Sunday, April 21, 2013

BB field-level inspection of farm, SME loan disbursement from today

BB field-level inspection of farm, SME loan disbursement from today

Published : Sunday, 21 April 2013
Rezaul Karim

The central bank starts countrywide field-level inspection today (Sunday) for collecting info on problems and prospects of agriculture and small and medium enterprises, sources said.
The newly-appointed 44 assistant directors (ADs) of the Bangladesh Bank (BB) will make the field trip to get information on farmers and SME entrepreneurs with a view to observing credit disbursement programme of different banks as well as other information of the sectors, sources said Saturday.
Some 44 ADs in 19 groups will inspect farm and SMEs credit disbursement programmes in different upazilas of various districts across the country. The BB officials, now receiving training, will collect data during the field-level visit that will continue till April 25, 2013.
The BB teams will talk to the farmers, and the SME entrepreneurs, listen to their problems, explore possibilities and visit rural bank branches during the tour, he said.
The groups will visit specially the hub of handicraft and nakshikatha of Jamalpur, textiles of Narsingdi, Manipuri textiles of Moulvibazar and Syhlet, tiles industry of Satkhira and textiles of Rangamati.
The central bank believes such an initiative will help ensure successful implementation of agriculture and SME loan programmes.
The BB has set a target for local and foreign banks of disbursing Tk 141.3 billion loan for the current fiscal year. The target is 2.4 per cent higher than last year's Tk 138 billion.
On the other hand, the BB has set Tk 722.03 billion SME loan disbursement target for local and foreign banks and non-banking financial institutions for the current calendar year (2013).
The amount is 22.35 per cent more than that of the previous year (2012).
The BB also opened an inspection department at its headquarters to monitor distribution and use of farm and SME loans. The central bank formulated a new agricultural/rural credit policy in July last for fiscal 2011-12 for the banks to follow.

G-20 for reforms in IMF's governance, quota issues

G-20 for reforms in IMF's governance, quota issues
Call to refrain from competitive devaluation of currencies
Published : Sunday, 21 April 2013
Nazmul Ahsan

WASHINGTON, April 20: Finance Ministers and Governors from G-20 (Group of Twenty) countries have adopted 14-point communiqué, making commitments to refrain themselves from competitive devaluation of their currencies and not to target each other's exchange rate in a bid to raise their economic growth rate and create more jobs.
The Group at a meeting at the headquarters of International Monetary Fund (IMF) on Friday urged for urgent reforms in the Fund's governance and quota issues, latest by next January.
"We reiterate our commitments to move more rapidly toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments," the communiqué noted.
"We will refrain from competitive devaluation and will not target our exchange rates for competitive purposes, and we will resist all forms of protectionism and keep our market open."
The communiqué said excess volatility of financial flows and disorderly movements in exchange rates have adverse implications for economic and financial stability from a global perspective.
Monetary policy should be directed toward domestic price stability and continuing to support economic recovery according to the respective mandates of central banks, it noted.
"We will be mindful of unintended negative side-effects stemming from extended periods of monetary easing," it further said.
Collectively, the G-20 economies account for more than 80 per cent of the global gross domestic product (GDP), 80 per cent of world trade and two-thirds of the world population.
The countries under the group include the US, South Africa, Canada, Mexico, Brazil, Argentina, China, Japan, South Korea, India, Indonesia, Russia, Turkey, Germany, France, UK, Italy and Saudi Arabia, besides the European Union (EU).
The communiqué said policy uncertainty, private deleveraging, fiscal drag, impaired credit intermediation, and a still incomplete rebalancing of global demand continue to weigh on global growth prospects. The medium-term challenges are also present in many economies, including those related to fiscal sustainability and financial stability, it added.
It said global economy has avoided some major tail risks and financial market conditions continue to improve. However, global growth has continued to be too weak and unemployment remains too high in many countries.
The recovery remains uneven and is progressing at different speeds with emerging markets experiencing relatively strong growth, the United States demonstrating a gradual strengthening of private demand, and the recovery in the euro area as a whole yet to materialize.
Maintaining that fiscal sustainability in the advanced economies remains essential, the communiqué said large surplus economies should consider taking further steps to boost domestic sources of growth.
Further progress towards a balanced medium-term fiscal consolidation plan is necessary for the US, although significant deficit reduction has already been achieved, it noted.
The communiqué urged the IMF to complete the reforms in its governance and quota systems latest by next January.
'We remain committed, together with the whole IMF membership, to agree on the quota formula and complete the 15th General Quota Review by January."
The communiqué called upon its member countries to make compliance with Basel 111 regulations possible in 2013 and highlighted the urgencies for forging cooperation in the area of tax-related issues.
"More needs to be done to address the issues of international tax avoidance and evasion, in particular through tax havens, as well as non-cooperative jurisdictions," the communiqué said.
It extended support for Financial Action Task Force (FATF) work, notably the identification and monitoring of high-risk jurisdictions with strategic anti-money deficiencies.
"We must tackle the risks raised by opacity of legal persons and legal arrangements, and encourage all countries to take measures to ensure they meet the FATF standards regarding the identification of the beneficial owners of legal persons, other corporate vehicles and trusts, that is also relevant for tax purposes," the communiqué concluded.

Financial inclusion and financial stability complement each other
Published : Sunday, 21 April 2013
Atiur Rahman

