Bangladesh: Exports to India hit 4yr low, China boom

Dhaka, July 14, 2014 (New Age): Export earnings from India hit four-year low at $456.63 million in the just concluded financial year 2013-14 while the exports to China skyrocketed by 62.85 per cent in the fiscal year. Experts and exporters said that the export to India witnessed a decreasing trend due to non-tariff barriers and devaluation of the currency of the country. On the other hand the export to China is booming as the country is moving towards high-end products from basic products and extended zero-tariff excess to Bangladeshi products. According to the Export Promotion Bureau data, the export earnings from India posted a 19.03-per cent negative growth from $563.96 million of the FY 2012-2013. The export earnings from China increased to $746.19 million in the FY14 from $458.18 million reading on the incredible growth of exports of RMG and leather and leather products, the EPB data showed. Ahsan H Mansur, executive director of the Policy Research Institute, told New Age that the export to India had dropped due to the devaluation of the rupee against the US dollar. On the other hand, the exporters were not considering India as the prime export destination, he said. Mansur said that the export earnings from China were increasing gradually as garment products, the main export products of Bangladesh, penetrated in the market. The duty- and quota-free entry facility to the Chinese market was also an opportunity for Bangladesh, he added. The exports of readymade garment products to India increased to $96.25 million in the FY14 against $75.21 million in the FY13 but the export earnings from non-RMG products posted negative growth. Exports of jute and jute-related products decreased to $80.70 million in the FY14 from $133.85 million in the FY13 while exports of fruits and related items fell to $60.71 million from $67.53 million and fish to $4.01 million from $13.78 million. The export of RMG products to China grew by around 73 per cent to $241.37 million in the FY14 from $139.14 million in the FY13. Export earnings from leather and leather products grew by 251.40 per cent to $227.85 million in the FY14 from $64.84 million in the FY13. Exports of jute and jute products to China increased to $103.49 million in the FY14 from $88.37 million in the FY13. Nazneen Ahmed, senior research fellow of Bangladesh Institute of Development Studies, said that non-tariff barrier was the main reason for the export slowdown to India. ‘India removed tariff barriers for the Bangladeshi products including garments but non-tariff barriers still remain which discouraged exporters,’ she said. Nazneen said that China was decreasing the production of low-end products due to increasing labour cost and importing the items from other countries including Bangladesh as the country (China) is moving towards hi-tech industry. The export of basic garments and other products increased to China due to competitiveness of Bangladeshi products, she said. ‘There is a huge potential in the China market for the Bangladeshi garment products as the country [China] is shifting its production to hi-end products,’ Shahidullah Azim, vice-president of Bangladesh Garment Manufacturers and Exporters Association, told New Age. He said that the garment exporters were giving special emphasis on the market size of the country which was $338 billion. Azim also said that the exporters did not feel comfortable in exporting to India due to non-tariff barriers. The export earnings from India were $563.96 million in the FY 2012-2013, $498.4 million in the FY 2011-12, $512.50 million in the FY 2010-2011 and $304.62 million in the FY 2009-2010, according to the EPB data. Exports to China had stood at $178.63 million in the fiscal year 2009-10 and those shot up to $319.66 million in the FY 2010-11 as China extended duty-free access. In the FY 2011-12, the exports to China stood at $401.94 million and in the FY 2012-13, the exports stood at $458.11 million, according to the EPB data.

