Local-Business
Commerce Minister Tipu urges businesses to utilize advantages of PTA
Minister for Commerce Tipu Munshi urged businesses of Bangladesh and Bhutan to play a pioneering role in expanding trade and commerce between the countries to utilize the advantages of the Preferential Trade and Transit Agreements signed earlier.
Minister Tipu said this while addressing at the inaugural ceremony of three-day ‘The Bhutan Trade & Investment Fair 2023’ at the Shooting Club in Gulshan-1 in Dhaka on Friday, as the chief guest.
He said Bangladesh inked the Preferential Trade Agreement (PTA) with its counterpart Bhutan to promote and expand bilateral trade on December 6 in 2020 and the ‘Traffic-In-Transit Agreement’ on March 22 this year.
The businesspeople from the both countries can enrich their mutual relations along with expanding trade and commerce by utilizing the advantages of the agreements, he said.
He underscored the need for a regional consolidation to accelerate economic activities including expansion of trade, commerce and investment.
Read:Tipu Munshi hopes PTA with Indonesia to be signed 'soon'
The commerce minister said that mutual confidence and belief will have to be built to increase regional consolidation, connectivity and intra-regional trade among the neighbouring countries.
Urging Bhutanese investors for more investment in Bangladesh, Tipu Munshi said an opportunity was given to Bhutan to set up an economic zone in Kurigram along their border.
Moreover, India, Japan and South Korea have already given economic zones for investment, he said, adding that Prime Minister Sheikh Hasina established 100 economic zones and most of them have been operated.
Claiming Bangladesh as the connectivity hub for this region, the minister said rail communication and transit facility along with the use of Saidpur International Airport and two ports can remarkably play a role in economic growth and development of Bhutan.
Heads of resident missions or embassies, chairpersons of businesses, executives of apex business bodies and other important personalities were present during the inaugural ceremony.
Sonam Tenzin, director general at trade department of the Bhutan government, delivered a statement on trade and investment and Kinlay Tshering, director at marketing and cooperatives department of the country, made a brief presentation on priority investment opportunities in agri-food systems in Bhutan.
Read: Bangladesh should go for PTA with Mercosur instead of FTA: Argentine minister
Around 25 companies from Bhutan are participating in the fair being held with the theme “Bridging the Gap Between Investors, Producers, Traders and Consumers for Made in Bhutan & Grown in Bhutan.”
There will be showcasing a wide range of products which are of premium quality due to Bhutan’s organic and natural methods of production.
On the sidelines of the fair, seminars on investment opportunities in Bhutan and agri-food systems in particular will be held from 23 - 25 June 2023 at the fair venue.
Read more: Bangladesh seeks direct shipping connectivity, PTA with Sri Lanka
US-Bangla secures 5th position in ‘Skytrax World Airline Awards 2023’
The US-Bangla Airlines has secured the 5th position among South Asian airlines in the Skytrax World Airline Awards 2023.
Starting its journey on July 17, 2014, the US-Bangla continues to set unique precedents in the aviation industry of Bangladesh. It has achieved so far various milestones of success, according to a media release.
The Skytrax World Airline Star Rating was launched in 1999, and is the prestigious, longest-established and unique mark of quality achievement and a global benchmark of airline excellence, awarded after professional audit analysis and evaluation of airline product and front-line service standards.
Read: US-Bangla Airlines launches initiative to train aircraft maintenance engineers
Airline star ratings are awarded by the Audit Office after a detailed, professional analysis of an airline's quality standards.
A typical rating of values ranges from 500 to 800 based on an analysis of product and service evaluation items. It takes into account the airline's airport services and onboard standards based on all applicable cabins or aircraft.
Skytrax has been awarding airline service and quality worldwide since 1999. No airline has to apply for the Skytrax World Airline Awards, there is no fee, and winning airlines do not have to pay anything to attend the award event.
Read: US-Bangla Airlines sending 11 more pilots to USA on training
The Skytrax World Airline Awards are called the 'Oscars of aviation industry' in various categories.
This achievement of US-Bangla Airlines will help Bangladesh in global aviation further.
The US-Bangla Airlines expressed their gratitude to passengers, media, all members of the organization and above all the well-wishers for this achievement.