August 9, 2007, is a day that will forever be remembered as the beginning of the great global financial and economic crisis of the new millennium. On that day, BNP Paribas SA, at the time France's largest bank, stopped redemptions from three investment funds it managed because it could no longer value the holdings of mortgage-related securities that constituted about a third of the funds' total investments. Although it wasn't the first such action by a major fund manager, the announcement by BNP Paribas was laced with unusual candour about the condition of the securitised mortgage market in the United States.
That day started just as any ordinary day in the global economy. But now, nearly six years into a seemingly endless period of financial and economic instability, as the world appears to lurch from one crisis situation to another, we are realising its full impact. Millions of jobs lost, trillions of dollars worth of asset values wiped out, dreams of financial security shattered for countless families - the global financial and economic crisis has truly been a setback in the march of the world community toward a better life for all.
But not for all have the recent years spelled doom and disaster. All the time, while big banks have reached for lifelines to their governments and corporate clients, big and small, have faced obstacles in raising funds, a quiet revolution has continued apace in many countries. That revolution, the revolution of financial inclusion, has persevered, in the midst of financial turmoil in bringing formal financial services to thousands upon thousands of households and small entrepreneurs who previously never had a relationship with a financial institution. And a great many of the "newly-banked" are women, low-income families, rural dwellers, and members of marginalised groups such as religious and ethnic minorities. Doors are opening to a more secure future for the beneficiaries of financial inclusion, most of whom live in the developing world, even as they unfortunately seemed to be closing for millions of families scarred by the financial meltdown in the more advanced economies. Bangladesh, however, has become a role model for financial inclusion particularly for the courageous regulatory moves by its central bank, Bangladesh Bank (BB), for guiding the banks, both private and public, in embracing financial innovative inclusive products even during this challenging time of global financial crisis. Ten-taka (12 cents!) bank accounts for millions of farmers and social safety net beneficiaries, bank-led mobile banking, school banking, small medium enterprise loans including for women entrepreneurs and green banking are only a few of these inclusive financial products.
A question is often asked of financial sector policymakers: why emphasise financial inclusion at a time of global turmoil? Why not concentrate all the attention on dealing with sick banks and insulating the healthy portion of the system from systemic shocks? Can banks and other financial institutions be profitable and build capital while reaching out to these new and inexperienced customers? Isn't financial inclusion a diversion, a luxury, that can be pursued only when times are good? Even one commentator wanted me to make a 'soul search' and refrain from this non-conventional journey of financial inclusion. I, of course, stuck to my guns. Yet, we need to respond to these reservations.
An answer to this question can be given by exploring the linkages between financial inclusion and financial stability. If financial inclusion can be shown to contribute positively to financial stability, then regulatory authorities can pursue both objectives even with scarce supervisory resources. Research on these linkages is only just getting started, but already several important relationships have been identified.
Defining financial inclusion: The G20 association of major world economic powers added its imprimatur to financial inclusion by recognising it as one of four pillars in the financial sector reform structure of its Global Development Agenda, and given equal standing along with financial integrity, financial consumer protection, and financial stability. In so doing, the G20 defined financial inclusion as: "…a state in which all working age adults have effective access to credit, savings, payments, and insurance from formal service providers…"
The "newly banked," as the beneficiaries of financial inclusion are often called, have not necessarily been deprived of all financial services. They may have significant, and often negative, experience with informal moneylenders, unofficial exchange houses, and ancient transfer systems such as hundi and hawala. However, financial inclusion offers them the possibility of dealing with rules-based institutions that are regulated, more transparent in their pricing, less likely to cheat their customers, and often even cheaper to use than the informal service providers.
Direct impact of financial inclusion on financial stability: To understand how financial inclusion can promote financial stability, it is convenient to discuss both direct and indirect impacts. Research on these links is just beginning, but analysts have pointed to the following direct links:
n Financial inclusion promotes a more diversified funding base. Periods of financial instability are more often related to crises of liquidity than crises of solvency. In turn, liquidity crises arise when financial institutions are unable to retain funds or attract additional funds to meet their payment obligations. Recent liquidity crises have originated in wholesale markets - banks unable to obtain funds from other banks, unable to roll over existing bond market obligations, or unable to keep foreign depositors from repatriating their funds. Apart from some well-publicised cases, usually traced to policy incompetence (such as Northern Rock and the current situation in Cyprus), runs on retail deposits have fortunately been relatively rare.
Accordingly, in any banking sector, the higher the proportion of funds the sector obtains from retail depositors, the more stable it tends to be. And within the broad category of retail deposits, it is plausible that small deposits are more stable than large deposits. This assertion is certainly true when comparing the reaction of holders of small accounts to holders of large accounts at a given bank when the remuneration offered to the depositors on these accounts lags behind competitors' offerings. Small depositors tend to stay put; large depositors tend to shop around. It is also likely, though not demonstrated through research, that small depositors are less likely to create a run on a bank than large depositors. They are less likely to be exposed to negative media coverage about a bank, and perhaps less likely even to hear rumours about a particular institution. Although small depositors do participate in bank runs once they get going, they very rarely start them.
With financial inclusion, a bank can diversify not only its deposit base, with numerous small accounts comprising a greater proportion of total deposits, but it can even expand the total deposit base to comprise a greater proportion of total attracted funds.
* Financial inclusion promotes a more diversified loan base. It is just as important for a bank to be diversified on the asset side of its balance sheet as it is on the liability side. If solid underwriting is maintained, it is logical that a loan portfolio consisting of thousands of small loans to households and micro-entrepreneurs will suffer fewer aggregate loan losses over a given period of time than a portfolio consisting of a few loans to large corporate borrowers. Indeed, before banks began to lower their underwriting standards in the United States in the early 2000s, loans to the household sector did have lower rates of default, and lower losses given default, than loans to the corporate sector.
From a risk management standpoint, it is also true that loan losses on a portfolio of many relatively homogeneous loans are easier to model, if data are available over a long period of time, than losses on a "lumpy" portfolio of few large corporate loans. And better modeling and prediction of loan losses can lead to better loan pricing, more accurate provisioning, and consequently more stable profits.
