Four private banks violate bank board rules

The four private banks’ authorities have long been violating the bank company act, putting their family members on the board of directors. According to the bank company act, 2013, the banks’ board cannot comprise more than two members of a single family. But the four banks still continue their dominion over the board of directors with their family members at the helm. These are the National Bank, the Premier Bank, The City Bank and the First Security Islami Bank.

Muhith urges banks to spend more on education from CSR funds

Finance Minister AMA Muhith on Thursday urged Bangladesh’s banking sector to spend more from their corporate social responsibility (CSR) funds on the education sector. Appreciating Shahjalal Islami Bank (SIBL) and Dutch-Bangla Bank for their CSR contributions to the education sector, the Finance Minister said these two banks believe that education has been the most contributory element to human development. He was speaking at a function arranged marking the distribution of scholarships by the SIBL at the city’s Officers Club. At the function, some 500 students from across the country received scholarships from the SIBL. Muhith also appreciated the Bangladesh Bank governor for his campaign to encourage banks to spend more on their CSR activities.

IDB offers $44m for second undersea cable

The government of Bangladesh has signed a Tk 340 crore ($44 million) loan contract with Islamic Development Bank to install the second submarine cable for the country. The installation may complete by 2016, while Bangladesh entered a consortium in March this year. Monwar Hossain, managing director of Bangladesh Submarine Cable Company Ltd (BSCCL), said BSCCL has already paid $19.2 million to the consortium from its own fund. Bangladesh will have to spend a total of $72.5 million for the new cable. The IDB will provide $44 million, while BSCCL will spend $70 million from its own fund. The rate of interest for the loans will be LIBOR+1.35 percent and the loans will have to be repaid in 13 years.

Govt to probe profits of Islamic banks

In an attempt to check financing of militancy, the government will investigate how Islamic banks, including Islami Bank Bangladesh, and other financial institutions have spent their profits till date, said State Minister for Home Affairs Asaduzzaman Khan yesterday. Intelligence personnel have been instructed to check whether there are any inconsistencies in the financial statements of the institutions, the minister added. Intelligence personnel will also intensify their vigilance in Chittagong Hill Tracts, as some NGOs in the name of Islam are carrying out suspicious activities there. The national committee will also launch a campaign against militancy involving eminent media personalities, said Asaduzzaman, adding that the government would intensify its monitoring on social media like Facebook.

Shahjalal Islami Bank director on five-day remand again

A Chittagong court yesterday placed Mohammad Solaiman, director of Shahjalal Islami Bank Ltd, on a five-day remand in a case filed for misappropriating Tk 140 crore. Solaiman was on remand for seven days once before. Referring to an investigation of the bank, Farman R Chowdhury, managing director of the bank, said Solaiman had influenced the bank to lend Tk 140 crore to SK Steel and gave false assurances about the loan and Solaiman's company Paradise Corporation took over Tk 18 crore as bribe from SK Steel for this. On April 13, the case was filed accusing Solaiman and others.

Shahjalal Bank director on remand

A Chittagong court has sent Shahjalal Islami Bank’s Director Mohammed Solaiman to seven-day police remand in a case over misappropriation of bank money. Shahjalal Islami Bank authorities had filed the case against Solaiman with the Kotwali Police Station in Chittagong on Apr 13, alleging misappropriation of Tk 1.49 billion. Later, the Anti Corruption Commission (ACC) recorded the case. ACC officials arrested him on Jun 25 in a raid on Akram Tower at Bijoy Nagar in Dhaka. After being detained following an ACC probe, Solaiman claimed he had been victimised by AK Azad, the present back chairman.

19th AGN of Social Islami Bank Limited

The 19th Annual General Meeting of Social Islami Bank Limited was held in Sylhet, Bangladesh. A 12% cash dividend for the financial year 2013 was approved by the shareholders in the AGM. Major (Retd.) Dr. Md. Rezaul Haque, the Chairman of the Board of Directors of the Bank presided over the meeting. Directors of the Bank were present. The Managing Director of the Bank Md. Shafiqur Rahman stated that SIBL maintained and achieved a stable position in 2013 despite of many challenges in all of their key areas of operations.

