Banglalink keen to offload 10% shares for Tk 900cr

Banglalink Digital Communications Limited – the third-largest telecom service provider in the country – is keen to raise Tk900 crore from the stock market.

To this end, the company, which has a paid-up capital of over Tk8,000 crore, will offload 10% of its shares at a face value of Tk10.

Once listed, it will be the company with the highest paid-up capital in the stock market, according to officials at the Bangladesh Securities and Exchange Commission (BSEC).

At the same time, Banglalink will be the third multinational telecom service provider to get listed on Bangladesh’s stock exchanges.

On Tuesday, senior Banglalink officials led by VEON Chief Executive Officer Kaan Terzioglu held a meeting with BSEC Chairman Shibli Rubayat-Ul-Islam to discuss the listing procedures.

Banglalink is fully owned by Malta’s Telecom Ventures Ltd (previously Orascom Telecom Ventures Ltd), a 100% owned subsidiary of Global Telecom Holding, which is, in turn, a subsidiary of the Dutch holding company VEON.

BSEC Commissioner Shaikh Shamsuddin Ahmed told The Business Standard, “The company wants to raise around Tk900 crore through an initial public offering (IPO) under the fixed price method.”

“The commission is eager to enlist it despite having some indications of weakness in the financial health of the company that needed to be addressed,” he added.

Earlier, multinational telecom service providers Grameenphone and Robi Axiata got listed on the country’s capital market in 2009 and 2020, respectively, by issuing 10% shares each.

Launched in February 2005, Banglalink has recently reached the landmark of 4 crore subscribers.

It has reported a 12.1% growth in revenue for 2022.

Its revenue grew to Tk5,347 crore, up from Tk4,794 crore, while its data revenue grew by 26.6% in 2022.

Taimur Rahman, chief corporate and regulatory affairs officer of the company, said, “Banglalink has been a catalyst for making telecom services affordable for the masses. It has been consistently performing well, and the recent result indicates a strong foundation for future sustainable performance.

“With double-digit revenue growth and an exceptional digital services offering in the market, Banglalink is now serving more than 40 million customers nationwide.”

“VEON sees a long-term opportunity in Bangladesh and would like to make the people of Bangladesh a part of Banglalink’s success story. In line with this, VEON had a good discussion with the BSEC and would be working together to explore future opportunities,” he added.

Source: The Business Standard


57 MNCs apply this year for permission to invest Tk15,000cr


  • India’s leading chemical company Indokem to invest Tk1,500cr
  • Belgium-based Azelis to initially invest around Tk1,200cr
  • Japan-based tire maker Bridgestone to invest Tk2,000cr
  • China’s Sinovac Biotech to start producing Plasma-Derived Medical Products with Tk5,000 cr investment

Infographic: TBS

Infographic: TBS

One of the top Indian chemical companies Indokem is gearing up to invest some Tk1,500 crore in Bangladesh. The company has already received investment approval from the Bangladesh Investment Development Authority (Bida) and set up a camp office in Dhaka.

Indokem has now applied to the Registrar of Joint Stock Companies and Firms (RJSC), seeking permission to open a branch in Bangladesh. They have also sought allocation of land in a private economic zone to set up factories.

Aside from Indokem, 56 other big and small multinational companies (MNCs) have applied to the RJSC this year, seeking permission to open their branches to import, produce and export various products and to market locally.

According to a source in RJSC, these applications are under process.

These companies will invest more than Tk15,000 crore and once they start operation, 30,000 new jobs will be created, RJSC and Bida sources say.

If necessary approvals of these companies are completed this year, they will be able to conduct business and production by next year, Bida officials say.

Sheikh Shoebul Alam NDC, registrar at the office of RJSC, told The Business Standard that a significant number of foreign companies have applied to the RJSC in the last three months.

“The RJSC received these applications from January to 10 March. So many applications in such a short period would be a first,” said Sheikh Shoebul Alam.

Explaining the growing number of interested companies, he said, “It’s because Bangladesh is now known to the world as an investment hub. Especially, the government’s plan to implement 100 economic zones is attracting such investments.”

“Foreign companies are interested in investing in Bangladesh due to the cheap labour and the large market in the country, he added.”

Owner of a reputed law firm, which is assisting nine of the 56 companies in the approval process, said if these companies get all approvals required from the government, this just might be the year of highest foreign investment in the country so far.

According to the RJSC sources there are 2,79,167 public, private limited companies, foreign companies, partnership firms and one person companies in the country as of last February. Among them 1,051 are foreign companies.

