• Friday, October 31, 2014

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Central Bank

Remove dishonest people from state banks: BB chief

The central bank yesterday came down heavily on the boards of state banks for failure in running the institutes. Bangladesh Bank Governor Atiur Rahman said the efficiency of the boards in running the banks must improve. "We hope the government will appoint honest people and remove inefficient and dishonest ones," Rahman said at the launch of the annual report on customer complaints. The governor's comments came just a day after AMA Muhith, finance minister, admitted to the directors' failures in these banks. Of...

Private credit rises on falling rates

Private credit rises on falling rates

Declining interest rates boosted private-sector credit growth in the past several months, but the growth still remains far below the central bank's target. Private sector credit accelerated 12.3 percent in June this year, up from 11.4 percent in the previous month and 10.8 percent in June a year ago, according to Bangladesh Bank data. Though...

State banks must come under central bank governance: WB

The World Bank yesterday recommended the government delegate the control of state-backed banks to the central bank for better supervision. Supervision of the banking sector is shared between the central bank and the banking and financial institution division under the finance ministry. Bangladesh Bank regulates private banks while the banking division looks after the eight state-run banks, some of which have been plagued by several financial scams in recent times. "That is probably not a good way to regulate the banking sector,"...

BB receives global award for financial inclusion

The central bank of Bangladesh has won an international award for promoting financial inclusion, especially through mobile banking services. Bangladesh Bank revealed this at a press conference at its headquarters in Dhaka yesterday. The Alliance for Financial Inclusion (AFI), a forum of central banks and other financial regulators working for financial inclusion, selected BB for its first-ever award at the Global Policy Forum in Port of Spain, Trinidad and Tobago. The AFI introduced the award this year to illustrate and promote successful...

Now a govt report says control of state banks must go to BB

A government report suggested the control of state-run banks should be handed to the central bank to arrest their rising bad loans and reduce scope for scams. "A number of steps have been taken to improve banking supervision but further steps are needed, including assigning the full supervision responsibility of public banks to Bangladesh Bank," said the mid-term review of the government's Sixth Five Year Plan. The planning ministry has prepared the evaluation report. "This is a serious weakness in the...

Islamic bonds' maturity period cut by half

The central bank has cut the maturity period of Islamic bonds by half as it amended the guideline on their issuance to make them attractive. A Bangladesh Bank official said the maturity period has been set at three months, along with the existing six months, to help Islamic banks and financial institutions manage their fund smoothly. The profit of Islamic bonds will equal the profit of a three-month fixed deposit scheme of the issuing Islamic banks, replacing the profits rate for...

Grameen Bank Board

Govt to change rule to elect it

The government will again amend Grameen Bank rules for electing nine women directors of the micro-lender as the central bank has declined to hold polls for picking new board members. "Bangladesh Bank has said that holding the elections will lead to a conflict of interest as they [the BB] are a regulatory body," Finance Minister AMA Muhith told reporters at the secretariat yesterday. "We will find ways to do it. There are a number of banks under the control of the...

BB brings cheer to foreign investors

Foreign investors having stakes in Bangladeshi private companies will now get higher returns if they sell their shares, as the central bank has introduced globally-accepted approaches to value such firms. Analysts say the move will encourage overseas investment in local companies. Along with the currently practised 'net asset value approach' for determining the repatriable value of shares, Bangladesh Bank has adopted two more methods: market value approach and income approach or discounted cash flow approach. Take an illustrative example under the three...

BB bankrolls troubled jute sector

BB bankrolls troubled jute sector

The central bank yesterday signed deals with 16 banks to extend low-interest loans to the jute sector in a bid to prop up the ailing industry. The loans will be extended from the Tk 200 crore refinance scheme that Bangladesh Bank has created for five years. All public and private sector jute mills, exporters and...

Bank deposits mount despite rate cuts

Bank deposits mount despite rate cuts

Bank deposits rose 15.81 percent year-on-year in fiscal 2013-14 despite the cuts in interests on savings in the past one year. On June 30, the total deposit in the banking sector stood at Tk 668,358 crore, with private banks accounting for 63.88 percent of the sum, according to data from the central bank. The private banks saw their deposits grow 17.56 percent, the state-owned commercial banks 13.68 percent, foreign banks 7.18 percent and the government-run specialised banks 14.81 percent. But it was Islamic banking that saw its deposits increase the most -- by 23.03 percent -- between June 30 last year and this year. Khondker Ibrahim Khaled, a former deputy governor of the...

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