Bangladesh

Al-Arafah donates CSR fund

Al-Arafah Islami Bank Ltd has donated a fund worth Tk 2.0 million for development of research on constructing crop cold storages at affordable costs. Professor Dr M Monjur Hossain of Rajshahi University received the fund from the bank under its CSR activities. Chairman of Al-Arafah Islami Bank Ltd Badiur Rahman and the bank’s managing director Mohammad Habibur Rahman were present in a ceremony arranged on the occasion, according to a statement.

Banks hit by crisis of cash dollars

Huge outflow of foreign currency during Hajj and Eid-ul-Azha has created a crisis of cash US dollar in Bangladesh, according to market players and the regulator. The crisis has now forced the central bank to request the National Board of Revenue to withdraw tax on import of US dollar notes by local banks. Hajj and the increase in the quota for cash when travelling outside the country have drained out the cash dollar reserves this year, said Nazneen Sultana, deputy governor of Bangladesh Bank. Generally, the demand for cash dollar rises ahead of Hajj every year. Spending for Puja and rising medical tourism have created further strain on the cash dollar reserves.

Taxing the Islamic bond

The Islamic banks wanted for long some sort of bonds from the Bangladesh Bank (BB) to invest in to the fulfilment of the statutory liquidity ratio (SLR), as required by the regulator. But only in 2014, did the BB come out with an offer of interest-free bonds to the Islamic banks, which now control one-fourth of the deposit market. If the Islamic branches of the interest-based commercial banks are included, then the deposit share will go up. Though the Islamic banks were permitted in the middle of the 1980s, the regulatory framework to oversee this activity and the conditions they were to fulfil with respect to compliance with the regulations were not there.

You can buy bonds in nation aided by yuan drop: Bangladesh

Bangladesh is a rare bird among developing nations: it benefits from a weakening Chinese yuan, is intervening to stop its currency gaining and is about to sell a debut Islamic bond in the quietest year for issuance since 2011. The nation is planning a $1bn note sale that may include a portion of Shariah-compliant notes anytime soon, central bank governor Atiur Rahman said. Only Hong Kong, Malaysia and Indonesia have issued global sukuk in Asia so far in 2015. Bangladesh Bank has sold $3.5bn of taka in the past year, boosting foreign-exchange reserves to a record $27bn, said Rahman.

Bismillah Group scam: ACC okays charge sheet against 14

The Anti-Corruption Commission (ACC) today approved a charge sheet against 14 people, including Bismillah Group’s Managing Director Khaza Solaiman Anwar Chowdhury, for embezzling Tk 110 crore from Shahjalal Islami Bank. Nine of them are employees of Bismillah Group, four of Shahjalal Islami Bank and one is Network Frame System Ltd’s Chairman Akhter Hossain. The accused include Soleman’s wife and group’s Chairman Nawrin Hasib, Solaiman’s mother Sarwar Jahan, former manager of Eskaton Branch of Shahjalal Islami Bank Aslamul Haq and former deputy manager ASM Hasanul Kabir. The controversial group swindled the money with the help of bank officials between June 2006 and October 2012.

Islami Bank to give Tk 1.39cr lifeline to Swan workers

Islami Bank Bangladesh, the financier of Swan Garments over the last 30 years, plans to donate Tk 1.39 crore to clear the workers' one-month salary, the bank's Managing Director Mohammad Abdul Mannan said. Mannan hopes the bank's Board of Directors will agree to give away the fund as a lifeline to the company. The bank cannot invest further in Swan Garments, which has 1,300 workers in two units, as the company does not have any legal owner now, he said. Islami Bank will need the central bank's permission to further bankroll the factory, the loans of which have already been classified, Mannan said. Disputes over Swan's ownership need to be settled first to resume its operations, he said.

