The board of directors of Brac Bank has recommended rights share for the existing shareholders to raise its paid up capital.

The company will offer rights share at a ratio 1:2 - one rights share for every two shares held - at an issue price of Tk. 25 each including a premium of Tk. 15 per share on paid up capital subject to the approval of EGM and regulatory authorities.

The Bank will offer rights share to increase paid up capital to meet Bangladesh Bank Basel II requirements. As per the BB order a bank must have Tk 400 core as paid up capital. Existing paid up capital of Brac Bank is Tk 385.5 core.

The company has fixed record date for EGM on May 29, 2012, while the EGM will be held on June 28.

Another record date for entitlement of the proposed rights share will be notified later after obtaining approval from SEC. Venue of the EGM to be notified later.

The Daily Sun/ Bangladesh/ 21-May-2012

Bangladesh's balance of payments (BOP) is in stress, but the central bank is not interested at the moment in "swap funds" offered by India due to relatively high interest rates.

Swap loans make foreign currencies readily available for central banks. By definition, the purpose of the swap system is to reduce the cost of loans between central banks, so that dollars or euros are cheaper to obtain.

The arrangement meant for the Saarc countries is a measure to address short-term liquidity and BOP difficulty.

The Reserve Bank of India (RBI) has offered $2 billion to other members of the South Asian Association for Regional Co-operation.

“Return on our reserve is not more than 2 percent. But we will have to pay 3 percent interest if we take the RBI's swap fund,” a BB official told The Daily Star yesterday.

“We'll not go for this fund unless we are obligated to meet demands,” the official said.

Earlier, BB Governor Atiur Rahman at a workshop of the Economic Reporters' Forum yesterday disclosed the formation of this swap fund, first of its kind in the region.

“We will be able to take loans up to $400 million through the swap arrangement,” Rahman told reporters at the central bank.

Under the arrangement, the Saarc member countries can get the funds in dollars, euros or Indian rupees. Each instalment is of three-month tenure and can be rolled over twice. The first roll-over will be at the normal rate of interest -- LIBOR plus 2 percentage points or 200 basis points, according to the RBI.

The second tranche will be costlier by 50 basis points more than the normal interest rate.

Bangladesh's BOP, which is a summary of its economic transactions with the rest of the world, is in the negative territory indicating foreign exchange reserve outflows outstripping inflows. And, to minimise the BOP pressure, the BB has recently taken loans from the International Monetary Fund worth nearly $1 billion.

Swap arrangement between the central banks came to the surface at the Chiang Mai Initiative, a scheme drawn up by Asean, Japan, South Korea and China, following the Asian financial crisis in 1997. Under the initiative, each party to the arrangement can draw upon the financial resources of other parties in case of BOP difficulties.

Later, the concept was adopted by central banks in the US and different European countries since 2007 when the financial crisis melted them down.

The swap arrangement was first discussed at a Saarc forum several years ago. Later, the Saarc finance ministers at a meeting on global financial crisis in February 2009 noted that a major cause of the current concern in the region is the drying up of credit and the contraction of financial markets.

The issue was also discussed prominently at this year's Saarc finance ministers' meeting in Dhaka.

RBI Governor Dr D Subbarao announced formation of a $2 billion swap arrangement fund at the 24th Saarc finance governors' meeting in Pokhara, Nepal last week.

The facility will be available in three instalments.

“India has set the interest rates for the fund as it has provided the entire fund,” said the BB official, pointing at a higher interest rate.

However, he said the fund is less costly than loans, such as Islamic Development Bank that charges a 5 percent interest rate.

RBI said, to take the fund, the central banks of the requesting countries will need to enter into bilateral swap agreements, which need final approval from the Indian government.

The RBI's proposal to offer swap facility to the Saarc member countries had earlier been approved by the Union Cabinet.

The Daily Star/ Bangladesh/ 21-May-2012

The World Bank's fund disbursement for different projects increased by 31 percent to $400 million in the first 10 months of current fiscal year, the lender said in a statement yesterday.

The government and the WB yesterday jointly completed a portfolio review of World Bank supported operations in Bangladesh.

The government and the major development partners have jointly taken a new initiative to hold joint review meetings to expedite the implementation of the projects, said an official of the Economic Relations Division (ERD).

The official said a two-day meeting with the project directors of the WB projects ended yesterday.

The WB's current portfolio in Bangladesh consists of 34 active projects with a commitment of $5.8 billion, the highest ever for the country.

The portfolio review found satisfactory progress in many projects and highlighted the need to speed up implementation in others.

According to the statement, the project teams, the ERD and the WB highlighted the need for resolving systemic issues such as staffing vacant positions to speed implementation of the slow moving projects.

The discussion also focused on projects to be closed in a year.

The yearly aggregated disbursement of the World Bank supported projects has seen an upward trend over the last four years, according to the statement.

In FY 12, the World Bank has committed $920 million in six new projects for improving primary education, strengthening the union parishads, providing electricity in villages through solar home systems, facilitating formal employment for poor women, increasing access to safe water in arsenic and salinity inflicted areas and improving agricultural productivity.

“We are encouraged to see results in many areas such as increase in girl's enrollment in school, schooling, reduction in under five child mortality or better disaster preparedness that have made Bangladesh a role model to its neighbours,” said Christine E Kimes, operations advisor to World Bank Bangladesh.

“The government of Bangladesh is fully committed to ensure that external financing is well utilised,” said Arastoo Khan, additional secretary to the ERD.

“The portfolio review of World Bank supported projects with the line ministries and World Bank demonstrates the government's strong commitment to faster and effective implementation of the Annual Development Plan.”

The WB statement said the government and the World Bank teams participating in the portfolio review identified actions to accelerate disbursement in the remaining months of FY 12 and to achieve desired development results.

Improved implementation will be required to further enhance disbursements.

News: The Daily Star/ Bangladesh/ 21-May-2012

The board of directors of Brac Bank has recommended rights share for the existing shareholders to raise its paid up capital.

The company will offer rights share at a ratio 1:2 - one rights share for every two shares held - at an issue price of Tk. 25 each including a premium of Tk. 15 per share on paid up capital subject to the approval of EGM and regulatory authorities.

The bank will offer rights share to increase paid up capital to meet Bangladesh Bank Basel II requirements. As per the BB order a bank must have Tk 400 core as paid up capital. Existing paid up capital of Brac Bank is Tk 385.5 core.

The company has fixed record date for EGM on May 29, 2012, while the EGM will be held on June 28.

Another record date for entitlement of the proposed rights share will be notified later after obtaining approval from SEC. Venue of the EGM to be notified later.

News: The Daily Sun/ Bangladesh/ 21-May-2012

Dutch-Bangla Bank Limited (DBBL) has opened its 116th branch at Ashulia Sunday.

Equipped with all modern facilities, the new DBBL branch will provide truly on-line banking facilities to the clients from the opening day of the branch.

Md. Mosaddiqur Rahman, Deputy Managing Director of the bank inaugurated the Mirer Bazar branch.

DBBL provides a wide array of banking products and financial services including card services to its retail and corporate customers.

News: The Daily Sun/ Bangladesh/ 21-May-2012