Premier Bank evades keeping Tk 370cr in provision

A Bangladesh Bank investigation has found that Premier Bank Ltd did not keep Tk 370 crore as provision against its loans and advances including classified loans in the last year.

But the central bank without giving the bank any punishment is set to allow the bank to keep the provision by December this year, said sources in the BB.

The BB inspection team recently conducted detailed inspections at different branches on financial position of the bank till December 31, 2014 and found that the bank hid the provision shortfall.

‘Our assumption is that the bank did not keep the provision to show higher net profits and give dividends to the shareholders,’ said an official of the BB.

In its financial data, the bank had sent to central bank earlier showed there was no provision shortfall as of December 31, 2014, he said.

Every bank has to keep 20 per cent provision against their classified sub-standard loans, 50 per cent against defaulted doubtful loans, and 100 per cent provision against defaulted bad loans.

Besides, the banks have to keep provision between 0.50 per cent and 5 per cent against their regular loans and special mention category loans to ensure a sound financial health.

‘The latest financial position of the bank shows that its financial health was not good,’ said the BB official.

BB sources said that Premier Bank had applied to the central bank on March 9, 2015 to enjoy three-year period to manage its provision shortfall of Tk 370 crore on a phase-to-phase basis as it is now unable to keep the required provision due to its weak financial health.

They, however, said that it was an unusual application to enjoy extended time facility from any bank to manage the provision as every bank had to keep the provision against their standard and defaulted loans for ensuring a better financial health.

The central bank is likely to give one-year period to the bank to manage the required provision considering its weak financial condition, he said.

A BB official said that the central bank would impose embargo on Primer Bank against offering cash dividend to their shareholders due to its large amount of provision shortfall.

The central bank data showed that the provisional net profit of Premier Bank had increased to Tk 88.04 crore in 2014 from Tk 56 crore in 2013.

The banks calculate the net profit by deducting the required provision and corporate tax from the operating profit.

The operating profit of the Premier Bank stood at Tk 184.04 crore as of December 31, 2014.

The net profit of Premier Bank would convert into net loss in 2014 if it had kept the required provision.

The Premier Bank managing director Khondker Fazle Rashid told New Age on Wednesday that his bank had faced the provision shortfall of Tk 370 crore due to an increased trend in the defaulted loans.

‘Against the backdrop, we have sought three-year time from the central bank to keep the required provision. Besides, we will take a strong recovery programme to recover the defaulted loans’, he said.

He said that his bank had already recovered Tk 100 crore from Dhaka North City’s mayor aspirant Sayeed Khokon.

When asked why the bank had not showed that there was a provision shortfall to BB, Fazle Rashid said that he had recently joined the bank and referred the issue to the additional managing director Abu Hanif.

Hanif, however, said that he would not give ‘such sensitive information’.

The BB data showed that defaulted loans in the Premier Bank stood at Tk 630.51 crore as of December 31, 2014. (Source: New Age, April 2, 2015)

ICB-run MF’s trading on despite tenure expiry

The trading of the units of the Investment Corporation of Bangladesh-run First ICB Mutual Fund continued at the Dhaka and Chittagong stock exchanges illegally on Wednesday despite that fact that the tenure of the fund expired on March 31.

As per the mutual fund rules, the stock exchanges delist a MF after the end of its tenure.

A senior official of Dhaka Stock Exchange told New Age on Wednesday that the trading of the units of First ICB Mutual Fund continued at the bourse despite expiry of its tenure on a verbal instruction from the capital market regulator.

He said that senior officials of the Bangladesh Securities and Exchange Commission also told them that the tenure of the fund would be extended by three months with effect from April 1 within this week.

The regulator, however, is yet to issue any directive in this regard.

A BSEC senior official on Wednesday told New Age that the commission on Tuesday held a meeting in this regard and found no valid ground to approve ten-year tenure extension plea made by the ICB for eight mutual funds it runs.

He said the commission would extend the tenure of First ICB Mutual Fund by three months from April 1.

As per the mutual fund rules, the tenure of close-ended mutual funds should not exceed 10 years.

Despite the legal bar, the units of the eight ICB-run mutual funds have been trading at the DSE for 18-34 years.