Read more: US-Bangla Airlines wins Best Domestic Airlines award
BGMEA training on fashion products using local heritage materials ends
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) hosted a grand closing ceremony of a project titled” Creating High-End Fashion Product Using Local Heritage Material” which began two years ago with an aim to develop high-end western apparel items by utilising centuries-old local heritage materials of the country.
The BGMEA implemented this programme with the support of the Ministry of Commerce and the World Trade Organisation (WTO).
Faruque Hassan, BGMEA president, Dr. Mohammad Ileas Mia, deputy secretary of WTO Cell at the Ministry of Commerce; Dr. Engr. Ayub Nabi Khan, pro-vice chancellor of BGMEA University of Fashion and Technology (BUFT) and Neela Hosna Ara, director of BGMEA, among others, were present during the closing event.
President Faruque Hassan said, “The heritage textile materials we have in our country are priceless. Having centuries-old pride, the BGMEA being the promoter of the apparel industry in Bangladesh, felt the urge to double down on heritage resurrection – through our indigenous textile materials and unique craftsmanship. We aspire to redefine luxury fashion by blending invaluable heritage.”
“If we can develop high-value fashionable garments using our locally produced heritage fabrics and link them to the export market, it will create opportunities for our sector with respect to diversification,” he said.
Read: BGMEA organizes blood donation program to serve humanity
Dr. Mohammad Ileas Mia, deputy secretary of the Ministry of Commerce said that under the WTO-supported programme they worked with food processing industry, agriculture, leather and other sectors.
He said that it was initially challenging to implement something like this project in the RMG sector, as the idea was very new and innovative.
“But, to our utter surprise, at the end of the project, RMG has been the best one fulfilling all the components,” he said.
A total of 160 participants from the industry, especially the fashion designers and innovators and local weavers, received training under this project.
During the training, they prepared some mood boards which represent how heritage and culture can be used to design blended luxury items.
Also, nine teams comprising 20 people from fashion designing backgrounds developed some prototypes of the fusion product for example, bridal wear, evening gown, and party dress using local Jamdani, Muslin and silk- all from Bangladesh.
Read: BGMEA President seeks government policy support to achieve RMG industry’s high growth vision
Faruque Hassan informed that the BGMEA has undertaken two other separate projects to promote Khadi, Muslin and local heritage motifs such as waterlily, Royal Bengal Tiger, rickshaw paints and others.
He invited the local designers to collaborate on these projects, in terms of design development and product sourcing.
The BGMEA president launched a new heritage website during the event. The website will present an in-depth feature on the local heritage products, unique design, craftsmanship, weaving techniques, information about weavers and their personal stories.
Read more: BGMEA organizes free eye care program for its employees
Banks to remain open on June 27, 28 in industrial areas
Bank branches will remain open in industrial areas on Tuesday and Wednesday (June 27 & 28) from 10 am to 2 pm, aiming to facilitate the disbursement of wages, bonus and other allowances to garment workers before Eid-ul-Azha.
The Department of Off-site Supervision of the central bank issued a circular in this regard and sent it to the top executives of all the scheduled banks on Wednesday.
Read: Bank branches to remain closed on Tuesday in election areas
The circular said bank branches in Dhaka metropolitans, Ashulia, Tongi, Gazipur, Savar, Bhaluka and Narayanganj will be kept open for full day on Friday and Saturday to disburse garment workers' wages, bonus and other allowances.
It also instructed to keep open bank branches in Chattogram metropolitan and industrial areas.
The central bank asked banks to arrange adequate security in the bank branches in coordination with local administration.
The holy Eid-ul-Azha will be celebrated across the country on June 29.
Read: Islami bank, Sonali bank branches put under lockdown in Naogaon, Bogura
The government has extended the Eid-ul Azha holidays to four days from June 27 to 30.
The decision came at the Cabinet meeting chaired by Prime Minister Sheikh Hasina at her office on Monday.
Read more: Bank branches at Ctg, Mongla, Benapole land ports to operate 15hrs daily
Nagad dangles ‘Ek Takar’ offer on GP mobile recharge
Nagad, a leading mobile financial service in Bangladesh, has come up with an “Ek Takar” offer on a recharge to any Grameenphone numbers through its app or by dialling USSD *167#, to encourage people to more and more digital transactions.
Customers will get a cashback of BDT 199 on the recharge of BDT 200 to GP prepaid, postpaid, and Skitto numbers through Nagad.
