BB orders audit into Agrani's anomalies

Posted by BankInfo on Tue, Mar 01 2016 10:04 am
The bank will appoint two auditors

The Banking Division has directed the Agrani Bank board to open a functional audit to find out whether irregularities were committed in granting loans to four companies.

The move comes as there are allegations that the bank pandered to misdeeds in disbursing loans to Sun Moon Group, Tanaka Tradecom International, Jaj Bhuiyan Group and BTL Group.

This is the third time that the Banking Division has called for an audit into a state bank.

Agrani Bank will appoint two chartered accountancy firms for the audit. Previously, chartered accountancy firms were appointed in the scam-hit Sonali and BASIC banks for functional audits.

The Banking Division has instructed Agrani to appoint SF Ahmed & Co and MABS & J Partners for the functional audit. They have also been asked to submit their reports in two months.

Contacted, Agrani Bank Chairman Zaid Bakht confirmed that they have received such a directive and will soon appoint the two audit firms.

The BB also served notice on Agrani Bank Managing Director Syed Abdul Hamid last month, seeking explanations from him under the banking companies act for nine counts of irregularities.

The BB letter mentioned that Agrani violated rules for loans amounting to Tk 792 crore.

The move against Hamid comes after the central bank's inspections into Agrani's main branch and the Asadganj and Laldighi East branches in Chittagong established the allegations against him.

The BB notice said Hamid approved loans for a select few clients by violating the directives of the central bank and the Agrani board of directors.

In 2011, a Tk 120 crore loan was extended to Tanaka Tradecom International from the bank's main branch. The loan was approved by Agrani's board with the condition that supplementary collateral will be kept as security with the bank.

Tanaka Tradecom later proposed changes to the condition, which Hamid approved without the consent of the board.

Later in 2015, he rescheduled loans of the company amounting to Tk 10.79 crore -- a decision he was not authorised to make.

Serious irregularities were also committed in disbursing loans to Mizanur Rahman Mizan, a customer of Agrani's main branch, and various companies linked to the client's Sun Moon Group.

The outstanding loans now stand at Tk 300 crore and they have become risky.

An official of the BB said the central bank also found irregularities in loans given to Agrani's other clients, including Zaynab Trading of Chittagong.

The central bank inspection found that a huge amount of loans was extended to a company in Chittagong whose address was not found.

In this regard, Bakht told The Daily Star that the two bank officials involved with these loans have been suspended.

Instructions have been issued to file criminal cases against the officials and the borrowers, he added.

News:The Daily Star/1-Mar-2016

BRAC Bank launches first energy efficiency financing loan

Posted by BankInfo on Mon, Feb 29 2016 12:24 pm

BRAC Bank launched "Planet Solutions", Bangladesh's First Energy Efficiency Financing Loan to assist readymade garments and textile industries to invest in energy efficiency technology.  The loan is targeted to the RMG & textile industry who will invest in energy efficiency technology and the Technology Service Provider Companies who provide energy efficiency solutions.  Mr. S K Sur Chowdhury, Deputy Governor, Bangladesh Bank, and Mr. Selim R. F. Hussain, Managing Director & CEO, BRAC Bank Limited, formally launched the loan product at a workshop on Water & Energy Efficiency Financing organized by International Finance Corporation (IFC), at a hotel in Dhaka on February 28, 2016. Wendy Werner, Country Manager of IFC Bangladesh, Mr. Siddique Zobair, Member (EE&C), Sustainable and Renewable Energy Development Authority (SREDA), were also present. IFC is providing technical assistance to BRAC Bank in launching the product.  This product will be an unsecured financing with an interest rate of 6% per annum. Entrepreneurs and the Technology Service Provider Companies will be able to avail the Planet Solution loan with Flexible loan tenors based on payback period within minimum processing time.  On the occasion, Mr. Selim R. F. Hussain, Managing Director & CEO, BRAC Bank Limited, "I would like to stress on the strong partnership we have developed over the years with IFC in working on Green Finance. IFC's customized and tailor-made support for BRAC Bank, complemented with their global knowledge and expertise has helped us structure, plan and launch the very first Energy Efficiency Loan product in Bangladesh. We look forward to becoming a market leader in the Green Finance space in Bangladesh."