The BSEC in November last year, scrapping an ICB plea for ten-year time extension for the eight mutual funds, asked the state-owned entity to convert or windup the close-ended MFs within December 2016 one by one starting from First ICB Mutual Fund, enlisted with the stock exchange in 1980, within March.

The commission at the same time also warned the ICB for not complying with earlier regulatory directive that had asked the entity to convert or windup all eight ICB-run mutual funds within December 2014.

Another BSEC official told New Age that despite ICB’s repeated violation of securities rules in this regard, the commission refrained from taking any tough measure against the entity due to the ICB’s strong lobby with the government’s influential quarter.

The ICB, ignoring the BSEC directive issued in November, lobbied the finance ministry to press the BSEC for extension of the MFs’ tenures, BSEC officials said.

Following pressure from the finance ministry and some other influential quarters, the capital market regulator agreed to consider the ICB’s proposal for tenure extension within legal framework, they said.

After getting BSEC’s green signal, the ICB as per its board decision on January 22 sought another ten-year tenure for its eight MFs by handing over the management of the funds to ICB Asset Management Company, they said.

As the commission found the proposal unlawful, the ICB filed another proposal to the commission last month.

The proposal said that as per the legal framework, other firms would be the trustee and custodian of the funds while the ICB would be the sponsor of the funds and would hold 10 per cent stake in each fund.

Even after the formulation of the mutual fund rules in 2001 that separated functions of sponsor, asset manager, trustee and custodian, the ICB has been doing all of these jobs violating securities rules.

The BSEC earlier rejected AIMS of Bangladesh’s plea for extension of tenure of its two mutual funds by 10 years. (Source: New Age, April 2, 2015)

Dhaka stocks fall as investors stare at city polls affairs

Dhaka stocks returned to the negative zone on Wednesday after a bull run in the previous trading session due to profit-taking share sell-offs in late trading amid an apprehension that the political situation might worsen again with the cancellation of mayoral candidature of two BNP-backed aspirants by the Election Commission.

The key index of Dhaka Stock Exchange, DSEX, fell by 0.38 per cent, or 17.37 points, to close at 4,513.10 points.

The turnover, a key indicator of the market, also declined to Tk 359.71 crore on the day compared with that of Tk 452.72 crore in the previous trading session. The turnover at the bourse had hit its four-month high on Tuesday following talks about formation of a forum to sort out the problems of the capital market-related entities.

Market operators said the market began the day on a positive note but failed to sustain the vibe amid profit-taking share sell-offs in late trading session.

Besides, investors were apprehending that the rejection of candidature of Abdul Awal Mintoo for the mayoral post of the Dhaka North City Corporation by the Elections Commission on Wednesday would be a factor in making the BNP’s final decision on its participation in the city corporation polls, they said.

Investors who were on the sidelines for the last couple of months have become active recently on the trading floor amid expectation that the political situation would ease with the BNP-backed candidates duly submitting nomination papers to the Election Commission, operators said.

The Shariah index of the bourse, DSES, fell marginally by 0.40 per cent, or 4.46 points, to close at 1,098.66 points on the day.

DS30, the blue-chip index of the DSE, declined to 1,719.88 points, shedding 0.49 per cent or 8.59 points.

‘The DSEX fell by 17 points today [Wednesday], reversing the day’s robust start,’ IDLC Investments said in its daily market commentary.

It said impatience and uncertainty on the part of the investors could be the main catalysts behind the current zigzag move in the index.

‘Investors maintained their interest on particular stocks and sectors as pharmaceuticals captured 19.2 per cent of the total turnover,’ said IDLC.

‘Today’s trading session started with a positive mood, but at the end of the day it ended up in the red territory as prices of most of the large cap stocks declined on the day,’ LankaBangla Securities said in its daily market analysis.

MJL Bangladesh led the turnover leaders on the day with its shares worth Tk 22.31 crore changing hands.

Square Pharmaceuticals, Grameenphone, ACI Limited, Shasha Denims, BEXIMCO, Lafarge Surma Cement, Saif Powertec, Khulna Power and IFAD Autos were among the other turnover leaders.