The mobile recharges between 5pm and 8pm will be eligible for the cashback offer. Every hour first 100 rechargers will receive this cashback and the amount will be posted to his or her Nagad number in the next working day.
Read: Nagad became a billion-dollar company in just 3 years, 5 more Bangladeshi unicorns by 2025: Palak
The campaign, which was launched on 19 June, will continue till 25th of this month. A customer can participate in this campaign as many times as they like, says a press release on Wednesday.
Besides, a user making the highest number of BDT 200-mobile recharge a day will get a smartphone or a tab from Nagad. The winners will be notified through SMS if selected for this special prize, and the list of winners will be published on the official Facebook page of Nagad Limited.
Sadat Adnan Ahmed, chief marketing officer of Nagad, said, “Nagad wants as many people as possible in the country to get used to digital transactions and use mobile money for daily needs like mobile recharge. That is why we have launched this campaign in partnership with Grameenphone. We want to make customers’ life easier and more comfortable.”
Read: Establishing Digital Bank paramount to build smart Bangladesh: Nagad MD
No one from Nagad Limited will ask customers for PIN number or OTP for this campaign or for any other reasons. Additionally, Nagad representatives will never call customers to make any transactions or recharge their mobile numbers.
Read: Nagad MD proposes cashless transactions to save billions and build a smart Bangladesh
IBBL gets new chairman
Ahsanul Alam has been elected as the chairman of Board of Directors of Islami Bank Bangladesh Limited (IBBL).
The decision to elect a chairman was taken at the 324th meeting of the Board of Directors of the bank on Monday, said a media release signed by Nazrul Islam, senior vice president of the bank.
Also: Tk 30,000cr loan from Islami Bank: HC asks S Alam Group to explain reports
Ahsanul is the son of Saiful Alam, chairman of S Alam Group, which has controlled IBBL since 2017.
After completing Bachelor's degree from University of Bradford and Master’s in Business Administration (MBA) from Edinburgh Napier University, United Kingdom, he performed duty as chairman of the Board of Directors of Union Bank Limited.
Also read: Scam-hit Islami Bank earns operational profit in 2022, Basic Bank reports loss
Currently he is the chairman of Hasan Abasan (Pvt.) Limited, S Alam Group's flagship real estate company based in Chattogram, and managing director of a number of other companies controlled by the group, including Artsy Holdings Limited, Shining Assets Limited, Affinity Assets Limited, Wesco Limited, Marina Assets Limited and Kraft Holding Company Limited.
Also read: BB disburses Tk 4000 crore as liquidity support to 5 Islami banks
He is also a director of SS Power-I Limited, the country's largest privately-owned thermal power plant located in Banshkhali. Ahsanul is a prominent businessman in the textile, garment and trading sectors.
Also read: Scam-hit Islami Bank earns operational profit in 2022, Basic Bank reports loss
He has already been conferred with the highest taxpayer from Chattogram award twice.
Time-befitting policy needed to utilise potentiality of tannery sector: BTA President
President of Bangladesh Tanners Association (BTA), Md. Shaheen Ahamed, said on Monday that despite immense potentiality of earning foreign exchange from the leather sector the tannery industries have remained backward for lack of time-befitting policy.
The entrepreneurs of the tannery sector faced loss and struggled to survive at Savar Tannery hub where the factories have been shifted without developing necessary infrastructures including an inefficient waste management plant, he said.
Shaheen made the statement in a seminar on "Actions for Sustainable Development of the Leather Industry” jointly organised by the Economic Reporters’ Forum (ERF), BTA, and The Asia Foundation at the ERF Auditorium on Monday.
BTA President Md. Shaheen Ahmed, and Rehena Akter Ruma, head of projects and program of BTA, presented a keynote paper on the overall situation of the tannery sector.
Kazi Faisal Bin Seraj, Country Representative of The Asia Foundation, Ferdaus Ara Begum, CEO of BUILD, Tariqul Islam Khan, Managing Director, Marsons Tannery Ltd, ERF president Refayet Ullah Mirdha and its secretary Abul Kashem, among others, spoke on the occasion.
