Banks
Higher Education Abroad: How Bangladeshis Can Open Student Files
Every year, thousands of Bangladeshi students go abroad for higher studies. Researches show that the number of students going abroad has tripled over the last 15 years. With such a huge volume of students going abroad, there is a natural question: How are the living costs or the tuition fees transferred from Bangladesh? This is where the student file comes in.
What is a Student File?
According to the regulation of Bangladesh Bank, there is no direct channel to send money to a foreign account from an existing local savings/current account. There is also a limit on how much foreign currency can be carried in each foreign trip (US$ 12,000) as well as a limit on credit card payments.
In such a scenario, a student opting to study abroad faces an imminent challenge regarding tuition fee payment or remitting the cost of living. Some European universities require students to maintain a “Block Account” which essentially withholds the entire cost of study and disburses locally to the students as per their need.
Read more: Study in Ireland: Application process, cost for international students
A student file essentially bypasses this regulation legally where the bank remits the payment on behalf of the student. A student file is the only authorized way through which a student can send their tuition fee or remit the living cost abroad.
How to Open a Student File?
The process of opening a student file is pretty straightforward. At first, the student or their legal guardian needs to open a savings account with a relevant bank that offers the student file service. After that, the bank can entertain the request for opening a student account.
Typically, a student account can be opened on the same day as that of the application. The cost of opening a student file and the documents required vary from bank to bank.
Read more: Study in Thailand: Admission process, cost for International Students
But first, here’s what’s needed to open a savings account.
- Passport-size picture of the account holder (to be attested by the introducer)- NID/ Passport copy - Passport-size picture of the nominee - NID/Passport copy of the nominee - Utility bill copy (for address verification).
Typically, the following documents are required for opening a student file in any bank.
- All academic certificates (original and copy)- All academic transcripts (original and copy)- IELTS certificate - Copy of passport - Visa document - Acceptance letter from the university - Tuition and living cost certificate - Detailed information about the financer.
Read more: Higher Study Opportunities in Turkey for International Students: Process, Cost
Which Banks Provide Student File Service?
Several leading banks in Bangladesh provide student file service including some government banks. However, it is important to note that due to the recent dollar crunch and new regulations from Bangladesh Bank, some banks are not opening new student files but are continuing to operate the existing ones. Also, having a savings account in the relevant bank is a key prerequisite for opening a student file.
Banks to remain open on Thursday, Friday to facilitate payment of RMG workers’ salary, bonus
Bangladesh Bank (BB) has directed keeping the scheduled banks open on April 19-21 (Wednesday to Friday) to facilitate payment of garment workers' salary, Eid bonus and allowances.
The central bank has asked the banks to keep open the branches before Eid-ul-Fitr in the industrial areas including Dhaka metropolitan, Ashulia, Tongi, Gazipur, Savar, Bhaluka, and the industry related branches of banks located in Narayanganj and Chittagong ensuring adequate security.
Read more: Gazette published fixing Tk 8,000 as minimum wage for RMG workers
The Department of Off-site Supervision of Bangladesh Bank on Monday issued a circular in this regard
17 banks facing severe liquidity crunch after violating lending limits
Despite Bangladesh Bank’s initiatives to promote good governance in the banking sector, 17 banks have recently violated their loan disbursement limits, and are now embroiled in a severe liquidity crisis.
Having been over-aggressive in providing loans, they are now unable to recover the loans and attract new deposits as desired, according to a latest internal report of the central bank seen by UNB.
The banks should not sanction any new loans until they restore the ratio of their loans to deposits in accordance with limits set by Bangladesh Bank, which regulates the financial sector.
Also Read: Banks' assets will decrease by 40% if international reporting standards followed: FRC Chairman
Conventional banks can provide loans of up to Tk 87 for every Tk 100 in deposits, while Shariah-based banks can give loans of up to Tk 92 against every Tk 100 in deposits, according to the rules of Bangladesh Bank. This is called Advance Deposit Ratio (ADR) or loan-deposit ratio limit in banking terms.
