State Minister for Finance MA Mannan and Md Abdus Salam, Managing Director of Janata Bank Limited, handing over cash financial support among the flood afected people of Sunamganj area recently. Md Helel Uddin, DMD of the bank was also present.

Posted by BankInfo on Tue, Jun 20 2017 09:16 am

State Minister for Finance MA Mannan and Md Abdus Salam, Managing Director of Janata Bank Limited, handing over cash financial support among the flood afected people of Sunamganj area recently. Md Helel Uddin, DMD of the bank was also present.

news:new nation/20-jun-2017

Experts focus on joint efforts of BB, customs

Posted by BankInfo on Mon, Jun 19 2017 11:35 am

Compliance one of the greatest concerns for banks

A collective effort of Bangladesh Bank (BB) and the customs authority should be taken immediately to check trade-based money laundering (TBML) in the country, senior bankers and experts have said.

They also said the commercial banks need to be more serious regarding legal compliance and identifying right prices for both exportable and importable products to address TBML.

The observations came during discussion at a review workshop on 'Trade Services Operations of Banks', held at Bangladesh Institute of Bank Management (BIBM) in the capital on Sunday with BIBM Director General Dr. Toufic Ahmed Chowdhury in the chair.  

Compliance is already one of the greatest concerns for the banks, and greater compliance requirements are affecting operational costs of trade financing, according to a study. It was presented by BIBM Director (Training) Professor Dr. Shah Md. Ahsan Habib at the workshop.

However, compliance to Anti-Money Laundering (AML) rules is essential and should be a collective concern, the study added.

"To hide profitable use of the proceeds of crime through illicit outflows of funds from Bangladesh the criminals use over-pricing in import, generally in case of low-duty items, like - capital machineries, raw materials and spare-parts, and under-pricing of export," the study explained.

The BIBM's findings came against the backdrop of rising trend of illicit fund outflows from Bangladesh in the recent years.

A substantial amount of fund, ranging between 12 per cent and 17 per cent of its total trade value, had annually flown out of Bangladesh during the last one decade, ending in December 2014, through trade mis-invoicing and other illegal transfers.   

Global Financial Integrity (GFI), a Washington-based research organisation, unveiled the estimate in its latest report titled 'Illicit Financial Flows to and from Developing Countries: 2005-2014'.

According to the latest estimation, illicit financial outflows from Bangladesh stood at $9.10 billion in 2014, and it is 13 per cent of the total trade in the year under review.

"Considering the concerning issues of trade-based money laundering, compliance requirements, and other financial crimes, regulatory supervision and reporting became crucial," BB Deputy Governor S K Sur Chowdhury said while speaking at the workshop as the chief guest.

He also said the returns or statements are important tools for monitoring and reporting, which are of great importance to the central bank that includes both on-line and off-line reporting.

"Adequate and reliable information on operations, process and trends in different trade services activities are crucial for bankers, academicians and researchers of the relevant fields for improving trade services," he explained.

However, contribution in trade financing, offered by the country's private commercial banks (PCBs) has increased gradually, while trade finance facilities of the state-owned commercial banks (SoCBs) have squeezed.

The country's major portion of trade financing facilities were offered by the PCBs that ranged between 57 per cent and 73 per cent during the financial years (FY) 2011-16, while the SoCBs offered between 33 per cent and 25 per cent, according to the study.

The contribution of the foreign commercial banks (FCBs) was around 3.0 per cent to 5.0 per cent, it added.

"The PCBs are now overtaking the SoCBs in terms of both the number of trade transactions and the trade volume," said Mehmood Husain, Managing Director and Chief Executive Officer of NRB Bank Limited.

Such contributions of the PCBs may increase in the coming years, he opined.

Helal Ahmed Chowdhury, Supernumerary Professor of BIBM and Independent Director of Islami Bank Bangladesh Limited (IBBL), said the PCBs are now dominating trade financing despite larger network of the SoCBs.