* Financial inclusion diminishes the appeal of potentially unstable savings channels. Admittedly, the formal financial sector has not consistently and uniformly been a safe haven over the last decade. However, in countries with a low penetration of formal financial services, alternative savings channels have sometimes caused disaster for many families. In Albania in the 1990s, for example, in spite of a fairly robust switch from a centrally-planned to a market economy, the formal financial sector was very limited. Households had few reliable savings options. Quickly, financial crooks took advantage of the situation. Fully two-thirds of households faced financial ruin when they invested in one or more "pyramid schemes." When the schemes collapsed, the resulting riots and instability led to the deaths of some 2,000 people, rampant inflation, 7.0 per cent decline in output in one year, and currency depreciation.
Kenya has also had a long, unfortunate history with pyramid schemes. A recent report listed 271 different schemes that were active in the 2006-2007 period, targeting all segments of society, but having particular appeal to those without a connection to a formal financial institution. Fortunately, the amounts lost were nowhere near as great as in Albania, but they undoubtedly caused financial distress to a large number of households. (It should be noted that pyramid schemes do not target only the unbanked. As recently as 2011 and 2012, hundreds of thousands of investors in the United States were bilked by a scheme that ultimately resulted in losses of $600 million. Most of these people also utilized formal financial services but were enticed by the high returns promised.) Bangladesh too has experienced a few tragedies of pyramid schemes mainly due to lack of financial literacy and enhanced greed. Financial inclusion, if started earlier, could have a void such tragedies to some extent.
* A more inclusive financial sector has greater political legitimacy. Bankers have never really been loved anywhere, and in the aftermath of the financial crisis there has been even more public anger directed at bankers who, fairly or unfairly, have been judged to be at fault, and, in many cases seem to be escaping punishment and are even seeming to be rewarded by their firms. The main reason for this public anger is that in the minds of the public, banks are run by rich people for the benefit of other rich people.
In the advanced industrialised economies that have been hit hardest by the financial crisis, there are calls for restrictions on bankers' salaries, and calls for the largest financial institutions to be broken up. In some countries, such as Jordan, a negative public attitude has led to higher corporate profits taxes being imposed on banks, compared with other corporations. In other countries, such as Venezuela, banks have even been nationalised. In Greece, banks have been vandalised and their customers harassed. In these and other countries, there is the sense that private banks are somehow illegitimate, creating profits out of thin air. Although some proposals, such as capping salaries or requiring divestiture of risky activities may have legitimate public policy purposes, interventions in banks' affairs that reduce their profitability, force them to invest in assets not of their choosing, or expropriate shareholders surely do not contribute to financial stability.
Financial inclusion, by encouraging a customer base that is more representative of the general population, especially low-income, rural, and minority segments, can go a long way towards legitimising the financial services industry in the minds of the public and politicians. Banks will be viewed as helping people, not hurting them. And when banks become less and less of a political issue, the risk of destabilising statements made by prominent individuals, and worse, destabilising public policies, is reduced.
Indirect impact of financial inclusion on financial stability: In addition to the direct impact of financial inclusion on financial stability, there are several potential indirect effects. (It should be noted that these indirect effects are desirable in themselves, regardless of whether or not there is a strong linkage between these effects and financial stability.)
* Financial inclusion promotes financial stability at the household level. There is considerable evidence to support the idea that providing formal financial services to the previously unbanked encourages savings. If households have a safe place to save, they will save a higher percentage of their disposable income. These savings can be used to smooth out consumption during periods of lower incomes, or to finance necessary, unexpected consumption (such as medical expenses), reducing the chances that a household will be driven into debt. And lower levels of household debt are positively correlated with overall financial stability.
* Financial inclusion promotes greater income equality, thereby fostering financial stability. Recent economic research has shown that greater income equality is associated with longer spells of economic growth, interrupted by shorter slowdowns. The precise mechanisms are unclear, but the hypothesis is that concentrations of income and wealth foster the buildup of imbalances, such as asset price bubbles and rapid credit growth, that are associated with subsequent downturns. In turn, longer periods of economic growth foster financial stability, not only by reducing debt-to-income ratios, but also by allowing banks and other financial institutions to build capital. To complete the indirect effect, financial inclusion has been shown to contribute significantly to income equality and poverty reduction.
Increases in income equality, which can be promoted by financial inclusion, are also associated with greater social stability, which can also help promote financial stability. When all segments of society believe that they can more fully participate in, and benefit from, the production and distribution of goods and services, there is a lower likelihood of disruptive social activism, and a stronger resistance to the falsely hopeful messages of demagogues whose primary targets are often banks and other financial institutions.
Feedback effects - financial stability leading to financial inclusion: Although the available literature and analysis has stressed the contribution made by financial inclusion to financial stability, there can also be a useful "feedback effect" from financial stability to financial inclusion. This "virtuous circle" comes about because a more stable formal financial sector will be a more attractive option for the unbanked. It is more attractive not only for the obvious reason that people want to place their wealth in stable institutions, but also because a stable financial sector - one in which financial institutions aren't constantly trying to make up for declining profitability from loan losses and other asset devaluations - can afford to reduce fees for everyday transactions and accounts, bringing financial services into the realm of affordability for many people.
Conclusion and a small word of caution: Certainly, there are many reasons to believe that financial inclusion can support financial stability. In order to play this supporting role, however, it has to be the right kind of financial inclusion. By its very nature, financial inclusion is bringing in people who have no track record in the use of formal financial services. They have no formal credit history, may be unfamiliar with filling out forms, and may lack proper identification. Accordingly, products must be tailored carefully to their needs, at a reasonable cost, and they cannot be "overloaded" with financial services that they do not need or want. In some cases, financial literacy education may be required, so that the tools they are provided can be used properly.
But if these conditions are met, financial inclusion can open up worlds of opportunity for those who were previously excluded, expanding the customer base for a whole range of financial products, and in so doing contribute mightily to a vibrant - and stable - financial sector.
Bangladesh Bank embarked on financial inclusion from a strategic vantage point to align itself with the national planned strategy of inclusive growth as reflected in both Sixth Five Year Plan (FY2011-FY2015) and also the Perspective Plan (2010 -2021). In the process it has been able to reach millions of unbanked population which has helped Bangladesh economy maintain a six-plus growth rate for years. The more diversified deposit and loan bases created through strategic financial inclusion have led to a desirable financial stability in Bangladesh despite prolonged global financial crises. The end results of this strategic option of Bangladesh may not be visible immediately. But all indications are that the on-going financial inclusion drive of BB will certainly lay a solid foundation for an inclusive sustainable growth process for Bangladesh.

