central bank
Bangladesh Bank raises dollar exchange rate by Tk 1 to Tk 100
Bangladesh Bank (BB) on Wednesday increased exchange rate of a US dollar by Tk 1 to Tk 100.
Now, those who will buy dollars from the central bank will have to pay Tk100 for each US dollar.
Read more: Exporters to get slightly higher rate of Tk 102 for one US dollar
The central bank increased the dollar price within a month. Earlier, the central bank fixed exchange rate of US dollar at Tk 99 on December 5.
It says that the price of the dollar has been increased in line with the market price.
Central bank spokesperson Masbaul Haque told UNB that the dollar price has been increased to match the market price and it is part of regular initiative.
Read more: Remittance: Bangladesh Bank tells banks to provide Tk 107 per dollar
Bangladesh gets $10.49 billion inward remittances in July-December: Central Bank
Bangladesh received USD $1.70 billion inward remittance in December 2022 through the banking channel, up by 4.23 percent compared to the same month of the previous year.
In November, the expatriates sent home $1.59 billion through the legal channel, according to Bangladesh Bank an updated report released on Sunday.
The central bank has been trying to increase inward remittance flow through banking channels by offering incentives and higher exchange rates of the US dollar.
Read: BB moves to encourage greater flow of remittance to boost forex
A review of the remittance flow showed that the total remittance received in the first 6 months of the fiscal year 2022-23 (July- December) was $ 10.49 billion.
In the same period of the previous financial year, the expatriates sent $10.24 billion in remittances. Accordingly, in the first 6 months of this fiscal year, Bangladesh received $287 million more in remittances.
The BB spokesperson Mesbaul Haque told UNB that in order to increase remittance inflow, the central bank has increased the exchange rate of US dollar.
Read: Bangladesh received $357.76mn remittance in first week of Oct
In addition to a 2.5 percent hassle-free incentive for remittance, several banks also provide additional incentives to attract foreign exchange, he said.
Banks will not cut any charge or fee for sending remittances in the legal channel, he said.
Research by Bangladesh Bank found that more than 40 percent of remittance of expatriate income is sent in the country through hundi or unofficial channel.
Read More: Banks to stop charging any fees for handling remittances
New central bank governor calls on president, seeks cooperation, guidance
The newly appointed Governor of Bangladesh Bank Abdur Rauf Talukder on Tuesday met President Abdul Hamid at Bangabhaban in the evening.
The new governor sought the President's full cooperation and guidance in discharging his duties.
President Hamid said that proper financial management is very important to protect economic stability in the context of the Corona epidemic and Russia-Ukraine war.
He suggested strengthening the activities of Bangladesh Bank in this regard.
The President said it is important to take effective steps to ensure transparency and accountability in the activities of various financial institutions and to expand and develop the domestic financial market.
Read: Rauf sets 3 priorities as new governor of Bangladesh Bank
The President expected that the new Governor will perform professionally to establish Bangladesh Bank as a true regulator of the financial sector.
President's Office Secretary Wahad Barua, Military Secretary Major General SM Salahuddin Islam and Joint Secretary Md. Wahidul Islam Khan were present.
Interest rates on Agri credits, pre-shipment loans further reduced
Bangladesh Bank has reduced the interest rates on both agriculture and rural credits and export-oriented pre-shipment support loans.
As per the new decision, the borrowers of the agriculture and rural credits will pay highest 8 percent interest instead of the existing 9 percent on their loans.
Besides, the borrowers of export-oriented pre-shipment credit will pay highest 5 percent interest instead of the existing 6 percent, said two separate circulars of the central bank.
Also read: Extended lockdown: Banks’ limited operation to continue until April 28
The circular, issued by the Banking Regulations and Policy Department, said the initiative for the agriculture and rural sector was taken as part of the support to bring back the productivity in the sector that was affected by the Covid-19 in 2020 like other sectors of the economy.
Mentioning the agriculture and rural sector as an important one for ensuring food security of the country, the circular said the new interest rate will be effective from April 1 this year.
It added that the highest interest rate for the sector was capped at 10 percent considering it a priority sector and then it was brought down to 9 along with all other interest rates except for credit cards from April 1 in 2020.
Read Interest rates of savings certificates not lowered: Govt
The other circular, issued by the same department, said the interest on credit for the pre-shipment facilities was re-fixed at 5 percent instead of existing 6 percent to ensure soft loan for the sector to attain further growth in export business.
