Sheikh Abdul Hye Bacchu, Chairman of BASIC Bank, presides over an AGM in Dhaka.

BASIC Bank Limited has declared 25 percent stock dividend for its shareholders for the year ended 2011.

The dividend was decided at the 23rd annual general meeting (AGM) of the company at the Bank's head office.

Sheikh Abdul Hye Bacchu, Chairman, Board of Directors of the Bank presided over the AGM, said a press release on Tuesday.

Directors of BASIC Bank Jahangir Akhand Salim, Fakhrul Islam, Shubhashish Bose, Neelufar Ahmed, Quamrun Nahar Ahmed, Shaskhawat Hossain, Prof Dr Kazi Akhtar Hussain, Md Anwarul Islam, FCMA, Managing Director, Kazi Fakhrul Islam, Additional Managing Director, Sheikh Manjur Morshed, Deputy Managing Directors, Fazlus Sobhan and Kanak Kumar Purkayastha were present.

Md. Rizwanul Huda, Deputy Secretary, Banking and Financial Institutions Division, Ministry of Finance attended the meeting as the representative of the government.

BASIC Bank Limited earned a gross operating profit Tk 2.35 billion in 2011.

The Daily Sun/Bangladesh/ 1st May 2012

Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA), the two major co-financiers of Padma bridge project besides the World Bank, have also extended the loan disbursement deadline by three more months.

The new move will keep alive the hope of donor financing for the country’s biggest infrastructure project. The deadline expired last week, ERD officials said.

Earlier, in late January the World Bank, the lead financier of the project, extended its loan activation deadline by six months.

The WB first withheld its funding to the project, after receiving a graft allegation over pre-qualification process of selecting consultants for the project. Later, other financiers also followed the WB.

The WB promised to provide $1.2 billion loan for the $2.9 billion project, while the ADB promised $615 million and JICA $400 million.

Recently, the WB blacklisted the Canadian firm SNC Lavalin, whose name surfaced in the allegations, after finishing primary investigations.

Earlier last month the WB reiterated its stance about their allegations and urged the Bangladesh government to pursue its own investigation into the allegations.

The Daily Sun/Bangladesh/ 1st May 2012

The Ministry of Finance is preparing to issue a total of $500 million sovereign bond in international market to obtain foreign loans from global markets to ease its foreign fund crisis.

“The ministry has taken all kinds of measures including holding talks with a foreign firm to issue bond in international market”, said a senior official of the Macroeconomic Wing under Finance Ministry.

He also said they were following recommendations of a government policy paper on borrowing credit from international securities market through issuing bond amid fund crisis in the European Union countries like Greece and Spain.

The paper was made by a seven-member technical committee headed by Addition Finance Division Secretary Syed Manjurul Islam, which was formed by the government in January on flotation of sovereign bond in international market. The committee submitted its final report to the government last month.

Now, most of the local companies take credits from the international sources with high interest rates, but a standard should be fixed on interest of foreign credits by private sector, the official said.

Now private firms get foreign loan at 10-12 percent interest rates, which are likely to come down to 7 percent after floating sovereign bond by the government.

Sources in macroeconomic wing further said members of the technical committee have already talked to different sovereign bond solution firms to appoint for the country.

As part of the move, Chairman of the body Syed Manjurul Islam talked with a director of Singapore-based Sovereign Solution Limited last week. The firm also works for the Bangladesh chapter of Standard Chartered Bank.

Regarding floating of the bond, Bangladesh Bank Governor Dr Atiur Rahman told daily sun last week that international credit rating firms would start working from next month to assign their ratings to Bangladesh.

After getting new ratings, the government will float sovereign bond in the international market, he added.

Stable monetary and fiscal management of Bangladesh earned Ba3 (Moody’s) and BB-(S&P) sovereign ratings with stable outlook for two consecutive years of 2010 and 2011.

According to a policy paper, to attain foreign loan through sovereign bond, the foreign loans to be borrowed under the proposed sovereign bond must not be spent on financing the regular budget deficit of the government, but on large infrastructure projects that offer scopes for revenue earnings.

It also said ensuring the maximum utilisation of the fund, collected through the bond, would be a daunting challenge for the government.

Because, strict conditions and intensive monitoring of the loan issuing authorities, particularly the development partners in case of projects under concessional loan, will not be in place for the projects, to be implemented with fund borrowed through sovereign bond.