Dr. Atiur Rahman is Governor, Bangladesh Bank. The author is grateful to Mr. Glenn Tasky, Supervision Advisor to BB for his academic support.

Regulatory reforms and the IDRA

Regulatory reforms and the IDRA
Bringing discipline and stability to insurance industry
Published : Sunday, 21 April 2013
Naba Gopal Banik

In the aftermath of the Liberation War, the Government of Bangladesh took over the control and management of all Pakistani insurance companies and the entire insurance industry was nationalised in August 1972. The newly-formed life insurance corporation, namely Jiban Bima Corporation (JBC), started its operation by taking over the liabilities of all life policies written by the Pakistani insurers. The Jiban Bima Corporation (JBC) on January 01, 1973 took over Tk 148 million as assets of Pakistani life insurers against the total liabilities of Tk 264 million. The country's newly-formed general insurance corporation, namely Shadharan Bima Corporation (SBC), started its journey in the same style by inheriting assets of Tk 103 million against the liabilities of Tk 76.5 million.
In 1984, the Government of Bangladesh promulgated an ordinance providing for the formation of insurance companies in the private sector and thus the insurance sector in Bangladesh started growing. At present, there are 60 insurance companies operating in the private sector in the country, out of which 43 are general insurance companies and 17 are life insurance companies. ALICO (now named Metlife Alico) is the only foreign company operating in Bangladesh.
Although the insurance industry plays an important role in the economy it has not seen the desired regulatory changes compared to the banking industry. However, steps have been taken by the government to bring changes in better supervision of the insurance industry.
In 1995, a report was submitted by M/S Watson Wyatt of Singapore in association with Janet Tay, consultant to the Government of Bangladesh, regarding changes needed in insurance regulation. As many as 20 specific recommendations were made in respect of insurance legislation and deregulatory aspects. A committee was formed by the government that conducted a detailed study on the consultants' recommendations and submitted its report to the government in March 2000. In July 2001, the government formed a specialist committee by the then Chief Controller of Insurance. Subsequently as per decision of the Ministry of Commerce, the World Bank appointed Mr. Craig Thorbon in mid-2003 to submit a report on reforms of insurance laws in Bangladesh. On the basis of the report of Mr. Craig Thorbon, a new insurance law reform committee was formed in January 2005. This committee submitted three draft acts: (a) Insurance Act 2005, (b) Insurance Regulatory Authority Act 2005, and (c) The Takaful Act 2005 in December 2005. Finally, after a lengthy process of review and discussion the parliament on March 03, 2010 passed two insurance laws to further reinforce the regulatory framework. The new laws are the Insurance Act 2010 and the Insurance Development and Regulatory Authority (IDRA) Act 2010. These came into effect on March 18, 2010.
Until 2010 the Department of Insurance as the regulatory and supervisory authority under the Ministry of Commerce administered the insurance industry of Bangladesh as per the Insurance Act, 1938 and the Insurance Rules, 1958.
The Insurance Development and Regulatory Authority (IDRA) as the new regulatory body started its journey on January 26, 2011 with the vision to establish the insurance industry as the premier financial service provider in the country.
Since the inception the IDRA has faced many challenges, namely excess commission, tariff violation, business on credit, lack of transparency etc.
In order to bring discipline and stability in the industry 11 regulations/rules have been framed including Fund Management Regulations 2011, Fit and Proper Test of Person for Appointment of Chief Executive Officer Regulations 2012, Fees for Licensing of Branch and Office of Insurers Regulations 2012, Fees for Registrations Rules 2012, Obligations of Insurers to Rural and Social Sectors Regulations 2012, Central Rating Committee Regulation 2012, and Dispute Resolution Regulations 2012.
Eleven rules/regulations including Investment of Assets of Life Insurance Regulations 2012, Investment of Assets of Non Life Insurance Regulations 2012, Paid-up Capital and Shareholdings of Insurer Regulations 2012, Reinsurance for Life Insurance Business Regulation 2012, Statistics Regulations 2012, and Life Insurance Policy Holders Protection Fund Regulations 2012 are in the pipeline. The IDRA has already issued 43 circulars giving different instructions to follow.
IDRA's vigilance teams inspect different branches of insurance companies in order to detect violation of rules and regulation. The vigilance teams already have inspected 181 branches of different insurance companies and their visits have yielded significant success, as a result of which remarkable improvement in the insurance industry has been achieved.
To ensure the protection of policyholders, the IDRA on receipt of complaints holds hearing. The IDRA has settled a significant number of claims by holding hearing with the concerned parties.
To bring any changes the IDRA always consult the concerned parties. The IDRA used to organise meetings with the chairmen and chief executive officers of insurance companies to solve different problems. To become conversant with problems of the insurance industry the IDRA has organised meetings with the officers and employees of the insurance industry in different parts of the country.
The IDRA is working to develop standardised reporting templates by which electronic data exchange and implementation of a computerised risk-based regulatory system will be ensured.
The IDRA has also become a member of the International Association of Insurance Supervisors (IAIS) and this will help it get access to the latest supervisory techniques and international best practices.
The IDRA's steps appear to have yielded some positive results. The net premium income of life insurance companies increased by 8.92 per cent from about Tk 57.26 billion in 2010 to Tk 62.37 billion in 2011. The total life funds of life insurance companies increased by 29.49 per cent from about Tk 138.34 billion in 2010 to Tk 199.67 billion in 2011. The gross premium income of non life insurance companies increased by 13.66 per cent from Tk 20.60 billion in 2010 to Tk 23.41 billion in 2011. The total assets of life insurance companies were Tk 55.35 billion, an increase of 17.10 per cent from Tk 47.26 billion in 2010.
The insurance industry in Bangladesh has managed to maintain stability and growth in the turbulent global environment. A lot of things still need to be done to achieve the desired level of improvement by ensuring transparency and abolishing the culture of violation of rules/regulations. A few initial reform measures have yielded positive results. Further reforms are needed on way to the coveted goal of development.
The writer is member of
IDRA, Bangladesh.

The central bank has approved six more private commercial banks (PCBs)

The central bank has approved six more private commercial banks (PCBs), aiming to help strengthen the ongoing financial inclusion programmes through bringing unbanked people under the banking network, Bangladesh Bank (BB) officials said.


The decision came at a meeting of the BB's board of directors, held at its central office Sunday, with BB Governor Atiur Rahman in the chair.


The six approved PCBs are:

 Union Bank Limited,

 Modhumoti Bank Limited,

 the Farmers Bank Limited,

 Meghna Bank Limited,

 Midland Bank Limited

 South Bangla Agriculture and Commerce Bank Limited.


"The board has approved the six PCBs after a thorough scrutiny of all 16 short-listed applications one by one," Deputy Governor of the BB SK Sur Chowdhury told reporters after the meeting.


He also said the board has also decided to issue letters of intent (LoI) to the approved six PCBs, giving them a period of six months to comply with the existing rules and regulations for setting up new commercial banks.


"We'll issue licenses to the PCBs after their proper compliance with all conditionalities," Mr. Sur said, adding that loan defaulters and tax evaders would not be allowed to be the directors of new banks.


The proposed chief executive officers (CEO) of the approved PCBs will have to present their business plan before the board, he said while explaining the conditionalities for the new banks.


The authorities concerned of the approved PCBs will have to deposit the amount of their paid-up capital worth Tk 4.0 billion with the central bank, before starting their operation, the BB deputy governor added.


"All the applicants are Bangladeshi citizens. The BB board has considered those who were found eligible, based on their qualifications," he said replying to a query if the approvals were given only to Awami League (AL)-affiliated people.


The proposed chairmen of newly-approved banks are: Union Bank Limited -- Shahidul Alam, Modhumoti Bank -- Humayun Kabir, Farmers Bank -- Dr Mohiuddin Khan Alamgir, Meghna Bank -- AHN Ashiqur Rahman MP, Midland Bank -- Moniruzzaman Khandker and South Bangla Agriculture and Commerce Bank -- SM Amjad Hossain.


"Since bank licences were last issued in 2000-01, there have been many significant developments in the Bangladesh economy," the central bank said in a statement, explaining the economic context and rationale behind issuing new bank licences.


The economy has grown and the banking system has become more competitive but there are still a large number of under-banked people in Bangladesh, the BB added.


Recent estimates from a survey conducted by the Institute of Microfinance found that only 45 per cent of the nearly 9000 households surveyed do have access to banks and micro-finance institutions (MFIs) for loans.


The population per branch (21065) and the ratio of loan accounts per 1000 adults (42) suggest that the outreach of the formal financial sector in Bangladesh is lower than that in India (14485 and 124 respectively) and Pakistan (20340 population per branch and 47 loan accounts per 1000), according to the statement.