Bangladesh: GB gets tax waiver for Jan-June of 2011

Dhaka, July 14, 2014 (New Age): The National Board of Revenue has decided to grant Grameen Bank exemption from tax on its income for the period of six months with retrospective effect from January 2011 to June 2011, officials said.
They said that the NBR at a recent board meeting decided to provide the exemption in a bid to remove the complexities Grameen Bank was facing in preparing financial statements for the period.
Earlier, the revenue board had rejected a plea made by the Nobel-winning microfinance institution seeking exemption from tax on its income for the period.
Now, the revenue board has backtracked from its earlier decision in line with the government’s softened stance on the issue, officials said.
Officials said that Grameen Bank had enjoyed tax exemption facility from its inception in 1983 to December 2010.
But the decision of extending the facility to Grameen Bank was pending until June 2012 when the NBR had again provided tax exemption facility for four years and six months until December 2015 with retrospective effect from July 2011, they said.
In the process, the period from January 2011 to June 2011 had been left out of the exemption facility.
Grameen Bank earlier had paid Tk 10 crore in advance income tax in the fiscal year 2011-2012 amid uncertainty about getting exemption because of delay in decision of the government at that time.
Later the bank in several times sought the exemption for the period saying that it had already completed its annual financial statement for the year 2011 following January-December as financial year.
If the tax exemption is not provided, the bank will have to prepare half-yearly financial statement based on credit and deposit accounts of the 84 lakh members of the bank which is time-consuming, tough and problematic for the bank, Grameen Bank claimed.
Officials said that that considering these problems, the revenue board took the decision of allowing the exemption for the period.
On the other hand, the institution enjoyed and is enjoying the tax exemption in pre and post period of the six months, they said.
The revenue board, however, will not give back the money paid as advance tax by Grameen Bank as the current exemption period is scheduled to expire in December 2015, officials said.
They said that the money would be adjusted with the payable tax of the institution if the revenue board would not extend the exemption period.

Bangladesh: Modi govt lowers grants for Bangladesh by 40pc

Dhaka, July 14, 2014 (New Age): India’s government of prime minister Narendra Modi has lowered the grants for Bangladesh in the current year’s national budget by 40 per cent to Rs 350 crore as against Rs 580 crore last year. Bangladesh is the only country in the South Asian Association for Regional Cooperation region for which the Indian budget has made lower provisions, reports Times of India. Comparatively, other countries of the SAARC have got marginal hikes in grants from the Indian government this year. Even Afghanistan, where India’s engagement has increased in recent years, has been allocated Rs 676 crore, not a big hike against last year’s Rs 525 crore. Nepal, with which the PM has expressed his desire to engage more, has not found as much prominence as Bhutan in monetary terms. Among grants and loans to foreign countries, Nepal has got Rs 450 crore as against Rs 380 crore in the previous year. In case of Sri Lanka, the allocation has been Rs 500 crore, an increase of Rs 90 crore from last year. Modi’s engagement with Bhutan has helped the Kingdom nation with the grants and loans allocated to the latter going up by nearly 50 per cent — from Rs 4,100 crore last year to Rs 6,000 crore this year. Bhutan has always been getting significant financial aid from India by way of grants, both under plan and non-plan expenditure heads. This year, particularly after Modi visited the neighbouring country soon after his swearing-in, the NDA government has significantly increased the financial package. Bhutan was Modi’s first foreign visit. PM Narendra Modi showed his special emphasis on neighbourhood diplomacy with his one-on-one meetings with all SAARC heads of government on his first day in office. He had invited all SAARC leaders for his swearing in ceremony. The next day, he met Pakistan PM Nawaz Sharif, Afghanistan president Hamid Karzai, Sri Lankan president Mahinda Rajapaksa and heads of governments from Maldives, Mauritius, Nepal and the speaker of Bangladesh parliament. 

