Bangladesh Economy: News & Updates

[Raquib]

BB predicts 6 pc growth rate for 2007-2008

Sun, Feb 10th, 2008 11:28 pm BdST
Dhaka, Feb 10 (bdnews24.com) – Bangladesh Bank predicts a GDP growth rate in the range of 6.0-6.2 percent for fiscal 2007-08 if the political situation remains favourable.

The prediction came in the central bank's second quarterly report released Sunday.

At the launching of the report, economist Mostafa Kamal Mujeri said: "We hope the political situation in the country will remain good and that we will have the expected production of boro."

"The central bank made its evaluation taking these positive views into account."

The report said the bank had also taken into account the recession in financial activities in the country in its forecast.

But achievement of 6.0-6.2 percent growth depends on effective steps to face existing obstacles, the report added.

It suggested that the government go faster to implement the ongoing reforms in the economic sector to achieve the target.

It recommended ensuring an institutional structure to sustain existing policy ahead of the general election expected to be held by the end of this year.

At the same time, the government must ensure supply of quality seeds and fertiliser, power and diesel to achieve the target of boro production, the report said.

The central bank claimed that the economy of the country was improving.

The real economy showed an improved pace of growth as domestic production activities started to rebound after the 2007 floods and Cyclone Sidr, the report said, adding that export growth also started to gather pace.

Against the estimated growth of 6.5 percent in fiscal 2006-07, the target GDP growth rate for fiscal 2007-08 was initially set at 7.0 percent in the financial year budget.

Recent domestic and global development—including natural calamities, temporary disruptions in domestic production, and adverse price developments in the international market—have adversely affected the growth performance of the economy requiring a downward adjustment in the GDP growth rate for the current fiscal year, the report said.

www.bdnews24.com

 

[Raquib]

Bangladesh c.bank says confidence lifting economy

A recovery in business confidence is lifting Bangladesh's economic growth prospects as the country moves towards democratic elections due by the end of year, the central bank said in its quarterly report.

The report, seen by Reuters on Monday, said that industrial growth in the fiscal year to end-June would be between 8.5 percent and 8.7 percent, compared with nearly 9 percent last year. The service sector was forecast to grow by 6.3 percent, compared with about 7 percent last year.

An official who asked not to be identified said overall economic growth could touch 6.3 percent, below an earlier target of 7 percent but up from the 6.2 percent forecast by the central bank governor in December.

The country has been under a state of emergency for the past year. The interim government headed by former central bank chief Fakhruddin Ahmed has promised to hold free elections this year.

"But now the growth prospects of the economy are brighter," the central bank said, adding that confidence among the business community had improved in step with socio-political stability, helped by the election commitments of the army-backed government.

Rising inflation, floods, the deadly cyclone Sidr and the lack of confidence among business people had led to the earlier cut in the growth forecast.

Bangladesh's annual inflation rate hit a 17-year high of 11.6 percent in December because of a jump in food prices after a series of natural disasters.

The government was trying to increase the production of boro, a rice variety, by 21 percent to 17.5 million tonnes this year, said Mustafa K. Mujeri, the chief economist of the central bank.

"It is important to ensure the adequate and timely supply of fertiliser, credit, irrigation and other inputs to achieve the boro production target," the report said.

Source: http://sg.news.yahoo.com/rtrs/20080211/tbs...rt-7318940.html

 

[Raquib]

SEC tightens listing rules
Wed, Feb 13th, 2008 12:54 am BdST
Dhaka, Feb 12 (bdnews24.com)— The Securities and Exchange Commission has made it mandatory for companies with Tk 50 core or more in paid-up capital to go public, in an effort to increase share supply to the capital market.

SEC executive director Farhad Ahmed told reporters Tuesday that private limited companies who want to raise their paid-up capital to Tk 40 crore or more have to convert to public limited companies within six months of the publication of the amended securities rules.

"Those who already have paid-up capital of more than Tk 40 crore will have 12 months to go public after the gazette notification of this decision by us," he added.

In case of public limited companies, those who have a paid-up capital of at least Tk 50 core have to issue an IPO within 12 months after their operation, Farhad said.

"However, public limited companies having no commercial operations at present will get three years' time to come up with an IPO after starting their operations," he added.