"The banks should be ascertained pricing of importable items using internet to avoid trade-based money laundering," he noted.

Among others, Syed Mohammad Bariqullah, faculty member of BIBM and former deputy managing director of National Bank Limited, and Mahbub ul Alam, deputy managing director of IBBL, also spoke on the occasion.

news:financial express/19-jun-2017

China freezes 1,000 bank accounts of Burmese traders

Posted by BankInfo on Mon, Jun 19 2017 11:23 am

Transactions in Muse are becoming difficult as Chinese banks have frozen over 1,000 bank accounts with estimated deposits of Ks40 billion (US$29.42 million) belonging to Burmese traders on Wednesday, June 14, 2017. In the photo, trucks at Muse 105-mile trade camp in Shan State of Myanmar

Over 1,000 accounts of Burmese traders were frozen by Chinese banks.

Transactions in Muse are becoming difficult as Chinese banks have frozen over 1,000 bank accounts with estimated deposits of Ks40 billion (US$29.42 million) belonging to Burmese traders.

“They started freezing our bank accounts on June 14. Most were locked the next day,” said a trader.

Also READ: Chinese bankers flock to Hong Kong as expats retreat

Although Chinese banks have blocked bank accounts in the past, it has never been done on such a large scale before.

“They freeze the bank accounts of exporters and importers. For instance, if we transfer money to buy goods, the Chinese trader, who accepts the transfer, is also banned so we cannot issue the goods. We heard that the authorities froze the bank accounts linked with internet gambling and smuggled goods. Now more accounts are frozen. Previously, they only froze accounts which are associated with bean, rice, sugar and maize exporters or money changers. Now the importers who open accounts at Chinese banks to buy goods are included in the banned list. Some have opened their accounts for medical treatment,” said a trader from Muse.

Normally the Chinese banks can settle a bank account within six months if it is frozen. However, some can be frozen for years. Muse accounts for about 70 percent of total border trade and the government should prevent financial loss for its traders, business representatives said.

“It mostly happens when we use illegal money transfers in China. Both governments need to negotiate officially permitting exports from Myanmar. The Chinese didn’t freeze the bank accounts of traders from other countries. They are only doing it to us. Many of us use illegal money transfers as they are cheaper than transfer services approved by the Chinese. The bank accounts frozen by the Chinese are often of money earned legally,” said a trader.

Traders say they will ask the government to make money transfer services official to protect them against Chinese government action and to register all exports to avoid seizures.

news:daily star/19-jun-2017

Qatar riyal quoted below peg but no threat of devaluation, bankers say

Posted by BankInfo on Mon, Jun 19 2017 11:17 am
Reuters, Dubai

Qatar's riyal is being quoted weaker than its peg against the US dollar as Doha grapples with a diplomatic crisis, but that is the result of poor liquidity in the currency market rather than a serious threat to the peg, bankers in the region say.

The riyal, officially fixed at 3.64 to the dollar since 2001, has been offered as low as 3.6680 since Saudi Arabia and other Arab states cut diplomatic and transport ties with Doha on June 5, accusing it of backing terrorism.

That was not a big move in absolute terms, less than 1 percent, but it marked the weakest spot market rate since July 2005, Thomson Reuters data shows.

Furthermore, previous dips in the riyal were usually one-day affairs, but this time the Qatari currency has been quoted significantly weaker than its peg for two weeks.

Gulf bankers inside and outside Qatar, however, said they did not think the spot market quotes showed any change in Qatar's determination or ability to maintain the peg.

Instead, they said, the fluctuations seemed to be the result of the way in which economic sanctions against Qatar have distorted trading between banks. Many Saudi, United Arab Emirates and Bahraini banks have cut back or suspended trading with Qatari institutions, fearing the displeasure of their governments. International banks have become more cautious because of political risk.

This has slowed foreign exchange trade, particularly between banks operating onshore and offshore, and caused bottlenecks in the supply of dollars to offshore institutions, pushing down the riyal.

