Business
Bangladesh Bank lends Tk 25,521 crore to banks, financial institutions
Bangladesh Bank has lent around Tk 25,521 crore to commercial banks and financial institutions to meet cash demands on Wednesday.
Shariah-based banks have borrowed around Tk 1500 crore, while other banks and financial institutions have borrowed the rest.
The central bank shared the information in a press release on Thursday.
BB announces tight monetary policy hoping to cut inflation to 6.5 percent
Banks faced tremendous cash withdrawal pressure on Wednesday when they opened only for four hours after days of closure due to curfew. With lack of money at ATM booths and days of internet shutdown, the demand for cash skyrocketed.
The central bank also informed that the auction of Bangladesh Bank Repo, Assured Repo, Assured Liquidity Support (ALS) for commercial banks and financial institutions, and Islamic Banks Liquidity Facility (IBLF) for Shariah-based banks was held on Wednesday.
Bangladesh Bank to publish monetary policy statement online amid potential boycott by economic reporters
In this auction, 14 banks and 2 financial institutions received Tk 5007 crore under the 7-day repo facility, Tk 2370 crore to 9 banks under the 14-day repo facility, Tk 7197 crore to 12 banks and 2 financial institutions under the 28-day repo facility.
Apart from this, Tk 5691 crore was given to 3 banks under 180 days of assured repo, and Tk 3774 crore was given to 11 primary dealer banks under 1 day of assured liquidity support.
Besides, under the Islamic Banks Liquidity Facility for 14 days, Tk 497 crore was given to 1 bank, and Tk 984 crore was given to 5 Islamic banks for 28 days.
Overcrowding and long queues as banks reopen today for only 4 hours
Banks witnessed overcrowding and long queues of customers today as they reopened on Wednesday for only four hours. All banks were closed for three consecutive workdays due to curfew across the country.
Bangladesh did not have internet for five consecutive days due to widespread violence over quota protests. After overcoming the situation, government, private offices, and banks were open today from 11 am till 3 pm.
Customers thronged branches of the banks since 11 am; most had gone to withdraw money.
Visiting different areas of Dhaka including Motijheel, Dilkusha, Paltan, and Kakrail, this correspondent observed overcrowding and long queues at banks.
Bank officials said there were more withdrawals than deposits during the day.
Customers said that due to no internet over the last five days, mobile financial services (MFS) and most ATM booths were out of service. This led to long lines at banks today to withdraw money via cash checks.
“I was very anxious over the last few days due to a shortage of cash. I couldn’t withdraw money from ATM booths either. After visiting several ATM booths in vain, I saw many facing difficulties like me,” said Kawser Ahmed, who was waiting in line at Sonali Bank’s Motijheel branch around 11:30 am.
“Hearing the banks were open today, I came here right away,” he added.
Joynal Uddin, a retired individual who visited Pubali Bank’s Dilkusha branch, said, “Due to cash shortage, I have been facing various problems. I couldn’t go shopping and buy medicine.”
“I’m really relieved that banks are open today for transactions. Having cash at hand brings peace of mind,” he added.
Business leaders urge waiving charges at port due to delayed shipment
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has requested the government to waive demurrage charges at ports due to delayed delivery of goods over the last five days.
Business leaders have also demanded that any new charges not be imposed in the next 15 days till normalcy returns to shipment and import clearance activities at the ports.
FBCCI President Mahbubul Alam, in a statement on Wednesday, said that businesses could not conduct export-import activities in the last week because of an internet blackout and countrywide curfew. Businesses need government support to minimize the loss, he added.
The call comes as business and economic activities resumed this morning after the government restored broadband internet services in selected areas and relaxed curfew.
At present, Chattogram port, which handles almost of Bangladesh’s over USD 100 billion international trade, has been witnessing container congestion amid problems in duty assessment by customs authority, and payments of bills at banks in the absence of internet since July 18 night.
SM Mannan Kochi, president of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) said that the garments sector of the country on average export products worth around Tk 1600 crores. Following the internet blackout and curfew, the RMG sector witnessed a loss of around Tk 8,000 crore, he added.
Similarly, production in many factories has been hampered due to delayed shipment of raw materials, he said.
The BGMEA president urged the government to take additional measures for quick shipment and delivery from the Chattogram port to keep production in the manufacturing sector uninterrupted.
Production in 220 RMG factories in Ctg resumes under special arrangement
Production in 220 garment factories in Chattogram out of 350 resumed on Tuesday under special arrangements by the local administration.
First vice-president of BGMEA Nazrul Islam said the orders in some garment factories are going to be stooped soon and to continue the production of the factories, the authorities concerned has decided to resume their operation.
Besides, the workers of those 220 factories were taken to their respected factories with police protection.
Meanwhile, Chattogram port authorities resumed their operation partially on Tuesday with internet access.
The government has restored the internet services at the port on a limited scale for keeping the port activities functional.