The SEC director said that non-compliance with these regulations would result in financial penalties "up to any amount".

Farhad told reporters that the regulatory body has approved Delta BRAC Finance's proposal to float zero-coupon bonds worth Tk 150 crore.

A zero-coupon bond is a discount bond bought at a price lower than its face value, with the face value repaid at maturity.

"The three-year bonds will be issued to banks and financial institutions which would not be listed on the public market," he added.

The executive director also informed reporters of the regulators decision to stop investors opening beneficiary owner's accounts upon allotted primary shares.

"We have seen that a certain number of BO accounts are found closed after the shares have been allotted and this is increasing at an alarming rate. There are 275 cases in Islami Bank alone," Farhad said.

www.bdnews24.com

 

[Raquib]

Huge population not problem, poverty imposed upon people, Dr Yunus

New York, Feb 12 (BSS)-Nobel laureate Dr Muhammad Yunus said
the huge volume of population of a country is not the main cause
of poverty and the chronic hardship is the result of faults with
the economic system.

"Poverty was imposed on the people across the globe and it's
not created by the poor people," he said while inaugurating a
scholarship program launched after his name at the York College
here.

Under the 'Dr Yunus Scholarship', every year 10 Bangladeshi
students will enroll at the York College and another 10 students
of the college will come Bangladesh to gather practical
experience on micro credit program. York College will bear all
expenditure of this exchange program.

Addressing the occasion as the chief guest, Dr Yunus said,
despite a lot of constraints, Bangladesh is moving forward to
achieve development in many sectors including poverty reduction
and women empowerment.

"People is not a problem at all, people is the force," Dr
Yunus said, adding, "Problem is in the system, which need to be
eased for the masses to eradicate poverty."

He said the Grameen Bank proved that with proper planning and
appropriate initiatives, one could achieve development without
capital.

The Nobel laureate informed the audience that a pilot
project of micro finance named 'Grameen America' has been
launched at Queens in New York. He also said, he has a plan to
introduce the project to other cities of the USA.

President of York College Dr Marcia Keizs, Vice President Dr
Gerald Posman, vice chancellor of City University New York Dr
Selma Botman and Professor Dr M Shawkat Ali spoke at the
function, among others.

http://www.bssnews.net/index.php?genID=BSS...-02-12&id=7

 

[Raquib]

Economy to see turnaround if emergency goes, says
ex-BB deputy governor
Staff Correspondent

The country’s present sluggish economy can see a turnaround only if the emergency laws are withdrawn, says a former central bank deputy governor, who believes that open market economy and a state of emergency are not compatible.
‘Emergency laws are very rigid whereas business is very flexible and these two just do not go together,’ Khondkar Ibrahim Khaled said at a book launching programme Wednesday.
Non-economic factors are responsible for sluggish economic performance, he pointed out. ‘Only those who control the non-economic factors can provide the solution to the current problems.’
If the government withdraws the emergency laws, there may be some political disturbances but the businesses will be able to run smoothly, the former deputy governor of Bangladesh Bank said.
‘The economy will rebound within six months if regular laws are enforced instead of the persisting emergency laws and if a government of people’s representatives is in place.’
The senior banker, who is now chairman of the state-run Bangladesh Krishi Bank, launched the book titled ‘Jonogoner Dorgoray Budget’ [Budget on the people’s doorsteps], edited by economist Atiur Rahman, in Dhaka.
Ibrahim Khaled viewed that channelling black money into productive sectors could help keep inflation in check.
If anybody invests black money in an industry, in creates a huge impact on the economy in terms of employment generation as well as increases in individual income, factory output and tax revenue, and thus brings down inflation or at least reduces its bite.
But if businessmen do not invest out of fear of being grilled for disclosing source of the black money, then no industry would be set up, he said.
‘It is definitely bad to hold black money, but the government should take pragmatic decision considering the reality,’ he suggested.
‘A black money holder sets up industries where 50,000 people work and if the government puts him behind the bar or forces him to go into hiding, those people will risk losing jobs.’
Instead, the government can penalise him and let him off the hook to run his business smoothly, he felt.
Grameenphone and other mobile phone operators have been penalised heavily for doing illegal VoIP business, but the government did not arrest any of the officials of the operators, Ibrahim Khaled cited.
About agriculture production, the Krishi Bank chairman said if the country could achieve near self-sufficiency in food earlier, why not now.
He emphasised on smooth distribution of fertilisers and seeds to get a bumper boro crop.
Under the current distribution system, prices may not fluctuate but the farmers may not get the right quantity of inputs in the right time, he feared.
‘Open the marketing channel and allow good businesses to run,’ he suggested.
Atiur Rahman said the primary task of the government was to restore confidence in the businessmen.
‘If the government asks where the equity comes from, no businessman will invest,’ he said.
Absence of political stability is very bad for the economy, said Atiur, chairman of research organisation ‘Somonnay’.
Everybody in the government — from chief adviser to chief election commissioner and chief of army staff — is trying to assure the people that the election would be held on schedule, he said.
‘So many assurances create suspicion among the people,’ he pointed out.
In people’s mind, there are a lot of questions like ‘Where the country is heading towards?’ and ‘What is happening in the economy?’
This shows that people lack confidence in the government, he said.
Stability in politics and administration is a must for smooth functioning of businesses, Atiur observed.