According to Bida data, “New foreign investment worth about Tk11,643 crore came in 2021 and Tk15,000 crore in 2022. Bangladesh Bank data says in 2022, foreign companies including new and old ones have invested about $3.5 billion.

Belgium based multinational company “Azelis”, one of the world’s leading multinational companies supplying raw materials for pharma, food, agricultural, chemicals for the textile, personal care (cosmetics) and life science products, is going to begin its operations in Bangladesh with a huge investment.

According to a source, the company will initially invest around TK1,200 crore in Bangladesh.

Aparna Khurana, managing director, Azelis-India told The Business Standard, “Azelis plans to lead in the Bangladesh Market.”

She did not disclose the figure of investment but hinted that the figure will be higher than other companies in the sector in Bangladesh.

RJSC sources said, application of the Belgium-based MNC is under process.

Japan-based motor tire manufacturer Bridgestone Corporation has already secured approval from Bida to set up a factory for manufacturing tires for the local market and also to export to various countries.

Their application is also under process and expected to get final approval by May-June, said RJSC sources.

A Bangladeshi official of Bridgestone Corporation told TBS that the company will initially invest around Tk2,000 crore.

The official said that Bida has already approved their proposal.

Bridgestone has sought land at the Bangladesh Special Economic Zone (BSEZ) in Araihazar, Narayanganj.

After the approval of RJSC, some 17 different types of approvals are required for foreign companies to set up a factory. Bida’s One Stop Service Centre assists the companies with these necessary approvals.

The Chinese company Sinovac Biotech, which makes a Covid-19 vaccine, is going to start producing Plasma-Derived Medical Products (PDMP) in Bangladesh with an investment of Tk5,000 crore.

An official of Sinovac Biotech (Bangladesh) Ltd told TBS that they are also waiting for the approval from the RJSC.

Kevin Zhang, general manager of Sinovac Biotech (Bangladesh) Ltd, told TBS “Bangladesh is one of the most important targeted countries to produce and manufacture plasma-based medicine. Before coming to Bangladesh, we have already established some branches in South America, Chile, Colombia and Turkey. We plan to establish more branches in different countries.”

As of now, Bangladesh, like other low- and middle-income countries, imports 100% of the plasma-based products, requiring a lot of foreign currency.

Barrister Omar Sadat, president of Bangladesh-German Chamber of Commerce and Industry (BGCCI) said that foreign investment is constantly increasing in Bangladesh. However, there are obstacles to approvals that need to be resolved.

“The government wants to increase foreign investment. But due to some bureaucratic complications, many foreign companies often turn away,” he pointed out,

According to Bida sources, of the 56 companies, 20 will invest in different economic zones while the rest will set up their point of operation and manufacturing plants in different regions of the country, including the outskirts of Dhaka and Chattogram.

Commerce Minister Tipu Munshi said the government is working to attract such multinational and foreign companies to invest in Bangladesh.

“The government will provide all kinds of facilities to foreign companies to do business and manufacture in Bangladesh,” he said, adding, “The Government will be able to collect huge revenues and at the same time a large number of people will find employment.”


Source: The Business Standard. 


Labaid Cancer Hospital plans to go public

It will be the second hospital after Samorita to go public

Labaid Cancer Hospital plans to go public

Labaid Cancer Hospital and Super Specialty Centre, a sister concern of Labaid Diagnostic Centre, is planning to come to the stock market to raise fund.

This will be the second hospital to go public after Samorita Hospital, which got listed with the Dhaka Stock Exchange in 1997.

Labaid Cancer Hospital has already signed a corporate advisory and issue management agreement with City Bank Capital, a merchant bank, officials of the companies told The Daily Star.

City Bank Capital will also act as the issue manager for the planned initial public offering of the hospital.

Labaid Cancer Hospital plans to go public

Ershad Hossain, managing director and CEO of City Bank Capital, and Sakif Shamim, managing director of Labaid Cancer Hospital, pose after signing a corporate advisory and issue management agreement at City Bank Capital’s headquarters in Dhaka today. Photo: Collected

Ershad Hossain, managing director and CEO of City Bank Capital, and Sakif Shamim, managing director of Labaid Cancer Hospital, signed a deal in this regard at City Bank Capital’s headquarters in Dhaka today.

The healthcare sector needs huge capital expenditure and the capital market has the scope to supply it, so the cancer hospital is planning to raise fund from the market, Hossain said.

Labaid Cancer Hospital has huge growth potential, so City Bank Capital has agreed to give the service, he added.