According to the central bank report covering January 1-26 of this year, 17 banks violated the limits set for them on lending order due to lack of discipline. As a result, the concerned banks have been plunged into an extreme liquidity crisis, making it difficult for them to sanction new loans. Some of them are even unable to pay depositors in some cases.
Experts fear that the existing situation has created additional risks for depositors. According to them, irregularities, corruption and ‘ghost loans’ - loans to firms that turn out to be non-existent -are behind the collapse of the banking system’s loan disbursement process.
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“In the banking sector, there have been allegations of giving large amounts of ghost loans in recent times. If this continues, the sector will be at risk,” said Dr ABM Mirza Azizul Islam, economist and adviser on finance to the last caretaker government.
Mirza Azizul told UNB, "Lending beyond the limit against deposits disrupts the credit system."
Besides, the debt collection situation of the banks is not satisfactory now. In such a situation, if the non-performing loans increase further with additional loans, then there is a danger for the bank and its depositors will suffer, he added.
He suggested the intervention of the central bank in these banks immediately.
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According to the Bangladesh Bank report, the ADR of National Bank Ltd stood at 98.23 while that of AB Bank was 96.64 in its conventional stream and 103.45 in its Shariah stream.
State-owned Basic Bank’s ADR stood at 91.17, One Bank’s was 89, and multinational National Bank of Pakistan’s was 87.52. Widespread irregularities and corruption have already been reported in these banks.
Apart from this, Community Bank's ADR was 88.28, NRB Bank’s at 88.05 and IFIC Bank's ADR was 87.48, the report states.
Shariah-based Exim Bank's ADR stood at 100.28, Standard Bank's at 96.28, Premier Bank's Islamic Window 155.09 and Bangladesh Commerce Bank's Islamic Window's ADR was 133.26.
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Apart from this, the ADRs of five other Shariah-based banks ranged between 93.01 to 104.54.
A managing director (MD) of a private bank told UNB that the lending limit has undoubtedly been set by Bangladesh Bank based on adequate research and global best practices. No bank should have to cross the limit.
“These violations are creating risk in the banking sector. Depositors in particular will be at greater risk. Already some banks and non-bank financial institutions are not able to return money to depositors,” he said, maintaining anonymity.
The central bank has also extended the period of ADR adjustment five times to allow the banks to bring their lending practices in line with the limits.
Read More: BB disburses Tk 4000 crore as liquidity support to 5 Islami banks
However, many banks could not coordinate this. In such a situation, Bangladesh Bank even increased the required ADR to improve the overall liquidity situation of the banking sector to maintain the pace in credit flow to the private sector.
The executive director and spokesperson of Bangladesh Bank, Md Mezbaul Haque, told UNB that although some banks may at times find themselves in violation of the ADR set for them, the central bank would under normal circumstances give them time to get themselves back within the limit.
“But if they stay outside the limit for long, then they must be warned and action would be taken accordingly,” Mezbaul said.
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EU slaps sanctions on top Russia officials, banks, trade
The European Union agreed Saturday to impose new sanctions on Russia over its invasion of Ukraine targeting more officials and organizations accused of supporting the war, spreading propaganda or supplying drones, as well as restricting trade on products that could be used by the armed forces.
The EU’s Swedish presidency said the sanctions "are directed at military and political decision-makers, companies supporting or working within the Russian military industry, and commanders in the Wagner Group. Transactions with some of Russia’s largest banks are also prohibited.”
Asset freezes were slapped on three more Russian banks and seven Iranian “entities” — companies, agencies, political parties or other organizations — that manufacture military drones, which the EU suspects have been used by Russia during the war.
The new measures, proposed by the EU’s executive branch three weeks ago, were only adopted after much internal wrangling over their exact make-up, and made public one day after the first anniversary of Russia’s invasion of Ukraine — the intended target date.
