Category Archives: Financial/Banking/Stock Market

Showcase Bangladesh in KL in July 13-15

Showcase Bangladesh in KL in July 13-15
Staff Correspondent

The Bangladesh-Malaysia Chamber of Commerce and Industry will organise a trade fair in Malaysian capital Kuala Lumpur, highlighting the Bangladeshi banks and money exchanges to attract the Bangladeshi expatriates working there.

Second Showcase Bangladesh 2012, as the show is titled, will be held in July 13-15, said BMCCI officials at a press briefing at the National Press Club in Dhaka on Sunday.

Mentioning that the remittance sent to Bangladesh has currently exceeded $1 billion, they said the government and the financial institutions as well have mulled efforts to increase its flow.

The show will have 70 stalls from nearly 60 Bangladeshi business houses and financial institutions including banks, readymade garments and knitwear companies, ceramics and leather products manufacturers, handicrafts and food producers and tourism promoters.

The exhibition will also focus on the Malaysian investor attracting investment in Bangladesh’s tourism and hospitality sector.

BMCCI president Syed Nurul Islam, Showcase Bangladesh 2012 organising committee chair Syed Moazzem Hossain, BMCCI secretary-general Mohammad Alamgir Jalil, representatives from show sponsors Islami Bank Bangladesh Limited, Eastern Bank Limited and Pubali Bank Limited, among others, spoke at the conference.


EBL Nobodoy to finance agro industry

EBL Nobodoy to finance agro industry
Author / Source : STAFF REPORTER

Dhaka, Jan 7: Eastern Bank Ltd (EBL) has launched a new lending product titled ‘EBL Nobodoy’ to finance the emerging agro-based industries of the country.

Dr. Atiur Rahman, governor Bangladesh Bank, launched the ‘EBL Nobodoy’ at Cox’s Bazar on Friday, says a press release. Ali Reza Iftekhar, managing director and  chief executive officer, Md. Khurshed Alam, head of SME business, Anwar Faruq Talukder, head of small business, Ziaul Karim , head of marketing of EBL, and Mrinal Sircar, programme manager, and Taif Ul Islam,  of South Asian Enterprise Development Facility-IFC were also present.

Launching this innovative financial product, Bangladesh Bank governor Dr Atiur Rahman encouraged other financial institutions to create need-based initiatives that promote climate-change mitigation projects. “Farmers being able to generate their own electricity will also help reduce the diesel subsidy being provided by the government,” he added. Ali Reza Iftekhar, managing director of Eastern Bank Ltd, said “Our bank is dedicated to sustainable development. Sustainability is the cornerstone of everything that we do. We are committed to finance businesses that invest in green technology and will continue exploring innovative ways aiming at improving local communities and the environment.”“EBL NOBODOY” is targeted to facilitate finance to the very emerging agro-based industries where million numbers of rural entrepreneurs are working. Target market is also thirty six agro based priority sectors including bio pesticide, bio gas and power generating industry from husk of rice, poultry dung and cow dung etc.An entrepreneur can avail up to Tk 1 million loan without any collateral security. For above Tk one million and upto Tk seven million 30-50 per cent of the availed loan amount as FDR to be provided. The loan is repayable in equal monthly instalments within maximum five years period. Interest rate is 10 per cent per anum. EBL has taken a special project in association with South Asian Enterprise Development Facility, managed by IFC to provide finance to poultry farmers under ‘EBL Nobodoy’ for converting poultry waste to bio-gas and electricity.

e-banking rides high on IT

e-banking rides high on IT
Sajjadur Rahman

The financial sector made remarkable progress in adopting electronic forms of payments instead of traditional paper-based ones in the just concluded year.

The use of debit card, credit card, automated teller machine (ATM), internet banking, mobile banking, automated cheque processing and credit information system increased significantly in 2011.

Banks were in the forefront of harnessing technology to improve their products, services and efficiency to rope in customers.

According to Bangladesh Bank (BB) data, out of 47 scheduled banks 43 are now engaged more or less in electronic operations.

The four banks that are yet to adopt electronic banking are: Bangladesh Krishi Bank, Bangladesh Development Bank, Rajshahi Krishi Unnayan Bank and Rupali Bank. All these are state-owned.

BB data shows 38 banks were providing online banking facilities and 18 banks internet banking. On the other hand, nearly 40 banks have now ATM or debit card services and 26 banks offer credit card facilities.

Transactions through ATMs increased by more than 50 percent to around Tk 35,000 crore in 2011. Credit card transactions also rose more than 50 percent to nearly Tk 5,000 crore.

The central bank also took steps to make automated cheque processing system and mobile banking more effective. The BB issued guidelines for mobile-based banking services in the same year in a bid to ensure financial inclusion of the non-banked population.