AB Bank 1^st Mutual Fund gained the most on the day with a 9.09-per cent increase in its share price, while Jute Spinners was the worst loser on the day, shedding 9.62 per cent. (Source: New Age, April 2, 2015)

844 VSPs’ fate unclear following new call termination rules

The country’s VoIP service providers fear abolish of their business as the telecom regulator’s new operational directive for international call termination did not provide connectivity module of the VSPs.

The VSPs, mostly small time businesses that bring international calls, were facing a hard time after the government in January 2013 issued 844 licences for the business in a bid to discourage illegal voice over internet protocol.

In May 2013, the Bangladesh Telecommunication Regulatory Commission in a directive to International Gateway services asked them to serve 35 VSP operators each under revenue sharing model.

In a recent move the BTRC in March 24 changed the operation model for the international call termination business allowing only seven IGW operators to control the entire business by an association.

The new rules also bar the IGWs to enter into any connectivity contracts individually saying only the seven IGW operators, controller of IGW Operators Forum, are allowed to deal with such issues.

‘Now all the international calls will be routed through a common network switch which will be controlled by the seven IGW operators. The VSPs were not given any instruction of connecting with this platform,’ a VSP operator told New Age recently.

He said according to the BTRC order the IOF would be the only party to control the international call.

‘Our rules allow us to connect with the IGWs separately but now the IGWs are not allowed to such agreement as the IOF is in place. We don’t know what to do,’ VSP operator said.

Another VSP operator told New Age that majority of the VSPs were yet to get connectivity from the IGWs as per previous BTRC order.

‘We were not getting any revenue and losing business. Now with the IOF in place, as we are not included as a party in the new operation model, we fear that our licence will be abandoned,’ he said.

Asked about the issue Bangladesh Association of VoIP Service Provider secretary Khondoker Romel said, ‘So far the VSP operators are clueless about their status under the new call termination model.’

‘This is a question of our existence. If the new model doesn’t include a place for VSP operators, there will be no way to run the business,’ he said.

Despite several attempts by New Age BTRC chairman Sunil Kanti Bose did not reply when asked about the operational procedure for the VSPs under the new network topology.

A senior BTRC official, however, told New Age that they had confusion about the issue.

‘We assume the VSPs will operate in the way they are doing now. But we need to check the new operational framework to be sure about the VSP issue,’ he said. (Source: New Age, April 2, 2015)

Bangladesh superstore owners seek uniform VAT system for all traders

Bangladesh Supermarket Owners Association on Wednesday demanded for introduction of package VAT system for superstores in line with other similar types of shops such as departmental stores and large shops.

At a pre-budget discussion with the National Board of Revenue, they claimed that introduction of unique value-added tax system or package VAT for analogous shops would ensure level playing field for all entrepreneurs.

On the first day of the pre-budget discussions held at NBR headquarters, entrepreneurs from shops, printing, security services, courier services, and travel and tourism sectors demanded that the revenue board should provide various tax benefits and prevent tax evasion by traders within the sectors to ensure competitiveness in business.

They also demanded that the NBR should ensure compliance as many VAT-payable traders remain out of VAT net.

If most of the traders from a particular sector do not pay VAT, the compliance traders who pay VAT will not be able to survive, they said.

BSOA general secretary Md Zakir Hossain said that one per cent VAT may be imposed on superstores established on above 12,000 square feet space.

Currently, 2 per cent VAT is applicable on sales of supermarkets like Agora, Shwapno and Meena Bazar while other shops including large ones and departmental stores enjoy package VAT facility under which shop owners pay VAT annually ranging from Tk 3,000 to Tk 12,000 based on the location of shops.

Bangladesh Mudran Shilpa Samity demanded for scraping international tender system for printing text books for primary and secondary schools claiming that local printing houses were capable of meeting the domestic demand.

‘If international tender is invited, the government should evaluate the tender documents submitted by Indian suppliers adding 20.43 per cent duties, taxes and fees to make the local bidders competitive,’ BMSS chairman Shaheed Serniabat said.

Currently, the National Text and Curriculum Board of the government pay 20.43 per cent taxes and fees including 12 per cent customs duties on behalf of Indian suppliers while local bidders have to pay 61.50 per cent duties on import of paper, he said.

Local printing houses do not get work order as their bid price becomes higher than Indian bidders as the government evaluate the tender documents of Indian bidders excluding the duties and taxes, he said.