News:Financial Express/29-Feb-2016

Banks put more funds in T-bonds

Posted by BankInfo on Mon, Feb 29 2016 11:59 am

Banks floating in excess liquidity invested more in treasury bonds in 2015 than in treasury bills (T-bills).

Higher yield rates on long-term securities provided the lure, bankers said.

However, the yield rates of both the securities saw a substantial decline during 2015 over those of the previous year.  

Aggregate investment in the treasury bonds -- officially known as Bangladesh Government Treasury Bonds (BGTBs) -- increased more than 8.0 per cent to Tk 1218.73 billion in the last calendar year from Tk 1124.81 billion a year before, according to the central bank latest statistics.

On the other hand, the banks' investment in the T-bills dropped by 30.45 per cent to Tk 292.28 billion in 2015 from Tk 420.23 billion in the previous year.

"It's a portfolio transformation of the banks," a senior official of the Bangladesh Bank (BB) told the FE Sunday about the switch of sides by the bankers.

The banks may give emphasis on long-term deposits than short-term ones gradually to minimise their fund mismatch, according to the central banker.

Talking to the FE, a senior official of a leading private commercial bank (PCB) said the government issued less T-bills than BGTBs in 2015.

Besides, higher interest rates on the BGTBs than that on T-bills encouraged the banks to invest more in treasury bonds than in the bills, the private banker explained. "We've invested more in the BGTBs to minimise our cost of deposits," the PCB official noted.

The yield -- generally known as interest -- on the BGTBs came down to 5.50-8.70 per cent in December last from 8.48-11.98 per cent a year ago while the interest rates on T-bills dropped to 2.90-4.20 per cent from 7.50-8.40 per cent, according to the banker.

"Such trend may continue until June," he observed.

Currently, three T-bills are being transacted on auction to adjust government borrowings from the banking system. The T-bills have 91-day, 182-day and 364-day maturity periods.

Furthermore, five government bonds with tenures of two, five, 10, 15 and 20 years respectively are traded on the money market.

News:Financial Express/29-Feb-2016

Banks asked to spend more CSR fund among poor: Governor

Posted by BankInfo on Mon, Feb 29 2016 11:39 am

Bangladesh Bank Dr Atiur Rahman poses with the students of a Southeast Bank Foundation scholarship programme at a city hotel on Saturday. Shahid Hossain, Managing Director and Alamgir Kabir, Chairman of the Board of Directors of Southeast Bank were presen

Economic Reporter :Bangladesh Bank (BB) is going to provide loan assistance to the students for purchasing laptop with a view to facilitating modern educational system across the country, said the central bank governor Dr Atiur Rahman on Saturday. The loan rate will be very low in order to encourage the students to purchase laptop, said the governor while addressing at Southeast Bank Foundation scholarship giving ceremony among the poor and meritorious students at a city hotel. The programme was organised by Southeast Bank Limited. The governor called upon the financial institutions to spend more CSR fund among the poor, underprivileged and meritorious students for achieving the expected level of economic growth. "So many poor and meritorious students in the country are not getting proper education due to financial crisis of their family, it is very unfortunate for a nation", Atiur Rahman said.Bangladesh Bank has undertaken a good number of initiatives to resolve the social problem. Already, the central bank had instructed all scheduled commercial banks of the country to spend at least 30 per cent of their CSR expenditure to the development of country's education sector.Banks are regularly providing scholarship to the poor and meritorious students across the country. "Skilled manpower is very essential for further development of the country, said the governor. Proper education is needed for creating skilled manpower and the introduction of modern educational system would help creating skilled manpower, said the governor.Bangladesh Bank Governor appreciated the role of Southeast Bank for their contribution for the development of country's education sector. The governor expected that the bank would continue provide their financial assistance for the development of country's education sector.Shahid Hossain, Managing Director of Southeast Bank presided over the ceremony. The Managing Director has underscored the need for improving country's educational system with a view to attaining a sustainable economy.Considering the necessity of education for all, the bank has introduced scholarship programme for the poor, underprivileged and meritorious students across the country. So far, the bank has distributed Tk 8 crore to the students since 2010, said Southeast Bank Managing Director Shahid Hossain. The bank plans to provide more scholarship in future as part of their corporate social responsibility, he also added.Alamgir Kabir, Chairman of the Board of Directors of Southeast Bank Limited was the special guest.A senior Bangladesh Bank official told The New Nation that the central bank earlier plans to provide loan at 4 percent interest rate on easy terms for the students of college and universities under a re- finance scheme to purchase laptop for acquiring knowledge by using ICT. Central bank Governor Dr. Atiur Rahman has taken the initiative at the request of Information and Communication (ICT) Division, which has launched a number of training projects. "If we can give loan at 4 percent interest rate to the farmers on cultivating spices including onion, garlic, ginger why not the same interest rate could be given for the students to purchase laptop," said the official.

