Banks reluctant to mobilise deposits

Posted by BankInfo on Wed, Apr 16 2014 11:20 am

Banks are reluctant to mobilise funds at higher rate due to lack of credit demand and sluggish investment climate

Deposit growth in the banking sector dropped substantially in last one year as banks are reluctant to mobilise funds at higher rate due to lack of credit demand and sluggish investment climate.

It decreased to 16.48% in February from 20% in the same month last year.

The credit growth of the banking sector decreased to 7.44% from 12.73% during the same period, according to the Bangladesh Bank data.

The banks could not utilise the deposits they mobilised due to lack of investment opportunities, particularly before the general election on January 5, said a senior executive of a private bank.

As a result, he said, the banks were reluctant to collect deposits and reduced the deposit rates to discourage the depositors.

The average interest rate on deposits decreased to 8.34% in February from 8.68% in the same period of last year.

The depositors are now searching for new opportunities to get lucrative return by investing their idle money, said a senior executive of another private bank.

They turned their eyes on the share market to invest as retail investors got back confidence slightly after the demutualisation of the stock exchanges, he said.

After the present government assuming office, the investors started speculating the market might boost further as the history of 2010 and 1996 tells the market booms during the Awami League tenure, he said.

“There is no more chance of disaster in the country’s share market as we reformed the rules and regulations, and started demutualisation process of the burses,” said Bangladesh Securities and Exchange Commission Member Helal Uddin Nizami.

Investors already witnessed the reflection of reforming regulations on share market as the price index did not fluctuate abnormally during the political unrest ahead of general election.

As a result, he said, inflow of funds toward the share market increased and price index remained within a range between 4,000 and 4,600.

According to the Bangladesh Bank statistic released recently, the total deposits of banking sector increased by 1.49% to Tk580,652 crore in July-September period of 2013 as compared to 3% growth to Tk504,041crore in the same period last year.

“The money will flow to somewhere where it will get maximum profit,” said Prof Abu Ahmed of Dhaka University. “Witnessing the current market indicators, we may say depositors’ money is flowing to the stock market. But how long it will continue will depend on the political situation.”

The country’s stock market is showing an uptrend during last two and half months as the turnover at Dhaka Stock Exchange scaled up to an average of Tk400 crore per day.

News:Dhaka Tribune/16-Apr-2014

New banks struggle to get business

Posted by BankInfo on Wed, Apr 16 2014 11:09 am

Governor to sit with them next week

Sajjadur Rahman

The nine new banks which opened last year are struggling to gain any traction in their business, as too many banks chase a limited customer pool amid sluggish economic activities.
As of February 20, the average advance-deposit ratio (ADR) of the nine new banks stood at only 54 percent, meaning the banks lent only Tk 54 against a deposit of Tk 100, which is much lower than the industry average of 70.35 percent and the Bangladesh Bank ceiling of 85 percent.
Of the new banks, Modhumoti Bank's ADR was only 15 percent, the lowest, followed by The Farmers Bank at 23.46 percent and NRB Bank 24.10 percent, according to data from Bangladesh Bank.
The total number of banks operating in the country now stands at 56, and a senior official of The Farmers Bank said the competition to get clients is fierce.
The bank, which has 12 branches at present, is now looking at small towns and rural areas to enlist new clients.
“We are trying to overcome the challenges. You will find us in a better situation by June this year,” said Mizanur Rahman, managing director of Modhumoti Bank that currently has six branches, with another 10 on way this year.
Muklesur Rahman, managing director of NRB Bank, said potential customers are still watching the situation before taking up fresh loans. He, however, said his bank's ADR has now increased to 54 percent, up from only 24 percent in February.
Amid this situation, the central bank has called a meeting with the new banks to discuss their business issues and challenges. BB Governor Atiur Rahman will chair the meeting to be attended by chairmen and managing directors of the new banks.
However, not all the new banks are struggling. NRB Global Bank's ADR has reached nearly 84 percent and that of NRB Commercial Bank 74 percent.
“We are going cautious, not aggressive,” said Abdul Quddus, managing director of NRB Global Bank.
Many analysts had opposed the central bank's move to permit more banks in the country, saying there are already too many banks. Despite that, BB allowed nine banks on political consideration.
On the other hand, India's central bank granted permission to only two new banks last week, although the country's half of the 120 crore population is out of banking services.
Currently, India has 88 scheduled commercial banks.

News:The Daily Star/16-Apr-2014

Prime Bank marks Pohela Baishakh

Posted by BankInfo on Wed, Apr 16 2014 10:57 am

Md. Nader Khan, Chairman of Prime Bank Limited, along with other high officials of the bank, is seen at a day-long cultural programme to welcome the Bengali New Year-1421 at the Amazon Club of Gulshan on Monday.

 Prime Bank Limited organised a day-long cultural programme with traditional Bangalee foods representing the heritage of Bangladesh at the Amazon Club of Gulshan on Monday to celebrate the Bengali New Year-1421.

Md. Nader Khan, Chairman of the bank inaugurated the programme, said a press release.

News:Daily Sun/16-Apr-2014

StanChart Bank high official arrives

Posted by BankInfo on Wed, Apr 16 2014 10:35 am

Anurag Adlakha, Regional Chief Financial Officer of Standard Chartered Bank, India and South Asia arrives Dhaka on Tuesday on a 2-day official visit to Bangladesh.

During this visit, Anurag Adlakha will meet external stakeholders and senior officials of the bank, said a press release.

Based in Mumbai, as the Regional Chief Financial Officer, India & South Asia, he is responsible for regional finance function and his key responsibilities cover business performance management, financial reporting and control, balance sheet management, financial compliance and tax.

Anurag, with more than 25 years of experience, worked in Europe, the Middle East and Asia. Prior to joining Standard Chartered Bank in 2007, Anurag worked with HSBC as Chief Financial Officer for India. He is also a member of the Institute of Chartered Accountants of India. 

News:Daily Sun/16-Apr-2014

Janata Bank Limited organise a workshop on ‘Awareness building on Security Management of the Branch’

Posted by BankInfo on Tue, Apr 15 2014 12:41 pm

Janata Bank Limited (JBL) organized a workshop on ‘Awareness building on Security Management of the Branch’ in JBL Divisional Office, Dhaka North on Saturday (15.03.014), reports in a press release.
Md. Alamgir Mia, GM Divisional Office, Dhaka North handed over the training material among the participants. Md. Kabir Ahammed & Salekuzzaman, DGM of the bank and Major (Rtd.) Md. Ziaur Rahman, Chief Security Officer were also present on the concluding ceremony. A total of 120 branches security workers participated on the workshop.
Janata Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of Tk. 20000 million (approx. US$ 250 million), paid up capital of Tk. 11000.00 million, reserve of Tk.17234 million.
The Bank has a total asset of Tk. 508567 million as on 31st December 2012. Immediately after the emergence of Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed as Janata Bank. On 15th November, 2007 the bank has been corporatised and renamed as Janata Bank Limited.
Janata Bank Limited operates through 892 branches including 4 overseas branches at United Arab Emirates. It is linked with 1202 foreign correspondents all over the world.

News:Bangladesh Today/15-Apr-2014
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