The 14-storey modern building facility of the hospital has over 150 inpatient beds, emergency facilities, intensive care unit, dialysis and palliative care, according to the website of the hospital.

It has the facility of chemotherapy, radiotherapy, brachytherapy, immunotherapy and hormonotherapy and dedicated modern laboratory for cancer diagnosis, it added.

Labaid is an around 35-year-old company and it has an intrinsic value, said Shamim of Labaid Cancer Hospital, the initial investment of which was Tk 500 crore.

“We want to go for the IPO for its value creation.”

The hospital has the potential to grow further and it has plans to go for expansion, he added.


৯ শতাংশ সুদহার তুলে নিচ্ছে কেন্দ্রীয় ব্যাংক

আন্তর্জাতিক মুদ্রা তহবিলের (আইএমএফ) ঋণের অন্যতম শর্ত সুদহার বাজারভিত্তিক করা। এমন পরিস্থিতিতে অনড় সিদ্ধান্ত থেকে সরে আসছে কেন্দ্রীয় ব্যাংক। তুলে দেওয়া হচ্ছে সর্বোচ্চ ৯ শতাংশ ঋণের সুদহার। উচ্চ মূল্যস্ফীতির প্রভাবে সঞ্চয়প্রবণতা কমায় উচ্চ সুদে আমানত নিতে পারছে না ব্যাংক। ফলে তারল্য সংকট সৃষ্টি হয়েছে।

গতকাল রবিবার বাংলাদেশ ব্যাংকের মুদ্রানীতিসংক্রান্ত এক বৈঠকে এ বিষয়ে আলোচনা হয়। বৈঠকে সভাপতিত্ব করেন গভর্নর আব্দুর রউফ তালুকদার। এ সময় ব্যাংকের ডেপুটি গভর্নরসহ সংশ্লিষ্ট বিভাগের নির্বাহী পরিচালক ও কর্মকর্তারা উপস্থিত ছিলেন।

বৈঠকের এক কর্মকর্তা জানান, আগামী জুনে নতুন মুদ্রানীতি ঘোষণা করা হবে। কেমন মুদ্রানীতি হবে এ বিষয়ে বৈঠকে আলোচনা হয়েছে। ঋণের সুদহার বাজারভিত্তিক করার বিষয়ে আইএমএফের শর্ত রয়েছে। এখন যে ৯ শতাংশ ক্যাপ রয়েছে, তা কিভাবে তুলে বাজারব্যবস্থার ওপর ছেড়ে দেওয়া যায়, সেটির কৌশল নির্ধারণে আলোচনা হয়েছে। যেমন লাইবর রেটের সঙ্গে ব্যাংক নির্ধারিত সুদ যোগ করে মোট সুদহার নির্ধারণ কর হয়। ঠিক সেভাবে পাঁচ ধরনের বন্ডের সুদহারের গড় রেটের সঙ্গে একটি রেট নির্ধারণ করে দেবে বাংলাদেশ ব্যাংক।

ব্যাংকাররা জানান, ব্যাংকগুলো অনেক দিন ধরেই সুদহারের সীমা তুলে দেওয়ার দাবি জানিয়ে আসছে। কেননা ঋণে ৯ শতাংশ সুদের সীমা থাকায় আমানতে সুদ বাড়াতে পারছে না ব্যাংকগুলো। আবার সুদ না বাড়িয়েও ঋণ পাচ্ছে না। আইএমএফের সাড়ে চার বিলিয়ন ডলার ঋণের অন্যতম শর্ত সুদহার বাজারভিত্তিক করা। সম্প্রতি বাংলাদেশ ব্যাংকের এক গবেষণা প্রতিবেদনেও সুদহারের সীমা প্রত্যাহার অথবা বাড়ানোর সুপারিশ করা হয়।

বাংলাদেশ ব্যাংকের নির্বাহী পরিচালক ও মুখপাত্র মেজবাউল হক বলেন, নতুন মুদ্রানীতি নিয়ে কাজ শুরু হয়েছে। আগামী জুনের তৃতীয় সপ্তাহে মুদ্রানীতি ঘোষণা করা হবে। চলমান মুদ্রানীতির কার্যক্রম পর্যবেক্ষণ ও আগামী মুদ্রানীতিতে কী কী থাকবে, বৈঠকে সেসব বিষয়ে আলোচনা হয়েছে।

