Bangladesh Bank (BB) today tightened credit to rice traders, millers and hoarders for ensuring
adequate supply of rice to the market and bringing down the price at consumers’ comfort level. The central bank in a circular today directed all the banks to adjust the advances to the rice millers and traders in 30 days from disbursements.
Currently, rice millers are allowed to adjust their advances in the form of revolving CC [cash credit] and OD [over draft] in 45 days when the rice traders get 30 days.
The new directive will force millers to sell rice sooner to adjust the loan, which will eventually help increase supply of rice to market, said a BB official.
The BB also issued two more circulars today, one of which limited the ratio of car loan to 50:50.
The other circular made import of equipment for effluent treatment facility (ETF) mandatory for opening letters of credit (LC) for setting up new industries.
It also asked all the banks not to provide existing industries working capitals if they do not have effective effluent treatment facility.
The central bank also directed the banks to consider EFT before financing any industry of BMRE of an existing one.

Source: The Independent 

The Managing Director and Chief Executive Officer of Trust Bank Limited—Shah A. Sarwar— fells that the latest call-money market volatility was a result of failed management by some financial institutions hich overlooked the importance of keeping balance between profit and liability. “If a financial institution goes for excessive profits, it might compromise its stance on liquidity, making itself vulnerable in the face of crisis,” he said.
  The top official of the Trust Bank Ltd said this while talking to The Independent in an interview, elaborating the latest money market volatility that surged as high as 180 per cent.
Financial Institution is a long term institution, have to build up its inner capacity in a way that it can stand tall to face both immediate and long terms issues.
According to him, there has been a significant availability of liquid money as a result of the country’s present investment scenario. Other than investment in the agriculture sectors, there has been a pause of investment in other sectors, he explained.
Misguided by this concentration of liquidity in the market, some financial institutions engaged themselves in investing into ‘non-cash generating sectors’ instead of managing its liquidity in a more wise modes, he said.
Mentioning banks investment in sectors like secondary equity and speculative real-estate markets, Mr Sarwar signalled caution in order to escape the effect of similar market volatility in coming days.
When a financial institution fails to maintain its control to invest into these sectors where commensurate cash return is unlikely, then the institution become vulnerable to such money market turmoil, he said.
Besides, when a bank invest huge amount of its capital/liquidity in expanding and renovating its premises, can find itself into liquidity shortage, he added.
“One or all these aspects could have played role in creating such shortage and likely be the reason behind the latest volatility,” he elaborated.
Explaining the stable position of the Trust Bank Ltd at the face of the recent money market instability, its MD/CEO attributed his bank’s management planning, followed by forward looking investment policy and understanding of the market movement.
“We have not managed the situation by fluke,” Mr Sarwar said, pointing out that it was an outcome of the bank’s wise policy.
Apprehending the current market scenario, he said, our bank management has undertaken several steps in last couple of months ‘with caution’.
“We have consciously come out of secondary stock market in keeping with our safety measures,” he said adding that they have ensured balance in investment in all sectors.
He said that it was essential that the CEO demonstrated leadership to strike a right balance between profitability and liquidity.
The Trust Bank chief maintained such a balance that helped the bank sail through smoothly when the market went into the extreme volatile phase recently, Mr Sarwar said.
It is also important to finance through a segment and sectoral balance to avoid structural cash flow issue and Trust Bank could do so successfully. When some private commercial banks put money in non-cash generating risky areas, the Trust Bank Ltd remained careful not to indulge.
“In line with the Bangladesh Bank’s policy, we were careful about investing in the over-heated stock market and also in other unproductive areas, and that’s why, we remained safe,” Mr Sarwar added.
Replying to a question, he said that his bank adjusted the stock market investment in last June as the stock market was going up to an unending limit.

Source: The Independent

Bangladesh Bank (BB) has directed commercial banks to provide loans for installing solar panels in residential, commercial and industrial buildings.

The BB sent a circular to the banks yesterday, asking them to come up with a scheme under which borrowers will get such loans at a 10 percent interest rate. The central bank said the banks can fix as high as 10 years as deadline for repayment.

Source: The Daily Star

Home loans for members of the central bank staff have been raised by 92 percent in view of an increase in the prices of land and construction materials.

Bangladesh Bank (BB) approved the proposal yesterday.

Such loans for officials on the highest salary scale has been raised by 87 percent to Tk 60 lakh. The present ceiling is Tk 32 lakh.

For the lowest tier, the ceiling has been increased by 92 percent to Tk 25 lakh. The present ceiling for the staff of this level is Tk 13 lakh.

The Home loans are given to the central bank staff in five categories.

Source: The Daily Star

Southeast Bank Foundation recently arranged scholarship programmes for 281 deprived and meritorious students who passed SSC Exam of 2010.

Dr Atiur Rahman, Governor of the Bangladesh Bank formally inaugurated the programme as the chief guest, said a press release.

Alamgir Kabir, FCA, chairman of the bank was present as the special guest at the programme. Among others, the directors of the bank, executives, other officials and guests also attended the programme.

The central bank governor highly appreciated the initiatives of the Southeast Bank Foundation. The chairman of the bank told that this scholarship programme is renewable and the number of scholarship holders would be around 2000 within 2015.

Source: Daily Sun