bangladesh bank
Banks won’t charge extra fees for late payment of credit cards bills, loan installments: Bangladesh Bank
Considering the current situation, Bangladesh Bank has instructed all banks and financial institutions to not charge any extra fees for late payment of credit card bills, and loan installments.
The central bank issued a directive to banks and financial institutions in two separate notifications in this regard on Wednesday.
Those who had time to pay their loan installments, credit card bills, and savings deposit installments during the curfew and public holidays can make the payments till July 31. Bangladesh Bank has said that banks and financial institutions will not collect any additional interest, penalties or late fees for installments/card bills payable between July 18 and 25. No savings scheme can be canceled due to failure to pay installment during this time.
According to the central bank notification, many borrowers and credit card users have not been able to pay their dues to the banks on time due to the current situation.
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Besides, many depositors could not deposit installments of various savings schemes including Deposit Pension Scheme (DPS) on time. Under the circumstances, the new guidelines will be effective from July 18 to 25 in respect to dues of loans, credit card bills, and installments of various savings schemes including DPS.
The Bangladesh Bank directive stated that if the loan and credit card dues are paid by July 31, any interest or profit and penalty interest, additional interest, excess profit, late fee on the outstanding amount will be deducted. If installments of savings schemes are paid by July 31, no late fee or penalty can be collected.
Apart from this, interest or profit and penalty interest or late fee on any loan or credit card and any kind of late fee or penalty on various savings schemes that has already been collected has to be refunded or adjusted.
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Bangladesh Bank introduces “Exit Policy” for expediting default loan recovery
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.
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"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.
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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.
Bangladesh received $23.91bn remittance in FY2023-24, 2nd highest in fiscal history: Bangladesh Bank
Bangladesh has received US$ 23.915 billion in remittances for the fiscal year 2023-24, ending on June 30, marking the second highest remittance inflow in a fiscal year to date.
Md Mezbaul Haque, Executive Director and Spokesperson of Bangladesh Bank, told UNB that expatriate Bangladeshis sent $2.542 billion in remittances in June 2024. This brought the total remittance amount from July 1 to June 30 of FY 2023-24 to $23.915 billion, compared to $21.610 billion in the previous fiscal year.
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Remittance inflow to Bangladesh rose 15.59 percent year-on-year to $2.542 billion in June, as migrant workers sent more money home for Eid-ul-Azha. In May 2024, expatriate workers sent $2.253 billion in remittances.
Sector insiders attribute this growth to the higher exchange rate of the dollar and the festive occasion of Eid-ul-Azha, which prompted expatriates to send additional remittances to their families.
Economist Dr. Ahsan H. Mansur commented that Bangladesh can increase remittances through legal channels by enhancing financial and non-financial benefits for the remitters. He noted that many remitters prefer the illegal Hundi system due to its higher exchange rate, diverting legal remittances to illegal channels.
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Photos of ex-NBR official Matiur with Bangladesh Bank governor go viral on social media
Photos of former National Board of Revenue (NBR) official Matiur Rahman, recently at the center of corruption allegations, with Bangladesh Bank Governor Abdur Rouf Talukder have gone viral on social media, sparking widespread discussion.
One viral photo shows the two men in Ihram during the Hajj pilgrimage, while another captures Matiur greeting Rouf with a bouquet of flowers at the governor's office in the central bank.
Read more: Matiur removed from NBR post after goat purchase scandal
Matiur Rahman was appointed as a director of Sonali Bank on February 1, 2022. At that time, Abdur Rouf Talukder was serving as the finance secretary.
Some media outlets have questioned the Bangladesh Bank governor through the central bank’s spokesperson, Mezbaul Haque. The inquiry focused on the governor’s comments regarding Matiur's appointment as a director of Sonali Bank during his tenure as finance secretary and the allegations of anonymous stock market investments through Matiur.
Responding to the media, Bangladesh Bank spokesperson Mezbaul Haque conveyed the governor's statement, asserting that the allegations are not true.
Read more: Ex-NBR member Matiur removed from Sonali Bank board
Bangladesh sees highest LC openings in almost 2 years in May: Here’s why
Bangladesh witnessed its highest Letter of Credit (LC) openings in 23 months, amounting to US $6.83 billion in May 2024, amid an ongoing foreign exchange crisis, according to Bangladesh Bank.
Previously, the highest LC opening was recorded in June 2022, reaching $7.02 billion. Since then, fluctuating dollar exchange rates and the domestic currency, the taka, have generally led to a decreasing trend in LC openings.
In April 2024, LCs worth $5.68 billion were opened. The figures for May show a significant increase of more than 20 percent compared to April. Compared to the same period in 2023, LC openings in May rose by 19.5 percent.
