Weekly News Clippings: 14 February, 2013

BB boss blames negligence for state bank scam  (The Financial Express, February 14, 2013)

The Governor of BB said that there remains considerable laps and deficiencies in credit administration, risk management, internal control and compliance function in the state banks as these banks do not follow and administer recommended policies like Know Your Customer (KYC), Credit Risk Grading (CRG) and Anti Money Laundering Provisions. As part of this, he said central bank has developed an electronic supervision dash-board which can provide signs of fraudulent transactions. He also said that the government now has taken a step to select the board of directors with adequate eligibility so that the practice of insider abuse and fraudulence will be reduced.

GSP may go on: AmCham (The Daily Star, February 13, 2013)

American Chamber of Commerce in Bangladesh (AmCham) said that there is hope for Bangladesh to retain GSP facility for its exports to US market. The total US investment in the country now standing at $1.35. According to the American Chamber’s data, in 2012 Bangladesh exported goods worth $4.91 billion to the US and imported products worth $501.9 million.

Fair opens in city to promote SMEs (The Daily Star, February 13, 2013)

In the fair organized by the SME Foundation, speakers stressed the need for adequate credit and availability of collateral loan. They noted that SMEs are repaying loans at a 90% rate, but still banks and financial institutions are reluctant to give loans to the SME entrepreneurs. Speakers said that SMEs in the country account for over 90 percent of the industries and provides jobs for 3.1 crore people so all should come forward to help them on financing. In the fair SME's from agriculture, clothing, home textile, handicraft, leather, light engineering, foods, beverage, electrical and electronics and furniture are participating.

Most SME loans went to unproductive sector in 2012 (The New Age, February 12, 2013)

According to Bangladesh Bank (BB) data, SME loan disbursement by banks and non-banks financial institution increased by 29.84% in 2012 in comparison with 2011.  Nonetheless the majority of the loans (63%) were not destined to manufacturing companies but for trade.  BB urged the banks and non-bank financial institutions to disburse more loans to entrepreneurs of the manufacturing sector. The SME loan disbursement by banks and NBI's had increased by 45.16% to tk 44,222.65 crore in trading sector in 2012 from the annual target of tk 30,463.81 crore. Women entrepreneurs also did not get the desired amount of loans, accounting for only 3.19% of the disburseds loan.

Export  earning growth falls to 8.83 % in 7 months  (The New Age, February 12, 2013)

According to statistics of EPB (Export Promotion Bureau) the export earning growth in 7 months of FY 2012-13 was positive but slower due to sluggish growth in export of ready made garments, leather and jute in the first five months of the year. The export growth of woven garments fell to 13.57% from 22.84% and knitwear fell to 6.39% from  9.71%. In total the country's export earning growth fell to 8.83% from 14.28%. In a report of EPB it is said the drop was due to the ongoing crisis in Europe and sluggish market of US.

Experts blame loan disbursement on political consideration  (The New Age, February 12, 2013)

According to BB statistics, default loan increased by 88.67% to Tk 42,723 crore in 2012 from Tk 22,644 crore in 2011. In state-owned banks the amount increased by Tk 13,344 crore to Tk 21,514 crore.  The largest portion of this increase came from Sonali Bank in the aftermath of the recent scandal.  Experts said that the amount of default loans increased in banking due to lack of monitoring of central bank and loan disbursement on political consideration. Another cause is the high rate of interest which businessman cannot repay timely.

Thrust on practical roadmap for integrated, sustainable growth of leather industry  (The Financial Express, February 11, 2013)

The leather industry of Bangladersh has been criticised by Human Right Watch, Reuters and other world media due to the working condition of Hazaribag tannery. Among the buyers and other stakeholders it has created a negative image of the industry.   The speakers and leaders of leather industry spoke in an event of the need for co-operation between the public and private sector to formulate and implement policy. They suggested for relocation of the tanneries to the leather village and listing of all bottlenecks and recommended solutions.