Dhaka, Bangladesh (BBN)

The instruction will be made during an online meeting with top executives of 16 banks and four non-banking financial institutions (NBFIs) to be held on Monday with Bangladesh Bank (BB) Governor Fazle Kabir in the chair.

The central bank is expected to ask the banks and NBFIs to expedite execution of the stimulus package for cottage, micro, small and medium enterprise (CMSME) sector to help revamping the economy from the adversity of the ongoing Covid-19 pandemic.

The banks and NBFIs, which have loan disbursement targets BDT 500 million and above, have been selected to participate at the review meeting.

Earlier on July 02, the BB governor met top bosses of 23 banks, which have loan disbursement targets BDT 3.0 billion and above, set by the central bank earlier, for the same purpose.

The BB has already formed a BDT100 billion revolving refinancing scheme to help banks and NBFIs for the implementation of the package for the CMSME sector.

In April, the central bank issued a guideline for providing working capital facilities amounting to BDT 200 billion in line with the government's announcement for the CMSME sector affected by the coronavirus pandemic.

Prime Minister Sheikh Hasina has so far announced 19 stimulus packages worth BDT 1.03 trillion to offset the impacts of the pandemic on various sectors.

The packages, which are 3.7 per cent of the country's gross domestic product (GDP), are now being executed under the supervision of the central bank and the finance ministry.

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Dhaka, Bangladesh (BBN)

The disbursed amount is just 7.50 per cent of total BDT 200 billion financial support meant for the CMSME to help the sector weather the adverse impact of the Covid-19 pandemic.

Loans amounting to BDT 27.50 billion were sanctioned to more than 8000 small enterprises during the period, according to central bank's statistics.

Senior bankers, however, said that some strict conditions, imposed by the BB on the policy as well as higher operational costs than those of large industrial and service sector loans are mainly responsible for the slower disbursement of such loans.

Under the existing policy, the banks and NBFIs can lend manufacturing and services 50 per cent and 30 per cent respectively while the remaining 20 per cent for trading purposes.

Rejecting the bankers' allegations, a senior central banker said the central bank has included such conditions in line with the government's desires.

"The government wants to create employment opportunities across the country by boosting manufacturing activities with the implementation of the package," the BB official noted.

Let alone cottage and micro, only SMEs are creating employment for 7.8 million people directly and providing livelihood for 31.2 million in Bangladesh.

These also contribute 25 per cent to GDP (gross domestic product), according to Household Income and Expenditure Survey 2016, conducted by the state-run Bangladesh Bureau of Statistics (BBS).

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Dhaka, Bangladesh (BBN)

The support was sought in a meeting with the newly-elected committee of the Bangladesh Leasing and Finance Companies Association (BLFCA) at the Bangladesh Bank (BB) headquarters in Dhaka on Tuesday with BB Governor Fazle Kabir in the chair.

The central bank high-ups assured the BLFCA leaders of examining their proposal on the emergency liquidity support at the meeting.

Talking to the BBN, a BB senior official said the central bank will examine the legal aspects of such a liquidity support.

He also said the central bank advised the BLFCA leaders to take initiatives to help each other in solving their liquidity problems.

The BLFCA, a forum of managing directors (MDs) and chief executive officers (CEOs) of the NBFIs, also proposed a special refinancing scheme involving BDT100 billion on the same grounds.

The proposed scheme envisages five-year term-loans to be extended to them and the loans will be repayable on a semi-annual instalment basis.

The interest rate of the loan should be equivalent to the six-month Treasury bill rate.

On the other hand, the central bank also advised the BLFCA leaders to submit a reconstruction scheme shortly, focusing on how to restore confidence of depositors through ensuring good governance in the sector.

“We’ll try to submit within a week a draft reconstruction programme to the central bank on how to revive the weak NBFIs after discussions with our chairmen,” Mominul Islam, chairman of the BLFCA, told reporters after the meeting.

Mr. Islam, also MD and CEO of IPDC Finance Limited, said the BLFCA sought an emergency liquidity support from the BB against their cash reserve requirement (CRR) and statutory liquidity ratio (SLR) with the central bank.

Under the existing provisions, deposit-recipient NBFIs maintain SLR at the rate of 5.0 per cent and non-deposit receiving NBFIs at 2.5 per cent while both types of NBFIs keep CRR with the central bank at 2.5 per cent.

Some banks are still feeling shy to deal with the NBFIs to avoid possible risks, according to insiders in the banking sector.

Some NBFIs are facing extra pressure on liquidity because of the shyness of the banks about transactions with them, they explained.

In the meeting the NBFIs were advised to move forward to help develop the country’s bond market that might become a source of funds for them, the meeting sources said.

Earlier on Monday, the BLFCA leaders met with Finance Minister AHM Mustafa Kamal in a bid to improve the financial health of the NBFIs.

Currently, 34 NBFIs are running their business across the country.