It mentioned that a Tk 5,000 crore re-financing scheme was launched in 2020 to support the export-oriented industries against the effect of the Covid-19 to continue earning of foreign currency and bringing pace in the economy.
The circular said the banks will receive the loan from the central bank at a rate of 2 percent interest while they will disburse it at highest 5 percent interest with effect from April 1.
Also read: Inter-bank cheque settlement, e-fund transfer system resumed at BB
BB signs PAs with 12 banks, 2 FIs to operate Tk1,000 crore TDF
The Bangladesh Bank has signed participation agreements (PAs) with 12 banks and two financial institutions (FIs) to operate its Technology Development Fund (TDF), a refinance scheme of Tk1,000 crore.
Earlier, the fund was launched in line with Export Policy 2018-21 to enhance competitiveness and sustainability of the export-oriented industries, said the central bank on Saturday.
Also read: Central bank to support SMEs build resilience
Bangladesh Bank Deputy Governor Abu Farah Md Nasser was present at the signing ceremony.
The central bank's Executive Director Nurun Nahar and General Manager of the Sustainable Finance (SDF) Department Khondkar Morshed Millat were also present at the event.
Also read: BB eases accessing foreign loans by foreign companies
The general manager of SFD and the chief executives of Agrani Bank, Bank Asia, Dhaka Bank, Modhumoti Bank, NCC Bank, One Bank, NRBC Bank, Standard Bank, Uttara Bank, Trust Bank, United Commercial Bank, Prime Bank, Lankabangla Finance and Lankan Alliance Finance signed the PAs on behalf of their organisations.
Central bank to support SMEs build resilience
Bangladesh Bank will provide a total of Tk 60,000 crore financing to Small and Medium Enterprises (SMEs) by 2023 to ensure economic resilience that will enhance GDP, employment, and inclusive development.
Deputy Governor of the central bank Abu Farah Md Naser said this at the Virtual Dialogue titled “Creating Resilient Recovery for Businesses through Enhancing Investment Opportunities: A Case of Southwest Bangladesh.”
Business Initiative Leading Development (BUILD) with support from the PROKAS program of the British Council organized the dialogue.
As the Chief Guest of the programme, Md Naser also said the Bank has taken the initiative to extend the timeline of the current stimulus package by 2023.
“Some Tk2,000 crore collateral-free loan opportunity for SMEs made available under the credit guarantee scheme should be utilized as much as possible,” he added.
He held the example of City Bank’s Leno financing model that uses digital technology to process loan applications in the shortest possible time and encouraged other banks to follow the example. For banks operating in grassroots level, he encouraged digital technology to ensure that loan evaluation and processing can be managed in the shortest possible time.
Also read: DCCI for SME act, new definition of CMSMEs
Md Naser thanked BUILD for organizing the meeting to address the concerns of cottage, micro, and small enterprises from remote regions.
“The central bank is also facilitating expansion of aggregate demand by nurturing Bank-MFI linkages that has a base of three crore people across the country,” he added.
During the discussion, the Mayor of the Mongla Municipality of the Bagerhat District Sk Abdur Rahman, mentioned that the neediest section of the population: the cottage enterprises, fishermen and the working class have largely missed the benefits of the package.
He suggested that banks should provide not only credit but also technical support to ensure that the credit is properly utilized for repayment.
“Training and capacity building provided by the government at the local level should be scaled up,” he encouraged speedy completion of the Mongla airport to ensure accelerated investment and development in the region.
BUILD Chairperson Abul Kasem Khan noted that the COVID-19 has affected business all around the country, especially the MSMEs. The timely initiatives by the Prime Minister and the government to prepare the country to tackle the health challenges as well as economic effects of the pandemic combined with the all-out action by the Bangladesh Bank and other government agencies were instrumental in protecting the country from the worst consequences.
Also read: CMSMEs can now take term loan under stimulus package
“Aside from supply side interventions, there also need to be demand side initiatives so that the income and consumption of the ordinary people can be boosted to reinject dynamism in the economy.,” he added.
He requested for social safety bond for the small entrepreneurs and some tax changes in the Tax policy and extend tax incentives so that large scale industries can also sustained.
BUILD’s CEO Ferdaus Ara Begum informed in reply to a point raised by BB that BUILD is working closely with the Ministry of Industries to get the definition of cottage, micro, small and medium enterprises to ensure that smaller and vulnerable businesses receive more policy priority and support.