Read: Treat tannery wastes properly to export leather to EU, US: Speakers
Shaheed said around 40 lakh cows and 45 lakh goats are expected to be sacrificed during the Eid-ul-Azha later this month in the country, and Tk 50,000 to 55,000 crore will be the turnover in the sacrificial animal market.
He said on average the market value of raw hide of a cow of 22 square feet is estimated at Tk 850.
“Other processing will cost Tk 1900. The price of the finished leather is Tk2750. It is possible to make 10 pairs of good quality shoes in the local market or exportable items at an estimated price of Tk50,000,” he said.
Read: Speakers press for compliance in labour rights to develop tannery industry
Shaheen said foreign investors and local entrepreneurs can invest more in the potential leather industries if the government strengthens policy support and ensures global standard waste management plants.
Read more: Speakers press for timely implementation of tannery sector compliance work plan
FBCCI and Faction sign MoU to boost research, innovation
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex trade body of Bangladesh, and Faction, a US-based company, have signed a memorandum of understanding (MoU) to enhance cooperation in establishing the FBCCI Innovation and Research Center.
FBCCI President Md. Jashim Uddin and Faction Co-Founder Max Garza III signed the MoU on behalf of their respective organisations yesterday at the Bengal Commercial Bank head office in the capital.
Read: Rationalize public sector borrowing to encourage private borrowing: DCCI President
Distinguished attendees at the signing ceremony included FBCCI Senior Vice President Mostofa Azad Chowdhury Babu; Vice Presidents M A Momen, Md. Amin Helaly, Md. Habib Ullah Dawn; Acting Secretary General Ambassador Mosud Mannan; and Chief Executive Officer of the FBCCI Innovation and Research Center, Bikarna Kumar Ghosh.
The FBCCI president said, "Bangladesh is moving towards digitization. We must ensure the maximum use of technology to build a developed Bangladesh by 2041, as announced by the Prime Minister. At the same time, country's businessmen must increase capacity to work with the government on the policy level with the problems and possibilities of the private sector.” The collaboration between FBCCI and Faction in the domains of innovation and research will significantly benefit the business landscape of Bangladesh, he added.
Read: Contractionary monetary policy announced to curb inflation
Instead of adopting a "one product, one policy" approach, focus must be on sector-wise policies to encourage product diversification. Innovation and research should be prioritised to foster differentiation among various sectors and clusters, the FBCCI president added.
Md. Jashim Uddin noted that these initiatives with Faction aim to establish linkages between universities, students, and organisations in both countries. By leveraging the expertise and knowledge-sharing between the best universities and institutions in the United States and Bangladesh, both nations will reap substantial benefits.
Read: IDRA appoints observers for Sun-Life, Progressive Life Insurance
Faction Co-founder Max Garza III expressed his enthusiasm for the partnership and acknowledged the immense potential for mutual growth. He stated that the collaboration between Faction and FBCCI would not only benefit Bangladesh but also contribute to the advancement of research and technology worldwide.
Rationalize public sector borrowing to encourage private borrowing: DCCI President
President of Dhaka Chamber of Commerce and Industry (DCCI) Barrister Md. Sameer Sattar said on Sunday that a contractionary Monetary Policy Statements (MPS) will help to revive the financial and private sectors.
The MPS primarily aims to curb inflation by reducing the aggregate demand in the economy, continuing supply-side interventions and a stable and favourable business environment, he said in response to the declared Monetary Policy for the first half of the fiscal year 2023-24 (July-December 2023) by the Bangladesh Bank.
The repo and reverse repo have been adjusted to 6.5% and 4.5% respectively to control inflation by reducing the money supply.
However, the effectiveness of these instruments of controlling inflation is yet to be seen. Because reverse repo was raised earlier but inflation did not decline as expected.
Read: NBR-private sector partnership crucial to achieve high revenue target: DCCI President
MPS showed that the lending rate cap of 9% has been lifted. However, the lending rate will be determined based on a new policy termed as “Short-Term Moving Average Rate (SMART)”.
As a result, the interest rate on bank loans may reach double-digit which may trigger manifold challenges for the survival of businesses in the current volatile geo-economic situation as well as provoking inflation. Lifting the cap of lending rate and introducing the SMART policy may also increase the cost of doing business for CMSMEs.
The public sector credit growth has been set at 43% for July-December of FY24, which was 40% in January-June of FY23. On the other hand, the private sector credit growth has been set at 10.9% for July-December of FY24, which was 11% in January-June of FY23. It is apparent that private sector credit growth has slowed down due to the current geo-economic uncertainty.
