Private commercial banks (PCBs) have almost doubled their stake in industrial term lending outpacing state-owned banks, a domination the latter enjoyed for years, central bank data show.
“With a very high level of past overdue, their (state-owned banks) actual role in industrial lending has become quite minor,” said a senior Bangladesh Bank (BB) official quoting its report of the 2007-08 financial year.
As per the report, the industrial term credit disbursed by all financial institutions in the country last fiscal stood at Tk 20,150 crore.
Of which, 30 PCBs alone disbursed Tk 13,650 crore, which was Tk 7,540 crore in FY 2006-07. Nine foreign commercial banks gave Tk 2,790 crore and non-bank financial institutions Tk 2,390 crore.
On the contrary, four state-owned commercial banks (SCBs) and five specialised banks disbursed only Tk 1,320 crore or 6.6 percent.
Of the amount, Sonali, Janata, Agrani and Rupali banks disbursed Tk 980 crore, while the specialised Bangladesh Krishi Bank, Rajshahi Krishi Unnyan Bank, Bangladesh Shilpa Bank, Bangladesh Shilpa Rin Sangstha and BASIC Bank disbursed Tk 340 crore.
Such loan disbursement by the banks and financial institutions marked a 62.6 percent rise and recovery 50.2 percent to Tk 13,620 crore.
According to bankers, the SCBs' contribution to industrial credit was above 80 percent until 1990, but the situation started getting reversed since the mid-90s with the more private banks' into business.
Shahjahan Bhuiyan, managing director of United Commercial Bank Limited (UCBL), a first generation private bank, said professionalism, services and above all customers' care have helped PCBs improve their stake significantly in lending.
SM Aminur Rahman, managing director of state-owned bank Janata identified some factors for the SCBs' low volume of credit disbursement, which include the credit ceiling set by the central bank, lack in business confidence and the fall in commodity prices in the international market.
“We could not disburse a significant amount of industrial credit in 2008,” said Syed Abu Naser Bukhtear Ahmed, managing director and chief executive officer of Agrani Bank.
He blamed political instability for this poor project financing by the bank.
Janata Bank MD has added another point: “Businessmen also did not come up with new ventures in 2008.”
SM Aminur Rahman, however, claimed that it is the SCBs that still create new entrepreneurs, not the PCBs.
Bhuiyan opposed Rahman's claim on developing entrepreneurship terming his idea 'an outdated one.'
“Now PCBs are creating entrepreneurs, not the SCBs,” he added.
Source: The Daily Star, December 26, 2008
December 27, 2008
December 24, 2008
Banks on branch expansion spree
Private banks have quickened their branch expansion programme to net the unbanked population across the country, officials said.
Some thirty private commercial banks (PCBs) have opened around 50 branches only during the time from November to December 20, 2008.
According to Bangladesh Bank (BB) data, the central bank has granted licences to 30 PCBs to open around 150 branches by this year.
BB officials meanwhile said the demand for new branches is increasing this year like never before.
“No one disputes the importance of online banking or its increasing coverage, but every bank believes that the way to get there is to first have a more visible presence on the street,” said Muhammad A Rumee Ali, chairman of BRAC Bank and a former deputy governor of BB.
Rumee Ali said: “I don't think it's possible to provide full banking services without physical presence.”
BRAC Bank has got BB approval to open the highest number (20) of new branches in 2008 followed by Dutch-Bangla Bank with 15 branches. No other banks got permission to open more than 10 branches, according to BB data.
As of October 31, 2008, 48 Bangladeshi banks that include four state-owned, 30 PCBs, nine foreign and five specialised banks have a total of 6,789 branches. The number was 6,562 at the end of 2006 and 6,402 in 2005.
“The number of total branches will be around 6,850 at the end of 2008,” a senior BB official said.
Different banks have different explanations for their branch expansion strategy. For some it is about plugging geographical gaps in their network, for some others it is a response to customer demand and the call for more business.
“Business is the prime objective of any branch expansion. A branch needs to generate income, otherwise it will be shut down,” Rumee Ali said.
Helal Ahmed Chowdhury, managing director of Pubali Bank, which would have 371 branches at the end of 2008, said a bank needs to assess business potentials before opening a new branch.
Pubali Bank got permission to open 10 new branches this year, of which seven rural and the remaining three are urban branches.
“Now we consider economic activities and remittances before opening a new branch,” Chowdhury said.
There will be more branches as new areas are becoming urbanised, he added.
Responding to a query, he said a branch requires only one year to make profit.
“An urban branch generates quicker profit than a rural one,” Rumee Ali said.
Source: The Daily Star, December 23, 2008
Some thirty private commercial banks (PCBs) have opened around 50 branches only during the time from November to December 20, 2008.
According to Bangladesh Bank (BB) data, the central bank has granted licences to 30 PCBs to open around 150 branches by this year.
BB officials meanwhile said the demand for new branches is increasing this year like never before.
“No one disputes the importance of online banking or its increasing coverage, but every bank believes that the way to get there is to first have a more visible presence on the street,” said Muhammad A Rumee Ali, chairman of BRAC Bank and a former deputy governor of BB.
Rumee Ali said: “I don't think it's possible to provide full banking services without physical presence.”
BRAC Bank has got BB approval to open the highest number (20) of new branches in 2008 followed by Dutch-Bangla Bank with 15 branches. No other banks got permission to open more than 10 branches, according to BB data.
As of October 31, 2008, 48 Bangladeshi banks that include four state-owned, 30 PCBs, nine foreign and five specialised banks have a total of 6,789 branches. The number was 6,562 at the end of 2006 and 6,402 in 2005.
“The number of total branches will be around 6,850 at the end of 2008,” a senior BB official said.
Different banks have different explanations for their branch expansion strategy. For some it is about plugging geographical gaps in their network, for some others it is a response to customer demand and the call for more business.
“Business is the prime objective of any branch expansion. A branch needs to generate income, otherwise it will be shut down,” Rumee Ali said.
Helal Ahmed Chowdhury, managing director of Pubali Bank, which would have 371 branches at the end of 2008, said a bank needs to assess business potentials before opening a new branch.
Pubali Bank got permission to open 10 new branches this year, of which seven rural and the remaining three are urban branches.
“Now we consider economic activities and remittances before opening a new branch,” Chowdhury said.
There will be more branches as new areas are becoming urbanised, he added.
Responding to a query, he said a branch requires only one year to make profit.
“An urban branch generates quicker profit than a rural one,” Rumee Ali said.
Source: The Daily Star, December 23, 2008
December 07, 2008
Beautiful Bangladesh: Country Brands for Bangladesh
Chief Adviser Fakhruddin Ahmed yesterday launched the first country branding for Bangladesh.
The logo of the branding includes a rising sun above waves of seawater with the slogan "Beautiful Bangladesh" beneath.
Fakhruddin told the function that the country branding would be able to attract more tourists and foreign investments to the county.
Emphasising the need for country branding, the chief adviser said the thousand-year heritage of the country, its people, quality of its goods and services could be taken under a single brand.
The country branding represents not one segment but all the sectors and the population as a whole, Fakhruddin told the function at Sonargaon Hotel.
He also thanked the committee who had prepared and developed the logo and the slogan.
The country branding was launched amid a cultural programme, including a laser show, music and dance.
The image of the country considerably lies on tourism branding, and tourism itself could be developed by branding and promotion, said Mahbub Jamil, the chief adviser's special assistant for civil aviation and tourism.
"A nation's brand is not static. It evolves with the country," he said.
The Daily Star, December 7, 2008
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