"As such, the new banks will help increase the quality of banking services by increasing competition in the banking sector. They will also be able to meet the unfulfilled demand for credit by the private sector whose needs have grown in line with a fast expanding economy," it noted.


Moreover, for new banks the ratio of opening rural and urban branch will be 1:1 which will help increase bank branches in rural areas and improve financial inclusion, the central bank said.


Earlier, 37 applications were submitted to the central bank for setting up of new PCBs. Of them, 21 were rejected by a preliminary scrutiny committee mainly due to lack of necessary papers and documents.


Last Thursday, the central bank approved three new commercial banks sponsored by non-resident Bangladeshis (NRBs) to help boost the inflow of foreign exchange.

Currently, a total of 47 commercial banks are in operation in Bangladesh.

Five new banks got approval

DHAKA, Feb 5, 2013 (BSS) - Five new banks got approval from the Bangladesh Bank (BB) today to start their business. With these new banks, the number of banks in the country has now stood at 52 including public, private and foreign banks.


The newly approved five banks are, NRB Commercial Bank of US expatriate Bangladeshi engineer Farasat Ali, Union Bank of former president and JP Chairman HM Ershad, South Bangla Agricultural Bank of SM Amzad Hossain, NRB Bank of expatriate Bangladeshi in UK Iqbal Ahmed and Meghna Bank of parliament member HN Ashikur Rahman.


The decision of approval to the new banks came at a meeting of the BB's Board of Directors, held at its headquarters on Tuesday with BB Governor Atiur Rahman in the chair.


The board put on hold the approval of another bank, Midland Bank of M Moniruzzaman, to review its business plan further, BB Deputy Governor SK Sur Chowdhury told the reporters after the meeting.


The central bank in two phases on Sunday and Tuesday reviewed the business plans of the six banks, presented by their managing directors.


Chowdhury said the approved banks would now need to get registration from the Joint Stock Company to form companies and subsequently apply to the central bank seeking permission for opening branches to start formal business.


On September 27, 2011, the central bank invited applications from people interested in setting up new commercial banks and received 37 applications. On April 17, 2012 the central bank issued letter of intent (LoI) to nine proposed banks, of which five got final approval.


Like the existing banks, the paid-up capital of the new banks would be taka 400 crore each.


Three banks, that did not get approval are Modhumoti Bank, Farmers Bank and another NRB bank. Among the three banks, the sponsors of the Farmers Bank and NRB bank could not fulfill the necessary capital requirement within the stipulated time-frame. Modhumoti Bank met the capital requirement, but has not given its business plan to BB yet.


Earlier, the BB issued licences to private banks first in 1983 and in two more phases 1995 and in 2001.


Wednesday, April 10, 2013

IFC takes a stake in bKash

 IFC takes a stake in bKash

Thursday, April 11, 2013

IFC takes a stake in bKash

International Finance Corporation (IFC), a member of the World Bank Group, has made an equity investment in bKash Limited. Headquartered in Washington D.C., IFC is a financial institution which offers investment, advisory, and asset management services to encourage private sector development in developing countries.

The two parties recently signed an agreement in this regard in Dhaka, Bangladesh.Kyle F. Kelhofer, Country Manager of IFC and Moinuddin Mohammed Rahgir, Head of Finance and Accounts of bKash signed the agreement on behalf of their respective organizations. Muhammad A. (Rumee) Ali, Chairman of bKash and Managing Director of BRAC Enterprise, Syed MahbuburRahman, MD and CEO of BRAC Bank, Kamal Quadir, CEO of bKash, M.Rehan Rashid, Senior Country Officer of IFCand other senior officials were also present at the signing ceremony.

bKash, a joint venture of BRAC Bank of Bangladesh and Money in Motion of the USA, focuses to ensure access to a range of financial services for the people of Bangladesh. With more than 40,000 community-based agents all over the country, bKash is facilitating financial inclusion for millions of unbanked people and is the market leader in Bangladesh for mobile financial services.  
Source:  Thursday, April 11, 2013The Daily Star

Tackling 'financial exclusion' in Bangladesh

Tackling 'financial exclusion' in Bangladesh

Wednesday, 10 April 2013

Chowdhury Mohidul Haque

'Financial exclusion' is a dangerous symptom of wealth and opportunity discrimination. It is a deterrent to equitable economic growth and proper wealth distribution which creates opportunities for exploitation. It must be tackled for the benefit of equitable economic growth and harmony among different sections of the society. And before tackling 'financial exclusion' it is important to make a national assessment. Assessment is important to formulate strategy for tackling 'financial exclusion'.

Bangladesh is a country of large unbanked population, believed to be 60 per cent, who have no or limited access to banks or financial service providers. For this reason, they typically conduct all financial transaction in cash and physically store or carry their earnings or remittance in cash too.

'Financial exclusion' is a process that prevents the poor and disadvantaged social groups from gaining access to the financial system. The term connotes unavailability of banking services to people living in poverty. It is believed to be one factor preventing the poor people from managing their finances on a cash-only basis and restricting their access to equitable sources of credit.

'Financial exclusion' can make the poor people vulnerable to money lenders.

It is a complex and dynamic process. Some people experience short periods of exclusion, maybe more than once in their lives. For some other people, however, it can be long-term, perhaps even life-long. The majority of people without financial services are excluded by a combination of marketing, pricing and inappropriate product design by the banks.

An alternative agenda to help construct institutional alternatives to low-income communities especially people living in rural areas who are currently being excluded by the financial system is crucially important. Building of alternative financial infrastructure may significantly reduce exclusion. Microfinance is an approach used to reduce 'financial exclusion'.

The researchers conclude that possible solutions to 'financial exclusion' should focus on four main areas: reducing barriers of access to finance, unfavourable bank product design, speedy delivery of financial services and encouraging engagement. Tackling these will require action by the government and financial institutions through cooperation.

There is no single explanation for households being without financial services. Many of those who have never used financial services will almost certainly do so at some stage in their lives. Moreover, 'financial exclusion' is a dynamic process. Many more people move in and out of exclusion at any time. Further, large numbers of people are also on the margins of financial services provision and therefore potentially at risk of 'financial exclusion'.

In general, the factors that contribute to the process of 'financial exclusion' include the lack of a secure job, having parents not using financial services and living in marginalised communities. Financial institutions which are not keen to attract people with low incomes as customers contribute largely towards 'financial exclusion'.

Using intermediaries to deliver financial services can overcome the problems of physical access. Mobile phone and computer-based services, however, are important for tackling 'financial exclusion'.

