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The London-based Economist in its latest issue has published an article on Thursday on the growth of Islamic banking in Bangladesh. The full text is as follows: In Motijheel, the main business district in Bangladesh's capital, Dhaka, an iron fence and terrible traffic divide two branches of the country's oldest private bank-a "conventional" one and an Islamic one. Abdus Sattar, manager of the Islamic one, says that when he joined AB Bank, in 2005, his was "a loser branch". Today, like most Islamic banks in the country, it is more profitable and better run than its conventional peers. Islamic banking's future in the country, however, remains murky. Bangladesh has eight full-fledged Islamic banks; a handful of orthodox banks, like AB, also offer Islamic-banking services alongside others. Islami Bank Bangladesh, founded in 1983 by Saudi and Kuwaiti investors, commands 90 per cent of Islamic-banking assets and deposits. It is also the biggest private lender overall, with 14,000 staff, 12m depositors and a balance-sheet of $10bn. Its success was built on the "two Rs": remittances and ready-made garments. Islami Bank was a pioneer in financing Bangladesh's rise as the apparel industry's main production base outside China. It also runs the world's biggest Islamic microfinance scheme. Azizul Huq, a former vice-chairman of Islami Bank, thinks sharia-compliant banking will eventually outgrow the conventional kind (at present it controls just 20 per cent of deposits). The population of 170m is 90 per cent Muslim. The World Bank reports that only one in three Bangladeshis has a bank account. The government's own polls show that Islamic banking is wildly popular, especially in the cities and among the young. Overall, 84 per cent "approve" of it. Ahsan Mansur, the executive director of Policy Research Institute (PRI), a think-tank in Dhaka, says Islami was the only bank where "bribery was not institutionalised". At conventional banks bad loans to politically connected businesses have been piling up. Politicians seem to be encouraging nepotism: a new banking law will allow directors to stay on boards for nine years (up from six); and allow controlling families four members (up from two), wrote The Economist. This month the central bank reported that net profits at conventional banks rose by just 4.9 per cent over the year to June. Non-performing loans (NPLs) stood at 9.2 per cent, compared with just 4.3 per cent at Islamic ones. At nine of the country's 57 banks, over 20 per cent of loans were non-performing. The bad-loan problem may yet worsen as business struggles with stagnant exports: in the 12 months to June, garment exports expanded by 1.7 per cent year on year, the slowest pace in 15 years. The central bank's stress tests show that if the three biggest borrowers defaulted, 23 banks would fail. In this context, Islamic banking might expect some official help. Far from it. The central bank has been sitting for years on applications from eight banks to change to an Islamic business model. It is yet to write rules for new sharia-compliant financial instruments, such as a sovereign sukuk, or Islamic bond. Islamic banks have no role in financing government projects. Resistance comes from both the financial and political establishments. The central bank adheres to economic orthodoxy and is wary of a form of banking in which interest rates are nominally abolished. And the government of Sheikh Hasina, the prime minister, has long identified Islamic banking with the political opposition. In January the government in effect instigated a boardroom coup at Islami Bank, which had been run by members of the biggest Islamic party. Ownership is now in the hands of those close to the prime minister's family. This, too, may stunt Islamic banking. Bangladesh's biggest successes -garments, microfinance and telecoms-are in industries where the government took a back seat. Since the takeover, the bank's biggest institutional investor, the Jeddah-based Islamic Development Bank, has reduced its stake from 7.5 per cent to 2.1 per cent. Mr Mansur of PRI notes that the takeover "clearly signals that assets in Bangladesh may not be safe in the future". Islami Bank's chairman, Arastoo Khan, insists it will bounce back, despite a record low 10 per cent dividend in 2016 compared with a historic average of 21 per cent, and rising NPLs. The future of Islamic banking in Bangladesh may hinge on whether he is right, concluded The Economist.....

Published at: 2017-08-25 05:00:05

The High Court directed the government on Thursday not to allow any industrial unit to be set up within 10 kilometres of the Sundarbans, reports UNB. The HC bench of Justice Moinul Islam Chowdhury and Justice JBM Hasan passed the order after primary hearing on a petition. The court also asked the government to submit within six months a list of the industries already built in 10 km area of the Sundarbans. It also issued a rule seeking explanation as to why the approval of industries and factories within 10 km areas of the forest will not be violation of the gazette notification of the Environment and Forest Ministry issued in 1999 and why those should not be removed. The Secretaries of the Environment Ministry, Industries Ministry, Land Ministry, Director General of the Department of Environment, Deputy Commissioner of Khulna, Bagerhat, Satkhira, Barguna and police superintendent of Khulna were asked to respond to the rule. President of Save the Sundarbans Foundation Sheikh Faridul Islam filed the writ on April 04. According to the writ petition, the Environment and Forest Ministry issued a gazette notification on August 30, 1999 declaring the Sundarbans as a reserved area and its 10 km areas as ecologically critical area but the Environment Department has reportedly issued clearance certificate to 150 industries in the said area.....