The delay, which was minor but symbolically important, is yet more evidence of how difficult it has become for the 27-nation bloc to identify new targets for restrictive measures that are acceptable to all member nations.
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The sanctions are meant to undermine Russia’s economy and drain funds for its war effort, but they are also increasingly inflicting pain on European economies already hit by high inflation and energy prices and still suffering from the effects of the COVID-19 pandemic.
Before this latest round of measures, the EU had already targeted almost 1,400 Russian officials, including President Vladimir Putin, government ministers, lawmakers and oligarchs believed loyal to the Kremlin, but also officers believed responsible for war crimes or targeting civilian infrastructure.
The bloc had also frozen the assets of more than 170 organizations, ranging from political parties and paramilitary groups to banks, private companies and media outlets accused of spreading pro-Kremlin propaganda.
Russia’s energy sector was hit, too — notably oil and coal — and the bloc, through its own measures and political decisions combined with retaliation from Moscow, was rapidly weaned off its dependence on Russian natural gas.
Ukrainian President Volodymyr Zelenskyy welcomed the new package in his nightly address on Saturday.
“Sanctions will continue to be introduced so that nothing remains of the potential of Russian aggression,” he said.
“There are new sanctions steps in the 10th package, powerful ones, against the defense industry and the financial sector of the terrorist state and against the propagandists who drowned Russian society in lies and are trying to spread their lies onto the whole world,” Zelenskyy said.
Ensure depositors’ trust and good governance in banks: Economists say at CPD discussion
Economists, during a discussion today, said the country’s banking sector is under threat due to lack of trust and good governance in banks.
Certain groups are influencing Bangladesh Bank’s regulatory decision-making, which is alarming for the economy, the economists added.
They made the observations at a discussion on ‘Managing the Economic Crisis’, organised by the Centre for Policy Dialogue (CPD), at a Dhaka hotel on Saturday.
Minister Abdul Mannan attended the event as chief guest while Professor Dr Rehman Sobhan presided over the function.
Former governor of Bangladesh Bank Dr Salahuddin Ahmed; economist Dr Ahsan H. Manur; former Chief Economist of World Bank’s Dhaka Office Dr. Zahid Hossain; Professor Abu Ahmed; Barrister Shamim Haider Patwari, Member of Standing Committee on Ministry of Law, Justice and Parliamentary Affairs; Rupali Haque Chowdhury, Managing Director, Berger Paints; Kamrul Islam, secretary of Bangladesh Garment Workers Solidarity, also spoke at the function.
Dr Salehuddin said, “If Bangladesh Bank can handle policy implementation rigorously, including defaulted loan collection, I believe the situation will improve.”
“But the central bank has to take the right policy independently, not look at anyone's face, as the current economic situation demands it,” he added.
Read more: Stick to global lending sources for long-term, low-interest loan, CPD tells govt
Any delayed decision of Bangladesh Bank, and the situation will worsen, he said.
Citing an example, he said the total volume of non-performing loans (NPLs) has increased by more than three times in the last 10 years since 2012.
The NPLs increased over Tk 1.34 lakh crore in the first quarter of the fiscal year 2023 from Tk 42725 crore in the fourth quarter of FY2012, as per a report of the central bank, he said.
He said the economy is standing at a point where it has to have proper reforms or be ready to see its collapse.
Executive Director of Policy Research Institute, Dr Ahsan H. Mansur, said deposits in the Brac Bank grew 27 percent in the last month as people are looking for good banks for the safety of their money. “So, trust and good governance can save a bank.”
He said that rigorous and exemplary punishment for loan scams is needed to gain people’s trust, appointing an observer is not enough.
Dr Zahid said the inflation is not created by external effects, domestic demand and GDP is growing, it does not match with the economy.
CPD Executive Director Dr Fahmida Khatun placed a report titled "Managing the Economic Crisis: CPD's Policy Recommendation" at the event.
"Actual NPLs will be much higher if loans in special mention accounts, loans with court injunctions, and rescheduled loans are included," the report said.
