The government is going to form a committee to prepare a set of recommendations about the future operation of Grameen Bank (GB) include the appointment of its new Managing Director.

The ministry of finance will announce the three-five member committee including its chairman soon after getting approval from the Prime Minister Sheikh Hasina, a senior official of the ministry said. Earlier the ministry has prepared a proposal to this effect.

The official also said the committee will also be asks to implement the recommendations of the Prof AK Monowar Uddin Ahmed review report on GB, the pioneering microfinance institution of the world.

Earlier, Deputy Managing Director of GB, Mohammad Shahjahan, appointed an acting managing director for the bank on August 16, 2011.

Sources in the finance ministry said the decision to form a committee was finalised at a meeting last week, presided over by finance minister AMA Muhith at his secretariat office.

Bangladesh Bank (BB) sources said BB will have to appoint an administrator if the financial institution fails to appointment its MD within three months as per the existing Bank Company Law. A BB authority has appointed administrators in different commercial banks during last 10 years, sources also said.

The provision 14(1) of Grameen Bank ordinance says that the government or Bangladesh Bank is the ultimate controlling authority regarding the appointment and removal of the managing director of Grameen Bank, sources said.

GB Chairman Khondaker Muzammel Huq earlier told newsman that the bank has failed to select a new MD due to various complexities in last seven months.

Earlier, on March 2, 2011, Bangladesh Bank removed Nobel Laureate Muhammad Muhammad Yunus from GB, which he fathered in 1983, alleging that he was overaged to hold the position as per the GB ordinance.

Banking Division Secretary Shafique Rahman Patwary also told daily sun last week that a committee will be formed soon to appoint an MD and to implement the recommendations of the review report on the bank.

“The issue of the bank’s interest rates on credits to the poor people should be looked into by the proposed committee and will recommend on this issues,” he said.

The secretary also said the financial condition of the bank was good compared to that in previous years.

“We have already forwarded GB chairman’s appeal of corporate tax exemption to the National Board of Revenue”, he also said.

Meanwhile, Grameen Bank Chairman Khondaker Muzammel Huq sent a letter to finance Minister AMA Muhith last week seeking exemption of all types of taxes of the bank for four years from 2012 to 2015. As per rules, Grameen Bank will have to pay 42.5 per cent corporate tax on its yearly profit.

GB earned Tk 8.4 billion in 2011, while the income was 7.6 billion in 2010.

The Daily Sun/Bangladesh/ 26th Feb 2012

Bangladesh Bank Governor Dr Atiur Rahman addresses a function at Bangladesh Institute of Bank Management (BIBM) Bhaban at Mirpur in the city yesterday.

Bangladesh Bank Governor Dr. Atiur Rahman said the banking sector of the country is passing a challenging time.

He said the government should be very much cooperative for overcoming the present situation as well as ensuring overall development of the sector.

Dr Atiur said this while addressing a function organised by the Bangladesh Institute of Bank Management (BIBM) to mark the BIBM day at BIBM Bhaban, Mirpur in the city.

Mentioning that Bank Company Act will be placed in the parliament, Dr. Atiur said monitoring over the banking sector has been increased and the banks will enjoy the benefits soon.

Governor said that the bankers should have knowledge on how other countries are facing the global economic recession.

BIBM Chairman Towfiq Ahamed Chowdhury presided over the function while former Deputy Governor (DG) of Bangladesh Bank (BB) Khorshed Alam, President of the Association of Bankers, Bangladesh (ABB), Nurul Amin and Managing Director of Bangladesh Commerce Bank, SA Chowdhury also spoke on the occasion.

Addressing the function former DG Khorshed Alam said the banking sector has been facing a catastrophe at present. Abu Hena Mohammad Razee Hasan said operating the banking sector has become much challenging.

During the function, four newly appointed DGs of Bangladesh Bank were accorded reception while just departed DGs were given farewell.

The Daily Sun/Bangladesh/ 26th Feb 2012

Deputy Managing Director of Social Islami Bank Limited AMM Farhad, senior executives of head office and managers of different branches of Dhaka city pose for photograph at a Road Side Camp organised by the Bank's Rampura branch at Children Heaven School of Mohanagar Project, Rampura in the city recently.

Financial Express /Bangladesh/ 23th Feb 2012

Chairman of the Executive Committee of Islami Bank Bangladesh Limited Engr Md Eskandar Ali Khan handing over a cheque for Tk 0.60 million to Bangladesh Country Representative of International Rice Research Institute (IRRI) Dr Muhammed Zainul Abedin to IRRI fund in the city recently.

Financial Express /Bangladesh/ 23th Feb 2012

The central bank has extended the timeframe of assured liquidity support (ALS) for the primary dealers (PDs) by 15 days to increase the cash liquidity in the market, officials said Wednesday.

Under the new provisions, the PDs are allowed to enjoy liquidity support against both success and devolved securities for a maximum of two and half months at a stretch from the date of issue of the government approved securities instead of two months.

"We've extended the liquidity support to the PDs considering the overall market situation," Executive Director of the Bangladesh Bank (BB) Sudhir Chandra Das told the FE.

He also said some Tk 10 billion-Tk 15 billion will be injected into the market as per the new provisions relating to ALS.

The central bank issued a directive in this connection Wednesday and asked the chief executives of all PD banks and financial institutions to follow the latest provisions of the ALS.

The central bank provided Tk 63.82 billion on the day to 13 PDs for one-day tenor as the liquidity support facility to meet their cash liquidity demand, according to the central bank statistics.

The PDs welcomed the central bank's latest move, saying that it would help them to meet the growing demand for cash liquidity to some extent.

"We had earlier requested the central bank to extend such liquidity facility for a maximum of at three months instead of two months," a senior member of the Primary Dealers Bangladesh Limited (PDBL) told the FE.

He also said 12 PD banks are now holding government securities worth around Tk 180 billion in excess of their statutory liquidity ratio (SLR) requirement with the central bank.

"The PDs have to comply with holding of the government securities against their underwriting obligation to the BB," the PDBL member said explaining the reason for holding the excess securities.

He also said normal banking business of the PDs is being seriously hampered due mainly to immense underwriting obligation relating to the government securities.

"Our short-term and long-term business growth plans are being hampered seriously due to substantial growth of the government securities," he said, adding that it's also creating problems in cash liquidity and cash flow forecast that, in turn, is also affecting day-to-day operational and investment activities.

The central bank earlier selected 15 PDs - 12 banks and three non-banking financial institutions (NBFIs) - to deal with the government-approved securities in the secondary market.

The PDs are required to subscribe and underwrite primary issues and can make secondary trading deals with two-way price quotations. But the secondary market in the country for such bonds and securities has not been developed yet and the volume of trading in such a very rudimentary market is very insignificant now.

Financial Express /Bangladesh/ 23th Feb 2012