Bangladesh Bank (BB) has announced a new monetary policy for the remainder of the current fiscal year 2024-25, targeting an inflation rate of 7-8% and setting GDP growth at 4-5%. Governor Dr Ahsan H Mansur presented the new monetary policy during a press conference at Jahangir Alam Conference Hall of the central bank on Monday. The monetary policy focuses on stabilising three key financial indicators: exchange rates, inflation and interest rates. BB to announce contractionary monetary policy on Monday It also aims to provide a slight economic expansion, despite a significant decrease in private sector credit flow, as the global economic slowdown, along with the impact of domestic financial scams, has contributed to sluggish GDP and credit growths in Bangladesh. Bangladesh Bank set to unveil monetary policy as rate speculation swirls However, the policy interest rate remains unchanged, meaning lending rates will not rise further. Despite recommendations from the International Monetary Fund (IMF), the central bank has opted to maintain the policy rate.  

A bank account holder can withdraw cash up to two lakh taka a day for this week given the current security situation, according to a Bangladesh Bank circular. The central bank issued the instruction to the MDs of all commercial banks through SMS on Saturday. It will be effective from Sunday, the first working day of the week. Earlier on Thursday the maximum cash withdrawal limit was set at one lakh taka.    Read more: Bangladesh Bank Governor Abdur Rouf resigns However, businesspeople can draw larger amount of cash for payment of salaries of employees ensuring security on their own, said the circular. The same is applicable for the expatriates. The central bank also asked banks to supervise that a person cannot withdraw money from multiple branches of banks in a day. This directive should be followed especially in the case of key political leaders. On Thursday, the Bangladesh Financial Intelligence Unit (BFIU) under the BB was ordered to report any amount of money withdrawn by a politically important person. The names of political leaders, bank chairmen, businessmen, secretaries, and senior police officers are on this list. Such instruction is given mainly to prevent any person from withdrawing money for criminal activity or escaping from the country. Read more: Bangladesh Bank operates without governor and deputy governors

Bangladesh Bank has formulated a new "Exit Policy" aimed at expediting the recovery of defaulted loans. This policy allows both defaulters and non-defaulting business customers to settle their industrial loans by paying off the balance, with specific conditions attached. According to the central bank's new notification, applicants must deposit at least 10 percent of the loan amount upfront to qualify for this facility. Banks have been instructed to develop their own policies in line with the central bank's guidelines, incorporating similar conditions. Under the policy, there will be no change in the quality of the loan until it is fully repaid, and customers utilizing the exit facility will not be eligible for new loans during this period.  Read more: 'Publish list of loan defaulters in parliament': AK Azad "If a businessperson takes this facility, they must repay the entire loan within a maximum of three years. These customers will not be identified as willful defaulters," the notification stated. The central bank noted that borrowers' businesses or projects might incur losses due to uncontrollable factors, leading to hindered debt collection activities and insufficient cash flow for loan repayment. Consequently, such loans are classified as defaults but not as willful defaults. The notification also emphasized that genuine adverse financial conditions can reduce the chances of debt recovery. Therefore, there is a need for a uniform policy to facilitate debt recovery or adjustment through the exit mechanism, as banks have been following varied procedures. In this context, the new policy aims to maintain liquidity flow and reduce defaulted loans in the banking sector. Regular loan exit facilities may be granted for recovering adversely classified loans with poor recovery prospects or in cases where projects or businesses have closed due to uncontrollable reasons. Read more: Process on to prepare list of loan defaulters, finance minister tells Parliament To apply for the facility, borrowers must pay a minimum of 10 percent of the existing loan balance in one-time cash. Banks are required to settle these applications within 60 working days of receipt.

The central bank of Bangladesh has been forced to issue a statement to clear the air, as it were, of the confusion arising out of its initiative to bring about consolidation in the country's ailing banking sector. As a necessary part of the process aimed at reducing the number of banks in the country, the sector is going to witness a number of mergers between previously disparate entities in the coming days. Top execs of merging bank cannot hold posts at acquiring entity: Bangladesh Bank Five merger proposals have already been received and  are expected to be approved by the end of 2024. They involve around 11 institutions, and if completed as proposed, would reduce the number of banks in Bangladesh by 6 - around 10% of the total. Yet the unprecedented nature of these moves in the banking sector, where there is no previous record of two Bangladeshi banks having merged, has led to a state of panic and confusion among members of the public, to the extent that people are reportedly withdrawing their deposits from certain banks, said sources at some respected banks. Bangladesh Bank auctions gold for the first time in 16 years They said most of the depositors are suffering from the dilemma of whether or not to keep money in the bank. Some are withdrawing their money from the banks due to 'fear'. Bangladesh Bank was forced to address the issue in its statement today, asserting that individual as well as institutional depositors' money will remain fully safe and secure in banks during the merger process. Noticing different news and social media posts, the central bank said accountholders of two merging banks will be able to maintain their respective accounts as before even after the completion of the merger. Bangladesh Bank issues detailed directive on appointment of MD, CEO for NBFIs The merger process will be completed based on the consent of the entrepreneurial directors, current boards, and common shareholders of the banks covered by the merger, said the statement.

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 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

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.

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

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.

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.