However, the loading and unloading of goods in the port remain undisrupted.
BB announces tight monetary policy hoping to cut inflation to 6.5 percent
Bangladesh Bank will continue its tight monetary policy for the first half of FY 2024-25, keeping all policy interest rates and exchange rate rates unchanged.
The new monetary policy announced on Thursday also aimes to cut down inflation by stopping money printing for government spending. The policy has also kept a target of bringing down inflation rate at around 6.5 percent within the FY2024-25.
The central bank released the new monetary policy by uploading online on Thursday for the first time as the journalists have been boycotting all the programmes of the BB Governors in protest of banning journalist entry to the central bank headquarters.
Usually, the monetary policy is released at a press conference in the presence of the governor, deputy governors, and chief economist of the central bank. They also join question-answer session and explain the different expectations of the monetary policy to the reporters.
The interest rate for loans will not increase as the policy keeps the policy interest rate unchanged. The new monetary policy has relaxed imports to bring a pace in the economic activities, which became slow earlier due to tightened imports.
In the MPS, the BB has stated that from now on, in the case of importing cars, fruits, flowers, and cosmetics, these products should be imported only by depositing cash against the letter of credit (LC). Apart from this, the issue of advance payment for import of other products will be relaxed.
The new monetary policy kept private sector credit growth unchanged. Private sector credit growth has reached 9.8 percent till last June. This rate of growth of private loans has been maintained until next December. On the other hand, the growth of public sector debt stood at 12.8 percent at the end of June.
In the new monetary policy, the government debt growth target has been further increased to 14.2 percent. That is, the government has been given the opportunity to take more loans from the banking sector.
In addition, the central bank has announced that it will not increase the supply of currency by printing new money (reserve money). Reserve money growth was 7.9 percent in June. The target is set to reduce this growth to 2 percent in December.
Per day loss of Tk 6,500cr: Economists and business leaders warn of economic toll from blockades, hartals
Economists and business leaders are calling for a sustainable and peaceful environment in Bangladesh to help navigate the ongoing economic crisis.
Experts have highlighted that the country loses nearly Tk 6,500 crore per day due to hartals and blockades. They also point to a combination of factors that have strained the economy over the past two years, including high inflation and interest rates, a shortage of US dollars, a high ratio of non-performing loans in the banking sector, and pressure from external debt repayments.
Violent clashes over the quota reform protests by students have further deteriorated the law and order situation, leading to casualties and numerous injuries, they observed.
In addition, a shortage of gas and electricity, as well as high taxes and VAT, have impacted both consumers and businesses.
Mahbubul Alam, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), emphasized the severe economic impact of unrest. “The economy is losing Tk 6,500 crores a day because of hartals and blockades,” he told UNB. “We repeatedly urge political parties, students, and the general public to avoid activities that cause financial loss and create public suffering.”
Eminent economist and distinguished fellow at the Centre for Policy Dialogue (CPD), Dr. Debapriya Bhattacharya commented on the multi-faceted crises facing Bangladesh’s economy. The student protests are fueling the economic crisis, and the country is experiencing a multi-dimensional image crisis, he said. The long-term effects of this unrest on people’s lives are significant and cannot be quantified in figures alone, he added.
The economist noted that international business groups and global buyers become wary during periods of instability, often redirecting their orders and investments to more stable regions. When a major global buyer shifts orders from a country, smaller buyers tend to follow, he added.
Noted economist Dr. Ahsan H. Mansur also stressed the need for a sustainable and peaceful environment to overcome the financial crisis. The right decisions from the country’s top leadership are required to resolve the unrest and restore Bangladesh’s image, he said.
No impact of revised export data on GDP or incentive calculation: Finance Ministry
The Ministry of Finance on Tuesday issued an explanatory note saying that the recent revision of export data would leave no impact on GDP data or disbursed incentives on export.
The Finance Ministry said that the Bangladesh Bureau of Statistics (BBS) calculates GDP growth based on Bangladesh Bank data and similarly the export incentive disbursed by the central bank against repatriation of export proceeds. Before the disbursement of incentive, the central bank audits export information by a third-party audit farm. In both cases, the central bank data that has been used is authentic.
As a result, the recent fears of a fall in the report published in newspapers and consequent decline in GDP and per capita income are not correct, said the Ministry of Finance.
The Ministry also said that steps have been taken to coordinate the export data of the National Board of Revenue (NBR) and Bangladesh Bank, streamlining the method used in data collection by all the concerned agencies.
As a result, it is expected that there will be no significant difference in the export data published by Bangladesh Bank, National Board of Revenue, and Export Development Bureau from now on.
Nagad’s ED Elite appointed as Fintech standing committee chairman at BASIS
Niaz Morshed Elite, executive director at Nagad Ltd has been appointed as the chairman of the Standing Committee on FinTech and Digital Payment at Bangladesh Association of Software and Information Services (BASIS).