“It (2011) was a great year for the financial sector in terms of IT adoption,” said Tapan Kanti Sarker, head of IT of NCC Bank.

Cheque processing, credit information and fund transfer all have been automated in the just concluded year, he added.

Syed Masodul Bari, head of IT of Al-Arafah Bank, said banking has become much easier due to the use of IT in 2011. He cited an example of remittance transfer, which has now become a matter of a few minutes instead of weeks needed earlier.

He said mobile banking would rise with a huge potential in 2012.

“Banks’ activities have become more transparent due to the use of IT,” said Bari.

London expo on Bangladesh capital market April 15

London expo on Bangladesh capital market April 15
Author / Source : STAFF REPORTER

DHAKA, DEC 27: Curry Life Events (CLE), a UK-based media company, is going to organise a three-day Bangladesh Capital Market Fair for the second time at Water Lily Business Centre (WLBC) in East London, says a press release. The CLE, along with the Bangladeshi stockbrokers, will arrange the expo to lure the investment of both expatriates and foreign investors in Bangladesh capital.

The disclosure came at a press meet at a city hotel on Tuesday where Syed Belal Ahmed, chairman and chief executive officer of Curry Life Group London, Syed Nahas Pasha, Editor-in-Chief of Weekly Janomot, and Mohammed NS Kabir, chairman of Stock and Security Linkway Ltd. were present.

The fair is scheduled to begin on April 15 and continue till April 17. The participants through nearly 60 stalls at the fair will showcase different information on the Bangladesh stockmarket.

To attract both expatriates and foreign capital market investors, the government of Bangladesh has announced a stimulus package, including investment opportunity of undisclosed money, withdrawal of 10 per cent capital gain tax on the income from share market investment of both expatriates and foreign institutes.

The fair organiser hoped that this stimulus package would encourage foreign investment in Bangladesh capital market as the Bangladeshi expatriates have already showed their keen interest.

Renowned stockbrokers and merchant banking institutions of Bangladesh will take part in the imminent fair, the organiser said.

To make the fair successful, the CLE has taken various steps, including arrangement of seminar, networking evening and gala-dinner.

The first-ever such fair in London was held in March, where about 24 Bangladeshi banks and stockbrokers took part.

Moreover, about 10,000 people visited the last fair as well as over 1,000 stockmarket investors opened Beneficiary Owners Account.

Standard Chartered official ‘bullish’ on B’desh

Standard Chartered official ‘bullish’ on B’desh
Bank seeking to mobilise funds for power sector
A Z M Anas

Bangladesh will see a surge in capital from advanced and emerging economies in the next five years, lured by cheaper stocks and tax incentives, a senior Standard Chartered Bank official says.

Harinder Singh, a managing director of the UK-based but emerging markets-focused bank, has said institutional investors, mutual funds, private equity firms, and wealth management groups from the Organisation for Economic Cooperation and Development (OECD) countries would come to Bangladesh in droves to invest.

OECD is a 34-member bloc of the world’s most advanced and emerging economies.

“This is a time of great opportunity,” said the Mumbai-based banker, even if he is aware of the risks associated with euro-zone crisis and a stuttering global recovery. He has no estimates of the potential flow.

His comments came as the average stock price-to-earnings ratio in the capital market hovered below 15 while the government waived a 10 per cent tax on income from mutual funds.

Although Dhaka Stock Exchange, the premier bourse, is one of the worst-performers in Asia this year, its market capitalisation is still as high as $33 billion.

Cheaper stocks have provided rooms for bargain hunting by foreign portfolio investors whose participation in Bangladesh’s equity market is negligible.

Mr Singh said his bank is also seeking to mobilise funds for Bangladesh’s power sector, which requires an investment of US$9.0 billion to produce 9,426 megawatts of electricity by 2015.

“We’re trying to raise Bangladesh’s profile abroad. Investments will be flowing in power and telecommunications sectors,” he said.

Foreign direct investment climbed by 30 per cent in 2010 to US$913.32 million, up from $700.16 million a year ago, the United Nations Conference Trade and Development (UNCTAD) data showed.

Mr. Singh, whose career with Standard Chartered spans as long as 17 years, said international capital should be harnessed in a way, making sure that it adds maximum value and trickles in useful and productive sectors.

Although liquidity crisis has engulfed the local banking industry, he said Bangladesh operations of Standard Chartered remain unscathed, because “we’re disciplined in balance sheets.”

However, the bank’s profit after tax plunged by Tk 350 million to Tk 4.5 billion in 2010, down from Tk 4.8 billion the year before, according to figures available with the bank.

Mr Singh, a business graduate of Delhi University, said positive demographics and domestic demand would propel Bangladesh’s growth in the coming years.

“We’re bullish about (Bangladesh’s) prospects,” he said, insisting that young people who make up two-thirds of Bangladesh’s 160 million population would prop up growth.