Bangladesh Dokan Malik Samity president SA Kader Kiron alleged that VAT officials harassed them when they went to pay VAT.

‘They sought bribe from us who pay VAT but do nothing to them who don’t pay,’ he said.

Representatives from Security Services Companies Owners Association and Courier Service Owners Association demanded to bring all companies from the sectors under VAT net saying that there may be many companies which do not pay VAT.

Association of Travel Agents of Bangladesh demanded that the revenue board should consider the 3 per cent tax paid by the travel agents on their commission as final settlement.

ATAB also requested the NBR for not deducting 10 per cent tax at source on foreign currency deposited in their accounts.

Tour Operators Association of Bangladesh president Akbar Uddin Ahmed sought tax holiday for seven years on income of tour operators to make the sector vibrant in the country.

The Federation of Bangladesh Chambers of Commerce and Industry adviser Monjur Ahmed requested the revenue board to ensure that all traders from the same sectors pay VAT to ensure a level playing field for all.

FBCCI director Abdul Haque said that the revenue board must reduce the VAT rate from 15 per cent under the new VAT act to be implemented from July 2016 otherwise traders would not be able to survive.

NBR chairman Md Nojibur Rahman said that he would instruct the officials for not harassing the taxpayers.

‘We will also try to find out who pay VAT and who don’t, and will take steps to bring all taxable traders under the tax net,’ he said.

At the meeting, NBR member Farid Uddin, Firoz Shah Alam, Parvez Iqbal, among others, spoke. (Source: New Age, April 2, 2015)

Threesixty brings liquid invisible screen protector for mobile

Threesixty Technologies Ltd will begin marketing of liquid invisible screen protector for mobile phone and tablet in Bangladesh in the first week of April.

The Japan’s Kristall NANO Liquid Screen Protector will protect the original screen lock of mobile phone, said a news release.

Threesixty Technologies officials say currently mobile phone users in the country are using PVC or poly paper screen protector that reduces the brightness and touch-sensitivity of smartphone and tablets. But liquid invisible screen protector will protect the screen of mobile phone and tablets from being scratched, they say.

The liquid invisible screen protector’s effectiveness will last for one year after the first use, the officials said.

Threesixty Technologies has recently signed an agreement with GTN Innovations, the manufacturer of Kristall NANO Liquid Screen Protector, to bring it in the Bangladesh market.

The liquid invisible screen protector has own ‘Digital Trend Top Tech 2015’ award in Mobile World Congress held in Barcelona of Spain recently. (source: press release)

Premier Bank opens branch at Mirpur–01

Premier Bank Ltd opened another new branch at Mirpur–01, Mirpur Branch, Dhaka (plot c/2, road -01, section-1,Mirpur01) on 30th March 2015.

Shah Mohammad Nahyan Haroon, honorable Director of the Premier Bank Limited has opened the Mirpur-01,branch as Chief guest while Managing Director Khondker Fazle Rashid, Addl Managing Director Abu Haniff Khan, Asif Zaman, SEVP& Head of HRD  & Branch Managers of Different Branches of the Premier Bank ltd along with other high official’s were also present along with local distinguished guests. (source: press release)

AB Bank Limited disburses ‘Awparajita’ loan

AB Bank Limited disbursed ‘Awparajita’ loan of Tk.5.00 Lac to a New Women Entrepreneur Client of it’s Cox’s Bazar Branch.  Dr Atiur Rahman, hon’ble Governor of Bangladesh Bank handed over the cheque in the “SME Women Entrepreneurs-Bankers Exchange of Views and Open Credit Disbursement” Program held on March 27, 2015 at Seagull Hotel, Cox’s Bazar. Iftekhar Enam Awal, Head of SME and other officials of AB Bank were present in the ceremony. (source: press release)

MTB MD, CEO Anis A Khan’s contract renewed until 2019

The Board of Directors of Mutual Trust Bank Limited (MTB), has with the approval of Bangladesh Bank, renewed the contract of service of Anis A. Khan, as its Managing Director and CEO, from April 15, 2015 until November 30, 2019.

