finally agree to pay the next installment of loans to Greece over the weekend.

A consensus on Greece bailout seemed more likely amid reports on Friday that Germany backed down and agreed not to involve private investors. The euro recovered slightly on Friday. For the whole week, it lost 2.6 per cent to 1.431 against the dollar.

Meanwhile, the market was still haunted by worries over US economic recovery as the US Commerce Department reported Wednesday that retail sales slipped 0.2 per cent in May, the first time in 11 months and a separate report from the Labor Department said producer prices rose 0.2 per cent in the same month.

On Thursday, the Labor Department said the consumer price index climbed a seasonally adjusted 0.2 per cent in May, and the core rate of inflation, which excludes food and energy costs, rose 0.3 percent, the fastest pace since July 2008, showing that the inflation was spreading more widely.

The Empire State index fell to -7.8 in June from 11.9 in May, according to the Empire State manufacturing survey released Wednesday by the New York Federal Reserve. The negative figure suggested that manufacturing activities deteriorated sharply in New York region, raising concerns about slowdown in manufacturing sectors.

The dollar index, which is regarded as the best gauge of its performance against a basket of six currencies, rose 0.3 per cent to 74.983 this week.

Against the Japanese yen, the dollar dipped 0.3 per cent as the Japanese central bank decided Tuesday to keep its key interest rate unchanged in a range of zero to 0.1 per cent after its two-day monetary policy meeting.

As for other currencies, the dollar gained 1.6 per cent against the British pound and 0.7 per cent against the Swiss franc this week.

News: Daily sun/ Bangladesh/ Jun-19-2011