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Economists and market analysts attribute this trend to several factors, including tax benefits at the end of FY 2023-24 and the anticipation of the withdrawal of tax exemptions on various products in the FY 2024-25 budget.
Dr. Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), explained to UNB that the increase in LC openings in May was influenced by a more lenient import policy on some items towards the fiscal year's end.
Additionally, traders rushed to open LCs fearing further increases in dollar exchange rates after the central bank raised the rate by Tk 7 in a single move on May 8, 2024, he added.
Trade analyst Dr. M. Mashrur Reaz noted that the increase in LC openings after a long period was also due to an improved dollar supply, thanks to remittances and foreign loan disbursements.
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Despite ongoing macroeconomic instability in Bangladesh, trade volume and business transactions have increased in recent months. Government policy support on capital imports also impacted LC openings, Dr. Reaz observed.
Furthermore, the announcement of new taxes on capital machinery imports in the FY 2024-25 contributed to the spike in LC openings. Capital machinery imports were tax-free until now, Dr. Reaz pointed out.
Buying US Dollar Investment Bonds: A Comprehensive Guide for NRBs
When it comes to investments, bonds offer some of the best-secured opportunities out there. As a part of investment facilities through bonds for non-resident Bangladeshis (NRBs), Bangladesh Bank offers US Dollar investment bonds (USDIB). Let's take a detailed look at who this is for, how to apply, and what are the benefits of the bond.
What is a US Dollar Investment Bond?
The US Dollar Investment Bond was first introduced in 2002 as a form of investment opportunity for the NRBs. The key goal was to maintain economic stability and increase foreign reserves by attracting dollar investments. It also provided a secure pathway for the NRBs to invest and gain from their foreign earnings.
The rules for the USDIB were later updated in 2012 where the invested principal and the interest can be repatriated in dollar or taka as per the choice of the investor.
Read more: How to Invest in Bonds: A Comprehensive Guide
Who is Eligible for USDIB?
The government of Bangladesh outlined the eligibility criteria for USDIB investment as follows:
Any NRB living and working abroad earning in foreign currency.Foreign nationals of Bangladeshi origin living abroad and earning in foreign currency. Government and semi-government employees working abroad and earning in foreign currency. This includes those working in Bangladeshi missions or international organizations.
How to Buy USDIB?
The process of buying USDIB starts with opening a foreign currency account in any designated bank that operates USDIB under Bangladesh Bank. Note that the F.C. account is different from the Non-Resident Investor’s Taka Account (NITA) as the investment currency can only be US dollars in this case.
Step 1: Opening a Foreign Currency Account
Almost all the leading commercial banks (both national and private) offer USDIB under their NRB banking services. To open a foreign currency account, an NRB would require the following documents.
- Prescribed Account Opening Form - Two passport-size photographs of each of the account holder and the nominee - Authorized specimen signature card (attested by the Bangladesh Embassy in the residing country) - Proof of employment - Copy of passport (attested by the Bangladesh Embassy in the residing country)
An NRB can easily open the F.C. account in any foreign branch of the available banks or use the mail-in service to open the account in Bangladesh.
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Step 2: Document Required for USDIB
The process of applying for USDIB differs from bank to bank. Generally, the following documents are required.
- Bangladesh Bank application form for USDIB (https://fid.portal.gov.bd/sites/default/files/files/fid.portal.gov.bd/forms/4085d5c1_fd59_4be6_921d_c2c491fce6dc/investment.pdf)- Application request to invest in USDIB in the respective bank - Personal declaration form - FATCA form (for NRBs residing in the USA)
Step 3: Applying for USDIB
Once you apply for USDIB, you will need to show equivalent funds in your foreign currency account associated with the bank. The money can be deposited in the F.C. account in one of the following ways:
- Cash foreign currency deposited at an NRB branch of the bank- Traveler cheques - Regular cheques or drafts - Money order receipt - Electronic fund transfer - Once the bank completes the due diligence, it will issue bond scrips against the desired amount of bonds to be purchased.
Read more: How to Buy Bangladesh Government Treasury Bond: Everything You Need to Know
IMF advises Bangladesh Bank to disclose full report on banks’ financial health
The visiting International Monetary Fund (IMF) delegation has advised Bangladesh Bank to disclose detailed and complete information regarding bad and risky loans fin the public interest.
Meeting sources said that the visiting IMF delegation gave this suggestion in the meeting held with the BB officials on Sunday (April 28).
In the meeting, the IMF asked to make the financial health of the banks and the inspection report open to the customers. At the same time, it urged to increase the number of inspections to prevent irregularities-corruption and loan scams.
Officials concerned in the meeting said that bad loans or risky assets are increasing in banks due to various irregularities including big loan scams. Several banks have weakened which also acknowledged by the BB Governor.