Bangladesh: BB for ACC action against BASIC’s ex-board members

Dhaka, July 14, 2014 (New Age): Bangladesh Bank on Sunday said it will send the detailed inspection report on the BASIC Bank loan scam to Anti-Corruption Commission so that the corrupt board members of the state-owned bank could be charged for criminal offence. The BB asked the newly constituted board of BASIC Bank to take punitive measures against its officials who were involved with the loan scam in collaboration with the former bank chairman Sheikh Abdul Hye Bacchu and managing director Kazi Fakhrul Islam. The newly appointed BASIC Bank chairman Alauddin A Majid on Sunday met with BB governor Atiur Rahman while the central bank asked to take measures to restore good governance so that the clients would regain their confidence in the bank. After the meeting, the central bank arranged a press briefing over the latest situation of BASIC Bank when BB executive director SM Moniruzzaman said that the new board would have to bring credit discipline in the bank in the shortest possible time to regain good governance. ‘The central bank has no scope to take action under the criminal laws against the corrupt officials and board members, and hence it will send its detailed inspection report to the ACC. The ACC may detect the involvement of the board members with the scam if it (ACC) conducts an in-depth investigation, he said. The BB asked the bank chairman not to approve any loan proposal according to the wish of any single director, he said. According to the central bank report, BASIC Bank disbursed more than Tk 4,500 crore in loans in the last few years violating rules and regulations. The BB report unearthed that the recently dissolved BASIC Bank board along with its management were involved with the irregularities. The BB asked the new BASIC Bank chairman to step up its default loan recovery programme and the board would have to review the latest situation of the non-performing loans at its next meetings, he said. ‘The bank board will have to ensure transparency and responsibility. The board earlier did not streamline its audit. From now on, the board will have to oragnise the meetings in accordance with the central bank direction,’ he said. BB inspection team found that the Shantinagar, Dilkusha, Gulshan, Agrabad and Jubilee Road branches of the state-owned bank had perpetrated huge anomalies in recent years, he said. The central bank earlier gave directions to the bank to reestablish governance at the branches, but it (BASIC Bank) did not comply with the direction of the central bank, Moniruzzaman said. The BB asked the bank to collect the real situation of the branches through field survey which would help to recover the defaulted loans, he said. ‘The BB will not intervene into the human resource system of BASIC Bank. But the bank will have to take action against its unskilled and corrupt officials’, he said. The new BASIC Bank board will hold its first meeting today. The BB governor asked the BASIC Bank chairman to restrict the bank’s spending, he said. The central bank also asked BASIC Bank to appoint a managing director and chief executive officer in the quickest possible time so that the management of the bank can function smoothly and efficiently, he said. In June, the BB fired BASIC Bank managing director Kazi Faqurul Islam for his involvement in the loan scam. The government also dissolved the board of directors of the BASIC Bank after the resignation of its controversial chairman Sheikh Abdul Hai Bachchu and replaced him with Alauddin A Majid.

Bangladesh: BSEC warns Agrani over raising capital without approval

Dhaka, July 14, 2014 (New Age): Bangladesh Securities and Exchange Commission has warned Agrani Bank Limited, a state-owned entity, over raising capital for three years without getting the approval of the capital market regulator. The BSEC sent a warning letter to the bank in June after holding a hearing from the Agrani Bank on April 28 this year. Agrani Bank is a non-listed public limited company. BSEC warned Agrani Bank as it had increased its paid up capital to Tk 991 crore in 2012 from Tk 547 crore in 2010, a BSEC senior official said. As per the securities rules each and every company is bound to get approval from the BSEC before increasing paid up capital, he said. A BSEC letter issued to the managing director, directors and company secretary of Agrani Bank said, ‘The commission, considering the explanation (of the bank) has decided to dispose of the proceedings against Agrani Bank by placing on record the Commission’s dissatisfaction on the default/contravention made by you (Agrani Bank) with a warning to ensure compliance of all securities related laws in future.’ The letter also said that disposal does not absolve the bank from its lawful responsibilities/obligations to any person, if affected, as a result of the stated default. As per the BSEC’s finding, the paid up capital of Agrani Bank was Tk 248 crore in 2008 which increased to Tk 497 crore in 2009 as the company issued 100 per cent stock dividends for its share holders. The paid up capital of the company increased by another 10 per cent to Tk 547 crore in 2010 after the Bank declared 10 per cent dividend. The capital of the company increased to Tk 901 crore in 2011 as it had declared 10 per cent dividend for its investors. The paid up capital of Agrani Bank increased by Tk 90 crore to Tk 991 crore in 2012, the audited financial statement of the bank showed. During the hearing, Agrani Bank confessed its unwilling mistake.

