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The ministry of finance (MoF) has asked the state-owned enterprises (SoEs) to speed up the ongoing move of offloading their shares in the capital market through resolving the existing complexities. The instruction came Wednesday at a meeting chaired by finance minister AMA Muhith. As per the Prime Minister's instruction, the SoEs were supposed to offload their shares by December, 2010. But the enterprises, except one, are yet to offload their shares despite holding several meetings with the MoF. As per the decision of Wednesday's meeting, the profit-making SoEs will have to submit a report by May next on the progress of offloading the shares. And, the loss-making ones have been asked to set a work plan for making them profitable with the purpose of offloading shares. The MoF would again sit with the SoEs in December next to follow up the development in this regard, the finance minister said. "It's time to offload shares of SoEs," a senior official of the MOF quoted the finance minister to have told the meeting. And, the representatives of relevant ministries and SoEs agreed in principle to work in this regard, he told the FE. He said State Minister for Power, Energy and Mineral Resources Nasrul Hamid also favoured offloading the shares of the SoEs under his ministry. The state minister informed the meeting that they had made an agreement with Boston Consulting Group for valuation of their companies and offload shares in the capital market. They would make some companies ready within one year for offloading shares. The representatives from the securities regulator told the meeting that they would arrange a workshop for the officials of SoEs to facilitate their share offloading procedure. Among different SoEs, the representatives of Essential Drugs Company were asked about their delay in offloading shares. In response, they argued that their public service-oriented objectives might be affected if they go public. "It cannot be the logic and the company should think about the government's plan of offloading the shares," an official quoted the finance minister as saying. Hedayetullah Al Mamoon, senior secretary of the MoF, Md. Nasir Uddin Ahmed, joint secretary of financial institutions division, Professor M Khairul Hossian, chairman of the securities regulator, Dr. Swapan Kumar Bala, a commissioner of the securities regulator, K. A. M. Majedur Rahman, managing director of Dhaka bourse, among others, were present at the meeting. As per information of previous meetings, some of 26 SoEs had not submitted 'positive' statement about offloading shares in the capital market. Some of the companies had emphasised on collecting fund from their own sources instead of offloading shares for their operations or implementing any other projects. The board of directors of one company also suspended the process of offloading shares. mufazzal.fe@gmail.com....

Published at: 2017-07-27 00:00:05

At least nine local banks have been battered by newly-invented 'de-risking' strategy to combat money laundering that may also affect profitability of other local banks. Such official findings stem from the national action plan mandated by an international combat against money laundering and terror financing.          "Some other local banks have also been affected by the de-risking," Abu Hena Mohammad Razee Hassan, Deputy Governor of Bangladesh Bank (BB), disclosed while replying to a query about the impact on de-risking of Bangladesh. The term 'de-risking' refers to financial institutions closing the accounts of clients perceived high risk for money laundering-or terrorist-financing abuses, namely money service businesses, nonprofit organisations, correspondent banks, and foreign embassies. The central bank of Bangladesh has already advised the global banks through their local offices or representatives to inform the Bangladesh Financial Intelligence Unit (BFIU) of the central bank before cutting ties with local commercial banks, said Mr. Razee Hassan, also head of the BFIU. "The issue has already been discussed at FATA (Financial Action Task Force) and APG (Asia Pacific Group on Money Laundering) recent meetings," the BFIU chief noted. Among the nine local banks, five are state-owned commercial banks while one is a Shariah-based Islamic bank and three other conventional local private commercial banks. They have been designated as the mostly affected banks of Bangladesh, according to a BB senior official. Currently, 49 local banks are running their operations across the country. He also said the BFIU has urged the global banks to review the corresponding relationship discontinuation with the local banks. "Some corresponding relationships had been discontinued on the basis of media reports," the official said in reply to a query. Adverse impacts of de-risking increased further in 2016, affecting 60 per cent local banks as against 53 per cent a year before. It was 60 per cent in 2014, according to a study conducted by the Bangladesh Institute of Bank Management (BIBM). Contacted, Shah Md. Ahsan Habib, professor and director of the BIBM, said the profitability of banks may be hampered following adverse impacts of the de-risking drive.  "Cross-border transactions and remittance business of the banks have been affected due to the de-rising," Dr. Habib explained. He also urged the banks to take effective measures to improve compliance capacity of AML/CFT for avoiding such negative impacts. "Workers' remittance inflows are suffering downturn not just because of weakened demand for migrant workers in major migrant labour-hosting countries but also because it is getting harder, even impossible in some instances, for migrant workers to access legitimate channels for sending money home, with high-cost burdens of compliance with unduly  stringent AML/CFT regulations dissuading international banks from relationships with remittance-handlers," the central bank said in its latest monetary policy statement (MPS), released Wednesday. It also said: "Urged repeatedly in global dialogues, inter alia by the BB and other Bangladesh authorities, global AML/CFT standard-setters are now reportedly looking into this." The inflow of remittances dropped by 14.48 per cent to US$ US$12.77 billion in the fiscal year (FY) 2016-17 from $14.93 billion a year ago. siddique.islam@gmail.com....