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Dhaka, Bangladesh (BBN)

The HC has also imposed a ban on the shareholder-directors and top executives, including PK Halder, of the non-banking financial institution (NBFI) leaving the country.

The ILFSL authorities have also been asked not to transfer their movables and immovables like stocks, cash and car to any person or entity until the disposal of the case.

An HC bench of Justice Muhammad Khurshid Alam Sarkar passed the order on Sunday after hearing a writ petition filed by some ILFSL depositors. The order was released on Tuesday.

It also directed the home secretary to seize the passports of the individuals upon whom the travel ban has been imposed and to collect detailed information about them.

The secretary got 15 days’ time to inform the court of relevant developments.

The HC asked the central bank to issue directives to all banks and financial institutions, asking them to freeze all the accounts of the persons under the scanner.

They are ILFSL chairman MA Hashem, director Nurul Alam, independent directors Zahirul Alam, Nasim Anwar, Bashudeb Banerjee, Papia Banarjee, Momtaz Begum, Nowsherul Islam, Anwarul Kabir and Mohammad Nuruzzaman.

The list also included ILFSL managing director Rashedul Haque, PK Halder and his mother Lilaboti Halder, brother Pritish Kumar Halder, wife Susmita Saha and cousins Amitav Adhikari and Avijit Adhikari.

Former managing director of Bank Asia Ltd Erfanuddin Ahmed and one Uzzal Kumar Nondi are also under watch.

The court removed Mr. Hashem from chairmanship, but he shall be on the board of directors of the company.

It asked Mr. Haque to write to the central bank of Bangladesh regarding the appointment of the company’s new chairmanship.

The registrar of joint stock companies and firms has been directed to furnish detailed information on the companies -- P and L International, P and L Agro, P and L Venture, P and L Business Enterprise.

The court also sought details on Hal International, Hal Travels, Hal Trip, Hal Capital, Hal Technology, Anon Chemical, Northern Jute, Sukhanda Limited and Reptile Farma within 15 days.

Barrister ASM Shahriar Kabir, who stood for the writ, said seven petitioners kept BDT 85 million with the ILFSL as fixed deposits.

After maturity, he said, the individuals applied for encashment of the deposits, but the company informed them of their inability to pay. Under the circumstances, the depositors went to the higher court in December 2019 for liquidation of the NBFI in question.

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Dhaka, Bangladesh (BBN)

The BIZZ AWARD, an international awards programme which offers recognition of business excellence in different countries across the globe.

The DMCB has been selected for the international award considering the business leadership, quality service, innovation, management systems, good governance and corporate social responsibility initiative of the co-operating bank.

Chairman of the DMCB Group Captain (Retd) Abu Zafar Chowdhury, GD(P), psc has received the Award at a programme in the USA on behalf of the co-operative bank recently, according to a press statement.

The WORLDCOB was founded on September 9, 2004, in the city of Houston, Texas, in the United States of America, under the name of MPBM, Co.

The primary mission of WORLDCOB is to promote business development worldwide, recognizing and boosting the growth of leading businesses and businesspeople in more than 130 countries across the world.

The DMCB started its journey after the liberation war in 1973 aiming to improve the socio-economic condition of the members of the society through the extension of security-free investments for their small and medium enterprises.

Currently, the DMCB is running operations with 133 branches and three sub-branches located in different parts of Bangladesh both in rural and urban areas.

BBN/SSR/AD

Dhaka, Bangladesh (BBN)

The revised limit for borrowing from the call money market of the NBFIs will come into effect from September 01, 2019, according to a notification issued by the Bangladesh Bank (BB) on Monday.

Talking to the BBN, a BB senior official said it will help the NBFIs to meet their liquidity requirements.

The BB enhanced the limit for borrowing from the call money market in line with a decision, taken at a meeting with the chief executive officers (CEOs) and managing directors (MDs) of non-banks, held at the BB’s headquarters in Dhaka on April 23, according to the central banker.

At that meeting, the NBFIs also were advised to raise capital through issuing bonds, which will also help reduce the dependence on funds from banks.

The BB’s latest move came against the backdrop of liquidity crunch facing the non-banking financial sector, especially after the recent liquidation of People’s Leasing and Financial Services Ltd (PLFSL).

Most of the banks are still reluctant to deal with some NBFIs to avoid the possible risk, according to insiders in the banking sector.

Such NBFIs are facing the extra pressure on liquidity as banks seek to avoid these institutions, they noted.

“We’re dealing with only select NBFIs,” a chief executive officer (CEO) of a leading private commercial bank (PCB) said without elaborating.

Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh (ABB), said: “It’s a good move as the banks will now have the scope for further investments in the NBFIs.”

However, it will depend on the internal parameters of the banks concerned, the senior banker added.

Currently, the central bank has set call money borrowing limit based on the equity instead of net asset earlier for the NBFIs.

The equity will be fixed on the basis of balance-sheet as on December 31, 2018 of the NBFIs concerned, the notice said.

Earlier on February 01, 2017, the BB had introduced such a provision for enhancing the equity of the NBFIs.