For day-to-day money management, many people require a simple account which would allow them to retain tight control over their money. It should offer basic money transfer facilities, including a facility for spreading the cost of bills. It would offer no credit facilities but have a 'buffer zone' to allow flexibility. Ideally, such a service should also be designed so that access is not dependent on credit scoring.

People on the margins of financial services want to deal with banks which are financially secure, trustworthy and understand their needs. It is not, however, necessary for the same bank to provide the product and deliver it to the customers. New technology offers some opportunities for product delivery. ATM cards and electronic money transfers are likely to be the most acceptable. Mobile phone and computer can provide very easy solution to the customers at an affordable cost.

Knowledge of financial products is remarkably low among people who do not use them. This is compounded by marketing policies of some banks which think that financial services are 'not for the poor'. Specific measures should be taken to tackle mistrust about many banks. Use of trusted intermediaries could overcome these barriers. Targeted marketing and delivery of new services would also increase engagement for 'financial inclusion'.

'Financial exclusion' is influenced by government policy and practice in many ways. First, payment of government benefits in cash encourages recipients to operate a cash budget. Secondly, there is evidence that regulation of financial services can cause or enhance 'financial exclusion'. On a more positive note, the government policies can create a new market for financial services. The government may introduce all kinds of benefits through electronic means like mobile phone services of banks and 'mutho phone' of the postal department.

In the recent years, there have been a number of developments that signify willingness by private and public sector organisations to tackle the problem of 'financial exclusion'. The expectation is high at this moment to tackling the problem than at any time in the past.

'Financial exclusion' is a deterrent to money movement, savings and credit, investment and employment on one hand and social exclusion leading to political discrimination on the other. When this kind of scenario exists, the economy and the society are affected by unemployment, poverty and discontent.

Tackling 'financial exclusion' should therefore get national priority in a country like Bangladesh. The government or on its behalf the central bank must have a comprehensive understanding of the 'financial exclusion' and help formulate appropriate strategy for tackling exclusion or in other words, enhancing 'financial inclusion' within a targeted time frame. And for that matter, before formulating a 'strategy', an assessment about the spread and depth of the exclusion must be carried out.

'Financial exclusion' is due to the reason of supply side and demand side effects. As for the supply side, most of the banks and financial institutions are reluctant to serve the under-privileged people thereby refusing bank account opening. The minimum balance requirement in account opening and maintaining transaction amount, lengthy and complex data formalities are considered to be hindrances from the supply side. On the other hand, many people in our society are not inclined to cash transaction and they do consider going to a bank troublesome. They are also unwilling to pay various charges and fees which are very high.

In Bangladesh, it is believed that over 55 per cent of the adult population and 60 per cent of the rural households do not have bank accounts. This, however, is not supported by any survey or study. Microfinance institutions (over a thousand in numbers), including Grameen Bank, have been providing poor people, especially women, some kind of financial services through small credits and compulsory savings in rural areas. Banks and microfinance institutions/NGOs together achieved so far 35 per cent target for 'financial inclusion'. But so far no specific initiative has been taken by the government or the Bangladesh Bank or any other appropriate authority to make a national assessment of 'financial exclusion' and its reasons. It is important for the purpose of formulating a strategy to achieve 100 per cent inclusion within the target time.

Without a creditable survey, it is not possible to determine the number of households or population who are deprived of or denied financial services. The survey will reveal the reasons and depth of 'financial exclusion' as well. No study or survey, however, has been conducted to determine the financial exclusion situation in our society.

Nevertheless, during the last few decades, banks and financial service providers expanded their services gradually. New banks and new branches of existing banks have rapidly been established. At this moment, Bangladesh has over 8,000 bank branches, 3,500 ATMs, 15,000 POS and a good number of kiosks. We have more than 10 banks operating full-fledged mobile banking having more than 20,000 agents all over the country. In a country of 160 million people, the initiatives are not enough. A 'financial inclusion' strategy is required to be formulated and implemented so that 100 per cent exclusion can be tackled. The government or the central bank should give serious consideration to this issue of tackling 'financial exclusion' and expanding inclusion and frame national strategy with specific timeline and actions in order to achieve equitable financial growth and opportunity for all sections of the population targeting 2021.

The writer is former Executive Director & Project Director, RPP Project (UKAID), Bangladesh Bank.

Wednesday, 10 April 2013

Cyprus: Can the banking crisis be tamed?

Cyprus: Can the banking crisis be tamed?

Wednesday, April 10 2013

B K Mukhopadhyay

Cyprus is going to receive €1 billion from the International Monetary Fund (IMF) as part of the €10 billion rescue package it agreed late in March, 2013 with euro zone finance ministers that prevented the meltdown of the island's banking sector and its exit from the euro.

The fund would support Cyprus through a three-year loan that aims to help Nicosia consolidate its finances and restructure its trouble-ridden banking sector. This combined financing package of €10 billion is designed to help Cyprus cover its financing needs, including servicing of debt obligations, while it implements the policies needed to restore the health of the economy and regain access to capital market financing.

The EU-ECB-IMF (European Union, the European Central Bank and the International Monetary Fund) troika clearly wants Cyprus to downsize its banking sector, continue fiscal consolidation efforts through spending cuts, while at the same time implement deep structural changes to improve competitiveness.

Accordingly, "A combined financing package of €10bn is designed to help Cyprus cover its financing needs, including to service debt obligations, while it implements the policies needed to restore the health of the economy and regain access to capital market financing." The International Monetary Fund has demanded that Cyprus cut state pension costs and reform its welfare system as the price of a €1bn (£854m) loan to help bail out the stricken island. The IMF said the poorest Cypriots would be protected from the worst of the cuts, but Cyprus must press ahead with measures to bring its annual state budget into surplus by 2018.

As the things stand now: Cyprus needs the money to refinance its stricken banking sector and reduce government debts (almost touching 180 per cent of GDP). The crisis brought Cyprus to the brink of collapse after it was in effect locked out of private markets and forced to seek funds from the EU and IMF. The economy struggled to bring the situation under control after a series of mishaps (inclusive of imposing a tax on bank deposits of less than €100,000 - protected under EU guarantees, which was later reversed).

Cyprus crisis intensified, adding problems to the euro zone - already being blitzed by gloomy economic data as manufacturing and services output in the 17-country currency club fell by more than expected in March, 2013, showing and indicating that the euro zone suffered a sixth successive quarter of GDP (gross domestic product) contraction in the first quarter of 2013.

Since the announcement of the bailout, Cyprus has become the first euro zone member to apply capital controls, with limits on credit card transactions, withdrawals, money transfers abroad and cashing cheques. Though this move aims to block outflow from the country, yet steady flight of deposits have been noticed when talks were on to tax depositors' savings.