Front Page

 

[Raquib]

Govt working to increase manpower exports: Iftekhar

DHAKA, Bangladesh, Feb 13 (BSS)-Foreign Adviser of Bangladesh caretaker government Dr. Iftekhar Ahmed Chowdhury today said the government was working to increase manpower exports in a planned way to take advantage of the opportunities abroad.

In January, Bangladeshis got a record number of nearly 92,000 jobs abroad, said Iftekhar, who is Adviser for Expatriates' Welfare and Overseas Employment ministry.

Last year, he said, a total of 832,000 Bangladeshi workers were cleared for foreign employment while $6.56 billion were received in remittances, both setting new records.

According to a foreign office press release, nearly five million Bangladeshis were working in 100 countries now.

It said that the government was looking for newer job markets for the country's workers in Europe and elsewhere.

Recently a batch of 100 semi-skilled and skilled workers left for jobs in Romania, it said.

The Middle East and Gulf's booming economies, and Europe's ageing population and increasing skills of Bangladeshi workers, said the adviser, were helping the country is getting a bigger market share.

Bangladesh, he said, was trying to agreements with more and more countries for the purpose.

He said Bangladesh was working with international organisations like the IOM to organise temporary migration for its workers in an orderly manner, protecting "our workers' rights."

Dr. Iftekhar said that he had already asked the ministry to take measures to raise awareness and strengthen the pre-departure briefings of the job seekers.

Bangladeshis, in general are considered hard working and disciplined, he said.

But there were reports that some of them indulged in undesirable activities and improper behaviour by some of them.

And it would be "a great pity" if hundreds and thousands suffer for the faults of "a few," he said.

Bangladesh, he said, was in continuous dialogue with the "destination Countries", he said.

http://www.bssnews.net/index.php?genID=BSS...-02-13&id=7

 

[Raquib]

ICB set to buy troubled Oriental

Thu, Feb 14th, 2008 8:05 pm BdST
Dhaka, Feb 14 (bdnews24.com) – Switzerland-based ICB Financial Group Holdings has clinched permission to buy troubled Oriental Bank, a central bank official said Thursday.

In a letter, Bangladesh Bank gave the green light to ICB Financial Group, the highest bidder, to buy a 51.10 percent stake in Oriental.

The central bank will sign a final agreement on Feb 28 with ICB, which will have to pay Tk 350.67 crore mentioned in the bid by the time, Bangladesh Bank deputy governor Murshid Kuli Khan told reporters.

ICB, incorporated in Switzerland, is the holding company for several banks operating in Eastern Europe, Africa and Asia.

The Group made its foray into Asia in 2003 by acquiring an indirect stake of 11.3 percent in Bank Internasional Indonesia, one of the largest banks in Indonesia, according to the company's website. ICB was listed on AIM (alternative investments market) of the London Stock Exchange in May 2007.

"The tender (for Oriental) was opened on Feb 4. The deal will be signed on Feb 28," Murshid Kuli Khan said.