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The CPD mentioned that appointments of bank directors based on political connections, loans sanctioned on political grounds, rescheduling of loans despite poor record of repayment, and writing off loans to reduce the tax burden and clean balance sheets of banks are among the reasons behind the high volume of NPLs in the country.
Besides, the weak internal control and compliance risk management of banks, lack of independence of Bangladesh Bank, dual regulation by the Financial Institutions Division and the central bank, and flexibilities given to defaulters by the central bank are also responsible for the high volume of the NPLs, it said.
‘They’re not intellectuals, rather intellectually disabled’
Bangladesh Prime Minister Sheikh Hasina today said rumours are being spread that there is no money in the banks. “We are not facing problems by the grace of Allah. There is money in every bank,” she said.
She was addressing the 30th National Council of BCL, the student wing of Bangladesh Awami League, at the historic Suhrawardy Udyan in Dhaka.
The PM said a quarter with vested interest wants to mislead people. “We have created ‘Digital Bangladesh’, but they are using it against us,” she said.
Sheikh Hasina harshly criticised a section of intellectuals and dignitaries who have “joined hands with BNP to oust the government.”
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“Many knowledgeable persons and dignitaries have joined hands with BNP – giving us theories and lectures on democracy… Many say that they are not intellectuals, rather intellectually disabled,” she said.
She said those intellectuals have accepting a convict – sentenced on charges of August 21 grenade attack, money laundering and arms smuggling – as their leader.
“My question is, why this attempt to snatch the rights of people by joining hands with such criminals?” – she asked.
“Awami League believes in democracy and the power of people. So, AL handed over power in a peaceful manner,” she said, criticizing Khaleda Zia for holding an election with “no voters” on February 15, 1996.
Read more: Women entrepreneurs can avail special opportunities in economic zones: PM
Khaleda Zia was forced to step down in face of public movement after that lopsided election, she said, adding that BNP leaders should not forget that.
Sheikh Hasina, also AL president, urged students including BCL activists to groom themselves as worthy citizens of Bangladesh so that they can contribute to the continuation of development.
She asked the BCL leaders and activists to create public opinion so that killers and anti-liberation forces including razakar and Al-Badr cannot ever come to power in the country.
The PM asked meritorious students among the BCL to pursue their studies properly, including technical education, and sit for PSC examination as an efficient administration is needed to govern the country.
Read More: Dhaka, Delhi agree on security, border management to strengthen cooperation
“Yes, we need politics. But at the same time, we need efficient administration and technical education,” she said. Sheikh Hasina extended her thanks to BCL for standing by the people during every national crisis, particularly throughout the Covid-19 pandemic and the recent flood in Sylhet region.
Appellate Division stays HC order barring banks, financial institutions to file cheque dishonour case
The Appellate Division on Thursday stayed the High Court order that barred banks and financial institutions from filing any case against any person over cheque dishonor.
A five-member bench of the Appellate Division led by Chief Justice Hasan Foyez Siddiqui passed the order following a petition filed by Brac Bank.
The Appellate Division stayed the HC order for two months.
On November 23, HC ordered that banks and financial institutions will not be allowed to file any case against any person over cheque dishonor.
Read more: Arresting govt employees: Appellate Division clears way for regular appeal against HC verdict
At the same time, the court ordered stopping the proceedings of all check dishonor cases pending in the trial court.
However, a case can be filed in the Money Loan Court only under the Money Loan Act of 2003 for loan recovery, the HC said.
HC also instructed the lower courts to dismiss of the cheque dishonour cases filed by any banks or financial institutions and send those to the Money Loan court.
Brac Bank authorities filed a petition with the Appellate Division seeking stay on the HC order.
On November 28, Chamber Judge of the Appellate Division M Enayetur Rahim sent the petition for hearing in the full bench without staying the HC order.
On June 20 in 2016, Mohammad Ali, a small businessman of Brahmanbaria, was sentenced to six-month imprisonment and fined Tk 2.95 lakh in a cheque dishonour case.