"The fact that the spot quote has gone below the peg is due to low liquidity, not a change in Qatar's policy," said a treasury manager at a Saudi bank, speaking on condition of anonymity because of political sensitivities.

He noted that in the past, the Saudi riyal had also fluctuated by significant margins around its dollar peg because of temporary liquidity squeezes, even though Riyadh's central bank had maintained the peg.

A Dubai-based fixed income portfolio manager said he didn't view the move of the spot rate off the peg as alarming.

"It might be a sign of a little speculative pressure, hard to say. It doesn't seem like banks have had massive outflow pressure from Qatar," he said.

The emir's 2001 decree establishing the peg said the central bank would "buy the dollar at a rate not exceeding 3.6385 riyals and sell the dollar at a rate not exceeding 3.6415 riyals to the banks operating in the State of Qatar".

It is continuing to do this, bankers said. A treasury banker at a Qatari bank in Doha said his institution remained able to obtain dollar supplies it needed from the central bank.

"We can buy dollars from the central bank," he said. "We are selling dollars in the market at 3.6415."

Because links between onshore Qatari banks and offshore banks in centres such as Bahrain and London have been damaged by the sanctions, however, these supplies are not reaching all corners of the market promptly.

Some traders said they were surprised the central bank had not acted immediately to quash any speculation about a change to the peg by releasing huge amounts of dollars into the market.

In his only public statement since the crisis erupted, central bank governor Skeikh Abdullah bin Saoud Al-Thani declared last week that Doha had "sufficient foreign currency reserves to meet all requirements" but did not explicitly mention the peg.

However, bankers in the Gulf noted the emir's decree did not commit the central bank to massive intervention as soon as the spot rate moved off the peg; it merely said the bank had the right to determine the volume and timing of dollar sales.

news:daily star/19-jun-2017

China-backed AIIB touts growth, sustainability

Posted by BankInfo on Mon, Jun 19 2017 11:08 am

Reuters, Jeju, South Korea

Leaders of the China-backed Asian Infrastructure Investment Bank touted its growing membership and commitment to sustainable development at its annual meeting, even as environmental groups were disappointed by its openness to investing in coal projects.

The AIIB, which has 80 member countries, was set up to help meet the estimated $26 trillion need for infrastructure spending in Asia through 2030, while also demonstrating that a China-led institution can meet international standards for best practice.

The United States and Japan, both members of the Manila-based Asian Development Bank (ADB), have not joined the AIIB.

The AIIB has pledged to use its investments to help members fulfill their commitments to the Paris climate accord, which the United States is withdrawing from under President Donald Trump.

"We will not consider proposals if we are concerned about the environmental and reputational impact," AIIB president Jin Liqun, a former vice president at the ADB, said Friday at the opening ceremony.

But the bank did get pushback from environmental groups about its commitment to being green, with several NGOs saying they were disappointed the bank's new energy industry strategy, adopted Thursday, left the door open for coal sector investment.

"I have a hard time reconciling in the energy strategy a statement that says up front the purpose of the energy strategy is to help countries meet their commitments under the Paris agreement, with 'we're going to finance coal projects'," said Andrew Deutz of the Nature Conservancy.

Jin said that after many rounds of discussion on the bank's energy policy, "this is the best we can achieve", adding there are no new coal projects in its pipeline of investments.

Other groups saw improvement over the last year in how the bank engages with NGOs.

"We thought this was a really interesting opportunity to see if this new institution can foster a race to the top in terms of creating strong sustainable credit practices, or foster a race to the bottom," said Katherine Lu of Friends of the Earth.

"I think the jury is still out," she said.

The AIIB, China's first effort to launch a multilateral development organization, has been careful publicly to put distance between itself and Chinese government policy as it looks to placate concerns it will be a tool of Beijing's foreign policy.

AIIB president Jin said "there's been some confusion" about the relationship between AIIB and China's huge "Belt and Road" infrastructure development and foreign policy initiative

news:daily star/19-jun-2017
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