Bangladesh Bank (BB) was elected as vice chairman of Asia-Pacific Regional Agricultural Credit Association (APRACA) for the tenure of 2012-2014. According to organisation's rule, the BB would takeover the charge of chair of APRACA for the regime of 2014-16 after completion of the 2012-2014 tenure as vice chairman.
Bangladesh won the electoral race defeating central banks of Malaysia, Korea and Sri Lanka, said a BB press release issued on Sunday.

News: The Independenty sun/ Bangladesh/ Jun-20-2011

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

Eastern Bank Ltd (EBL) signed a short term rollover loan agreement with International Finance Corporation (IFC), World Bank Group. Mr. Ali Reza Iftekhar, Managing Director & CEO of Eastern Bank Ltd and Mr. Kyle F. Kelhofer, Country Manager of IFC signed the agreement on June 14, 2011 for the respective parties. EBL Deputy Managing Directors Mr. M. Fakhrul Alam and Mr. Muklesur Rahman and other senior executives of both EBL & IFC were present during the signing.

This is first time such an agreement signed between EBL & IFC. Under the agreement EBL will obtain foreign currency funds from IFC to support the customers’ requirements with respect to import-export transactions, trade finance, working capital requirements and related areas from it’s offshore banking unit (OBU). EBL has offshore banking operations since 2004 along with a wide network of branches, delivery channels, valued customer base and state of the art information technology facilities. EBL has been working closely with IFC, World Bank Group as a partner bank in the Global Trade Finance Program (GTFP) since 2005. EBL has also been awarded by IFC as the Most Active GTFP Issuing Bank in South Asia 2009-2010 and the Most Active Issuing Bank in Agribusiness Sector in South Asia 2010-2011.

Source: EBL Website

The central bank has initiated a move to reduce the influence of individual families on banks' boards, a senior Bangladesh Bank (BB) official said.

"We are considering necessary amendment to the Banking Companies Act, 1991 so that more than two members of a family cannot be on the board of directors of a banking company," the BB executive director Jahangir Alam told the FE Wednesday.

Presently, the Banking Companies Act does not allow a family or a company to hold more than 10 per cent share of a bank at a time. However, the amendment is not considering to bring any change in this particular provision, he said.

The draft of the proposed amendments, which is likely to be submitted to the Ministry of Finance (MoF) within this month, is also considering tagging a clause regarding the exposure of banks in the capital market with their equity instead of depositors' money.

"banks won't be allowed to invest depositors' money in the stock market. Only a portion of their paid-up capital can be invested in the capital market, but the amount is yet to be fixed," said Mr Alam, who is leading the team drafting the amendment.

"We are also working on changing the definition of capital," he said without elaborating.

According to the present Banking Companies Act, if any company of a group becomes defaulter the group is considered defaulter. The proposed amendment is likely to consider the specific company defaulter, not other members of the group, sources said.

The draft of the proposed amendment, which is almost at the final stage, is going to propose the maximum number of directors at 20 instead of the present 30 to 40. The existence of a large number of directors proves to be a barrier to proper governance of the bank, as most of them try to influence loan sanction and other processes, an official said.

The amendment is likely to propose empowerment of the central bank to penalise individuals and organisations directly instead of going to courts for the same. At present offenders take legal protection to save themselves from punishment, and the regulator becomes helpless.

Sources said the draft amendment may propose formation of a central financial regulatory authority, comprising all the financial regulatory bodies, including the BB, the insurance authority, the micro-credit authority and the Securities and Exchange Commission to help monitor the banks' exposures to other areas.

The draft is likely to bring changes to Section-35 of the Act, allowing more than one person as nominee of an account holder.

The BB has been working on the amendment to the Banking Companies Act during the last one year, following the promulgation of an ordinance by the last caretaker government.

Source: Financial Express, Bangladesh, 16th June 2011

Kamaluddin Ahmed has recently been elected chairman of Social Islami Bank Ltd (SIBL). The election took place at the bank's 250th meeting in Dhaka.

The bank also elec-ted Md Anisul Haque and Mohammad Azam as vice chairmen, the bank said in a statement.

Ahmed is the chairman of Alif Group of Industries and former vice-president of Federation of Bangladesh Chambers of Commerce and Industry and former president of Chittagong Chamber of Commerce.

Haque is the finance director of Hamdard (Waqf) Bangladesh. He has been serving SIBL as director on behalf of Hamdard.

Azam is a director of Northern General Insurance Company Ltd.

Source: The Daily Star, Bangladesh/16th June, 2011