Depositors with more than €100,000 in the Bank of Cyprus could lose up to 60 per cent of their funds. The shakiest of the Cypriot banks - Laiki, the island's second largest - will be closed. Smaller deposit holders at Laiki will be transferred to the Bank of Cyprus, which will need serious recapitalisation, not least because it inherits Laiki's €9bn debt to the ECB. Deposits of more than €100,000 - amounting to €4.2bn in all - will be placed in a "bad bank". That means savers will only get a fraction of their savings back and the deposits could, in theory, be lost entirely. Money for that will come from Bank of Cyprus's own wealthy deposit holders. Bank of Cyprus, the biggest lender, will be restructured.

These changes, it is hoped, will avoid a run on the banks. The threat that the ECB would stop providing day-to-day support for the Cypriot banking system has been lifted. The new proposal removes the most objectionable aspect of the first package - the levy on all depositors - making it less politically toxic. By raising money from the better off - many of them Russian - Cyprus will get €10bn from the troika (the European Union, the European Central Bank and the International Monetary Fund).

This market economy, incidentally it may be mentioned here, remains dominated by the service sector, accounting for four-fifths of GDP -tourism, financial services, and real estate being the most important sectors. Erratic growth rates over the past decade reflect the economy's reliance on tourism, the profitability of which can fluctuate with political instability in the region and economic conditions in Western Europe. The economy, which tipped into recession in 2009 (contracting by 1.7 per cent), has been slow to bounce back since, posting anaemic growth in 2010-11 before contracting again by 2.3 per cent in 2012. Serious problems also surfaced in the Cypriot financial sector in early 2011 as the Greek fiscal crisis and euro zone debt crisis deepened. Not surprisingly, Cyprus experienced numerous downgrades of its credit rating in 2012 and has been cut off from international money markets.

Cyprus's banking sector - eight times bigger than the country's gross domestic product - was already severely damaged by its high exposure to bad Greek debt. As the sovereign debt crisis in Greece worsened, Cypriot banks were forced to take huge losses that penalised its finance-driven economy. The island also suffered predominantly from exposure to the domestic property market which was hit by a sharp fall in demand.

Can it then be reasonably forecast that Cyprus would face a bleak economic future in which the need for a second bailout looks a probability? It is not just that the country's economic model has been destroyed. Nor is it simply that a brutal austerity programme is the condition for the €10bn loan.

Nicosia implemented measures to cut the cost of the state payroll, curb tax evasion, and revamp social benefits, as well as trimmed the deficit to 4.2 per cent of GDP in 2012, but in July, 2012, it became the fifth euro zone government to request an economic bailout programme from the European Commission, the European Central Bank, and the International Monetary Fund.

The question that looms large at this stage is: can the risk of a full-scale economic collapse that may result in Cyprus having a debt problem worse than that in Greece be wiped out?

Though these international lenders said they were targeting a reduction in banking so as to achieve an average euro zone size of 300 per cent of GDP by 2018, yet there are reasons to believe that what has happened in Cyprus will have ramifications for the rest of the single currency. Added to this, Russian fallout is a distinct possibility. ECB President is not thus wrong, when he opines that the plan to tax savers in Cyprus was "not smart to say the least".

The rescue package would definitely call for tough efforts from the Cypriot population, as the government will be forced to push through painful changes to meet the loan's conditionality. Cyprus bailout, though deeply flawed, yet can be described as one of the efforts launched in the time of real need as the same at least removes immediate risks of a banking collapse.

It is has been observed in the recent times that the problems which are allowed to persist in comparatively small and weak economies spread wings and eventually land on the stronger economies. Should we then wait for the second bail out?

Dr B K Mukhopadhyay, a Management Economist, writes from Guwahati, India.


Wednesday, April 10 2013

GDP growth will dip to 5.7pc this fiscal : ADB

GDP growth will dip to 5.7pc this fiscal : ADB 

Falling export, domestic demand growth blamed

Wednesday, 10 April 2013

The Asian Development Bank (ADB) has projected Bangladesh's economic growth to be slipping to 5.7 per cent in the current fiscal 2012-13, falling by 1.50 percentage points from the government estimate of 7.2 per cent.

The Asian Development Outlook (ADO) 2013, released in the ADB's headquarters in Manila Tuesday, said the gross domestic product (GDP) growth will dip in the current fiscal due to falling export and domestic demand growth.

"Export demand, a major contributor to GDP growth, is expected to slacken slightly, reflecting the ADO baseline assumptions that the euro area economy stagnates and the US recovery remains frail," said the ADO.

It further said despite higher remittances, growth in demand for private consumption is expected to weaken as households adopt a cautious approach to spending because of political uncertainties ahead of parliamentary elections expected by early 2014 and depressing production in industries oriented to

domestic markets.

The ADB also forecast Bangladesh's GDP growth at 6.0 per cent in the next financial year (FY) 2013-14.

The outlook said industrial growth is expected to slow to 6.5 per cent in FY2013, reflecting slack demand externally and domestically.

It has, however, projected higher industrial growth in next FY2014 with expected improvements in external and domestic demand.

The ADB outlook said economic forecasts for FY2013 and FY2014 rest on four assumptions--firstly, the central bank's slight easing in monetary policy announced in January 2013 will not stoke inflation, given the declining trend in international commodity prices and a favourable domestic crop outlook.

Secondly, the government will contain subsidies by continuing to raise fuel and electricity prices and thus keep in check its need for bank borrowing.

Thirdly, though political activity is expected to be volatile, social stability will be maintained. And, finally, weather will be favourable.

Consumer subsidies artificially reduce the price of energy, diverting it from more efficient uses and disproportionately benefiting the non-poor, the ADB said adding subsidies impose a tremendous burden on public budgets, exceeding 4.0 per cent of the GDP in Bangladesh.

Favourable rainfall during planting and expanded acreage sown to the winter rice crop should help agricultural output in FY2013 recover to 4.2 per cent growth, it said adding greater access to credit resulting from central bank initiatives is expected to bolster output from livestock, aquaculture, and non-cereal crops.

In FY2014, agricultural growth is projected to ease to 4.0 per cent, returning to trend following the previous year's high base, the ADB forecast.

Services growth in FY2013 is expected to slow to 6.0 per cent, reflecting weaker economic activity, and then expand by at least 6.1 per cent in FY2014 on moderate recovery in overall demand.

The ADB outlook said average annual inflation is projected to slow to 7.8 per cent in FY2013.

It said export growth is expected to slow slightly to 6.0 per cent in FY2013, reflecting economic doldrums in the euro area and slow recovery in the US.

The current account is projected to show a larger surplus of 2.0 per cent of the GDP in FY2013 as the trade deficit narrows.