তিনি আরো বলেন, নতুন মুদ্রানীতিতে ব্যাংকঋণের সুদহার কী করা যায়, সে বিষয়ে আলোচনা হয়েছে। এখানে ব্যান্ডিং ও রেফারেন্সের রেটের কথা ভাবা হচ্ছে। এসব বিষয়ে পরীক্ষা-নিরীক্ষা করা হচ্ছে। আগামী মুদ্রানীতিতে এসব বিষয়ে বিস্তারিত ঘোষণা করা হবে।

মূল্যস্ফীতি নিয়ন্ত্রণ ও কাঙ্ক্ষিত প্রবৃদ্ধি অর্জনের মধ্যে ভারসাম্য রাখতে মুদ্রানীতি প্রণয়ন ও প্রকাশ করে কেন্দ্রীয় ব্যাংক। দেশের আর্থিক ব্যবস্থাপনায় মুদ্রানীতি খুবই গুরুত্বপূর্ণ। এর মাধ্যমে অভ্যন্তরীণ ঋণ, মুদ্রা সরবরাহ, অভ্যন্তরীণ সম্পদ, বৈদেশিক সম্পদ কতটুকু বাড়বে বা কমবে এর একটি পরিকল্পনা তুলে ধরা হয়।

বাংলাদেশ ব্যাংকের সর্বশেষ তথ্য অনুযায়ী, দুই বছর মেয়াদি বন্ডে ৭.৫৫ শতাংশ, পাঁচ বছর মেয়াদি বন্ডে ৭.৯০ শতাংশ, ১০ বছর মেয়াদি বন্ডে ৮.৩৩ শতাংশ, ১৫ বছর মেয়াদি বন্ডে ৮.৭৭ শতাংশ ও ২০ বছর মেয়াদি বন্ডে সুদের হার ৮.৯৫ শতাংশ। অর্থাত্ এই পাঁচ ধরনের বন্ডে সুদহারের গড় ৮.৩০ শতাংশ। এই রেটের সঙ্গে যদি বাংলাদেশ ব্যাংক ৫ শতাংশ করিডর রেট নির্ধারণ করে দেয়, তাহলে ১৩.৩০ শতাংশে ঋণ বিতরণের সুযোগ পাবে ব্যাংক। অর্থাৎ এই নীতিমালা বাস্তবায়িত হলে ব্যাংকঋণের সর্বনিম্ন সুদহার এক লাফে ৪ শতাংশ বৃদ্ধি পাবে। মূল্যস্ফীতি নিয়ন্ত্রণ ও আইএমএফের ঋণ পাওয়ার শর্ত পূরণ করতেই এ সিদ্ধান্তের কথা ভাবছে বাংলাদেশ ব্যাংক।

সূত্রঃ কালের কন্ঠ 

Bank Asia’s 2022 profit goes up 13pc, on higher dollar-taka gap

Bank Asia Ltd has registered a 13 per cent year-on-year rise in profit to Tk 3.05 billion for the year ended in December 2022, thanks to higher income from export-import business.

Its consolidated earnings per share stood at Tk 2.62 in 2022, up from Tk 2.34 the year before, according to a disclosure posted on the Dhaka Stock Exchange (DSE) on Sunday.

Meanwhile, the bank’s share rose 2.48 per cent to close at Tk 20.70.

Market insiders said significant gains from the treasury department, which deals with foreign exchange transactions in export and import, were the main driver of the profit growth.

Though the bank’s core business suffered in the sluggish economy, incomes from foreign exchange business rose due to the surge in the US dollar price against the taka.

Bank Asia’s profit from foreign exchange transactions jumped 770 per cent year-on-year to Tk 2 billion in the first six months of 2022, according to media reports.

The local foreign exchange market turned volatile as a severe shortage of the greenback emerged following an unprecedented jump in import bills fuelled by the Russia-Ukraine war.

The board of directors of Bank Asia declared a 15 per cent cash dividend for 2022. Having been listed on the Dhaka bourse in 2004, it disbursed 15 per cent cash dividend for 2021 as well.

The final approval of the dividend will come at the annual general meeting scheduled for April 30. The record date is April 6.

Bank Asia also reported consolidated net asset value (NAV) per share of Tk 24.41 and consolidated net operating cash flow per share of Tk 13.82 for 2022 as against Tk 23.33 and Tk 15.23 respectively for the previous year.

There are 34 banks listed in the stock market. The banking sector’s total market-cap is Tk 670 billion, the second highest after the pharmaceuticals sector on the DSE.