Islami Bank urged to lend further to Swan Garments

The Department of Inspection for Factories and Establishments (DIFE) yesterday requested Islami Bank Bangladesh, the financier of Swan Garments, to further lend Tk 1.39 crore to the apparel maker so that it can clear one month's salaries of its workers. Both the DIFE and the bank had been in trouble finding a successor of the company after the death of its Chinese owner, Ming Yuen Hon (Toby), in April. Disputes over the ownership have to be settled to resume operations of Swan Garments, and if Islami Bank wants to continue financing, it will need permission from the central bank as the company's loans have already been classified.

BB bars traditional banks from Islamic banking

The central bank's decision not to allow conventional banks to convert into Islamic banks has frustrated half a dozen lenders. Even conventional banks, which were earlier permitted to open branches or windows for Islamic banking, are not allowed to do it anymore. Bangladesh Bank will not entertain their demand, SK Sur Chowdhury, deputy governor of Bangladesh Bank, said yesterday. The banks that are now awaiting the licence to become Islamic Shariah-based banks should have taken their original permits as Islamic banks instead of conventional ones, he said. Some of the applications have been pending for more than two years now.

Islami Bank moves up in global ranking

Islami Bank Bangladesh has moved 16 notches up to rank 954th in 2015 among the top 1,000 banks of the world by The Banker magazine of the UK. The bank ranked 970th in 2014 and 1,000th in 2012, the bank said in a statement. Besides, the bank has been ranked 70th, 250th, 791st and 785th considering return on capital, return on assets, capital assets ratio and amount of assets of the bank respectively, according to the statement. The Banker conducts a rating of the top 1,000 global banks since 1790. The magazine publishes the list in July every year on the basis of data and evaluation of more than 5,000 leading banks from 163 countries.

New DMD for First Security Islami Bank

Md Mustafa Khair has recently been promoted as the deputy managing director of First Security Islami Bank. Prior to the promotion, Khair has been serving the bank as senior executive vice president, the bank said in a statement. He started his banking career at Bangladesh Shilpa Rin Sangstha, which is now known as Bangladesh Development Bank. He also worked with IFIC Bank and Dutch-Bangla Bank before joining First Security Islami Bank in 2006, according to the statement.

Shahjalal Islami Bank reelects chairman

Shahjalal Islami Bank has recently reelected AK Azad as its chairman and Mohammad Younus and Md Abdul Barek as vice chairmen. Azad is the managing director of Ha-Meem Group and president of Bangladesh Chamber of Industries. He is also the former president of the Federation of Bangladesh Chambers of Commerce and Industry. Azad is also the managing director of Channel 24 and Daily Samakal. Younus has business concerns in paper, fabric, and cold storages industries. He is also a director of NTV, the bank said. Barek is a sponsor shareholder of Shahjalal Islami Bank and Shahjalal Islami Bank Securities. He also owns Arju Electronics, Jony Electronics and Rony Electronics.

MasterCard launches Islamic cards in Bangladesh

MasterCard partnered with Al-Arafah Islami Bank to launch the MasterCard Islamic debit, credit and prepaid cards in Bangladesh. five new MasterCard cards will be added to the bank's repertoire. The cards will offer the lowest monthly compliance fees, 50 days without any additional charges, along with discounts at over 600 merchants and vendors. Jamilur Reza Choudhury, vice-chancellor of Asia Pacific University, attended the launching ceremony as the chief guest along with Badiur Rahman, chairman of Al-Arafah Islami Bank, and Syed Mohammad Kamal, country manager of MasterCard Bangladesh.

Islami Bank gets new chairman

Mustafa Anwar has been elected chairman of Islami Bank Bangladesh, while Yousif Abdullah Al-Rajhi and NRM Borhan Uddin have been elected vice-chairmen. Anwar, who is the chairman and managing director of Birds Group, started his career as an engineer of Bangladesh Water Development Board after completing his graduation in civil engineering from Bangladesh University of Engineering and Technology in 1964. Rajhi is the general manager-cum chief executive officer of Al-Rajhi Company for Industry and Trade, KSA. Borhan Uddin, who is currently chairman of audit committee of the bank, is the vice-chancellor of City University, Dhaka.

