Dhaka, Bangladesh (BBN) – The BBN (Bangladesh Business News) has prepared the morning business round up compiling reports, published by different newspapers and news portals in Bangladesh.
Govt hints loss-making state banks may be privatized
The continuous losses of state-run banks prompted the government to consider privatising them all, expect one, said officials yesterday. The issue of sustaining the taxpayer-funded lenders was discussed at a meeting in the presence of Finance Minister AMA Muhith, managing directors of all the seven state banks, governor of Bangladesh Bank, and the finance and banking secretaries. They reflected upon the capital shortfall of five state-run commercial banks and two state-run specialised banks. After the meeting, Muhith told reporters, “Every government-run bank is weak. Every bank has some shortfall whether it is in case of capital or provisioning.”
Govt clears draft credit deal with India’s EXIM Bank
The government has approved a draft credit agreement worth $1.6 billion with India’s EXIM Bank for the construction of a 1,320MW coal-fired power plant at Rampal near the Sunderbans amid widespread protests at home and abroad against the controversial project. The estimated total cost of the project is $2 billion of which the bank will provide 80 per cent while the Bangladesh and the Indian governments will equally share the rest. On Sunday, the power division issued a letter to the Bangladesh-India Friendship Power Company Limited — owner of the power plant — asking it to take necessary steps to sign the credit agreement with the lender, EXIM Bank of India, said officials.
Foreigners now free to invest in BD cos directly
Foreign investors can now invest their funds in local companies through purchasing shares with local currency directly, officials said, as the central bank opened a window. “We’ve taken the measures through clarifying our existing guidelines for foreign-exchange transactions to facilitate the inflow of foreign direct investment (FDI) into Bangladesh,” a senior official of the Bangladesh Bank (BB) told the FE. He also said it will also help in averting exchange-rate-fluctuation risk during the investment period.
Frozen foods sector demands tax cut
Bangladesh frozen foods exporters want tax at source be slashed to 0.3% from the existing 0.6% in the next fiscal year’s budget. They said the tax cut is necessary for the sector to stay competitive in the global market. The exporters said they sought the tax benefits as the production cost went up due to lack of sufficient supply of shrimps. The sector people can now utilise only 15% of the installed capacity as they did not have enough supply of shrimps. The fluctuation of exchange rates and devaluation of euro, ruble and yen against US dollars leave them in tougher competition in the global market, according to the insiders.
Bangladesh’s stocks slip into red, turnover up
Bangladesh’s stocks finished slightly lower on Sunday, after remaining positive in the past three consecutive sessions, as risk-averse investors went on late hours selling spree. Both bourses – the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) –finished marginally lower maid short-term profit booking on sector specific stocks. The market opened in positive note in the morning but the upbeat trend could not sustain as the session progressed, ultimately closed 5.82 points lower amidst improved participation from the investors.
Mercantile Bank to form new unit for mobile financial services
Mercantile Bank will set up a subsidiary company to run its mobile financial services (MFS) in an effort to become a top player in the field. “Our services will be driven by an independent company that will be owned by the bank,” said Adil Raihan, deputy managing director of Mercantile Bank, which now runs MFS under the brand name MYCash. The decision was taken at the bank’s board meeting on Thursday. MFS is different from core banking and so, it is better to run the service by a dedicated company, where professionals and experienced people will operate it, Raihan said.
Banks’ SME loan disbursement target raised by 18pc for 2017
Bangladesh Bank has set the SME loan disbursement target at Tk 1,33,853.59 crore for 2017, which is 17.93 per cent higher than the target set for the previous year. A BB official told New Age on Sunday that banks were now showing an increased interest in disbursing small and medium enterprise loans as the businesspeople were reluctant to set up large-scale industrial units amid a dull business situation in the country. According to the latest BB data, the target of SME loan disbursement by state-owned commercial banks increased to Tk 15,508 crore for 2017 from Tk 13,434 crore for 2016, that by specialised banks to Tk 1,030 crore from Tk 816 crore, that by private commercial banks to Tk 52,887 crore from Tk 44,564 crore, that by Islamic banks to Tk 55,947 crore from Tk 47,215 crore, and that by non-bank financial institutions to Tk 7,172 crore from Tk 5,457 crore.
Corporate tax cut ‘likely in next budget’
Finance Minister AMA Muhith Sunday hinted at the possibility of reducing the corporate tax in the budget for the next fiscal year, and the budget size would be of Tk 4.15 trillion. “I have been trying to reduce the corporate tax in my every budget, but I could not do that. But this year, I will do something in the budget,” he said, in response to a request at a discussion on ‘Path to an Easier Business Environment’, organised by the Institute of Chartered Accountants of Bangladesh (ICAB) in a city hotel. He admitted that the rate of corporate tax was very high in Bangladesh.