The banking sector has long been facing a stressful situation, blemished by a series of loan scams, rising default loans, and weak performance of bank stocks on the bourses.

Currently, seven banks are trading at below the face value of Tk 10.

More than one-fourth of the IPO shares of Midland Bank have remained unsold recently despite good financial performance of the new-generation bank.


New inflation measure to replace outmoded index

Bangladesh is updating the consumer inflation index with lot many goods and services in count, with 2021-22 as new base year, as price rises have upset indices locally and globally.

Officials say the updated gauge to measure inflation is likely to be launched next fiscal year, beginning in July, as the existing one uses 2006 fiscal as base year and fails to portray real picture of inflation.

The updating with the additional items in basket will result in new weightings for the components of its Consumer Price Index (CPI) basket, people at the national statistics office told the FE Sunday.

“There have been huge changes in the consumption habits over the years, so we need the latest commodity basket to reflect the real picture of the price changes,” said a senior official working at the national accounting wing of Bangladesh Bureau of Statistics (BBS).

“The existing basket will be updated and most of the weightings will be also changed because the present structure of people’s habits has changed remarkably,” he added.

But the official wouldn’t say what the impact of the re-basing would be on the headline inflation, which, measured by the BBS, has surpassed government-set target –7.5 per cent (revised for FY 2023) — for seven straight months to stand at 8.78 per cent in February.

However, the BBS statistician said there would be around 700 commodities in the new basket, up by 66 per cent from the existing 422 commodities.

People in the agency, meantime, said they had already finalised lists of the goods and services, both for urban and rural areas.

They will also organise a technical session for the BBS people today (Monday) at its headquarters in Dhaka.

Many items, including MFS or mobile-phone financial services, were not covered in the 2006 index. “Many more people spend a lot more on mobile telecommunications these days and this will significantly increase the weight of communications in the consumer basket,” the statistician noted. Usually, each decade needs to be rebased for the basket for changes in eating habits.

The BBS first rebased the CPI in 1973-74, and it continued until FY 1987. Later it introduced 1985-86 as the base year with new weights, and in 1995-96, the BBS also updated. And the existing yardstick is based on 2005-06.

Currently, the BBS collects price data from 140 (64 from urban, 64 from rural, and 12 from Dhaka City Corporation) main markets across the country to calculate the price indices.

Three price quotes per item are collected from each of the markets. Prices of 151 food items as well as 271 non-food items in urban areas, 133 food items as well as 185 non-food items in rural areas (2005-06) are collected.

In collecting prices, four schedules (Darchak) are used (i) monthly rural retail (ii) monthly urban retail (iii) monthly urban wholesale and (iv) quarterly house rent.

Data are usually collected from select shops in each market or selected units or service providers in case of services.

In constructing price indices, the average price for each item is considered.

Source: The Financial Express


Local production of pharma raw materials gaining traction

Pharmaceutical companies are gradually enhancing their capacity to produce the raw materials needed to make medicines, which will go on to reduce Bangladesh’s over-reliance on imports and augment the country’s competitive edge in the global market.

In the last 12 years, the value of active pharmaceutical ingredients (APIs) made in the country grew four times to more than Tk 2,000 crore thanks to the entry of more firms in the segment in recent years. It was about Tk 500 crore in 2010.

“The pharmaceuticals sector will not face severe challenges after the graduation of Bangladesh from the group of the least-developed countries in 2026 as we are building our capacity of making APIs,” said Abdul Muktadir, chairman and managing director of Incepta Pharmaceuticals.

Currently, 15 firms, including Eskayef, Square, Beacon and Beximco, produce APIs, up from 10 a couple of years ago, said SM Shafiuzzaman, secretary-general of the Bangladesh Association of Pharmaceutical Industries, which represents 265 domestic drug-makers.

Local companies meet 10 per cent to 15 per cent of the annual demand for APIs, according to Monjurul Alam, director for global business development at Beacon Pharmaceuticals.

“We have a vast opportunity to invest in API manufacturing. This will allow the sector to compete in the global market.”

He believes if APIs are produced in sufficient quantities, pharmaceutical companies will be able to buy them immediately. “This will reduce the lead time.”

A significant development in API production will provide a huge gain to the pharmaceuticals industry in a country where 97 per cent of the demand for medicines is met through local manufacturing.

Although API production has not grown in keeping with the pharmaceutical sector, local companies produce high-quality raw materials, albeit on a limited scale, helping the drug industry add value to their products.

And Shafiuzzaman thinks Bangladesh would not be able to manufacture 100 per cent of the required APIs due to patent issues.

