BB signs deals to provide Tk 100cr for small entrepreneurs

Posted by BankInfo on Mon, Aug 11 2014 11:35 am

Bangladesh Bank yesterday signed Tk 100 crore re-financing deals with 32 banks and financial institutions to provide soft interest loans to small entrepreneurs, reports UNB.
Under the deals, 23 banks and nine financial institutions will get funds from the central bank at five percent interest for disbursement among the categorised entrepreneurs at 10 per cent interest. Each entrepreneur can take a loan up to Tk 10 lakh without collateral and up to Tk 25 lakh with collateral as running capital and term loan.
Speaking at the signing ceremony Bangladesh Bank Governor Atiur Rahman said the deals aimed at job creation through new entrepreneurs who are entering the job market.
“Our main target is to create a new group of entrepreneurs with new dimension,” he said referring to Dhaka Chamber of Commerce and Industry’s initiative under which about 1000 new entrepreneurs were training to start businesses.
“I think the new entrepreneurs would run business mostly based on new technology,” said Rahman. He urged banks and financial institutions to provide soft term loans to them. He said Bangladesh is the third largest country in software export. He also urged the bankers to focus on agricultural sector’s entrepreneurs.
Atiur mentioned that Bangladesh Bank has launched a Tk 600-crore re-financing scheme for small entrepreneurs from which a women entrepreneur can take loan upto Tk 25 lakh on easy terms.

News:The Independent/11-Aug-2014

Deposit rate falls below 8% after 27 months

Posted by BankInfo on Mon, Aug 11 2014 11:22 am

The is due to the banks reluctance to collect funds at high interest rate amid sluggish investment climate, bankers said 

Interest rates on bank deposits have gone down to as low as 7% in June this year, breaking a steady trend of over 8% in the last 27 months.

The is due to the banks reluctance to collect funds at high interest rate amid sluggish investment climate, bankers said. 

The deposit rate stood 7.79% in June from 8.01% in the previous months. It ranged between 8.68% and 8.01% for more than last two years. Earlier, the rate came below 8% in February 2012 and stood at 7.95%. The deposit growth dropped to 15.89% in June from 16.26% in December last year, as a result.

Banks have reduced the interest rate on deposit as they are unable to invest the money due to lack of credit demand, said a senior executive of a private bank.

“We have also reduced the lending rate to encourage entrepreneurs for becoming more active in their business expansion as the economy started returning to normalcy after a prolonged political unrest,'' Pubali Bank Managing Director Helal Ahmed Chowdhury told the Dhaka Tribune.

He said all the scheduled banks would cut their lending rates gradually as they are under pressure to reduce it because of the robust foreign loan inflow.

The interest rate on advance loans reduced to 13.1% in June from 13.23% in the previous month.

The total deposits of the banking sector increased by 5.15% to Tk610,530 crore in October-December period of 2013 as compared to 50.62% growth to Tk532,633 crore in the same period of previous year, according to latest Bangladesh Bank figures.

The banks failed to utilise the deposits due to lack of investment opportunities before the general election on January 5, said a senior executive of another private bank.

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

Consequently, the depositors are now searching for new opportunities to get lucrative return from their idle money, he said.

“The depositors have turned their eyes on the share market as the retail investors to some extent got back their confidence after the demutualisation of the stock exchanges,'' he said.

The interest rate spread went up abnormally in the recent months due to deeper cut in deposit rate than the lending rate. 

As a result, despite warning of the central bank to keep the interest rate spread at the desired level of 5%, the spread between the lending and deposit rates further rose to 5.31% in June, which is highest in 17 months. It was 5.22% in May. At the bankers meeting held last month, the central bank warned the banks of bringing down the spread at a desired level.

The spread was 5.33% in December 2012 when the lending rate was 13.8% and deposit rate 8.47%. The spread ranges between 4.95% and 5.15% in last one and half years.

The central bank though tried to keep the spread at 5%, it went up from February after coming down at 4.99% in January.

The gap rose again as banks were forced to cut their deposit rate due to low investment demand and easing money market conditions. They slashed the lending rate slightly as compared to the deposit rate cut that caused an imbalance between the rates and pushed the spread up, said a senior executive of Bangladesh Bank. 

