Bangladesh Bank yesterday increased the rate for daily cash reserve requirement (CRR) against deposits by 50 basis points to help banks manage liquidity better than before.
In line with the past rules, all banks had maintained a monthly CRR of 5 percent on average. On a daily basis, the rate had been no less than 4 percent -- a ratio which was hiked to a minimum requirement of 4.5 percent by the central bank yesterday.
A high official with Bangladesh Bank said the banks had normally maintained 4 percent at the beginning of the month. In an attempt to maintain 5 percent on average throughout the month, bankers had often created a volatile situation in the call money market.
But the BB official would not see the latest move as a tight monetary policy.
The required reserve ratio is a bank regulation that sets the minimum reserves each bank must hold to customer deposits. The reserves are designed to satisfy withdrawal demands and would normally be in the form of fiat currency, or with a central bank.
The reserve ratio is sometimes used as a tool in monetary policy, influencing the economy, borrowing and interest rates.
Source: The Daily Star, January 14, 2009
January 14, 2009
January 11, 2009
Local firms zoom in on bank software
Domestic software developers are slowly making a niche in the local banking software market.
Presently, the banking software used for a particular branch is mostly made by local information technology (IT) firms. Also, at least six local private commercial banks (PCBs) with online banking services use locally developed online real-time software, according to sector people.
Thanks to the flourishing IT industry, the market for real-time banking software, once totally captured by foreign companies, is now being grabbed by the local firms. However, the industry has been catering to the domestic needs for branch banking solutions since the 1990s.
Branch banking software is used for a branch of a bank, while a single real-time banking software is used for keeping, processing and updating information and data of all branches of a bank.
"We have been working for a long time with real time software for banks and we have so far supplied the product to four private banks," said SM Waesh, senior vice president of Flora Systems, a local software and data entry company.
Four PCBs such as Trust Bank Ltd, NCC Bank Ltd, Jamuna Bank and Mutual Trust Bank now use 'Flora Bank', a centralised banking software, said Flora Systems officials.
According to software developers, said the cost of such a locally developed varies between Tk 1 crore and Tk 3 crore, while a foreign software costs between Tk 30 crore and Tk 40 crore.
"Apart from such cost-effectiveness, this local centralised banking software saves our hard-earned foreign currency and creates job opportunities for many,” Waesh added.
Flora and five or six local software developers, including Beximco Computers Ltd, a concern of Beximco Group, Leads, are the local players who are working to build online and branch banking software.
In addition, some banks have developed their own banking software for their own use.
After building the software for its own use, Bank Asia now markets it for other banks.
Pubali Bank Limited, Islami Bank Bangladesh Ltd and Uttara Bank Limited have also developed their branch banking and online banking software by their own to meet their needs.
Bank Asia has developed its centralised software through ERA- InfoTech Ltd, a joint venture company. Bank Asia Ltd, Ranks IT Ltd and a Dubai based IT firm are funding this project.
"We are using the software successfully and also supplied it to the locally owned Standard Bank," Irfan Uddin Ahmed, deputy managing director of Bank Asia, said, adding that the software would be exhibited in an international fair in Dubai soon to attract foreign customers.
Officials with Beximco Computers Ltd, a concern of Beximco Group, said the company supplies branch banking solutions, but it is now thinking of developing a centralised banking solution to meet the market demand.
Now over 300 branches of 15 major banks of the country use the company's software, according to the official website of Beximco Group.
Talking to The Daily Star, Shaikh Abdul Aziz, chief executive officer and managing director of LEADS Corporation Limited, a software company, said his company has developed both branch and centralized banking software including PcBANK2000 and BankUltimus. As many as 21 banks and financial institutions are using the products, he added.
Sector people attributed the competitive price and extensive after-sales-service to the increased use of local software. They said foreign solutions are dearer.
"Generally the annual service and maintenance fees account for 10-20 per cent of the total cost of a software. As the cost of local software is low, its service charge is also low," said Subodh Kumar Bhowmik, chief technical officer of Flora Systems.
He said it takes two-three years to fully customise a foreign made software because these software are made for different use in different countries. But local software are developed targeting the local market, he added.
But local customers sometimes undermine the local solutions thanking that it would not serve company purposes, Bhowmik lamented.
Source: The Daily Star, January 11, 2009
Presently, the banking software used for a particular branch is mostly made by local information technology (IT) firms. Also, at least six local private commercial banks (PCBs) with online banking services use locally developed online real-time software, according to sector people.
Thanks to the flourishing IT industry, the market for real-time banking software, once totally captured by foreign companies, is now being grabbed by the local firms. However, the industry has been catering to the domestic needs for branch banking solutions since the 1990s.
Branch banking software is used for a branch of a bank, while a single real-time banking software is used for keeping, processing and updating information and data of all branches of a bank.