On July 27 in 2015, Brac Bank filed the cheque dishonour case against Mohammad Ali.
Read more: Wrongful imprisonment: Appellate Division orders Brac Bank to compensate Jaha Alam
Ali appealed to the HC against the judgment.
The HC relieved him of the imprisonment and ordered him to pay back 50 percent of the loan within the next 10 days, said his counsel Advocate Abdullah Al Baki.
Banks, financial institutions won’t be allowed to file cheque dishonour case: HC
The High Court on Wednesday ordered that banks and financial institutions will not be allowed to file any case against any person over cheque dishonor.
The HC bench of Justice Md Ashraful Kamal passed the order after turning down the cheque dishonor case of Brac Bank against a small businessman for loan recovery.
At the same time, the court ordered stopping the proceedings of all check dishonor cases pending in the trial court.
Read more: HC revokes bail of militant arrested from Mymensingh
However, a case can be filed in the Money Loan Court only under the Money Loan Act of 2003 for loan recovery, the HC said.
HC also instructed the lower courts to dismiss the cheque dishonour cases filed by any banks or financial institutions and send those to the Money Loan court.
On June 20 in 2016, Mohammad Ali, a small businessman of Brahmanbaria, was sentenced to six-month imprisonment and fined Tk 2.95 lakh in a cheque dishonour case.
Read more: HC issues rule on compensation for daily labourers jailed by mobile court
On July 27 in 2015, Brac Bank filed the cheque dishonour case against Mohammad Ali .
Ali appealed to the HC against the judgment.
The HC relieved him of the imprisonment and ordered him to pay back 50 percent of the loan within the next 10 days, said his counsel Advocate Abdullah Al Baki.
Meanwhile, Brac Bank’s counsel Saifuzzaman Tuhin said they will appeal against the HC order.
Banks have Tk 1.69 lakh crore excess liquidity: Bangladesh Bank
Banks have excess liquidity of Tk 1.69 lakh crore, and rumours on social media are unfounded, Bangladesh Bank spokesperson Md. Abul Kalm Azad said today.
He was addressing a press conference at the central bank to brief reporters on misinformation circulating in social media regarding bank deposits and liquidity.
“Conspiratorial news is being circulated on social media. Investors are being asked to withdraw their bank deposits. It is being said that banks do not have cash or that there’s a iquidity crisis,” he said.
Read: Bangladesh Bank brushes off liquidity crisis 'rumour,' says people's money safe in banks
“But this is not true. The banking system of Bangladesh is very sound. There is no liquidity crisis as the banking system currently has excess liquidity of Tk 1.69 lakh crore,” Azad said at the press conference.
Bangladesh Bank as issued a special warning to managing directors of commercial banks regarding the liquidity situation. If there is any disruption in the liquidity management of a bank, the central bank will take steps to resolve it with utmost importance.
Read: Banks to enjoy 24 holidays in 2023: BB
No bank has shut down in 51 years of Bangladesh's history, he pointed out.
“People's deposits in banks are completely safe. Nothing has happened to cause panic over people’s hard-earned savings in banks,” Azad assured.
Banks’ additional investment term in share market extended for a year
The Ministry of Finance has extended the tenure of banks’ additional investment in the capital market for another year.
The Financial Institutions Division of the ministry extended the deadline till December 31, 2023.
Last Monday, the Deputy Secretary of the Financial Institutions Division of the Ministry of Finance issued the notification. The notification was sent to Bangladesh Bank yesterday.
Read more: Despite central bank's green light, banks shy to invest in capital market
Time has been given till December 31, 2023 to bring down the additional investment of banks including BDBL in the share market (collectively or individually in the case of holding shares of other companies) to the prescribed limit as stated in the Bank Companies Act, 1991.
Besides, in the case of holding the shares of other companies within that extended period, in the case of holding the shares of any company collectively or individually, the over-investing banks cannot increase the respective investment (in the ratio) based on August 31, 2022 in any order.