Bangladesh Islamic finance sector: Sukuk the missing link

Bangladesh Islamic finance industry is well developed but lacks sharia-compliant instruments such as sukuk. This is limiting further growth of the sector according to a report. Sukuk would be helpfull to diversify the funding sources and could make up for the limited scope of the Islamic money market in Bangladesh. Islamic banks that follow religious principles are now representing 18.9 percent of all Bangladeshi bank deposits.

IBBL approves dividend of 18pc

The Islami Bank Bangladesh Limited approved 18pc dividend comprising 10pc stock and 8pc cash for the Shareholders for the year 2013. This was announced in its 31st Annual General Meeting, according to a news agency. Further in the meeting, four directors were elected. The AGM was held at the Bangabandhu International Convention Centre. Prof. Abu Nasser Muhammad Abduz Zaher, Chairman of the Bank presided over the meeting. The Shariah Supervisory Committee along with shareholders and high executives of the Bank were also present at the AGM.

Banks' dividends fail to lift investor confidence

Of the 30 listed banks in Bangladesh, 13 declared higher dividends than in the previous year, eight announced lower dividends, and eight the same, according to Dhaka Stock Exchange. Dutch-Bangla Bank came up with the highest amount of dividends—40 percent cash—for its general shareholders. ICB Islamic Bank gave no dividends. With the mixed trend in dividend declaration, the banking shares were unable to draw the investors' attention in the last couple of months, as corporate declarations from the sector could not fulfil retail investors' expectations. The banks' income from lending business declined in 2013 than the previous year due mainly to the political volatility. But thanks to the central bank's move of relaxing loan provisioning rules at the yearend, the banks could recover losses.

BB to introduce Shariah-based refinancing scheme for SMEs

Bangladesh Bank (BB) will introduce Shariah-based refinancing scheme for Small and Medium Enterprises (SMEs) and other thrust sectors, Governor Dr Atiur Rahman said. Referring to the Shariah compliant mode of refinance support from BB's Export Development Fund (EDF), the governor said introduction of similar Shariah compliant refinance support against SMEs and other thrust sector lending by Islamic banks is also underway. The central bank already issued guidelines for Islamic banking in Bangladesh using an approach that delegates to the Shariah-based financing community the self-regulation and oversight of its Shariah compliance practices.

Banks default international payments

Bangladesh’s credit rating might deteriorate as well as the LC confirmation cost would rise further. This is because two local private commercial banks Prime Bank and Dutch Bangla Bank allegedly failed to repay the loans (not more than US$2 million only) from the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC). Local commercial banks are now unable to repay the loans against local and foreign LCs due to stagnated business activities amid political deadlock ahead of the general election and prolonged violence. LC confirmation cost will be increased unless the local banks maintain the standard credit rating of the commercial banks.

IFIC to become Islamic bank

Bangladesh's International Finance Investment and Commerce Bank (IFIC Bank) has decided to become a full-fledged Islamic bank. The proposal has already been approved by the bank's board, and the government, being the bank’s majority shareholder, has also given clearance. The conversion is now subject to approval from different regulators. Shah A Sarwar, managing director of the bank, could not give a definite time on how long the conversion process would take. The government holds 32.75 percent of the bank, directors and sponsors 11.31 percent, institutions 33.91 percent, foreign investors 0.28 percent and the rest 21.75 percent is held by the general public.

BD becomes a role model of financial inclusion for Islamic world

Bangladesh has become a role model of financial inclusion for the Islamic financial world, said Mohammad Abdul Mannan, managing director (MD) of Islami Bank Bangladesh Ltd (IBBL). He came up with the observation while addressing the first ever ADB conference on Islamic finance for Asia held at the ADB Headquarters in the Philippines on 4-5 November.