News:Dhaka Tribune/11-Aug-2014


BB signs refinance scheme with 32 banks, FIs for new entrepreneurs

Posted by BankInfo on Mon, Aug 11 2014 11:10 am

The refinance scheme will be implemented through the country’s banks and financial institutions

Bangladesh Bank Governor Atiur Rahman urged the banks to divert their investment focus to the creation of new entrepreneurs providing small loans to them.

He also said the SMEs have demonstrated more commitment in repayment of loans than the big entrepreneurs.

“Banks are to face crisis sometimes by providing loan to big entrepreneurs but SMEs (small and medium entrepreneurs) would be more committed in this case,” he said while addressing a signing ceremony of “New Entrepreneurs Refinance Scheme” at Bangladesh Bank headquarters yesterday.

The central bank signed a participatory contract with 32 commercial banks and financial institutions under its refinance fund of Tk100 crore for the development of new entrepreneurs.

The fund will be used for providing highest loan of Tk10 lakh without collateral and Tk25 lakh with collateral at 10% interest rate to a new entrepreneur aged 18 to 45 years who did not take any loan earlier.

The refinance scheme will be implemented through the country’s banks and financial institutions.

Earlier, Dhaka Chamber of Commerce and Industry had taken an initiative to promote 2,000 new entrepreneurs.

In order to expose these entrepreneurs to the local and global arena, DCCI had taken a mega expo titled “DCCI Entrepreneurship and Innovation Expo” held in November last year.

The refinance scheme is the outcome of that initiative for creating new entrepreneurs taken by DCCI, said governor.

“We have many projects for financing the SME sector but this refinance project is most important as the fund will go to the new generation of our country,” he said.

He expressed hope that the fund of Tk100 crore would be increased following the approval of central bank board if the outcome of using the fund is good.

“There is no funding problem, but important is how many entrepreneurs we are creating.”

Dr Atiur Rahman called the banks to keep their commitment in disbursing the fund properly.

Governor directed Bangladesh Bank officials to ensure the timely disbursement of the fund.

DCCI President Shahjahan Khan and Former President Sabur Khan were also present, among others, at the function.

Shahjahan Khan said: “Despite the contract is being signed, the main objectives are not achieved.”

He urged the banks to come forward to achieve the goal of creating new entrepreneurs using the fund properly.

Masum Patwary, General Manager of SME and Special Programmes Department of Bangladesh Bank, alleged the banks showed interest to sign such contracts but after signing they didn’t participate actively in the SME loan disbursement. 

Ali Reza Iftekhar, President of Association of Bankers Bangladesh (ABB),  denied the allegation and said the banks always achieved successfully the targets set by Bangladesh Bank in all projects including in agriculture and SME sectors.

Selim R.F Hussain, Managing Director of IDLC Finance, assured on behalf of all banks and financial institutions that they would be committed about the proper use of the fund.

Helal Ahmed Chowdhury, Managing Director of Pubali Bank, expected the size of the fund would be increased in future if properly used. The fund will have an important role on employment generation, he hoped.

News:Dhaka Tribune/11-Aug-2014


Dhaka Bank holds business review meeting

Posted by BankInfo on Mon, Aug 11 2014 10:58 am

Abdul Hai Sarker, Chairman of Dhaka Bank Limited, is seen at the business review meeting of the bank at The Peninsula Chittagong in the port city on Saturday.

 A business review meeting of Dhaka Bank Limited was held at The Peninsula Chittagong in the port city on Saturday.

Abdul Hai Sarker, Chairman of the bank attended the meeting, said a press release.

News:Daily Sun/11-Aug-2014

Union Bank holds half-yearly conference

Posted by BankInfo on Mon, Aug 11 2014 10:53 am

Md. Abdul Hamid Miah, Managing Director of Union Bank Ltd, speaks at the Half-Yearly Branch Managers’ Conference of the bank held at Hotel Lake Shore in Dhaka on Saturday.

 The Half-Yearly Branch Managers’ Conference of Union Bank Ltd was held at Hotel Lake Shore in Dhaka on Saturday.

Md. Abdul Hamid Miah, Managing Director of the bank attended the conference as chief guest, said a press release.

Syed Abdullah Mohammed Saleh, DMD, S.A.M Salimullah, Senior Executive Vice President, A.B.M Mokammel Haque Chowdhury, Executive Vice President, Abdul Hannan Khan, Company Secretary, branch managers and high officials of the bank were present.

News:Daily Sun/11-Aug-2014
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