As chairman, Elite will have the opportunity to lead initiatives aimed at fostering innovations and streamlining digital payment systems, influence crucial decisions and inspire committee members, according to a press release.
The standing committee will give importance to addressing regulatory challenges, promoting the adoption of digital payment solutions, and supporting the growth of fintech startups.
Elite expressed his enthusiasm for the new role, stating, “It is an honour to be appointed as the chairman of the Fintech & Digital Payment Standing Committee at BASIS. I look forward to collaborating with industry leaders and stakeholders to drive digital transformation and create a more inclusive financial ecosystem in Bangladesh.”
Niaz Morshed Elite is involved in many other businesses and has also associations with a variety of professional, sports and socio-cultural organisations. He is also the managing director of Borotakia Group. Besides, he is the founding president of JCI Chattogram alongside serving as the two-time national president of this non-profit organization.
Elite is also serving as chairperson of JCI Bangladesh Trust and director of Chattogram Regional Cricket Council.
Bangladeshi overseas credit card spending drops by over 10% in May
Bangladeshis spent Tk 456.5 crore abroad in May using credit cards, a decrease from Tk 507 crore in April, according to a report by Bangladesh Bank released today. Meanwhile, foreign nationals in Bangladesh spent Tk 170 crore on credit cards during the same period, down from Tk 199 crore in April.
The report, prepared by the Statistics Department of the central bank, includes data from 44 banks and one financial institution that issue credit cards in Bangladesh. Bangladesh Bank publishes this report monthly to track spending patterns.
In May, the expenditure of Bangladeshi citizens on credit cards abroad dropped by Tk 51 crore, marking a more than 10 percent decrease from the previous month. Similarly, foreign nationals in Bangladesh reduced their credit card spending by Tk 29 crore, a 14.5 percent decline from April.
Top Destinations for Credit Card Spending
Bangladeshi credit card users primarily spent their money in a few key countries, including India, the United States, Thailand, the United Arab Emirates, the United Kingdom, and Singapore. These six countries accounted for about 65 percent of all overseas credit card spending by Bangladeshis.
Spending Breakdown by Country
India: Tk 76.5 crore
United States: Tk 75.9 crore
Thailand: Tk 38.2 crore
United Arab Emirates: Tk 36.3 crore
United Kingdom: Tk 35.1 crore
Singapore: Tk 33.3 crore
Canada: Tk 27.2 crore
Reasons Behind the Spending Trends
A significant number of Bangladeshis visit India for travel and medical treatment, contributing to the high credit card usage in the country. Despite the overall decline, spending in the United States increased by Tk 9.4 crore from April to May, reflecting a growing trend among Bangladeshi travelers to the US.
Spending Limits for Bangladeshi Nationals
Bangladesh Bank officials noted that Bangladeshi nationals are allowed to spend foreign currency equivalent to USD 12,000 annually when traveling abroad. This amount can be spent via credit cards or taken as cash. However, individual transactions made through credit cards are capped at USD 300 at a time.
BGMEA, Cascale discuss collaboration to make garment industry sustainable
BGMEA President S. M. Mannan (Kochi) on Monday urged Cascale to lead the effort in formulating a unified code of conduct that would benefit all stakeholders, including buyers, manufacturers, and workers worldwide.
He emphasized that sustainability in the industry's long-term future hinges on such measures.
Different codes of conduct from various buyers and multiple audits in garment factories not only waste time and money for factories but also complicate the audit process and hinder compliance.
To foster sustainability in the industry, it is crucial to establish unified codes of conduct and standardized protocols for factory audits.
A meeting was held between Colin Browne, CEO of Cascale (formerly the Sustainable Apparel Coalition), and leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The objective was to collaborate on harmonizing protocols for developing and auditing unified codes of conduct within the apparel sector.
The meeting, held at the BGMEA Complex in Uttara was chaired by BGMEA President S. M. Mannan (Kochi) and attended by Vice President Abdullah Hill Rakib, Directors Ashikur Rahman (Tuhin), Shams Mahmud, Abrar Hossain Sayem, Md Mohiuddin Rubel, and Barrister Shehrin Salam Oishee.
Key topics of discussion included the necessity of formulating a unified code of conduct universally accepted for social and technical audits in the industry.
Cascale's CEO Colin Browne mentioned Bangladesh's progress in the garment sector while highlighting the need for further improvements. By joining forces, BGMEA and Cascale can collaboratively advance sustainable practices in the apparel industry and collectively strive towards bringing positive transformations throughout the supply chain.
The meeting also explored potential areas for cooperation to foster industry development, ensure compliance with forthcoming regulations such as the Due Diligence Directive, and enhance factory capabilities to improve worker welfare.
Cascale is a global platform with over 400 members, including brands and NGOs.
Both parties agreed that Cascale will conduct training sessions on the Code of Conduct at the factory level. This initiative aims to enhance factory capacities to comply effectively with these standards.