Banks continue to expand their branches this year to net new customers for low-cost deposits.
Despite a slowdown in the global financial sector, some 300 new bank branches will be added to the country's existing network in 2009, taking the tally to over 7,000, according to Bangladesh Bank (BB) data.
“We have agreed to permit opening of around 300 new branches in 2009, assessing the demand, mainly from the private banks,” a senior BB official told The Daily Star.
The total demand was much more than the permitted number, the official said.
As of December 2008, the number of total bank branches stood at 6,886.
The banking sector of Bangladesh comprises four categories of scheduled banks -- state-owned commercial banks (SCBs), state-owned development finance institutions (DFIs), private commercial banks (PCBs) and foreign commercial banks (FCBs).
These banks had a total of 6,717 branches as of December 2007, while the number was 6,562 and 6,402 in 2006 and 2005 respectively.
With new branches banks can collect millions in cheap deposits that are lent at higher rates, bankers said.
Even though they increasingly offer technology-driven products and automated teller machines (ATMs) in convenient places, banks still hope to lure customers to a physical branch.
According to BB data, total deposits of the banks in 2008 increased by 19.19 percent to Tk 256,127 crore from Tk 214,890 crore in 2007. The growth was 15.5 percent in 2007. Banks' deposit was Tk 186,060 crore in 2006.
Share of four SCBs -- Sonali, Janata, Agrani and Rupali -- is declining on the increasing presence of PCBs, BB data shows.
Deposits of 30 PCBs increased by 26.12 percent in 2008 compared to 8.44 percent by four SCBs.
The SCBs' share in deposits decreased from 35.2 percent in 2006 to 32.6 percent in 2007. On the other hand, PCBs' deposits in 2007 amounted to Tk 115,020 crore or 53.5 percent of the total industry deposits. PCBs' deposit was Tk 95,550 crore or 51.3 percent in 2006.
FCBs' deposits in 2007 rose by Tk 3,260 crore or 21.6 percent over the previous year. The DFIs' deposits in 2007 were Tk 11,560 crore against Tk 10,020 crore in 2006 showing an increase by 15.4 percent.
“We want to reach more rural and semi-urban population. Already we have more rural branches than urban ones,” said Muhammad A Rumee Ali, chairman of BRAC Bank that has got permission to open 15 branches in 2009.
Rumee Ali, also a former deputy governor of BB, said still the bankable people in the country are much lower compared to many countries.
He urged BB to look into the issue of urban and rural branches opening by banks.
The BB approves new branch opening based on a set criteria such as capital base, provision shortfall, corporate governance, foreign exchange management and disbursement of SME loan.
This year the central bank will not allow a bank to open more than three branches in Dhaka and Chittagong, the most concentrated areas. BB encourages banks to open more branches in rural areas.
Besides BRAC Bank, Islami Bank Bangladesh has been given permission to open a total of 15 branches this year.
Source: The Daily Star, February 22, 2009
February 22, 2009
February 05, 2009
Bankers fear slow loan payback from spinners
Bankers fear random import of low-cost yarn from neighbouring India will cost them heavily by making their clients defaulted.
Banks have also tightened their grip on new lending to this sector to see the bad time of the industry, which had a consistent growth for the past one decade, bankers said.
“Payment from the spinning millers is getting slowed,” said Ali Reza Iftekhar, managing director and chief executive officer of Eastern Bank.
He said banks are in a threat because they have huge exposure in spinning mills, which are capital-intensive industries.
“We are in great uncertainty. Immediate steps are needed to address the issue,” said Shahjahan Bhuiyan, managing director of United Commercial Bank.
Bhuiyan said about Tk 60,000 crore are involved in the textile sector spinning, knitting, dyeing and import of raw materials required for the industries.
The ongoing global recession has already caught up with the country's yarn industry with substantial fall in its local and export demands and a pile up of a huge amount of unsold yarn.
Easy access to import the item from India at a cheaper rate has made the local millers more worried.
According to industry people presently the Tk 27,000 crore spinning mills of the country are struggling with an inventory of 2.5 lakh tonnes of yarn worth Tk 2,500 crore that millers failed to sell for a demand decline and a flood of comparatively low cost yarn from India.