Currently, 34 NBFIs are operating in the country.

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Dhaka, Bangladesh (BBN)

The liquidator visited the headquarters of the financial institution on the day and asked the existing management to provide him with affidavit information on the company’s assets and liabilities by July 27 in line with the existing company law.

The High Court gave the Bangladesh Bank (BB) the go-ahead on July 14 to appoint a liquidator for the NBFI.

Md Asaduzzaman Khan, deputy general manager of the BB’s financial institutions department and markets, was appointed as the liquidator for the PLFSL.

Considering its fragile financial state, earlier on June 27 the finance ministry asked the central bank to liquidate the PLFSL and protect the interest of depositors.

Liquidation of the PLFS means closing its operations permanently and the central bank, with the court’s permission, will take steps to settle liabilities by selling off its assets.

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Dhaka, Bangladesh (BBN)

The advice was made at a meeting with chief executive officers (CEOs) and managing directors (MDs) of NBFIs at the Bangladesh Bank (BB) headquarters in Dhaka on Tuesday with BB Governor Fazle Kabir in the chair.

The central bank also warned the NBFIs against returning any cheque unpaid for ensuring clients’ confidence as the lenders sought policy support to improve their liquidity position, meeting sources said.

The regulator’s warning came few days after announcement of liquidation of People's Leasing and Financial Services Limited (PLFSL).

Talking to the BBN, a BB senior official said the central bank has suggested that the NBFIs create an alternative long-term source of fund for lowering dependence on banks gradually.

The BB, the Ministry of Finance (MoF), National Board of Revenue (NBR) and Bangladesh Securities Exchange Commission (BSEC) already started making concerted efforts to develop the bond market, he added.

Besides, a move was already taken to withdraw tax on zero coupon bonds, the central banker noted.

He also said the senior bankers were advised at a bankers’ meeting on July 21 to continue doing transactions with the NBFIs.

At Tuesday’s meeting, the central bank assured the NBFIs of providing all kinds of support for ensuring financial stability in the country.

Talking to reporters, Arif Khan, MD and CEO of IDLC Finance Limited, said they sought liquidity support from the central bank considering the Reserve Bank of India’s scheme in this connection.

“We’ve urged the BB to take initiatives along with MoF, NBR and BSEC to develop the bond market,” said Mominul Islam, MD and CEO of IPDC Finance Limited while replying to a query.

He also said all the NBFIs already invested BDT 650 billion for developing infrastructural facilities and different industries of Bangladesh.

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Dhaka, Bangladesh (BBN)

They will also not be able to get savings or funds from autonomous and semi-autonomous government institutions, according to a notification, issued by Financial Institutions Division of the Ministry of Finance on Monday.

The state-owned enterprises (SoEs) have also been advised to deposit their funds with the banks and selected non-banking financial institutions (NBFIs) at maximum 6.0 per cent.

The government’s latest move comes as a strong measure to compel banks to lower down interest rates on lending to 9.0 per cent, as committed to the government earlier.

The country’s business community has long been complaining of double digit interest rates, what has been seen as one of the key reasons behind lagging private sector investment in Bangladesh.

BBN/SSR/AD

Dhaka, Bangladesh (BBN)

The decision was taken at a meeting with the chief executive officers (CEOs) and managing directors (MDs) of NBFIs at the central bank headquarters in Dhaka on Tuesday with Bangladesh Bank (BB) Governor Fazle Kabir in the chair.

Under the decision, the NBFIs will be empowered to borrow from the call money market maximum 40 per cent instead of the existing level 30 per cent of their equities.

Talking to the BBN, a BB senior said the central bank has decided to relax its policy to help easing liquidity pressure on the NBFIs.

He also said the central bank will issue a directive in this connection shortly.

Earlier on January 29 last calendar year, the central bank set call money borrowing limit based on equity instead of net asset earlier for the NBFIs.

The equity will be fixed on the basis of balance-sheet on the last working day of each calendar year of the NBFI concerned.

The NBFIs have also been advised to raise capital through issuing bonds that will also help reducing dependence on bank’s funds.

The central bank has suggested the NBFIs to create an alternative source of fund through boosting bond market in Bangladesh, according to the central banker.

He also said the central bank, Bangladesh Securities and Exchange Commission (BSEC) and the Ministry of Finance are working to develop the country’s bond market.

When contracted with Md Khalilur Rahman, chairman of Bangladesh Leasing and Finance Companies Association (BLFCA), he said the BB’s latest move will help easing liquidity pressure on the NBFIs to some extent.

He also said the NBFIs are also interested to issue bonds for creating a new window for investment.

The central bank governor will send a letter to the National Revenue Board (NBR) shortly requesting to facilitate boosting bond market through providing policy supports, the meeting sources said.

At meeting, the CEOs were advised to improve their quality of assets and for taking necessary measures to reduce the amount of non-performing loans (NPLs) through expediting their recover drives.

Currently, 34 NBFIs are running their business in Bangladesh.

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