"We have been working for a long time with real time software for banks and we have so far supplied the product to four private banks," said SM Waesh, senior vice president of Flora Systems, a local software and data entry company.
Four PCBs such as Trust Bank Ltd, NCC Bank Ltd, Jamuna Bank and Mutual Trust Bank now use 'Flora Bank', a centralised banking software, said Flora Systems officials.
According to software developers, said the cost of such a locally developed varies between Tk 1 crore and Tk 3 crore, while a foreign software costs between Tk 30 crore and Tk 40 crore.
"Apart from such cost-effectiveness, this local centralised banking software saves our hard-earned foreign currency and creates job opportunities for many,” Waesh added.
Flora and five or six local software developers, including Beximco Computers Ltd, a concern of Beximco Group, Leads, are the local players who are working to build online and branch banking software.
In addition, some banks have developed their own banking software for their own use.
After building the software for its own use, Bank Asia now markets it for other banks.
Pubali Bank Limited, Islami Bank Bangladesh Ltd and Uttara Bank Limited have also developed their branch banking and online banking software by their own to meet their needs.
Bank Asia has developed its centralised software through ERA- InfoTech Ltd, a joint venture company. Bank Asia Ltd, Ranks IT Ltd and a Dubai based IT firm are funding this project.
"We are using the software successfully and also supplied it to the locally owned Standard Bank," Irfan Uddin Ahmed, deputy managing director of Bank Asia, said, adding that the software would be exhibited in an international fair in Dubai soon to attract foreign customers.
Officials with Beximco Computers Ltd, a concern of Beximco Group, said the company supplies branch banking solutions, but it is now thinking of developing a centralised banking solution to meet the market demand.
Now over 300 branches of 15 major banks of the country use the company's software, according to the official website of Beximco Group.
Talking to The Daily Star, Shaikh Abdul Aziz, chief executive officer and managing director of LEADS Corporation Limited, a software company, said his company has developed both branch and centralized banking software including PcBANK2000 and BankUltimus. As many as 21 banks and financial institutions are using the products, he added.
Sector people attributed the competitive price and extensive after-sales-service to the increased use of local software. They said foreign solutions are dearer.
"Generally the annual service and maintenance fees account for 10-20 per cent of the total cost of a software. As the cost of local software is low, its service charge is also low," said Subodh Kumar Bhowmik, chief technical officer of Flora Systems.
He said it takes two-three years to fully customise a foreign made software because these software are made for different use in different countries. But local software are developed targeting the local market, he added.
But local customers sometimes undermine the local solutions thanking that it would not serve company purposes, Bhowmik lamented.
Source: The Daily Star, January 11, 2009
January 10, 2009
PCBs post rise in profit
Private commercial banks (PCBs) kept up a good show in 2008 despite a global and domestic slowdown in business activity, according to data received from different PCBs.
The operating profit of a PCB was as high as 97 percent and the lowest margin was 23 percent for 2008.
Bankers put the growth down to higher import payments following a huge rise in the prices of commodities from the beginning of 2008.
“The commodity price hike that lasted through the third quarter of 2008 pushed the banks' profit up in 2008,” said Shahjahan Bhuiyan, managing director of United Commercial Bank (UCB).
“Banks' commission income increased significantly because of a price rise in 2008,” said AKM Shafiqur Rahman, executive vice president and secretary of National Bank Limited (NBL).
The operating profit of Al-Arafah Islami Bank rose by 97.5 percent to Tk 158 crore in 2008 from Tk 80 crore in 2007. Shahjalal Bank and Islami Bank saw operating profit increasing by 57 percent and 55 percent respectively in 2008, from a year earlier.
National Credit and Commerce Bank recorded a 33 percent rise in operating profit to Tk 236 crore in 2008 from Tk 178 crore a year ago. The growth rate for UCB and NBL, two first-generation PCBs, was 24 percent and 28 percent respectively in 2008.
Operating profits by NBL and UCB reached Tk 374 crore and Tk 260 crore respectively in 2008.
Operating profits of BRAC Bank, a third-generation private bank, also increased by over 23 percent to Tk 200 crore from Tk 162 crore in 2007.
Prime Bank's operating profit soared to Tk 410 crore in 2008 from Tk 326 crore in 2008. Pubali Bank earned Tk 60 crore more than its 2007 income of Tk 306 crore.
Southeast Bank posted Tk 300 crore in operating profit, up from Tk 291 crore in 2007.
Of the other banks, EXIM earned Tk 260 crore, Dhaka Bank Tk 254 crore, Dutch-Bangla Tk 221 crore, Mercantile Tk 190 crore, IFIC Tk 177 crore, Basic Tk 175 crore, Standard Bank Tk 156 crore, Trust Bank Tk 138 crore, Jamuna Bank Tk 120 crore, One Bank Tk 110 crore and Social Investment Bank Tk 100 crore, according to data tallied by The Daily Star.