On Sept 23, six companies had showed interest to buy the bank but only two of them took part in the bidding.

Local market players BRAC Bank and Summit Industrial & Mercantile Corporation were among the four other candidates.

The UK-based East Investment Private Equity and Sri Lanka's Hatton National Bank were the other contenders.

On June 19 last year, the central bank took over Oriental Bank to protect depositors' interest in the wake of the bank's several financial irregularities and mismanagement.

A central bank official was appointed as the bank's administrator to conduct emergency operations.

The central bank removed Oriental's managing director and suspended the board of directors' activities on Aug 6, 2006.

After intensive investigations, the bank's shares of its sponsors Obaidul Karim and Abul Khair Litu were confiscated as per the Banking Companies Act.

They were found responsible for "pervasive irregularities".

Later the central bank took a scheme to rebuild the bank, which increased its paid-up and approved capital.

On Aug 2, 2007, the BB invited 'Expression of Interest' for Oriental's 50.1 percent stake with a minimum target price of Tk 350 crore.

On Dec 12, 2007, the regulator floated tenders for a new management for Oriental, which was originally Al Baraka Bank when it started operations on May 20, 1987.

In 2004, the individual ownerships of the ICB Banking Group were corporatised under the umbrella of ICB Financial Group Holdings AG, a Swiss based holding company.

 

[Raquib]

Bangladesh exports to USA increase
United News of Bangladesh . Dhaka

Bangladesh exports in USA have shown some increase in the year 2007.
A data released by US department of commerce on Friday showed that Bangladesh exports to USA was $3,271.4 million during 2006 whereas in 2007 that figure has increased to $3,433.2 million.
An increase of $161.18 million between 2006 and 2007 could be considered as a notable boost considering the recent natural and political upheaval in Bangladesh during that period as well as slowing down of US economy beginning from the middle of 2007.
The US department of commerce ranked Bangladesh at 32 in terms of their volume of trade deficit this year that translates to a three digit upward change from Bangladesh’s 2006 rank of 35.
The US bureau of economic analysis showed that US export to
Bangladesh also increased between 2006 and 2007 and thereby establishing a positive correlation between the two economies. This means that more Bangladesh exports to USA may spur more imports from USA and thereby establishing a two-way linkage between the sectors of the economy of these two friendly countries.
Market analysts believe that Bangladesh could expect further increase in its market penetration in the USA if the ongoing policy and institutional reforms could be strengthened along with reforms in the working environment of exporting sectors.

Business

 

[Raquib]

Grameen Bank extends loan to immigrant women in US
Agence France-Presse . London

Grameen Bank, founded by Bangladeshi Nobel Prize winner Muhammad Yunus, is taking its pioneering microfinance model to the United States, the Financial Times reported Saturday.
The move, which will open doors for some of the 28 million people in the US who do not have bank accounts, comes with the banking sector there being battered by the crisis over subprime loans.
Grameen Bank made its name by lending money to poor women who are trying to start small businesses but cannot borrow from banks because they do not have a good enough credit rating or bank accounts.
The FT said that the bank had already lent 50,000 dollars (34,000 euros) in the last month to groups of immigrant women in the New York borough of Queens. It plans to offer 176 million dollars of loans within New York City over the next five years and then expand across the United States.
‘Now is a good time because of...the subprime crisis and that highlights the issue that the financial system is not perfect,’ said Yunus, who shared the Nobel Peace Prize with Grameen Bank in 2006, in comments quoted by the paper.
The bank’s entry into the US market is its first into a developed market.

Business

 

[Raquib]

Forex reserves hold steady over $5bn

Sun, Feb 24th, 2008 10:00 pm BdST
Dhaka, Feb 24 (bdnews24.com)—Foreign currency reserves of Bangladesh Bank have been remaining over the $5 billion mark for more than eight months, driven by inward remittances, according to central bank data.

Although most of the major indices of the economy are slowing, the foreign currency reserves have reached a satisfactory level, economists say.

The central bank recorded foreign currency reserves at $5.68 billion Sunday, up from Thursday's $5.61 billion—enough to meet about four months' import bills.