Bangladesh: Stocks fall for ninth day, turnover hits fresh 9-month low

Dhaka, July 14, 2014 (New Age): Dhaka stocks declined for the ninth trading session on Sunday with the turnover hitting fresh nine-month low due to low participation of institutional invests since the June 30 half-yearly closing. The key index of Dhaka Stock Exchange, DSEX, lost 0.42 per cent, or 18.72 points, to close at 4,344.36 points on the day. The DSEX shed142.71 points in the last nine trading sessions. Frustrated by the continues fall in the share prices, a section of retail investors formed human chain in front of the Bangladesh Securities and Exchange Commission’s office at Motijheel in the city during the trading hour on Sunday. They demanded that the government should intervene into the market to save it from further fall and to rescue the investors who have been suffering from huge losses since the market crash in 2010-2011. Market operators said that the market was suffering from lack of intuitional investors’ participation on the trading floor which was the main reason for the continuous fall in the share prices. Institutional investors are waiting to buy shares at cheaper prices, they said. Operators said amid the downward trend retail investors were suffering from lack of confidence. Unless the institutional investors increase their participation on the trading floor, the market will not get a positive momentum, they said. Turnover of the bourse declined to Tk 149.96 crore on Sunday from that of Tk 177.21 crore in the previous trading session. Sunday’s turnover was the lowest after Tk 110.43 crore on October 20 last year. Turnover of the bourse had declined to Tk 157.49 crore on Wednesday last week. DS30, blue-chip index of the bourse, finished at 1,595.27 points, shedding 0.56 per cent or 9.12 points. The Shariah index of the DSE, DSES, fell by 0.66 per cent, or 6.63 points, to close at 990.26 points. Of the 291 shares and mutual funds traded on Sunday, 63 advanced, 179 declined and 49 remained unchanged. BEXIMCO led the turnover leaders with it shares worth Tk 12.08 crore changing hands on the day. The company gained the most with an 8.50-per cent increase in its share price. Grameenphone, Lafarge Surma Cement, Far Chemical Industries, Olympic Industries, Square Pharmaceuticals, United Airways, Square Textile, Generation Next Fashions and Padma Oil were among the other turnover leaders. MIDAS Financing lost the most, shedding 10 per cent. The share prices of the company had advanced significantly after the BSEC had approved its rights offering. 

Bangladesh: bKash offers 15pc cash back on shopping during Ramadan

Dhaka, July 14, 2014 (New Age): Mobile financial service provider bKash Limited has offered 15 per cent cash back to its customers if they pay for their shopping at selected places through bKash. The offer is available at Aarong, Yellow, Cats Eye, O2, Kay Kraft, Anjan’s and Monson Rain, said a news release. Started from the first day of Ramadan, the customers can avail the offer till the Eid-ul-Fitr day. Making payment through bKash is free of charge. Once the transaction is done, customer will receive the eligible cash back amount in his or her bKash wallet within next working day, said the release.

Bangladesh: RMG workers rally for arrears and festival allowance before Eid

Dhaka, July 14, 2014 (New Age): Leaders of National Garments Workers Federation on Sunday at a human chain in Dhaka demanded paying the wages and festival allowance of the garment workers within Ramadan 20. The federation formed a one hour human chain in front of the National Press Club at 11:00am to press their demands. Amirul Haque Amin, the president of the organisation called on the Awami League-led government to take steps to pay the wages and bonus of the apparel workers within Ramadan 20. He also called on the government to take steps for holding meetings between the management and the workers’ leaders to avoid labour unrests in the factories before Eid-ul-Fitr. In past years, Amirul said, the factory owners did not pay the wages and the festival allowance properly in due time resulting the labour unrests before Eid.