ONE Bank Limited has opened a new branch at Madhabdi Bazar in Nasingdi recently.

Zahur Ullah, Chairman of ONE Bank Limited, formally inaugurated the branch at an inaugural ceremony held at its premises, said a press release.

Kazi Rukunuddin Ahm- ed, Director, Farman R Chowdhury, Managing Director, Senior Executives of the bank and many local elites and businessmen attended the inaugural function.

Source: Daily-Sun, Bangladesh/20th Dec 2010

Allahabad Bank, a Calcutta based local bank of India, is planning to open a branch in Bangladesh, news of Economic Times. This bank took initiative to open separate branches in China, Singapore and Hong Kong. J. P. Dua, Chairman and Managing Director of Allahabad Bank, informed that they have already asked for permission to the central bank of India, Reserve Bank of India (RBI) for opening these branches.

Currently Allahabad Bank has only one foreign branch in Hong Kong. In the past two years this branch was successful in making profit to run it. Apart from this there is a representative office of Allahabad Bank in Shen Ben of China. Bank authority wishes to convert this branch in a fully fledged branch. This bank has managed to deal a foreign business of One thousand and two hundred Rupees with only a branch and a representative office. The Bank authority is hopeful to make this business thrice in the next two years.

Mr. Dua also informed that they have plan to open forty more branches in India in the next three years.    

News Source: Prothom Alo/20 Dec 2010

Bangladesh Electronic Funds Transfer Network (BEFTN) will start function from February 20 next year.

The Bangladesh Bank in a recent circular announced the date of starting the BEFTN activities and asked all participating commercial banks for taking necessary preparation enabling them to conduct transactions through the network.

With the introduction of BEFTN, the fully automated cheque clearing process would be completed in the country. Earlier on October 7 this year, the activities of the Bangladesh Automated Cheque Processing System (BACPS) started at the Dhaka clearing zone.

The activities of this modern high value national payment system have now been expanded at all branches of the central bank across the country.

All the branches of the banks that are members of Dhaka Clearing House are members of the regular value clearing, but the high value service is only activated at few branches of commercial branches at Motijheel and Dilkusha.

This high-value service will be extended to all branches in the city from January 5, next year, according to the Bangladesh Bank circular.

The automated clearing house activities will start in Sylhet on January 20, and in Chittagong on February 3 next year.

The central bank has asked all branches of member banks to send all instruments on clearing to BACPS Data Centre in Dhaka. The net-settlement would be completed through integrating all accounts of participating banks preserved at the central bank.

Bangladesh Bank in partnership with the UK Depart-ment for International Develop-ment (DFID) embarked on a project to modernise Bang-ladesh’s national payments system.

All commercial banks who are members of the Dhaka Clearing House will be required to submit their list of selected branches and to finalise their "point of transaction" for submission of their outward cheque images and data to BACPS and be prepared to handle cheque image and data as part of their inward clearing operations.

Source: Daily-Sun, Bangladesh/20th Dec 2010

Bangladesh Bank (BB) yesterday extended the deadline for banks to adjust investment exposure to non-productive sectors by a month to February 15.

The decision came hours after the Dhaka Stock Exchange suffered the biggest fall in its history.

“We have decided to extend the deadline to ensure a congenial environment for stock investors,” Ziaul Hasan Siddiqui, deputy governor of Bangladesh Bank, after an emergency meeting with the chairman of the Securities and Exchange Commission (SEC).

Also, the central bank extended the deadline from December 31 to January 15 for banks to submit statements on diversion of loans to the stockmarket.

SEC Chairman Ziaul Haque Khondker said yesterday's index fall was a 'massive correction'.

The SEC holds a meeting with stakeholders today to discuss the market situation.

Source: The Daily Star, Bangladesh/20th Dec 2010

The inter-bank call money rate recorded an unprecedented rise at 190 per cent on Sunday, the second day after enforcement of the new cash reserve requirement (CRR) rules for the commercial banks to contain inflation.

The call rates were swinging between 55 and 190 per cent on the day against 50 per cent and 175 per cent a day earlier. However, most of the deals were settled at rates ranging from 100 per cent to 150 per cent, treasury officials said.

One non-bank financial institution borrowed loan at 190 per cent from the inter-bank call money market yesterday, another official also said.

The call money rate rose to 175 per cent on Thursday last, marking a historical high, as some lending banks suddenly raised their call rates to cash in on the liquidity crunch in the market.

Earlier, the call money rate increased up to 150 per cent in 2006 during the BNP-led four party alliance regimes.

The central bank raised CRR by fifty basis points to 6.0 per cent for the commercial banks on December 1 last to help curb inflationary pressure on the economy.

Under the new CRR rules, the banks are required to maintain the reserve at 5.50 per cent instead of 5.0 per cent earlier on daily basis, but the bi-weekly average has to be 6.0 per cent in the end.

An analyst of the Bangladesh Bank said there would a positive impact on inflation due to increase of CRR, which would help decline prices of local commodities during December-January period.

The declining trend of food prices has already contributed to a drop in inflation, which slipped to 6.86 per cent in October from 7.61 per cent in September, according to the official data of the Bangladesh Bureau of Statistic which released on Sunday.

The food inflation decreased to 8.43 per cent in October from 9.72 per cent in September.

Director General of Bangladesh Institute of Bank Management Dr Toufic A Chowdhury told daily sun that the call money rates surged to another historical high due to lack of proper liquidity management by the local banks.

“Most of the commercial banks have invested their funds in the share markets for quick gains, but those were blocked as the share prices fell sharply during the past two weeks,” he added.

The historic high in call money rate on Sunday was mainly due to aggressive dealings by few banks, managing director of Pubali Bank Limited Helal Ahmed Chowdhury told daily sun Sunday evening.

He also said that the Bangladesh Bank should set a ceiling for call money rate as the local market has remained volatile for last few days.

“Higher call money rate may push the interest rates on deposits up in the near future to meet the growing demand for liquidity and as a result the banks are raising the interest rates to attract more deposits from their clients,” he added .

The Bangladesh Bank injected Tk 32.79 billion in the money market under a special repurchase agreement (Repo) on Sunday, which seemed to be inadequate, fund managers said. The total demand for money in the call money market stood at Tk 120 billion on Sunday.

Source: Daily-Sun, Bangladesh/20th Dec 2010