Bangladesh Bank governor Salehuddin Ahmed expressed satisfaction over the increase in reserves and told bdnews24.com Sunday: "The reserves increased mainly due to the remittances sent by expatriate Bangladeshis. Despite huge import bills to the Asian Clearing Union in recent times, the foreign currency reserves have exceeded the $5 billion mark."

The BB governor said, "The figure is very positive for the country. About four months' import bills can be paid with the present reserves."

According to Bangladesh Bank statistics, the reserves touched $5.08 billion on June 30, the last day of the previous fiscal year.

The forex reserves have not since gone below the $5 billion mark.

The remittances from the expatriate Bangladeshis are steadily increasing over the past several years. In fiscal 2006-07, the remittances were recorded at $5.98 billion.

In the first seven months (July-January) of the fiscal 2007-08, Bangladesh posted inward remittances at $4.15 billion, with $715.49 million in January, which is a one-month record.

In the first seven days of February, remittances were $164.37 million.

According to the Export Promotion Bureau, export earnings grew only 2.4 percent in the first five months of the current fiscal year (July-November), down from 25.83 percent in the same period of the last fiscal year.

 

[Raquib]

ICB buys Oriental

Thu, Feb 28th, 2008 7:08 pm BdST
Dhaka, Feb 28 (bdnews24.com) – Switzerland-incorporated ICB Financial Group Holdings has purchased the problem-ridden Oriental Bank, officials said Thursday.

ICB has bought a 50.10 percent stake in the bank for Tk 350.67 crore and renamed it ICB Islamic Bank Limited.

ICB takes over management of the bank 15 days from now. A tripartite agreement was signed at Bangladesh Bank in Motijheel Thursday morning.

The proposed chairman of ICB Islamic Bank Ltd Dr Hadenan bin Abdul Jalil signed the agreement on behalf of ICB while Bangladesh Bank's acting general manager Jahangir Alam and Oriental Bank chairman AH Toufique Ahmed signed on behalf of their organisations.

ICB, incorporated in Switzerland, is the holding company for several banks operating in Eastern Europe, Africa and Asia.

The Group made its foray into Asia in 2003 by acquiring an indirect stake of 11.3 percent in Bank Internasional Indonesia, one of the largest banks in Indonesia, according to the company's website.

ICB was listed on AIM (alternative investments market) of the London Stock Exchange in May 2007.

After the signing of the agreement, Dr Hadenan told reporters that his first job after takeover would be to increase the efficiency of the bank.

He said necessary steps would be taken to bring back transparency to the bank, and that all banking activities would be conducted abiding by the rules and regulations of Bangladesh Bank.

The would-be chairman said that no officers or employees of the bank would be retrenched.

The bank will be overhauled with the appointment of new officials and employees, he said.

A plan is underway to increase the number of branches to 50 from the existing 30, Hadenan added.

Bangladesh Bank deputy governor Murshid Kuli Khan who was present at the ceremony said that being able to sell the troubled bank in such a short time was a great success for the central bank.

Of the 49.90 percent shares that remain of the bank, ownership of about Tk 300 crore would be given to general shareholders.

Depositors will also get a chunk of general shares proportionate to their deposits, according to a scheme.

The bank has about Tk 1,400 crore deposit liabilities .

Bangladesh Bank in a formal letter on Feb 14 gave permission to ICB, the highest bidder, to buy a 50.10 percent Oriental stake.

A tender was initially invited for the crisis-ridden Oriental on Feb 4, 2007. Six firms showed interest in buying the bank. Only ICB and Domestic Investors Consortium Bangladesh submitted tender bids.

Bangladesh Bank acquired Oriental Bank on June 19, 2006, following charges of financial irregularities.

An official of the central bank was appointed administrator of the bank. On Aug 6, 2006, the central bank removed Oriental Bank's managing director and suspended the activities of the bank's management council.

The central bank, with the government's approval for reconstruction of the bank, increased the approved and paid-up capital of the bank.

 

[Raquib]

Industry, service sectors likely to see turnaround: ADB

DHAKA, Bangladesh, Feb 28 (BSS) - The industry and service sectors are expected to see a turnaround in the second half of the current fiscal, Asian Development Bank (ADB) Country Director Hua Du said today.

