Abrar A. Anwar, Chief Executive Officer of Standard Chartered Bank Bangladesh and MJMN Marikkar, Managing Director of Raj Lanka Power Company Ltd, posing at a ceremony of preference share transaction arrangement of Tk1.60b for Raj Lanka Power Company Limi

Posted by BankInfo on Wed, Jun 21 2017 09:39 am

Abrar A. Anwar, Chief Executive Officer of Standard Chartered Bank Bangladesh and MJMN Marikkar, Managing Director of Raj Lanka Power Company Ltd, posing at a ceremony of preference share transaction arrangement of Tk1.60b for Raj Lanka Power Company Limi

news:new nation/21-jun-2017

Bangladesh infrastructure is world’s costliest, says World Bank

Posted by BankInfo on Wed, Jun 21 2017 09:19 am

World Bank economist Zahid Hussain speaks at a press conference in office in Dhaka’s Agargaon on Tuesday. Seated next to him is Qimiao Fan, World Bank’s country director in Bangladesh.

The global lender made the statement as it presented a comparison of infrastructure spending from other countries.

“Bangladesh’s spending for each kilometre of track is higher than in China and India,” said Zahid Hussain, the World Bank’s lead economist for its Dhaka office. 

He said the absence of competition in the bidding process for these works amount to corruption. 

“The cost becomes higher when there isn’t competition in the tender process. This is part of corruption. Acquiring high and low lands also increases cost,” said Hussain.

The World Bank has long been funding Bangladesh’s infrastructure.

But making allegations of graft, it had pulled out of a loan deal for building Bangladesh’s longest bridge on Padma River in 2012.

The project continued after Bangladesh initiated a plan to fund the bridge itself. A number of other structures are also under construction.

Bangladesh spent $6.6 million on each kilometre as it expanded the Rangpur-Hatikumrul highway to four lanes, said Hussain.

A chart showed that each kilometre of expansion work on the Dhaka-Sylhet highway cost $7 million. For Dhaka-Mawa, it was $11.9 million per kilometre and $2.5 million for the Dhaka-Chittagong highway. The expansion work of Dhaka-Mymensingh highway cost $2.5 million per kilometre.

But in India, constructing one kilometre of a four-lane road cost $1.1 million to $1.3 million, including land acquisition, he said. In China, the figure was $1.3 million to $1.6 million.

For Europe, the cost for each kilometre of four-lane road was $3.5 million, while the conversion of a two-lane road to four was $2.5 million. 

“The figures are a bit old, from 2013. But the picture is still the same,” Hussain said.

Long and short

Finance Minister AMA Muhith’s big and optimistic budget for the coming fiscal year lacks a well-grounded assurance, according to the World Bank.

 

The budget plan worth Tk 4 trillion is “long on hope but short on assurance,” said Hussain.   

Many of the goals were impractical, and based completely on hope, said the economist in his analysis.

Since presenting his budget in parliament on Jun 1, Muhith has faced criticism from MPs and business leaders for wanting to impose a uniform VAT rate of 15 percent.      

When asked about Prime Minister Sheikh Hasina’s take on the planned rate, the finance minister told reporters that she would bring it up on Jun 28 and there was no way to know before that.

There was also no way to realise Muhith’s plans for achieving the largely VAT-reliant budget without implanting the new VAT law, said Hussain.

“The implementation of the new VAT law is integral for increasing revenue. Big budget means big earnings,” said the economist.   

Prices under the new law would not be very different, he added. “VAT isn’t charged on rice, lentils, edible oil, medicines and several other essential goods. Businesses below turnover of Tk 3.6 million are also not under VAT.”

“So prices must increase slightly, not much. But the negative propaganda around the new law may lead to fear and some price hike.”

Growth target ‘healthy’
 
The World Bank also cast doubt on the target set by Muhith to achieve 7.4 percent economic growth in the next fiscal year, but said it was healthy. 
 
“Growth isn’t on autopilot. Investment must go up for achieving this. The target cannot be reached if the present state continues. Investment must go up in both public and private sectors,” said Hussain.

As the government scrambled to fill up shortages of rice following crop losses in flash floods, the economist advised that high prices be contained in the shortest possible time.

“The high prices are putting the poor at risk. Rice prices are very sensitive in Bangladesh’s reality. This has to be controlled fast.”

Expediting imports of food grains should be the way forward for now, he said. 
 
“There is no point in trying to scare millers and storage owners. They’ll release their stockpile if import increases. The market will be in control.” 

news:bd news 24/21-jun-2017

BB asks banks to help landslide victims

Posted by BankInfo on Tue, Jun 20 2017 11:03 am

Bangladesh Bank has advised all scheduled banks to distribute relief and financial assistance among the people affected by the recent landslides in Chittagong hill tracts areas.

Banks were asked to help them under corporate social responsibility activities and show such expenditure in the balance sheet as spending in social projects or community investment sector, the banking regulator said in a statement yesterday.

As of yesterday, 150 people, including four army men, were killed in the landslide and the death toll may rise as the rescue operation has not yet come to an end.

news:daily star/20-jun-2017

BB reconsidering cap on credit card interest rate

Posted by BankInfo on Tue, Jun 20 2017 10:41 am

Star Business Report

Bangladesh Bank is weighing the case for resetting the cap on credit card interest rate it had set last month following fervent protest from banks.

Earlier on May 11, the BB issued a guideline on credit card operations that stipulated banks can charge the highest interest rate on consumer loans plus 5 percent, meaning the interest rate on credit cards came down to 16-17 percent -- half the previous rate.

Now, the central bank is considering setting the cap at 5 percent plus the highest interest rate on any loan, said a high official of the BB.

The development comes after the BB yesterday held a meeting, chaired by its Governor Fazle Kabir, with the top executives of banks over the issue at its headquarters.

At present, the interest rate on SME loans is the highest amongst the banks' products: about 16-17 percent. This means, the interest rate on credit cards would come to about 22 percent.

“We explained how the interest rates cap will hurt the card business and the central bank assured us of reconsidering,” said Abrar A Anwar, chief executive officer of Standard Chartered Bangladesh.

The interest rate on credit cards should be higher to make the business sustainable, he said, adding that globally the rates are high due to it being collateral free and widely disbursed.

The interest rate ceiling will reduce banks' profitability as the monitoring cost for unsecured loans is high, said a top executive of a private bank.

“The cost to ensure cybersecurity is also high,” he added.

The average interest rate on consumer loans is very low in the market: it stood at 9.52 percent in April in contrast to 9.62 percent for other loans.

The new guideline for credit card operation will now be implemented from January, said the BB official. Previously, it was supposed to take effect from the date of issue of May 11.

Another revision to the guideline that the BB is considering is allowing dual currency for supplementary credit cards. The original guideline restricted supplementary credit cards to only local currency. 

news:daily star/20-jun-2017

China central bank boosts liquidity

Posted by BankInfo on Tue, Jun 20 2017 10:33 am

BEIJING: China's central bank Monday injected 120 billion yuan (17.65 billion U.S. dollars) into the financial system via open market operations to ease liquidity pressure.

The operations included 50 billion yuan of seven-day reverse repos, 40 billion yuan of 14-day reverse repos, and 30 billion yuan of 28-day contracts, with interest rates of 2.45, 2.6, and 2.75 percent, respectively, the People's Bank of China (PBOC) said on its website, reports Xinhua.

The PBOC attributed the new operations to a huge decline in overall liquidity due to factors including payments for government bonds.

Offset by 10 billion yuan of maturing reverse repos, the PBOC injected a net liquidity of 110 billion yuan into the market through reverse repos on Monday.

news:daily sun/20-jun-2017
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9