Published at: 2017-08-25 05:00:05

Finance Minister AMA Muhith inaugurated on Thursday the online banking activities of Palli Sanchay Bank (PSB), with a call to help upgrade the financial condition of rural people. He launched the real-time core banking activities of the newly established bank, dedicated to provide seasonal loans to the rural poor for improving their livelihood, at a function at Bangladesh Secretariat. The government last year turned the "One House, One Farm" project into PSB to make more funds available to the poor people. Mr Muhith hoped that all the eligible people would come under the net of "One House, One Farm" project by 2021, when the project will be abolished while the bank will fully takeover the activities of the project. He said that the attitude of saving something grew among the people between 1983 and 2016, and it has brought big changes to the country's economy. The people now prefer taking group loans, instead of micro-credit, and jointly start farm business. The minister said the PSB at a time digitised its 485 branches. None of the other banks could digitise such a big number of branches at once. Speaking on the occasion, PSB chairman Dr Mihir Kanti Mazumder said no bank was providing loan at an interest rate as low as 8.0 per cent, but the PSB was doing so. He expressed the hope of extending the banking services to the union level for bringing more un-banked people under the services. Finance division senior secretary Hedayetullah Al Mamoon and financial institutions division secretary Eunusur Rahman also spoke, among others, on the occasion.          syful-islam@outlook.com....

Published at: 2017-08-25 05:00:05

Registration of the country's products as geographical indication (GI) will act as a 'grand branding' both at home and abroad, industries minister Amir Hossain Amu said at a certificate giving ceremony on Thursday. "Most of the Bangladeshi products with commercial prospects will be registered as our own GI gradually aiming to expand the export market," he told the ceremony titled 'Bangladesh Hilsa' organised by Department of Patent, Design and Trademark (DoPDT) at CIRDAP Auditorium in the city. At the programme, the minister formally handed over the GI Certificate on Hilsa to Md Arif Azad, director general of Department of Fisheries (DoF). Hilsa has recently been registered by DoPDT as the second Bangladeshi GI product, followed by Jamdani. A geographical indication (GI) is a name or sign used on certain products which corresponds to a specific geographical location or origin of a country. Articles 22, 23 and 24 of the World Trade Organisation (WTO)'s Trade-Related Aspects of Intellectual Property Rights (TRIPS) grant countries the right to protect and patent famous, exceptional and extraordinary products as their own GI. The industries minister said the government has enacted GI Products (Registration and Protection) Act 2013 and GI Rules 2015 with the help of World Intellectual Property Organisation (WIPO) to protect products of its own origin. He said registration of Hilsa as GI will greatly help in branding the fish in the global arena. The minister stated that the country produced nearly 0.495 million tonnes of Hilsa in the last financial year (2016-17) which was 75 per cent of the global output. State minister for fisheries and livestock Narayan Chandra Chanda said the government's initiatives to protect Hilsa have helped raise the production of the delicious fish. He said more than 0.4 million fishermen now get food and cash incentives when Hilsa catching remains banned in the major sanctuaries. Hilsa can now be found in many rivers after decades thanks to the government's mother Hilsa and Jatka (baby Hilsa) preservation projects.       Secretary to the MoFL Maksudul Hasan Khan who presided over the programme said responsibilities of the private sector have increased further. "After the GI registration, now the quality of exportable fish should strictly be maintained," he added.   Additional secretary to the industries ministry Shusen Chandra Das pointed out that his ministry is facing problems due to lack of any comprehensive data on products and species which is mandatory for registering maximum products of own origin. Apart from the industries ministry, the Prime Minister's Office (PMO) has also been involved in GI registration process, he said, adding that the PMO has directed all the government offices at union level to apply for GI registration of products produced in their locality.   Registrar of DoPDT Md Sanwar Hossain said 24 more items are in the pipeline which will be registered as Bangladeshi GI soon. He also put emphasis on raising awareness among the country's people about GI registration. tonmoy.wardad@gmail.com     ....

Published at: 2017-08-25 05:00:05

RAJSHAHI, Aug 24: Members of Anti Corruption Commission (ACC) today arrested an officer of Sonali Bank Limited on charge of defalcating Tk 6.0 million here. The arrested was identified as Khaledul Haque, Senior Officer of Tanore Branch of the bank. Earlier, the local ACC office lodged a case with Rajpara Police Station accusing two officers of the Tanore branch- Khaledul Haque and Nadir Hossain-- on money defalcation charge.  On a tip-off, a team of ACC arrested Khaledul Haque from Keshabpur area under Rajpara Police Station, said Arif Hossain, Assistant Deputy Director of ACC.  The ACC officials were conducting drives to arrest another accused of the case Nadir Hossain, he added.    — BSS....

Published at: 2017-08-25 05:00:05