She said this at a function marking the release of the Bank's quarterly economic update at its office here. Senior economist Rezaul Karim Khan presented the update.

Hua Du said the first five months of the current fiscal 2007- 08 saw slow progress in different fields as the country was hit by floods and cyclone last year along with continued shortcoming in business confidence.

But, she said, the industry and service sectors are expected to see a turnaround following several government steps directed to restore the business confidence and revive activities in the private sector.

She hoped that the Better Business Forum, the Regulatory Reform Commission or the proposed Truth Commission would play a positive role in boosting the business confidence and suggested that the holding of regular dialogue between the government and the private sector may further stimulate the confidence.

Hua Du said the election preparation is in satisfactory progress and she believed the polls will be held in time as per the roadmap.

Replying to a question, Hua Du said the anti-corruption drive of the caretaker government should be selective and target oriented without allowing it to disrupt the overall business environment.

It has started to ease, she said adding, the caretaker government has already recognized the problems and undertaken measures to allay public fear.

The ADB chief said the country may have a bumper boro crop this year and a successful harvest may be able to bring down inflation at an affordable level.

The excessive subsidy to agriculture and petroleum products, she said, is aggravating the inflation which was 11.6 percent in December last on point to point basis.

She laid emphasis on further rationalizing the subsidies to reduce the government deficit financing.

The revenue collection of the National Board of Revenue (NBR) was 24.6 percent from July to January, the ADB report said adding the tempo may only be continued if business gets new impetus in the remaining time of the financial year.

The ADB said the country's export grew by 15.4 percent during the October-December period resulting from a downswing in the export orders for woven garments.

But much of the loss was overcome by rise in knitwear export, the ADB report said.

During the first half of the current fiscal, the growth of the large to medium industry was 3.5 percent compared to 8.1 percent growth in the small scale manufacturing.

Economic growth would be less than 6 percent this year compared to 6.5 percent during the previous fiscal, according to the report.

The growth outlook points to the need to boost business confidence, restoration of cyclone and flood affected infrastructure, livelihood of the displaced persons and recovery in the external competitiveness, the ADB report said.

It said the reserves at the Bangladesh Bank stood at US$ 5.4 billion at the end of January.

http://www.bssnews.net/index.php?genID=BSS...-02-28&id=7

 

[Raquib]

Oriental Bank to expand with Islamic banking
Sajjadur Rahman


Switzerland-based ICB Financial Group Holdings AG, the new majority owner of Oriental Bank, plans to turn the once scandal-ridden bank into one of the country's biggest, focusing on Shariah-based banking.

Dr Hadenan Bin A Jalil, chairman of the ICB Group, which is listed on the London Stock Exchange, said Bangladesh has huge potential, but it would take five to six years to transform Oriental into one of the best banks in the country.

Hadenan made the comments on the day ICB formally signed a deal to take a 50.10 percent stake at a cost of more than Tk 350 crore (US$51 million). Oriental Bank will be renamed ICB Islamic Bank Limited, according to the new owner.

“ICB is expanding. The company is now targeting emerging Asian economies and we've seen potential in Bangladesh where 85 percent of the 150-million people are Muslim,” Hadenan told The Daily Star in an interview yesterday at Oriental Bank's headquarters at Karwan Bazar in Dhaka.

He said: “We're committed to provide a wide variety of innovative Islamic products and services to fulfil the financial needs of the locals”.

Other potential areas of business the ICB Group has identified are agriculture, services sector and remittance.

“We will pump more into the bank to improve its efficiency and strengthen product base,” said Hadenan, who is also the chairman of Takaful Malaysia, an insurance company.

ICB Group has already deposited the purchase sum with the Bangladesh Bank.

“There will be zero tolerance with inefficiency in the management. Staff of the bank will be given time and training to improve their efficiency,” he said. “No employees will lose job initially as they will be monitored for one year.”

On expansion plans, he said the first one year will be spent for restructuring the bank, aiming to provide improved services to the clients. Infrastructure, especially information technology will be heightened to international standard.

“More emphasis will be given to electronic banking, including ATMs,” he added.

New branches will come up, but the number will not cross 50, he said. Currently, the bank has 30 branches across the country.