Read: DCCI urges industrialists to setup factories in EZs for uninterrupted power supply
DCCI President believes that the target set for public sector credit may limit the scope for private sector borrowing.
“To reduce public sector borrowing, efficiency and good governance must be ensured by adjustment in government spending through austerity measures, rationalization of government expenses and prioritization of development projects,” he said.
He also underscored enhancing tax revenue to reduce the public sector borrowing from the banking sector.
Regarding exchange rate stability, Barrister Sattar agrees that a unified exchange rate will stabilize the market. However, strong monitoring should be in place by the Bangladesh Bank so that it is properly maintained.
Read: Bangladesh economy is growing to offset global challenges: Speakers tell DCCI seminar
Reduction of ERQ encashment limit to 50% and increase of interest of EDF to 4.5% are necessary moves to mitigate the foreign exchange challenges.
To enhance remittance inflow in the country, Bangladesh Bank needs to be very stringent to discourage the informal channel of inward remittance like Hundi.
Barrister Sattar was hoping for solid recommendations from the Bangladesh Bank to deal with Non-Performing Loans (NPLs).
This is because maintaining low NPLs and ensuring good governance in banks and financial institutions are critical for maintaining financial sector stability.
"We hail Bangladesh Bank and the Government of Bangladesh for the formation of a committee to review the existing Bank Company Act 1991 to propose effective resolution to the growing NPLs,” he said.
Since growing NPLs is limiting the private sector credit and in turn, stalling private sector growth, Barrister Sattar feels that stern measures for quick loan recovery should be brought into place.
In connection, he said, Bangladesh Bank can identify and pinpoint the exact reasons, focusing on habitual defaulters, and start engaging with various institutions and stakeholders in order to work towards reducing the current backlog in recovery cases along with quick reforms to introduce ADRs in an effective manner.
Contractionary monetary policy announced to curb inflation
Bangladesh Bank (BB) on Sunday announced a tight monetary policy statement (MPS) for July-December of FY24, lifting the interest rate cap and giving priority to taming inflation and stabilising the exchange rate.
Governor Abdur Rouf Talukder announced the new monetary policy in a press conference at Jahangir Alam Conference Hall, at 3pm. Chief Economist Dr Md Habibur Rahman gave a presentation on the new MPS highlighting the different measures relevant to the macroeconomy.
The governor said, “The BB adopted a contractionary monetary policy to bring down the rate of inflation to a desired level, while remaining supportive to investment and employing generating.”
The central bank has finally removed the lending interest rate cap along with increasing the policy rate (repo rate) by 0.5 percent from July this year from the present 6 percent, in order to control money flow and reduce consumptions, said the BB governor.
Read: Proposed budget for FY 2023-24 fails to address macroeconomic challenges, says CPD
Though it is a contractionary monetary policy, the central bank will ensure money flow for agriculture and rural credit to ensure food production and employment, Rouf said.
These measures are usually adopted to control inflation to bring macroeconomic stability and cut demand.The interest rate cap of 6 percent on deposits and 9 percent on lending(deposit-lending) ended, replacing it with a market-driven smart reference rate, which will be regulated by the average treasury bills rate.
As per the smart rate formula, adopted in the monetary policy, the reference rate will be calculated as the six-month moving average rate of treasury bills with a 3 percent margin for banks and a 5 percent margin for non-bank financial institutions.
Read: RMG exports growth over 10% in first 11 months of FY2022-23
Currently, the rate of the 6-month treasury bills stands at 7.10 percent, so the maximum lending rate for bank loans will be 10 percent plus, and for NBFIs 12 percent plus.
Governor Abdur Rouf said the monetary policy focused on interest rates in order to control the growing inflation, which was created by external effects.
In reply to a query, he said a stable exchange rate and standard foreign exchange reserves are the challenges of this monetary policy.
The MPS has projected private sector credit growth of 11 percent in FY24 from 14 percent in FY23, and public sector credit growth to 30 percent from 37.7 percent.
Read: Bangladesh Bank to announce new monetary policy tomorrow, 9% interest rate cap to be withdrawn
Deputy Governors, executive directors, and different department heads were also present at the press conference.