The country’s internal demand is driven mainly by its 3.0 million-odd middle class with considerable spending habit, say economists.

Despite the debt crisis in the euro-zone and US economic woes, the Bangladesh economy expanded at 6.6 per cent in the last financial year, its highest since the early 1970s.

“Lots of countries wouldn’t have growth at all during the time,” Mr Singh said.

He didn’t say whether it was a “right step” to allow more private banks to operate in the country — a move that has already sparked nationwide controversy.

But he said market forces would determine whether it is good or bad to issue new licenses for private lenders in what is otherwise Bangladesh’s crowded banking sector.

Excluding state banks, a total of 39 private banks are operating in Bangladesh and the central bank is now reviewing applications of 37 sponsors who are seeking new banking licenses.

Mr Singh noted that attracting clients would be the biggest hurdle for new banks, making it challenging for them to stay afloat.

The depreciation of Bangladesh Taka doesn’t worry the banking professional who said India’s Rupee declined by 16 per cent this year — the worst performing currency in Asia in 2011.

Asked whether his bank planned to be listed in Bangladesh’s stock markets in near future, Mr Singh said he is not aware of any such move.

“Bangladesh is a key market for us. We feel that we’re a local bank and we bring in cross-border expertise,” he said. “We’re here for 107 years and not focused on short-term profitability.”

BB set to implement Basel-III from 2014

BB set to implement Basel-III from 2014
Siddique Islam

Bangladesh has started preparations to implement the Basel-III framework for bank companies from 2014 in line with the global standard, a top central bank official said Monday.

“We’ve started the ground work to implement the Basel-III for bank companies by 2014,” Executive Director of the Bangladesh Bank (BB) SK Sur Chowdhury told the FE.

The Basel-III is a new global regulatory standard on bank capital adequacy and liquidity agreed upon by the members of the Basel Committee on Banking Supervision.

The third of the Basel Accords was developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis.

The Basel-III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage.

“Liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) are pros and cons of the Basel-III framework,” Mr Sur said, adding that the central bank is providing training to the commercial bankers about the LCR and NSFR.

The LCR is a new liquidity standard introduced by the Basel Committee to ensure that a bank maintain an adequate level of unencumbered, high-quality liquid assets that can be converted into cash to meet its liquidity needs for 30 calendar days.

The NSFR is a new standard introduced by the Basel Committee aiming to limit over-reliance on short-term wholesale funding assessment of liquidity risk across all on and off-balance sheet items.

As part of the preparations, the central bank has been organising a three-day-long training programme on liquidity risk management tools since Sunday. It will continue today (Tuesday), he added.

“We’re organising the training programme aiming to improve efficiency of the commercial bank officials about measuring, identifying and controlling of liquidity risks in line with the existing Basel-II and Basel-III frameworks,” Mr Sur noted.

He also said the central bank advises the bankers for taking necessary measures to submit liquidity profile reports in line with the BB’s prescribed formats.

Liquidity profile is a snapshot of a bank’s overall liquidity position in different time buckets.

“We need accurate liquidity profile reports for taking proper measures to keep the country’s money market stable,” the central banker said.

The training programme has been discussing implication of the credit-deposit ratio (CDR) to avoid liquidity risk.

The CDR is the proportion of loan-assets (investment-assets) created by the banks from the deposits received.

“Excessive credit growth, that is, when the credit growth is higher than the deposit growth, causes higher interest rates,” the BB said in a document, adding that this is simple, because banks are borrowing for a short term for credit expansion.

“When the payment is due they again borrow. But when most of the banks have the similar situation in their books, scarcity of fund arises which causes higher interest rates,” it noted.

Bangladesh is now implementing the Basel-II accord to consolidate capital base of the banks in line with the international standard.

It has been prepared on the basis of three pillars: minimum capital requirement, supervisory review process and market discipline.

Three types of risks – credit risk, market risk and operational risk – have to be considered under the minimum capital requirement.

Islami Bank launches iTransfer, iRecharge services

Islami Bank launches iTransfer, iRecharge services
Author / Source : UNB

Dhaka, Dec 11: Islami Bank Bangladesh Limited has launched iTransfer and iRecharge services. It will introduce new horizon in the banking sector of Bangladesh, the officials said on Sunday. Through iTransfer one can transfer upto Tk 5 lakh from his account to other’s and through iRecharge one can upload money in his mobile by debiting his bank account, said a release of the bank.

On the occasion, the bank organised a workshop for 61 IT officers of different branches of Dhaka at Mohammad Younis auditorium, Islami Bank Tower in the city on Sunday.

Mohammad Abdul Mannan, managing director of Islami Bank Bangladesh Limited, was present as the chief guest. The programme was also attended by high officials of the bank.