News:New Nation/28-Feb-2016

12 banks fail to achieve agriculture loan target

Posted by BankInfo on Mon, Feb 29 2016 11:17 am

Abu Sazzad :Twelve scheduled commercial banks of the country failed to achieve the agriculture loan disbursement target in the first seven months (July to January) of the current fiscal. The 12 banks are National Bank of Pakistan, Commercial Bank of Ceylon, Bank Al-Falah, Farmers Bank, Bangladesh Development Bank, Dhaka Bank, Meghna Bank, Modhumoti Bank, NRB Commercial Bank, NRB Global Bank, Prime Bank, and South Bangla Agriculture and Commerce Bank.Maximum banks disbursed below 30 per cent of their annual targets of loan disbursement to farmers. Of them, National Bank of Pakistan, Commercial Bank of Ceylon and Bank Al-Falah did not disburse any farm loan in the period.Although these banks have failed to fulfill their disbursement target, the farm loan disbursement increased by 18.74-per cent in the first seven months of the current financial year compared with the corresponding period of the FY15.The banks disbursed Tk 10,079.45 crore in farm loans in the July-January period of the FY16 against Tk 8,488.44 crore in the same period of the FY15. In the first seven months of the ongoing fiscal, the eight state-owned commercial and specialised banks including Sonali, Janata, Agrani, Rupali, BASIC, BDBL, Bangladesh Krishi and Rajshahi Krishi Unnayan together disbursed Tk 5,220.97 crore in farm loans. The amount is 56.20 per cent of their annual loan disbursement target of Tk 9,290 crore.The private and foreign commercial banks together disbursed Tk 4,858.48 crore in agriculture loans in July-January of the FY16. The amount is 68.33 per cent of their total annual loan disbursement target of Tk 7,110 crore.The BB will take punitive action like the previous years against the banks which will not take required steps to speed up farm loan disbursement programme, said a senior BB official.The banks are now being compelled to disburse the farm loan in line with their financial year's target as the central bank had earlier said that they (banks) would have to deposit the entire fund of their undisbursed agriculture loans in a blocked account with the BB.The central bank took the move as a punishment measure. The central bank implemented the rule from this financial year, he also said. The BB will return the fund to the respective banks if they disburse the undisbursed amount with their fresh targets for the next financial year, also said the BB official.For this reason, the banks are now more cautious to fulfill their annual farm loan disbursement target to avoid the punishment measure set by the central bank, he said.The BB official said that the central bank had already asked the banks to speed up the farm loan disbursement programme.Center Policy Dialogue (CPD) Executive Director Mustafizur Rahman said, every year Foreign Commercial Banks failed to fulfill their annual disbursement target due to their illogical banking policy.They (FCBs) do not have any rural branches, so they deliberately avoid the disbursement target, he claimed. FCBs can make a liaison with the Micro Finance Institutions (MFIs) to achieve their disbursement target of SME and agriculture loan, which will reduce the risk management factors, suggested the CPD Executive. Adequate SME and agriculture loan are important to attain a sustainable economy, he pointed.

News:New Nation/28-Feb-2016
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