Muhith urges IDB to come out of traditional financing

Finance Minister of Bangladesh AMA Muhith has urged governors of the Islamic Development Bank (IDB) to push for a community-based partnership and come out of traditional financing models for a prosperous Islamic world. Muhith suggested leaders of the Islamic countries should work together to pull up the OIC (Organisation of Islamic Cooperation) region towards achieving healthy human development and securing strong, sustainable economic growth. He was speaking to OIC leaders at the 40th annual meeting of the Islamic Development Bank Group at Maputo, Mozambique. Currently, IDB's support for low-income members is stymied by not just a lack of adequate development funds but by its relatively higher cost as well, Muhith said.

Product structure of Islamic banks in Bangladesh

Since the Islamic banking industry is still emerging in Bangladesh, it is essential to know at this stage if the products and services of Islamic banks are consistent with the practices that have been developed and universally accepted by the practitioners of Islamic banks across the globe. It is really important for Islamic banking industry in the country not only for the sake of outreach but also for the regulators to formulate policy which will enhance the credibility and international stakeholder's confidence. Until today, the development of Islamic financial products has generally been limited to the re-engineering of the conventional products to meet Shariah requirements. But there is a still scope for product innovation and differentiation.

Bangladesh Approves Islamic Instruments

In a bid to accelerate the country’s economy, Bangladesh has launched a new interest-free financial instrument, highlighting the need for a strong Islamic Shari`ah board or council to operate and supervise the new instrument. Professor Mujahidul Islam, senior teacher and former chairman of the banking department of Dhaka University, said however, that this kind of bond was not popular with Islamic banks, financial institutions and people. He opined that this bond fund should be invested in power sector, water treatment plants and any other profitable and economically viable projects which contribute to the welfare of the country and accelerate the economy.

Digital Finance in Bangladesh: Where are all the Women?

Bangladesh has long been a success story for women’s financial inclusion. But in terms of digital finance, the story is very different. Despite being identified as a “mobile money sprinter” by the GSMA, only 18% of digital finance users in Bangladesh are women, with even fewer holding registered accounts. This is perplexing, given the rapid growth of digital financial services now reaching more than 21 million registered account holders. There are a number of potential reasons, including the fact that women are less likely to have an official identification. Besides, English-language phone menus may have a disproportionate impact on women. Nevertheless, there are resources and market players available to bridge this gender gap.

Bangladesh Bank gives more time to ICB Islamic Bank for repaying Oriental Bank's debt

The central bank has extended ICB Islamic Bank's timeline by three and half years to repay the money it owes to its clients. According to central bank's figures, former Oriental Bank's financial liabilities towards it depositors stand at Tk 7.5 billion. The bank was rechristened ‘ICB Islamic Bank’ in 2007 and a scheme was initiated to pay back the money to its depositors within six and half years. In a circular issued on Sunday, Bangladesh Bank extended the tenure of the scheme by 42 months on a request from the ICB Islamic Bank.

Three banks want more time to remove same-family directors

National Bank, City Bank and Premier Bank have failed to comply with the central bank's directive to bring down the number of directors from the same family to a maximum of two. The central bank last week asked four private banks to cut the number down in seven days. Only First Security Islami Bank complied with the directive within the deadline, according to Bangladesh Bank. The three other banks sought one to three more months to comply with the directive, but the regulator extended the deadline till October 30, a BB official said. National Bank has five directors from a family. City Bank has nine directors from two families. Four directors of Premier Bank come from one family.

Islamic banks - FIs asked to participate in Shariah-based refinancing scheme

The central bank has asked Islamic banks and non-banking financial institutions (NBFIs) to participate in its newly introduced Shariah-based refinancing scheme. The advice came at a meeting with the senior executives of the Islamic banks and NBFIs with Deputy Governor of the Bangladesh Bank Abul Quasem in the chair.
At the meeting, the central bank assured the Islamic banks and NBFIs that it would provide extra fund in the scheme if necessary. Five Islamic banks have already deposited Tk 3.75 billion with the BB's newly opened account for introducing the refinancing scheme exclusively for Sharia-based banks and NBFIs.

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