Earlier yarn import from India was restricted, but the caretaker government at its last time decision withdrew those restrictions and allowed importers to go freely.
Manufacturers are now importing Indian yarn at 15 to 20 cents per pound lower rate than that of locally produced yarn.
Bangladesh's commercial banking sector comprising 30 private banks, nine foreign banks and four state-owned banks has financed a lot to develop the country's textile industry. They have financed set up about 350 spinning mills in the country to supply yarn for manufacturing woven and knit garments. Banks also fund to import raw materials for the spinners.
“About Tk 60,000 crore bank finance are involved with the whole industry spinning, dyeing, knitting and import of raw materials,” Shahjahan Bhuiyan said.
Bhuiyan said many of their clients couldn't finance bank payment due to poor sale of the yarn produced locally.
“Now local yarn producers are forced to sell their product at a lower rate for their survival,” Ali Reza Iftekhar said.
He said Bangladesh's yarn is better in quality than the Indian product.
“Immediate corrective measures are needed, otherwise the industry will be in great difficulty,” the EBL chief executive remarked.
A senior official in Janata Bank, which has huge exposure in the sector, also admitted the fear.
“Local industry will have benefited if the government did not allow low-cost Indian yarn,” the official who requested not to be named said.
Source: The Daily Star, February 5, 2009
Banks have also tightened their grip on new lending to this sector to see the bad time of the industry, which had a consistent growth for the past one decade, bankers said.
“Payment from the spinning millers is getting slowed,” said Ali Reza Iftekhar, managing director and chief executive officer of Eastern Bank.
He said banks are in a threat because they have huge exposure in spinning mills, which are capital-intensive industries.
“We are in great uncertainty. Immediate steps are needed to address the issue,” said Shahjahan Bhuiyan, managing director of United Commercial Bank.
Bhuiyan said about Tk 60,000 crore are involved in the textile sector spinning, knitting, dyeing and import of raw materials required for the industries.
The ongoing global recession has already caught up with the country's yarn industry with substantial fall in its local and export demands and a pile up of a huge amount of unsold yarn.
Easy access to import the item from India at a cheaper rate has made the local millers more worried.
According to industry people presently the Tk 27,000 crore spinning mills of the country are struggling with an inventory of 2.5 lakh tonnes of yarn worth Tk 2,500 crore that millers failed to sell for a demand decline and a flood of comparatively low cost yarn from India.
Earlier yarn import from India was restricted, but the caretaker government at its last time decision withdrew those restrictions and allowed importers to go freely.
Manufacturers are now importing Indian yarn at 15 to 20 cents per pound lower rate than that of locally produced yarn.
Bangladesh's commercial banking sector comprising 30 private banks, nine foreign banks and four state-owned banks has financed a lot to develop the country's textile industry. They have financed set up about 350 spinning mills in the country to supply yarn for manufacturing woven and knit garments. Banks also fund to import raw materials for the spinners.
“About Tk 60,000 crore bank finance are involved with the whole industry spinning, dyeing, knitting and import of raw materials,” Shahjahan Bhuiyan said.
Bhuiyan said many of their clients couldn't finance bank payment due to poor sale of the yarn produced locally.
“Now local yarn producers are forced to sell their product at a lower rate for their survival,” Ali Reza Iftekhar said.
He said Bangladesh's yarn is better in quality than the Indian product.
“Immediate corrective measures are needed, otherwise the industry will be in great difficulty,” the EBL chief executive remarked.
A senior official in Janata Bank, which has huge exposure in the sector, also admitted the fear.
“Local industry will have benefited if the government did not allow low-cost Indian yarn,” the official who requested not to be named said.
Source: The Daily Star, February 5, 2009
February 03, 2009
World Economic Forum in Davos & Dr Muhammad Yunus
Nobel laureate Dr Muhammad Yunus told the just-concluded World Economic Forum in Davos that world's poor people would be the most affected by the ongoing global financial crisis.
Prof Yunus, a panellist at the Davos Philanthropic Roundtable, said when the world is busy talking about bailout packages for companies, at the same time it is needed to design similar packages for the poor.