Published at: 2017-07-27 00:00:05

The mobile operators have urged the government not to impose any restriction on 'funding sources' for their upcoming investment in 4G, saying that any such provision would put them 'at a disadvantage compared to other industries'.   In a formal letter sent to the State Minister for Post and Telecom, the Association of the Mobile Telecom Operators of Bangladesh (AMTOB) said the operators should be allowed to borrow from local banks for 4G investment. Such 'fiscal circulation' will 'help the roll-over of idle money', the Association pointed out.    Bangladesh is targeting to introduce 4th Generation mobile communication technology by this year, four years after the 3G technology was launched in the country.   As part of this, the government, earlier this month, unveiled the draft 4G guideline after a long wait, shedding light on several thorny issues related to the launching and roll-out of 4G networks in the country. The draft guideline, among other things, has stipulated that for development, operation and roll-out of 4G or LTE (long-term evolution), the foreign partner shall invest in foreign currency directly equal to its percentage of ownership.   No loan from any Bangladeshi scheduled bank or financial institution or leasing company can be raised for the foreign part of the investment to pay license fee, spectrum acquisition fee and to purchase equipment (hardware and services from abroad) during the roll-out period, the guideline said.    Providing its feedback on the draft guideline, the AMTOB, however, stated that the guideline has 'introduced funding restriction' on the operators.   "The clause is ambiguous and places mobile network operators at a disadvantage compared to other industries and companies, both local and foreign", the AMTOB letter said. Noting that loans to foreign-controlled companies are already regulated by other competent authorities, the AMTOB said with a substantial foreign exchange reserve and plenty of liquidity in local scheduled banks, fiscal circulation will help the roll-over of idle money, which will directly contribute to the GDP growth of Bangladesh. "It is our proposal that there should not be any regulations in the guideline on sources of fund to invest", the AMTOB letter said.   When contacted on the issue, official sources, however, opined that the guideline's provision regarding 4G funding is in line with the prevailing foreign investment regulations of the country. As per the industry figures, the mobile operators have so far invested a total of Tk 320 billion in 3G while earning Tk 60 billion as revenue. Besides, the operators are planning to invest around Tk 226 billion for introducing 4G in the country.   Mobile operators were also critical about the provision of technology neutrality fee outlined in the draft guideline. The 4G guideline, in its latest draft, has stated that in addition to annual license fee and 5.5 per cent of gross revenue, the licensees will 'have to pay the conversion fee for technology neutrality of spectrum already assigned in favour of Cellular Mobile Phone Operator'. Citing this provision, the AMTOB said, "lt is our view that no conversion fee should be levied on the operators as it deviates from the commitments made in the 2G licensing guideline". "Furthermore, operators should have the clarity and necessary flexibility to convert their existing frequency based on their commercial needs", it added. mehdi.finexpress@gmail.com....

Published at: 2017-07-27 00:00:05

The Anti-Corruption Commission (ACC) will launch 'Hotline Number 106' today (Thursday) for its call centre to receive graft allegations over phone. Finance Minister AMA Muhith is expected to launch the anti-graft phoning programme at a function to be held at the ACC Media Centre today in the morning.     — FE Report....

Published at: 2017-07-27 00:00:05

The National Board of Revenue (NBR) wants the Comptroller General of Accounts (CGA) office to improve its quality of work to avoid mismatch between tax revenue collection estimates of the two organisations.    Md Nojibur Rahman, chairman of the NBR, while speaking at an 'opinion-exchange' meeting with the newsmen Wednesday in Dhaka described the process of data compilation by the CGA office 'faulty'.   "Mismatch between NBR and accounting department's data makes the taxmen upset. Revenue collection data of both the organisations should be considered by Ministry of Finance (MoF)", he added. The data made available to the Ministry of Finance by the CAG office showed that NBR had mobilised tax revenue of Tk 1.21 trillion in July-March period of the immediate past fiscal year, (FY) 2016-2017. The amount is lower by Tk 47.98 billion than the amount the NBR claims to have mobilised during the period. The NBR chairman disclosed the revenue collection data for the FY '17 at the 'view-exchange meeting'. Value Added Tax (VAT) wing led the aggregate revenue collection amount of NBR despite various challenges, including unexpected decline in revenue collection from tobacco and mobile telecom sectors. The wing collected Tk 668.91 billion revenue last fiscal out of NBR's aggregate tax-revenue collection of Tk 1.85 trillion. The revenue board achieved the record 19 per cent growth in its aggregate revenue collection last year compared to that of the previous year. Of the total tax collection, Income Tax wing contributed Tk 637.81 billion and Customs wing Tk 543.30 billion. The NBR chief said the tax authority has used digital technology to monitor taxpayers. NBR is also preparing a work-plan to achieve the revenue collection target for this FY. Citing the finance minister's recent hints, he also said the aggregate target of NBR may be revised downward, as revenue might not come according to the government's expected volume due to non-implementation of the new VAT law. "We will do our job in accordance with the original target set by the government, and without waiting for downward revision," he added. Responding to a query, the NBR chairman said he has sent letters to the government high-ups concerned to improve public service for encouraging tax payment. He noted that NBR could not collect the expected amount of revenue due to some negative factors. The VAT officials' efforts to motivate and prepare themselves for implementing the new VAT law hindered the flow of VAT collection, the NBR said in a statement. Besides, VAT wing took preparations to phase out the current accounting system, expecting execution of the new VAT law. The process caused a decline in product release and revenue deposit in the last one week of FY 17. Income tax collection also faced challenges due to 14 per cent negative growth of profits in the banking sector. Long vacation of the Eid-ul-Fitr at the end of June also affected the revenue collection flow and realization of arrear tax at the end of last FY. NBR offered different exemptions on duties and taxes to energy sector and other projects of the government last year. The revenue board provided exemption worth Tk 400 billion in the form of income tax, VAT and customs duty to various public and private sector entities. Bangladesh Petroleum Corporation (BPC) and Petrobangla owe a large amount of revenue to NBR. Petrobangla has Tk 228 billion in outstanding VAT to Large Taxpayers Unit (LTU) alone. The original revenue collection target for FY' 17 was Tk 2.03 trillion. NBR could have surpassed it by Tk 46 billion, if the arrear could be realised. The NBR chairman said the arrear would be realised with support from the government high-ups. NBR would set up tax camps at the union level to encourage taxpayers, he added. doulot_akter@yahoo.com....

Published at: 2017-07-27 00:00:05