The paper strongly suggested finalisation of the projects before issuing sovereign bond in the international market to maximise the utilisation of the money.

The technical paper, first of its kind in the country, was prepared as the government is seriously planning to float sovereign bond in the global markets soon to help ease pressure on foreign currency reserve and improve balance of payments (BoP) situation.

The bond may be issued for five to 10 years. The minimum amount to be borrowed could be $500 million, the paper suggested.

According to the policy paper, the total global bond market in 2011 was worth $221 billion. Of the total, $9.0 billion was borrowed by a number of Asian countries, including Sri Lanka, Indonesia, Malaysia, Vietnam and the Philippines.

The Daily Sun/Bangladesh/ 1st May 2012

Akhtaruzzaman Chowdhury

Akhtaruzzaman Chowdhury has been re-elected as the chairman of United Commercial Bank (UCB), the Bank said in a statement yesterday. He is a founder director of the Bank.

Chowdhury is also serving as chairman of the parliamentary standing committee on the textiles and jute ministry.

Showkat Aziz Russell, a top entrepreneur, has been re-elected as vice-chairman of the Bank.

MA Sabur has been re-elected as the chairman of the executive committee, and Md Jahangir Alam Khan as chairman of the audit committee.

The Daily Star/Bangladesh/ 1st May 2012

Not all tax identification number (TIN) holders will have to pay minimum tax in the next fiscal year, the National Board of Revenue (NBR) said yesterday.

The board, however, said it looks for scope to impose taxes on some TIN holders on a case-to-case basis and aims to bring the local government units such as pourashava and "growth centres" under the tax net by encouraging people to get TIN.

"Our target is to increase the number of TIN holders to get more tax," said NBR member on income tax policy Syed Md Aminul Karim, responding to the media at a press briefing at the NBR office in Dhaka.

“But we are not thinking of imposing taxes on all TIN holders,” he said.

NBR Chairman Nasiruddin Ahmed and other members were also present.

The tax collector shared the view days after Finance Minister AMA Muhith said the government considers imposing minimum tax on all of the 30 lakh TIN holders. Of them, only one-third submit returns.

The NBR said it collected Tk 62,737 crore in July-March of the current fiscal year with an 18 percent growth and expects to beat the entire year's target at Tk 91,870 crore.

In the next fiscal year beginning in July, the NBR aims to collect Tk 112,350 crore in revenue, said its chairman.

"We will also say good-bye to the PSI (pre-shipment inspection) system next year," said Ahmed, adding that the system would stand scrapped from December.

"We are formulating an exit strategy the system," he said.

On whether black money will be allowed to be legalised in the next fiscal year also, Ahmed said there is a provision in the income tax law that one can show his undisclosed money under the head of "income from other sources".

NBR accepts such undisclosed income by imposing up to 25 percent taxes without question. This provision will remain in force through the next fiscal year.

"We will not question if anyone shows his income as income from other sources," said the NBR chief.

The NBR said there is no limit to 'income which can be shown as income from other sources'.

The tax administrator, however, could not give any information on how much undisclosed money may become legalised under the provision of the current law.

Ahmed said the NBR also considers scanning 'transfer pricing' in the upcoming income tax law in a bid to curb siphoning off money out of the country by manipulating the system.

Some $1.8 million are siphoned off from the country each year through the misuse of transfer pricing, said the NBR chairman, citing estimates by various sources.

Transfer pricing happens whenever two related companies -- that is, a parent company and a subsidiary, or two subsidiaries controlled by a common parent -- trade with each other.

For instance, a US-based subsidiary of Coca-Cola buys something from a French-based subsidiary of Coca-Cola. When the parties establish a price for the transaction, they are engaging in transfer pricing.

Transfer pricing is not, in itself, illegal or abusive. What is illegal or abusive is transfer mispricing, which is also known as transfer pricing manipulation or abusive transfer pricing.

"It is very important and is also practisced in other countries," Ahmed said, adding that the NBR would scan how multinational companies use transfer pricing. The NBR would provide training to its officials who will examine transfer pricing, he said.

Ahmed also said the proposed VAT law would be placed in parliament in June for passage.

The Daily Star/Bangladesh/ 1st May 2012