The bank will ensure good governance, transparency and accountability. “We'll provide a benchmark for other banks to follow,” he added.

On the higher interest rate charged by banks in Bangladesh, Hadenan said: “An efficient management can cut the lending rate”.

The new owner of the bank said initially the bank's board will consist of as little as five or six members. Of them, one or two will be nominated from Bangladesh and three/four from foreign countries.

The Bangladesh Bank in June 2006 dissolved Oriental Bank's board of directors after detecting massive corruption. To safeguard the interest of the depositors, the central bank took over its full control and appointed a BB executive director as the bank's administrator.

In August 2007, BB floated a tender to sell the bank's majority shares. Two bidders participated in the tender and Swiss ICB Group won the bid as it offered higher price than that of Domestic Consortium.

Private sector, BB and Islamic Development Bank own the remaining shares.

ICB Group has banking business in some 13 countries in Africa and Asia.

Managing Director of Oriental Bank Asaduzzaman said the paid-up capital of the bank is over Tk 700 crore of which Tk 351 crore is ICB Group's share, Tk 300 crore depositors' shares and Tk 50 crore is with the bank's old shareholders.

:The Daily Star: Internet Edition

 

[Raquib]

Banks fail to keep pace with agri-credit needs
Bank borrowing to finance 4.7pc budget deficit tolerable: BB governor
Unb, Dhaka

Commercial banks have failed to keep pace with the credit requirement to help recover the agriculture output losses from two recurrent floods and devastating cyclone Sidr.

During July-January period of the current fiscal year, the banks disbursed only 54 percent against the requirement of around 80 percent of the year's total credit target of Tk 8,370 crore to stimulate farm production.

The disbursement of Tk 4,551 crore during the period was, however, 62 percent more than what the commercial banks disbursed during same period in the previous fiscal, according to Bangladesh Bank (BB) figures released yesterday.

The central bank has been insisting the banks since the second flooding last year to increase agriculture credit and disburse 80 percent of the fiscal year's total credit target by January so that the farmers could recoup their production losses through increased Boro cultivation.

“The response from the state-owned banks has been slow. The private banks did better,” Bangladesh Bank Governor Dr Salehuddin Ahmed said yesterday.

He was exchanging views with the new executive committee members of Economic Reporters Forum at the BB conference room on current economic issues including government's borrowing from the banking system, inflation and foreign exchange reserve position.

The governor said the central bank will again talk to the commercial banks to expedite agriculture credit disbursement and achieve the target by March.

He advised the banks not to chase the certificate cases while considering loan disbursement, as the amount stuck up against the cases would be at most Tk 50 crore, which is much less than one single loan defaulter from the large sectors.

On the most recent estimate of increased government borrowing from the banking system, Dr Salehuddin said: “The 4.7 percent budget deficit is quite tolerable. It's unlikely to affect the inflation as well as the private sector lending.”

He said the government borrowing so far was not so high except for the portion of Bangladesh Petroleum Corporation (BPC).

The government has so far borrowed only Tk 4,667 crore, excluding BPC's Tk 7,000 crore, from the banking system during the current fiscal year against total budgeted amount of Tk 7,253 crore.

About the forex reserve that stood at US$ 5.9 billion as of yesterday, the governor said some people have suggested that the BB should hold the reserve at a level of US$ 3.5 billion and release the rest to ease the forex market.

:The Daily Star: Internet Edition

 

[Raquib]

Fee fixed at $788 for Korea-bound Bangladeshi worker
Unb, Dhaka

The government has fixed US$ 788 as total fee for a Bangladeshi worker who will go to South Korea for work under the newly introduced Employment Permit System (EPS).

Sources said the Expatriate Welfare and Overseas Employment Ministry with the consent of the South Korean Labour Ministry has fixed the fee.

The total fee includes US$ 30 for Korean language proficiency test (KLPT). The charge also includes airfare, medical checkup, welfare fee, airport tax, immigration certificate and service charge of Bangladesh Overseas Employment and Services Ltd (BOESL).

The fee will have to be paid to BOESL.

An official announcement on Wednesday also advised the intending Bangladeshi workers “not to do any financial transaction with any other recruiting agency or person to go to South Korea for work”.

:The Daily Star: Internet Edition