Anis commenced his banking career with the then Grindlays Bank plc (GB), as a Management Trainee in December 1982. He served with GB and its successor banks – ANZ Grindlays Bank and Standard Chartered Bank in a multitude of roles, both at home and abroad, for 21 years, before joining IDLC Finance Limited (IDLC) as its CEO & Managing Director in April 2003. After serving IDLC for 6 years, Anis joined Mutual Trust Bank as its Managing Director & CEO on April 15, 2009. 

Anis, a Fellow Member of the Institute of Bankers Bangladesh (IBB), also  serves as the Chairman of Primary Dealers Bangladesh Limited (PDBL), Chairperson of the SWIFT Member & User Group of Bangladesh, Vice Chairman, Board of Governors of the Association of Bankers, Bangladesh (ABB), Vice President of the Metropolitan Chamber of Commerce & Industry, Dhaka (MCCI), Trustee Treasurer of the CSR Centre and member of the Board of Governors of the Society for Promotion of Bangladesh Art (SPBA). (source: press release)

City Bank Capital Resources Limited signs deal with InGen Technology Limited

An Alternative Investment Agreement signing ceremony between City Bank Capital Resources Limited (CBCRL) and InGen Technology Limited was held on the 30th of March 2015 on the premises of The City Bank Limited, in Dhaka. The arrangement will be for the development of renewable energy projects across the country.

Mr. Ershad Hossain, Managing Director & CEO of CBCRL and Mr. Niaz Ahmed, CEO of InGen signed the agreement on behalf of their respective organizations. Md. Kamrujjaman of InGen; Mr. Shakil Rahman, Ms. Anisa Ali, Ms. Tania Ahmed, K.M. Atiqul Islam and Mr. Fuad Hussain of CBCRL were present during the Ceremony. (source: press release)

Bank Asia declares 15% dividend

Bank Asia declared 15% dividend (10% bonus share and 5% cash dividend) for the year 2014 at the 16th Annual General Meeting of the Bank held on Tuesday, 31 March, 2015 at Lady’s Club in the capital city Dhaka.

A Rouf Chowdhury, Chairman of the Bank presided over the meeting. With 10% stock dividend, the paid-up capital of the Bank would increase to Tk. 8.39 billion.

Vice Chairmen Mohd Safwan Choudhury and AM Nurul Islam, Chairman of Executive Committee Rumee A Hossain, Chairman of Audit Committee Mohammed Lakiotullah, Directors M Irfan Syeed, Shah Md Nurul Alam, Ms Sohana Rouf Chowdhury, Naheed Akhter Sinha, Mashiur Rahman, Md Nazrul Huda and Md Shahajahan Bhuiyan, and President & Managing Director Md Mehmood Husain and Additional Managing Director Aminul Islam were present.

There was a large turn-out of the shareholders in the annual general meeting. They expressed satisfaction at the overall performance of the Bank and approved the accounts for the year 2014. The meeting started in the morning with chorus of national anthem rendered by artists of Bank Asia and all the shareholders stood and lend voice to the national anthem. (source: press release)

MIDAS Financing Limited re-elects Rokia as chairman

Rokia A Rahman has been re-elected as chairman of the board of MIDAS Financing Limited for a period of another two years, said a news release.

Rokia is a women entrepreneur and a former adviser to the Caretaker Government of People’s Republic of Bangladesh.

Rokia is the chair and managing director of RR Group of Companies and also the chair and managing director of Arlinks Group of Companies.

Rokia is the chairperson of Mediaworld Limited — owning company of The Daily Star and also one of the directors of Mediastar Limited — owning company of Prothom Alo, ABC Radio.

Rokia is also a member of the board of directors of Grameenphone Limited and MIDAS Investment Limited. She is currently the president of Metropolitan Chamber of Commerce and Industry Dhaka, vice-president of International Chamber of Commerce Bangladesh; trustee board member of Transparency International Bangladesh.

Rokia is the founder president of Bangladesh Federation of Women Entrepreneurs. Her commitment to the development of socio-economic conditions of the country brings her to the board of BRAC, Manusher Jonno Foundation, etc.

Rokia is the founder chair of Presidency University Foundations, former chair and currently board member of Asian University for Women Chittagong.

Rokia has received several international and national awards. (source: press release)