Tk9.9bn scam by Bismillah Group

The Anti-Corruption Commission (ACC) of Bangladesh has filed 12 cases against 53 officials of five banks and the Bismillah Group for their alleged involvement in the embezzlement of funded loans worth over Tk9.9bn. The list of the accused included 13 people from Bismillah Group, 12 Janata Bank officials, eight Prime Bank officials, seven Premier Bank officials, five Jamuna Bank officials and eight Shahjalal Islami Bank officials. According to the probe report, Bismillah Group, in association with the bank officials, embezzled the money through loans against trust receipts using names of fake foreign buyers. They secured cash incentives against fake export documents, taking advantage of inland bills purchases and overpricing non-existing export items. The inquiry also found that the group laundered money abroad.

MoU inked between SJIBL, CPTU

Shahjalal Islami Bank Ltd. has signed a Memorandum of Understanding regarding e-GP (Electronic Government Procurement) system with the Central Procurement Technical Unit (CPTU), Implementation Monitoring and Evaluation Division (IMED), Ministry of Planning. Under this Memorandum, Shahjalal Islami Bank Ltd. will provide e-GP (Electronic Government Procurement) service within the territorial jurisdiction of the Bank. CPTU of the Ministry will provide e- GP Portal Dashboard and training to nominated focal persons of the Bank for the use of payment system under e- GP. On the other hand, CPTU Ministry of Planning will publish the names of the Bank in e-GP portal link to the Bank as the e-payment service provider.

IFSB and BB Spearhead Discussions on the Prospects and Challenges in the Development of Islamic Finance for Bangladesh

The Islamic Financial Services Board (IFSB) and Bangladesh Bank has successfully organised a "Seminar on Prospects and Challenges in the Development of Islamic Finance for Bangladesh" on 23 and 24 September 2013 in Dhaka. The seminar aimed to create greater awareness on the latest developments on the Islamic financial services industry, and to discuss the issues in further augmenting its role in Bangladesh. The meeting consisted of five sessions where recent developments in the Islamic capital market, regulatory frameworks, microfinance among others were discussed. At the end of the one and a half day seminar, IFSB assured Bangladesh Bank of its constant support for the various initiatives to strengthen the Islamic finance in its member countries.

Cash Waqf gets popularity

Cash Waqf is a voluntary endowment of money, deposited to the banks perpetually. Profit paid on this deposit is spent in different people's welfare purposes according to instructions of the account holders. These include education, health, food, utility and rehabilitation services as per instruction of the donors. The product is still at primary stage of its flourishing in Bangladesh. When a considerable amount of investment will be injected into the scheme, it might significantly contribute to a stable and sustainable economy. Banking insiders attributed the rising popularity of the scheme mainly to the opportunity to donate cash-money during the present time of land scarcity, and to the flexibility of distributing cash-benefits anywhere. Anybody can open this account by depositing total money of declared Waqf amount once or by installments.

ICIEC and The Bangladesh Bank sign MOU

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) and the Bangladesh Bank (The Central Bank of Bangladesh) signed a Memorandum of Understanding (MOU). The objective of the MOU is to establish a basis for the exchange of information between the two institutions on banking industry's condition and operating performance and ICIEC exposures on the banks operating in Bangladesh. It is expected that the MOU will help pave the way forward for ICIEC in meeting its objectives under the IDB Group Member Country Participation Strategy (MCPS) for Bangladesh, through enhance letter of credit coverage and support in terms of political risk insurance coverage of Foreign Direct Investment (FDI). The signing of the MoU should enhance ICIEC's ability to support exporting companies operating in Bangladesh, and also will help to attract more FDI.

IIDFC reappoints managing director

Md Asaduzzaman Khan has recently been reappointed as managing director of IIDFC. A career central banker, Khan joined IIDFC after taking voluntary retirement as executive director of Bangladesh Bank in 2008. He is an MA in economics from Dhaka University and an MA in banking and finance from the University of Wales, UK. He was appointed as administrator of the then Oriental Bank Ltd (now ICB Islamic Bank Ltd) in July 2008. He was also the managing director of the security printing press of the central bank at Gazipur. He is also a director of ICB Capital Management Ltd, a member-cum-director of IIDFC Securities Ltd and a former director of the Dhaka Stock Exchange.

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