Currently, Bangladesh has to depend on imports to meet around 85 per cent of requirements for APIs. This costs the country about $1.3 billion annually.

The country has made major progress in completing the construction of the API Industrial Park in Gazaria of Munshiganj.

Syed Shahidul Islam, the immediate past project director of the park, said the physical development work of the initiative has been completed and 27 companies have been handed over plots for setting up factories.

Acme Laboratories, UniMed UniHealth Pharmaceuticals, Healthcare Pharmaceuticals, and Ibn Sina Pharmaceutical Industry have already set up their plants. Of them, Healthcare Pharmaceuticals is about to begin trial production.

“We are ready for commissioning,” said Md Halimuzzaman, chief executive officer of Healthcare Pharmaceuticals.

A central waste treatment plant has been set up in the park at a cost of Tk 100 crore and this is about to be commissioned.

In Bangladesh, companies are also raising their capacity to manufacture finished formulation, which includes both small molecule synthetic drugs and complex biologics and vaccines.

And Muktadir believes that the rising API production would help the pharmaceuticals sector grow its share in the global generic drug market, valued about $400 billion.

Local companies export products to 157 countries in Asia, Africa, North America, South America and Europe.

Medicines exports rose more than 11 per cent year-on-year to $188 million in 2021-22, data from the Export Promotion Bureau showed. The pharmaceuticals exports have grown almost three folds in the last seven years.

Pharma-makers also think that Bangladesh should focus on potential API markets across the world. The global market is estimated to reach $216 billion in 2027.

“Diplomatic efforts should be initiated so that once API is available, Bangladesh can have a ready market,” said Muktadir.

Beacon Pharmaceuticals’ Alam said there was no need to worry about the challenges Bangladesh would face in the post-LDC era.

“This is because we have already introduced pharma products in the local market and these products should be considered as prior art.”

Prior art is any evidence that one’s invention is already known.


রোজার সুবাতাস রেমিট্যান্সে, দিনে আসছে প্রায় ৭৩৩ কোটি

চলতি মার্চ মাসের প্রথম ১৭ দিনে রেমিট্যান্স বা প্রবাস আয় এসেছে ১১৬ কোটি ৪১ লাখ ৮০ হাজার মার্কিন ডলার। দেশীয় মুদ্রায় যার পরিমাণ প্রায় সাড়ে ১২ হাজার কোটি টাকা। দিনে আসছে প্রায় ৭৩৩ কোটি টাকা।

রোজার আগেই বেশি বেশি আসছে রেমিট্যান্স। রমজান মাসে খরচ বৃদ্ধির কারণে প্রবাসীরা পরিবারে বেশি বেশি অর্থ পাঠানো শুরুর কারণে র‍েমিট্যান্স বাড়ছে। ঈদের আগে পরিমাণ আরো বাড়বে বলে ধারণা করা হচ্ছে।

প্রবাস আয়ের এ ধারা অব্যাহত থাকলে মাস শেষে রেকর্ড ২ দশমিক ১২ বিলিয়ন মার্কিন ডলার বা ২২ হাজার ৭১৪ কোটি টাকার প্রবাস আয় আসবে দেশে।

রবিবার (১৯ মার্চ) বাংলাদেশ ব্যাংকের হালনাগাদ প্রতিবেদন সূত্রে এ তথ্য জানা গেছে।

কেন্দ্রীয় ব্যাংকের তথ্য পর্যালোচনা করে দেখা গেছে, চলতি বছরের ফেব্রুয়ারি মাসের প্রথম ১৭ দিনে রেমিট্যান্স এসেছিল ১০৫ কোটি ১৭ লাখ ৫০ হাজার মার্কিন ডলার। মার্চ মাসের প্রথম ১৭ দিনে এসেছে ১১৬ কোটি ৪১ লাখ ৮০ হাজার মার্কিন ডলার। মার্চের রেমিট্যান্সের এই ধারা অব্যাহত থাকলে মাস শেষে প্রবাস আয়ের অঙ্ক ২০০ কোটি ডলার ছাড়িয়ে যাবে।

এর আগে সদ্যঃসমাপ্ত ফেব্রুয়ারি মাসে রেমিট্যান্স বা প্রবাস আয় ‌ছিল ১৫৬ কোটি ১২ লাখ ৬০ হাজার মার্কিন ডলার। দেশীয় মুদ্রায় (প্রতি ডলার ১০৭ টাকা ধ‌রে) যার পরিমাণ ১৬ হাজার ৭০ কোটি টাকা। গত বছরের ফেব্রুয়ারি মাসে প্রবাস আয় এসেছিল ১৪৯ কোটি ৪৫ লাখ মার্কিন ডলার।
সূত্রঃ কালের কন্ঠ


EDF reduced to $5.5b, banks to face penalty interest for repayment delay

Banks will have to pay 4% “penal interest” if they fail to repay loans taken from the Export Development Fund (EDF) formed from the country’s foreign exchange reserves on time, according to a circular issued by the Bangladesh Bank on Sunday. 