"Net inflows of foreign assistance rose sharply and FDI inflows improved. Pressure on the balance of payments will remain low in FY2014, though the current account surplus is expected to shrink to 1.0 per cent of the GDP as economic recovery revives imports," the ADB report said.

Revenue collection grew by 15.1 per cent in the first 7 months of FY2013, probably too slowly to meet the budget's target improvement of 21.6 per cent, it said.

"The Annual Development Programme spending will rise as the government seeks to address infrastructure deficits ahead of the elections but will nonetheless remain below the budget target."

The government is holding current spending on subsidies in check by setting fuel and electricity prices higher, the outlook said.

The overall deficit is expected to stay within the targeted 5.0 per cent of the GDP, the ADB outlook projected.

"Economic developments in the euro area and the US may prove to be much weaker than assumed in the ADO baseline, materially affecting exports from Bangladesh", the outlook cautioned.

"Another risk is budget revenues weakening if political unrest intensifies enough to markedly disrupt economic activity. Extreme spending policies to brighten re-election prospects could compromise monetary and fiscal discipline. Natural disasters pose perennial risks," the ADB said.

To overcome the projected risks, the ADB suggested that Bangladesh needs to give priority to enhancing its business climate, which the World Bank's Doing Business 2013 shows deteriorating in the past year.

The country also lags in South Asia in terms of infrastructure quality, as seen from the World Economic Forum's Global Competitiveness Report 2012-13. In addition to improved infrastructure and trade logistics, the trade regime needs to become more open to force manufacturers to improve their productivity and global competitiveness, the outlook said.

The country's policy-makers need to identify new growth drivers, notably promoting labour-intensive manufacturing for export and expanding industry to serve domestic markets, the ADB suggested

            Wednesday, 10 April 2013

Modhumati Bank may get final nod from BB tomorrow

Modhumati Bank may get final nod from BB tomorrow

Bangladesh Bank in its tomorrow’s board meeting may give final approval to proposed Modhumati Bank, said officials of the central bank.

A BB official told New Age on Monday that the central bank is almost done with the scrutiny of Modhumati Bank’s proposal and the issue would be placed in the BB board meeting on Wednesday. 

Prime minister Sheikh Hasina’s nephew Fazle Noor Taposh is the key sponsor of the bank while its chairman and managing director are Humayon Kobir and Mizanur Rahman respectively.

‘The managing director of the proposed Modhumati Bank will present their future business plan before the central bank board. The board may give their no objection certificate to the proposed bank if the central bank’s directors are satisfied with the plan,’ he said.

The proposed Modhumati Bank and NRB Global Bank failed to submit the application and bank draft worth Tk 400 crore as paid-up capital to the BB in time although the other proposed seven banks submitted them within October 16, 2012.

Under the circumstances,the BB board extended the time for the sponsors of two proposed banks to submit related documents and bank drafts.

The new deadline for Modhumati Bank was set on December 31, 2012 while it was March 31, 2013 for NRB Global Bank.

The two proposed banks were able to submit applications and paid-up capital within the new deadline set by the BB, the central bank official said.

‘The BB has already started the scrutiny of the NRB Global Bank proposal. The procedure will be completed as early as possible,’ he said.

The BB had earlier gave its final approval to seven banks for getting licences to launch their banking operation and four among them — South Bangla Agriculture and Commerce Bank, NRB Commercial Bank,

Union Bank and Meghna Bank — have already been enlisted as scheduled banks by the central bank.

The central bank in April 2012 issued letters of intent to the sponsors of nine proposed banks, including three banks to be set up by non-resident Bangladeshis.

The sponsors of the proposed banks are either from ruling party-led alliance or businessmen backed by the ruling party.

Source : New Age Bangladesh/9-Apr-2013

EBL signs MoU with CRISL

EBL signs MoU with CRISL

 Md Khurshed Alam, Head of SME of Eastern Bank, and Md Muzaffar Ahmed FCMA, FCS, President and CEO of CRISL, sign an MoU in Dhaka recently.

Eastern Bank Limited (EBL) signed an MoU with Credit Rating Information and Services Limited (CRISL) in Dhaka recently.

As per the MoU, CRISL will provide the pre-investment client's loan application assessment and rating services to EBL.

Md Khurshed Alam, Head of SME of Eastern Bank and Md Muzaffar Ahmed FCMA, FCS, President and CEO of CRISL, signed the agreement on behalf of their respective organisations.

Source: Daily Sun Bangladesh/10-Apr-2013

Arfan promoted to DMD of Bank Asia

Arfan promoted to DMD of Bank Asia

Md. Arfan Ali, Senior Executive Vice President and Chief Business Officer (SMR) of Bank Asia was recently promoted to Deputy Managing Director of the bank.

Arfan Ali has earned experience in corporate and retail banking at both local and multinational banks, said a press release.

He joined Bank Asia in September 13, 1999 and worked as branch head, He headed other important departments at the corporate office.

After completing MBA from the Institute of Business Administration (IBA), University of Dhaka, Arfan Ali started his career with Arab Bangladesh Bank as a probationary officer in 1991.

He also served in Hanil Bank (now Woori Bank) of South Korea from 1996 to 1999 prior to joining Bank Asia
News:Daily Sun Bangladesh/10-Apr-2013

Bank Asia offers 10pc stock dividend

Bank Asia offers 10pc stock dividend

Posted by latestbankaffairs on Mon, 1st April 2013

Bank Asia Limited recommended 10 percent stock dividend for its shareholders for the year 2012.

The approval was given at the 14th annual general meeting (AGM) of the bank held at the Officer's Club in Dhaka Sunday, said a press release.

A Rouf Chowdhury, Chairman of the bank, presided over the meeting.

With the declared dividend, the paid-up capital of the bank would be increased to Tk 6.93 billion and total capital fund to about Tk 13 billion

News:Daily Sun Bangladesh/1st April-2013

Wednesday, April 3, 2013

Union Bank opens head office at Gulshan

Union Bank opens head office at Gulshan

 Tue, Apr 02 2013 05:02 pm

Union Bank Limited has opened its head office at Bahela Tower at Gulshan Avenue in Dhaka Monday.

Hussain Muhammad Ershad, Chairman, Jatiya Party and former president of the country, inaugurated the head office of the bank, said a press release.

Shahidul Alam, Chairman of Union Bank Ltd, Directors, Md. Abdul Hamid Miah, Managing Director, executives and officers of the bank, renowned businessmen, industrialists and local elites were also present.

A doa mahfil was also organised on the occasion.

The bank is committed to playing the leading role in the economic development of the country, the release said.

Source: News:Daily Sun Bangladesh/2-Apr-2013