Therefore, the IMF believes that the deposits of those banks which are in trouble are also at risk. In such a situation, the global lender suggested that the banks should disclose the full report of risky assets to the customers.
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According to the IMF Officials, “If these reports are published, the customers will be able to make informed decisions about keeping their deposits.”
In the meeting, the IMF sought to know whether the central bank's inspection of banks' financial health is continuing or not. Clarification has also been sought as to whether inspection reports are disclosed to customers or not.
In addition, the IMF delegation suggested increasing the quality and number of inspections to prevent irregularities, corruption and loan scams, sources said.
When asked about the meeting with the BB, the executive director and spokesperson of the BB Mesbaul Haque said that the meetings with the IMF are ongoing. This meeting will be held step by step till May 8. He did not agree to make any comment other than that and said the details will be given in future.
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Nothing to worry about deposits in merged banks: Bangladesh Bank
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.
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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.
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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.
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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.
Sikder Group responds to allegations following ACC case against directors
Sikder Group, a prominent business conglomerate in Bangladesh, has issued a statement in response to various media reports regarding a case filed by the Anti-Corruption Commission (ACC) against its directors, Rick Haque Sikder and Ron Haque Sikder. The group alleges that certain vested interest groups are conspiring to tarnish its reputation by disseminating misleading information.
The statement highlights that the accusations, particularly concerning alleged money laundering involving National Bank's credit card, are unfounded. It clarifies that the Sikder Group directors lawfully utilized $9.83 million abroad through credit cards, subsequently settling the total amount, including $2.04 million in interest and charges, from their foreign earnings in accordance with Bangladesh Bank regulations. This matter was resolved two years prior, and the recent resurgence of these allegations is deemed to be maliciously motivated, the statement says.
Additionally, Sikder Group explains that the credit cards in question were linked to Foreign Currency (DC) accounts, which are exempt from the standard $12,000 travel quota limit.
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The conglomerate emphasizes its longstanding commitment to ethical business practices both domestically and internationally. Sikder Group, founded by Freedom Fighter Zainul Haque Sikder, has made significant contributions to Bangladesh's development sectors, including healthcare, education, and infrastructure, the statement says.
The group suggests that the malicious targeting has intensified following the death of its founder, Zainul Haque Sikder. It asserts that under the leadership of Rick Haque Sikder and Ron Haque Sikder, it has continued to achieve remarkable progress, despite ongoing attempts by detractors to hinder its growth. The statement condemns these actions, especially at a time when Sikder Group is endeavoring to secure foreign investment for key national projects, and calls on the public to disregard the baseless accusations circulated by these conspirators.
Bangladesh Bank closing around 200 MFS accounts a day in Hundi crackdown: Governor Abdur Rouf
Bangladesh Bank (BB) Governor Abdur Rouf Talukder on Monday (March 11, 2024) said that around 200 mobile financial services (MFS) accounts are closing each day due to their Hundi connection.
The central bank is checking rigorously trade transactions through LC and mobile financial services to prevent money laundering activities by any means, he said.
The governor said this in the opening ceremony of the money laundering prevention workshop held at the head office of the Criminal Investigation (CID), Bangladesh Police in the capital on Monday.
Rauf highlighted the steps taken to prevent money laundering since his joining the Central Bank as Governor.
He said, “When I joined Bangladesh Bank in 2022, there was a severe crisis of foreign exchange in the country. At that time took the first step to stop over-invoicing.”
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Again, money laundering occurs despite keeping the profit of export products abroad. Initiatives are also taken to prevent that, he mentioned.
The governor expressed the strong stand of the central bank on banning hundi.
He said that expatriates may send Tk500 to their family in the country, then he gives it to someone he knows abroad and asks him to give it to his family in the country.
That money remains abroad. In contrast, a representative in Bangladesh paid the amount. As earlier payment was made through home delivery, now it is done through MFS.
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Around 200 such accounts are being closed every day. Later some accounts were opened again with guarantees, permanent action was taken against some of them, he said.
Highlighting the context of the campaign against money changers, the governor said that USD $45 to $50 million transactions are done through money changers in the country every year. About $270 billion in transitions are made in the banking channel.
But despite a small fraction of transactions, when money changers hiked the dollar rate, many expatriates tried to hold on to remittances. This is how the dollar crisis was created, Rouf pointed out.
“That is why the campaign against money changers is ongoing. Also, avoid dealing in cryptocurrencies. It is completely illegal in our country,” said the BB Governor.
CID Chief and Additional IGP Muhammad Ali Mia in the chair, head of Bangladesh Financial Intelligence Unit (BFIU) Md. Masud Biswas also spoke at the function.
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