The central bank has made the decision as several banks have been delaying the repayment of EDF loans for a long time, officials concerned have told The Business Standard.

Data obtained from the central bank on 19 March show that the outstanding amount of EDF loans currently stands at $5.5 billion.

To reduce the strain on its reserves, the central bank has been more aggressive in recovering outstanding EDF loans than disbursing new loans from the fund. In the last two and a half months, the amount of outstanding EDF loans has been reduced by over $1.5 billion.

According to central bank sources, the size of the EDF at the beginning of January this year was more than $7 billion, which was reduced to $6 billion by the third week of the month.

A senior official of the central bank said that the size of the EDF is regularly being reduced in accordance with the advice of the IMF.

According to the central bank’s guidelines, foreign exchange assistance is provided to exporters for importing raw materials under the EDF. An EDF loan has a tenor of 180 days and this period can be extended by another 90 days subject to the approval of the Bangladesh Bank. But, many banks failed to repay EDF loans even long after the completion of the extended period, prompting the central bank to impose penal interest.

The latest circular of the central bank says that the penal interest or compensation in the case of Shariah-based Islamic banking will be charged at a rate of 4% per annum above the prevailing interest rate on the overdue amount of EDF loans for the delayed period.

According to industry insiders, the interest rate of EDF loans was previously determined in accordance with the London Interbank Offer Rate (Libor). Until the beginning of the Covid-induced economic downturn, the interest rate of EDF loans was fixed by adding 1.5% to the 6-month average Libor.

However, to reduce the cost of funds amid the coronavirus pandemic, the interest rate was fixed at 2% in the first phase. Later on 20 July last, the rate was increased to 3%. Finally, the Bangladesh Bank increased the interest rate to 4.5% in January this year.

According to several sources of the central bank, the size of EDF will be downsized by another $2-3 billion within the next six months.

The central bank is planning to phase out foreign currency lending from EDF, which is made up of foreign currency.

The IMF delegation that visited Dhaka in December last year to discuss the terms and conditions for the $4.5 billion loan also suggested that the central bank exclude the existing EDF loans from its reserve calculation, sources at the central banks told The Business Standard.

Anwar-ul Alam Chowdhury, chairman of Evince Textiles Ltd, told TBS, “EDF was instrumental to increasing our country’s exports. Through this, traders could take funds at low interest. The latest central bank instruction will discourage them from doing so.”

“If the interest rate of this fund is high, the product cost will also be high, which will trigger sales problems. It is true that the government is under some pressure because of the IMF’s loan conditions, but phasing out EDF should have been done slowly. At least a year would have given everyone a chance to sort it out,” he said.

“Backward linkages will face some major problems as they have to bring the cotton in advance. Besides, textile mills import yarn with EDF funds. At present, they have fewer orders, and if the import cost becomes high, they will face a big problem,” Anwar-ul Alam Chowdhury said.

The central bank has reduced the size of the EDF but created a new fund of Tk10,000 crore as part of its decision to build an EDF in local currency to support exporters by providing loans at 4% interest.

In this regard, several exporters said the problem remains even if the fund is provided in local currency. Because Bangladeshi traders have to pay more than Tk110 for a dollar to import goods but get a lower rate when they export.

At present, the gross foreign currency reserves of the country stand at $31.28 billion, but if the IMF calculation is taken into account, the figure will be nearly $24 billion, according to central bank sources.


Revenue barely grows, raising worries about fiscal balance

Infographic: TBS

Infographic: TBS

Revenue growth has nosedived and fallen far behind the target in the eight months of the current fiscal year up to February, raising concerns over financing the deficit and development projects with prospects of more domestic resource mobilisation in the rest of the year remaining bleak.

The downward trend in revenue collection that began in November last year continues with collection growth falling as low as 3.07% this February, sliding by more than a percentage point from 4.91% in January.

According to the National Board of Revenue (NBR) sources, Tk23,727 crore in revenue – income tax, value-added tax (VAT) and customs tax – was collected in February this year, which was Tk23,020 crore in February of FY22.