Former US President Bill Clinton, billionaire philanthropist Bill Gates and former British prime minister Tony Blair were present, among others, at the discussion, says a release from Yunus Secretariat.
The theme of the 39th World Economic Forum this year was 'Shaping the Post Crisis World.'
Prof Yunus, also founder and managing director of Grameen Bank, underlined that the crisis increased the need for special attention to the poor and the rich still had plenty of money.
"Those who had billions and have lost half of it, still have the other half. Their lifestyles will not change. But the real impact will be on the people at the bottom," said Yunus, who was awarded Nobel Peace Prize in 2006 for his efforts to lift people out of extreme poverty.
Bill Clinton also echoed his views during the roundtable saying, "The economic stimulus packages should be aimed at the poorest in society."
He also urged the world's rich nations to spend more on supporting projects in the developing world even though their own wealth has been hit.
In addition to the Philanthropic Roundtable, Prof Yunus was a lead speaker at an especially organised panel entitled 'Restoring Growth through Social Business.'
During this session, moderated by Kishore Mahbubani of the Lee Kuan Yew School of Public Policy Singapore, panellists discussed the great prospect of social business, non-loss, non-dividend companies, to address social goals ranging from improved nutrition, provision of safe drinking water, information technology for the poor and others.
They also discussed the on-the-ground experience of social businesses already being operated in Bangladesh by Grameen.
Panelist Franck Riboud, chairman and CEO of French dairy giant Danone, which has partnered with Grameen in a social business, said that all CEOs would now have to reinvent what business means in light of what is happening, and social business is a way forward for this.
In Davos from January 29 to February 1, Prof Yunus held discussions with business leaders, philanthropists, including Bill and Melinda Gates, heads of UN agencies on joint-venture collaborations in social business to address some of the world's most pressing problems, particularly healthcare for the poor.
He finalised the joint venture agreement to set up production plant in Bangladesh to produce nutrition supplement and treated mosquito nets, with Dr Humbrecht, CEO of BASF, a giant German company.
Prof Yunus, a panellist at the Davos Philanthropic Roundtable, said when the world is busy talking about bailout packages for companies, at the same time it is needed to design similar packages for the poor.
Former US President Bill Clinton, billionaire philanthropist Bill Gates and former British prime minister Tony Blair were present, among others, at the discussion, says a release from Yunus Secretariat.
The theme of the 39th World Economic Forum this year was 'Shaping the Post Crisis World.'
Prof Yunus, also founder and managing director of Grameen Bank, underlined that the crisis increased the need for special attention to the poor and the rich still had plenty of money.
"Those who had billions and have lost half of it, still have the other half. Their lifestyles will not change. But the real impact will be on the people at the bottom," said Yunus, who was awarded Nobel Peace Prize in 2006 for his efforts to lift people out of extreme poverty.
Bill Clinton also echoed his views during the roundtable saying, "The economic stimulus packages should be aimed at the poorest in society."
He also urged the world's rich nations to spend more on supporting projects in the developing world even though their own wealth has been hit.
In addition to the Philanthropic Roundtable, Prof Yunus was a lead speaker at an especially organised panel entitled 'Restoring Growth through Social Business.'
During this session, moderated by Kishore Mahbubani of the Lee Kuan Yew School of Public Policy Singapore, panellists discussed the great prospect of social business, non-loss, non-dividend companies, to address social goals ranging from improved nutrition, provision of safe drinking water, information technology for the poor and others.
They also discussed the on-the-ground experience of social businesses already being operated in Bangladesh by Grameen.
Panelist Franck Riboud, chairman and CEO of French dairy giant Danone, which has partnered with Grameen in a social business, said that all CEOs would now have to reinvent what business means in light of what is happening, and social business is a way forward for this.
In Davos from January 29 to February 1, Prof Yunus held discussions with business leaders, philanthropists, including Bill and Melinda Gates, heads of UN agencies on joint-venture collaborations in social business to address some of the world's most pressing problems, particularly healthcare for the poor.
He finalised the joint venture agreement to set up production plant in Bangladesh to produce nutrition supplement and treated mosquito nets, with Dr Humbrecht, CEO of BASF, a giant German company.
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