The International Monetary Fund (IMF) Monday cautioned that the increased government borrowing from the banking system would fuel further the inflationary pressures in future.

The caution came from IMF resident representative Eteri Kvintradze who made the key observations of the Fund on the latest macro-economic developments in Bangladesh public, at a press briefing in Dhaka.
The IMF also suggested the central bank to tighten the monetary policy in order to contain inflationary pressure.

Eteri Kvintradze said high inflation has been eroding domestic purchasing power as well as the country's external competitiveness.

Bangladesh is now facing double-digit inflation, and non-food inflation has also moved upwards in recent months, according to official statistics.

The IMF, however, made a suggestion to increase fuel and electricity prices further to compensate for the high subsidy cost.

The government has increased fuel prices twice in recent period, creating pressure on the people of low and middle-income groups.

The IMF Bangladesh head advocated for gradual fuel and electricity tariff adjustments to mitigate the price spike impact. 

She said the Bangladesh Bank (BB) has rightly increased the cash reserve ratio and the statutory liquidity ratio to combat inflationary pressure on the economy. Monetary policy now remains accommodative although credit growth is down modestly, she added.

Eteri Kvintradze said the rising subsidy cost in Bangladesh has threatened its social and development spending to a great extent.

"If the present trend continues, the total subsidy cost will stand at Tk 315 billion against the budgetary estimation of Tk 19.1 billion."

The IMF mission chief said subsidy amount could be equivalent to 3.4 per cent of the GDP, if there is no move to make price adjustments shortly. She suggested the government to contain subsidy cost and help implement Annual Development Programme (ADP), which now remains much below the target.
A major part of the subsidy money is being eaten up by fuel-oil. "New electricity generation initiatives have pushed up the demand for fuel oil significantly," she added.

She said the overall balance of payments was in deficit for the first time in a decade, leading to foreign reserve loss for the fiscal year 2011-12.

"As a result that local currency Taka has come under pressure, with a moderate depreciation of taka vis-a-vis the US dollar" Eteri Kvintradze told the reporters at the press conference.

"Import is growing faster than export, and remittance flow is growing at a slow pace, putting pressure on the BoP."
Slower remittance growth and lower aid inflow have added further pressure on the BoP, the IMF official said.
She said the country must safeguard foreign exchange reserve to meet its import payment. "It should allow gradual depreciation of taka," she added.

The IMF Bangladesh mission chief said the present credit expansion will put some pressure on the banking sector.

She said: "Some banks are also heavily exposed to stock market, and it creates problems in the market." 
The IMF official said, "The good news is that revenue mobilisation is growing. Tax revenues exceeded 10 per cent of the GDP (gross domestic product) in the fiscal year 20011-12. Definitely this is a milestone for the country." 

She said the government consolidates gain in revenue mobilisation by continued improvement in tax administration along with new business-friendly VAT and income tax laws.

The mission chief said Bangladesh's GDP growth is strong, but it still remains behind the regional average. 
She said exports of the country surged in recent period. "Bangladesh grabbed further market share in the ready-made garment sector."

However, weaker-than-expected growth in the advanced economies could impact the RMG exports and possibly remittances.

She said expanding the export base and accelerating regional integration could also be significant factors to the country's stronger growth performance.

Source: The Finance/ Bangladesh/ 22th Nov 2011

The 13th Extra-Ordinary General Meeting (EGM) of Trust Bank Limited was held recently at Trust Milonayaton in the city.

The meeting was arranged to comply with the directives of Securities and Exchange Commission (SEC) for changing the denomination of shares of the Bank from existing Tk. 100.00 to Tk. 10.00 as well as determining the market lot of the shares from existing 50 to 500.

The shareholders approved the change of the denomination of the shares and the market lot of the shares through amendment relevant clause/ articles of the Memorandum of Association and Articles of Association of the Bank. 

General Md Abdul Mubeen, ndc, psc, Chief of Army Staff, Bangladesh Army & Chairman of Trust Bank Limited presided over the meeting.

Source: The Finance/ Bangladesh/ 22th Nov 2011

Muhammad Ali

Social Islami Bank Limited (SIBL) Monday completed 16 years of operation vowing to make it more technology-driven and mass-oriented.

"We are extremely happy to share the joyous moment of 16th anniversary and we have already taken some vigorous steps to turn the Bank into a modern financial entity aiming to consolidate its contribution to the development of the national economy," Managing Director of the Bank Muhammad Ali told the FE in an interview Monday.

The SIBL MD said that adoption of various IT-enabled services helped the bank reach from an alley to a highway with a theme slogan--continuous excellence.

"The adoption of modern IT-enabled services made us a real-time online bank and we are optimistic to go further to strengthen SIBL's contribution to the development of rural economy," Mr Ali said.
The bank earned a operating profit Tk 2.167 billion registering a whopping growth of 84.95 per cent till October 31, 2011. The capital adequacy ratio stood at 12.83.

The SIBL's capital, total deposit and net investment witnessed tremendous growth of 111.08 per cent, 62.37 per cent, 55.68 per cent respectively.
"The bank is also trying to focus on green banking considering the effect of climate change. Now we only approve projects having the environment-friendly provisions," the SIBL MD said.
"As part of green banking we are trying to operate a branch using solar energy and also making aware the customers avoiding paper-based banking, Mr Ali also said. 

The focused areas of SIBL are SME, agro-finance, remittance and alternative delivery channel.
A second generation bank, SIBL has now 74 branches with two subsidiary companies- SIBL Securities Ltd and SIBL Investment Ltd.
The SIBL Monday launched a new product on school banking titled 'Young Star Account' and on the first day four students opened accounts.
The bank earlier launched products titled Sonali Din, Shomridhir Shopan, Shachondo Protidin, Swapner Shiri, Shukher Thikana, Sabuj Chhaya, Shabuj Shayanho, Subarnalata, Subarnarekha, Shanchita and Zameel ATM Debit Card.

In testimony to the bank's growing progress, CRISL rated it A+ in long term and ST-2 in short term.
Standard Banking career in Sonali Bank in 1977, Mr Ali worked in different positions in National Bank Ltd, NCC Bank, Standard Bank Ltd and Social Islami Bank Ltd ahead of joining SIBL.
Meanwhile, to mark the 16th anniversary, the bank would honour eight eminent persons for making outstanding contributions in the field of respective areas. The SIBL award recipients are Prof Nurul Islam, Barrister Rafiqul Huq, Prof Abdullah Abu Sayeed, M Azizul Huq, Shaikh Siraj, Mahbubuz Zaman, Nilima Akhter Chowdhury and Haripad Kapali.

Source: The Finance/ Bangladesh/ 22th Nov 2011

Shahjalal Islami Bank Ltd and Money Exchange SA, Spain signed a remittance arrangement recently, says a press release.

Bangladeshi expatriates living in Spain can now send money safely and quickly to the beneficiaries by electronic fund transfer through all of the branches of Shahjalal Islami Bank  in Bangladesh. 

Md Abdur Rahman Sarker, managing director of Shahjalal Islami Bank and Jesus Abio Vilarig, general director of Money Exchange SA, Spain has signed the agreement.

Source: The Independent/ Bangladesh/ 22th Nov 2011

Ekramul Haque, managing director of Al-Arafah Islami Bank, inaugurates the Bank's shifted Bogra branch in Borogola on Sunday.

Source: The Daily Star/ Bangladesh/ 22th Nov 2011