AB Bank's operating profit however dipped by Tk 15 crore to Tk 450 crore in 2008 from Tk 465 crore in 2007.
“Banks in Bangladesh saw a good year in 2008 despite the global financial turmoil. Credit should go for the central bank for its prudent and effective guideline,” said Nurul Amin, managing director of NCC Bank.
“We have also seen growth in the banking industry in 2008 in spite of a slowdown in the global economy,” said Syed Abu Naser Bukhtear Ahmed, chief executive officer of state-owned Agrani Bank.
Agrani's operating profit reached Tk 600 crore in 2008 from Tk 526 crore a year ago.
The operating profit of the PCBs had increased by nearly Tk 1,500 crore to Tk 5,200 crore in 2007, up from Tk 3,734 crore in 2006.
The country's imports grew by 31.66 percent in the first four months of the current fiscal year, compared to the same period of the previous fiscal year, according to Bangladesh Bank data.
The value of letters of credit against imports worth $7.898 billion was settled in the July-October period of fiscal 2008-2009, compared with $5.999 billion in the same period of the previous fiscal year.
Credit to the private sector rose by 24.72 percent to Tk 39,736 crore in October 2008, compared to the same period of the previous year.
Source: The Daily Star, January 02, 2009
The operating profit of a PCB was as high as 97 percent and the lowest margin was 23 percent for 2008.
Bankers put the growth down to higher import payments following a huge rise in the prices of commodities from the beginning of 2008.
“The commodity price hike that lasted through the third quarter of 2008 pushed the banks' profit up in 2008,” said Shahjahan Bhuiyan, managing director of United Commercial Bank (UCB).
“Banks' commission income increased significantly because of a price rise in 2008,” said AKM Shafiqur Rahman, executive vice president and secretary of National Bank Limited (NBL).
The operating profit of Al-Arafah Islami Bank rose by 97.5 percent to Tk 158 crore in 2008 from Tk 80 crore in 2007. Shahjalal Bank and Islami Bank saw operating profit increasing by 57 percent and 55 percent respectively in 2008, from a year earlier.
National Credit and Commerce Bank recorded a 33 percent rise in operating profit to Tk 236 crore in 2008 from Tk 178 crore a year ago. The growth rate for UCB and NBL, two first-generation PCBs, was 24 percent and 28 percent respectively in 2008.
Operating profits by NBL and UCB reached Tk 374 crore and Tk 260 crore respectively in 2008.
Operating profits of BRAC Bank, a third-generation private bank, also increased by over 23 percent to Tk 200 crore from Tk 162 crore in 2007.
Prime Bank's operating profit soared to Tk 410 crore in 2008 from Tk 326 crore in 2008. Pubali Bank earned Tk 60 crore more than its 2007 income of Tk 306 crore.
Southeast Bank posted Tk 300 crore in operating profit, up from Tk 291 crore in 2007.
Of the other banks, EXIM earned Tk 260 crore, Dhaka Bank Tk 254 crore, Dutch-Bangla Tk 221 crore, Mercantile Tk 190 crore, IFIC Tk 177 crore, Basic Tk 175 crore, Standard Bank Tk 156 crore, Trust Bank Tk 138 crore, Jamuna Bank Tk 120 crore, One Bank Tk 110 crore and Social Investment Bank Tk 100 crore, according to data tallied by The Daily Star.
AB Bank's operating profit however dipped by Tk 15 crore to Tk 450 crore in 2008 from Tk 465 crore in 2007.
“Banks in Bangladesh saw a good year in 2008 despite the global financial turmoil. Credit should go for the central bank for its prudent and effective guideline,” said Nurul Amin, managing director of NCC Bank.
“We have also seen growth in the banking industry in 2008 in spite of a slowdown in the global economy,” said Syed Abu Naser Bukhtear Ahmed, chief executive officer of state-owned Agrani Bank.
Agrani's operating profit reached Tk 600 crore in 2008 from Tk 526 crore a year ago.
The operating profit of the PCBs had increased by nearly Tk 1,500 crore to Tk 5,200 crore in 2007, up from Tk 3,734 crore in 2006.
The country's imports grew by 31.66 percent in the first four months of the current fiscal year, compared to the same period of the previous fiscal year, according to Bangladesh Bank data.
The value of letters of credit against imports worth $7.898 billion was settled in the July-October period of fiscal 2008-2009, compared with $5.999 billion in the same period of the previous fiscal year.
Credit to the private sector rose by 24.72 percent to Tk 39,736 crore in October 2008, compared to the same period of the previous year.
Source: The Daily Star, January 02, 2009
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