“As BUILD continues to engage in research and facilitation of the businesses in Mongla and Bagerhat the support from the central bank will be essential,” she also added.
In the keynote presentation, Md. Tahmid Zami, Additional Research Director of BUILD noted that in the local BSCIC Industrial Estate of Mongla, around 50% businesses are out of operation and only 20% workers are retained in many factories.
“The coconut oil mills, rice mills, small traders, and many other sectors have faced tremendous shock due to the COVID-19. Finance should be distributed to the cottage, micro and small enterprises without stringent requirements for rescuing the endangered businesses,´ Tahmid added.
He referred the e-survey in the form of a KPI conducted by BUILD during February-March, 2021 covering chamber representatives, local Government and BSCIC, Bank officials and Businesses.
Also read: SMEs are lifeline to country's economy: Tipu Munshi
Husne Ara Shikha, General Manager of SME and Special Credits Department informed about 6% of total money disbursed for SME have gone of Southwest region, in case of women, in number it is about 5.43% of the total and noted that there are both positive signs and mixed results in distributing credit to SMEs in the region.
Syed Abdul Momen, Head of SMEs of BRAC Bank mentioned that the definition of SMEs should be modified to target the cottage, micro and smaller enterprises more effectively.
The decentralized credit management of BRAC and the agent banking sets a good example for the banking industry of the country for meeting the needs of the businesses in the rural level.
S Humayun Kabir, Vice President of Bangladesh Frozen Foods Exporters Association requested for a proper insurance policy for the shrimp industry as well as higher incentives such as cash subsidy to ensure better development of the high-potential sector. Cold storage facility for the shrimp and fish sectors should be boosted.
He further suggested to consider the sector as agro-based sector while extending support facilities. In case of getting finance Banks and FI request for higher collateral considering uncertainty of the production.
Md. Mofidul Islam Tutul, Director of Khulna Chamber of Commerce and Industry stressed on the prospects of the jute sector.
BB eases accessing foreign loans by foreign companies
Bangladesh Bank has brought further flexibility in accessing foreign loans by foreign-owned companies operating in Bangladesh.
BUILD lauds extension of relaxed forex rules across sectors
Business Initiative Leading Development (BUILD), a platform for public-private dialogue, on Thursday lauded the central bank's decision to extend relaxed foreign exchange regulation facilities for exporters across sectors till the end of this fiscal.
Central bank lowers provisioning against unclassified loans to boost consumer spending
Banks and other financial lenders will now have to maintain 2 percent general provision against unsecured loans instead of the earlier 5 percent. Unclassified loans are those that the lender considers to be at high risk of default.
A Bangladesh Bank circular, issued on Tuesday, said that with a view to meeting emergent demand of consumer loans and to encourage the participation of lenders in this segment, it has now been decided that the banks will have to maintain 2 perce
BB further relaxes loan repayments until Dec 31
Bangladesh Bank has further extended its relaxed conditions for loan repayment till December 31 taking into consideration the impact of coronavirus on the country’s trade and business.
According to a circular issued by the central bank on Monday, classification of loan will not be changed between January 1 and December 31 this year even if anyone failed to pay back the loan as per the schedule.
Earlier, the facilities were applicable until June 30 and then extended until September 30 through a similar circular issued on June 15 this year.
The new circular, issued by its Banking Regulation and Policy Department (BRPD), said businesses in Bangladesh were affected like other parts in the globe due to the coronavirus outbreak.
It is assumed that many loan recipients may not be able to repay their loans as per the schedule, it said.
In such a situation, there is an apprehension that the trade and businesses might be affected and the overall employment might be impeded.
Considering the situation, this was decided that the classification of any loan will remain unchanged until December 31 and will be treated as it was from January 1, mentioned the BB circular.
But if the classification of the loan is improved, it could be upgraded by this time, it added.
The directive was issued in a circular sent to the chief executives of all scheduled banks.
According to the new guidelines, the borrower will not be considered as a defaulter even if he does not pay any installment from January 1 to December 31 this year.
No penalty, interest or additional fee (whatever the name may be) may be levied on the loan / investment during this period.
Rational rebate facility can be provided by the bank to encourage the customer to repay the term loan (including short term agricultural loan and micro loan) in installments voluntarily and to repay the loan, said the BB circular.
Also read: Bangladesh Bank suspends interest on bank loans for April-May period