This persistent declining tendency raised questions among economists about the various initiatives taken by the government to reduce imports, as well as the capacity of the NBR as the central revenue-collecting authority.

At a pre-budget meeting on Sunday, leading economists suggested reforms to the taxation system to increase the country’s tax-to-GDP ratio, which is the lowest in South Asia.

M Saiduzzaman, former finance minister, stressed that increasing the tax-GDP ratio should be given the highest priority in the next budget to solve major problems of the economy.

Revenue collection in eight months till February of the current fiscal year runs short of target by about Tk23,000 crore.

The revenue deficit would mean more government borrowing from the stressed banking system to bankroll the annual development programme (ADP) outlay and more spending in interest payment, economists have warned.

The government has already cut the ADP allocation by 7.5% to Tk227,566 crore, slashing the foreign aid component. But local component remained the same as Tk153,066 crore, meaning that the revenue authority will be under pressure to gear up its efforts to collect more tax revenue to meet the resource gap and comply with the IMF’s condition to raise tax-GDP ratio.

Otherwise, higher bank loans will be the only option for the government as foreign aid flow has dwindled due to limited implementation capacity.

Net borrowing of the government from the banking system stood at Tk41,392 crore in eight months till February, against the target set at over Tk1 lakh crore for the whole fiscal year.

The possibility of changes in the government’s current approach to control imports in the coming months is low. Hence, there is no scope for the revenue collection to increase in the remaining months of this fiscal year, rather this growth may decrease a bit more, economists said.

Dr Muhammad Abdur Mazid, the former chairman of NBR, believes that the country’s macroeconomic stability may be threatened and development activities may decrease as the shortfall in revenue collection in the eight months (July-February) of FY23 is about Tk23,000 crore of the target.

He told The Business Standard (TBS), “Due to low revenue collection, bank loans will increase and the International Monetary Fund’s (IMF) conditions [for the $4.7 billion credit] will also not be met, which may make it difficult to get the next instalment of the loan from the agency.”

However, a review of the revenue collection figures from July to February of FY 23 shows that the growth in NBR’s revenue collection during the period is close to 9%, which was almost double in the same period of last fiscal year. Revenue earnings had a negative growth of 2% in the 2019-20 fiscal year that met pandemic-induced lockdowns, but recovered in the next two fiscal years posting an average 16% annual growth.

“The written-unwritten restrictions on imports were imposed mainly due to the dollar crisis, resulting in a significantly lower collection of import duties. If the situation continues, the current revenue growth may decrease further in the future,” Muntaseer Kamal, a research fellow of the Center for Policy Dialogue (CPD), told TBS, adding that this situation can be called the slowdown of the economy.

Bangladesh’s revenue contribution to GDP (tax to GDP ratio) is very low if compared globally. There are several conditions attached to the $4.7 billion loan from the IMF and one of which is to increase the tax-to-GDP ratio by 0.5% in the next 2023-24 fiscal year.

“But it will be difficult to meet the conditions like reducing tax expenditure and increasing the tax-to-GDP ratio,” Muntaseer Kamal added.

The government has taken several steps to discourage imports since April last year as the strong US dollar raised global commodity prices when the Russia-Ukraine war broke out. These import restrictions were not eased yet but rather increased in some cases. As a result, imports are continuously decreasing.

According to the latest Bangladesh Bank data, imports fell by 5.7% from July to January of FY 23, which affected the revenue collection. In January, there was a negative growth in import duty collection.

NBR sources said, among the three sectors of revenue collection, the growth in import duty was the lowest at a little over 4% in the first eight months of the current fiscal year. The growth in VAT and income tax collection has been 15% and 6.29%, respectively.

Former NBR chairman Dr Muhammad Abdul Mazid said he believes that the main reason for this growth in VAT collection is the high price of imported goods.

NBR takes initiatives to boost revenue collection 

NBR Chairman Abu Hena Md Rahmatul Muneem held a meeting with field-level senior officials on Sunday to find ways to increase revenue collection.

In the meeting, field-level officials explained some of the reasons behind the slow growth in revenue collection.

On condition of anonymity, a senior NBR official, who was present at the meeting, told TBS, “It has been challenging to increase revenue collection due to low imports. However, directives have been given to realise large sums owed to the Bangladesh Petroleum Corporation (BPC), Petrobangla and other organisations.

“We were also instructed to dispose of cases quickly to increase revenue collection,” he added.