Thursday, April 4, 2013

Weekly News Clippings (4 April 2013)



One shutdown means Tk 1,600cr losses (The Daily Star, April 04, 2013)

A survey by Dhaka Chamber of Commerce and Industry (DCCI) revealed that a day of shutdown (hartal) causes a loss of Tk 1,600 crore to the country’s businesses. The Ready Made Garment (RMG) is the hardest hit sector, which counts a loss totaling Tk 360 crore from single day of shutdown. On average, Bangladesh faces 40 shutdowns in a year leading to financial losses of Tk 64,000 crore which means 6.5 percent of the country’s gross domestic product (GDP). Opposition parties enforced shutdowns for 22 days so far this year.

Remittance goes into property purchase, fuels prices: analysts (The Daily Star, April 04, 2013)

Property investments using remittance is a key factor behind rising land prices, as many migrant workers send money to their families in Bangladesh to purchase land. The observation was made at a workshop held, to design a questionnaire for the country’s first ever survey on the uses of remittance. Bangladesh Bureau of Statistics (BBS) will conduct the survey from early June. At present, more than 80 lakh Bangladeshis are working all over the world. The country received $12 billion in remittance during the fiscal year 2011-12, according to Bangladesh Bank data. However, there is no data on how the recipients of remittance use the money.

Tannery relocation looks uncertain, costs to environment mount (The Daily Star, April 03, 2013)

The relocation of tanneries from Hazaribagh to Savar seems to have hit a dead-end due to lack of coordination between the industries ministry and Bangladesh Tannery Association (BTA) much to the grievance of green activists. According to a memorandum of understanding (MoU) signed in 2007 between the two parties, the Central Effluent Treatment Plant (CETP) was supposed to be constructed by the government, with the tanners paying back in installments spread over 15 years. However, the industries minister blamed the BTA for delaying to sign the agreement of setting up the plant.
Without the signed agreement, the ministry will not be able to get the approval from the Executive Committee of National Economic Council to get the project started.

 
BlackBerry comes under BTRC lens (The Daily Star, April 03, 2013)

The high end Canadian smartphone brand BlackBerry has recently raised suspicions of an intelligence wing of the government, which advised the Bangladesh Telecommunication Regulatory Commission (BRTC) to ban BlackBerry services for the sake of national security. At present, Grameenphone and Airtel, the service providers of BlackBerry, have 4,664 and 1,661 users of the smartphone brand. As per licensing terms and conditions in most countries, the government reserves the right to gain access to telecom service providers’ networks. But this interception does not work in cases of subscribers with BlackBerry handsets, as the messages sent from the devices are highly encrypted to protect privacy. Some countries, including India, United Arab Emirates, Saudi Arabia, Indonesia, Russia and China raised concerns about the use of the handset, with many threatening to ban the company’s proprietary email and instant messaging service called BlackBerry Messenger.

BB to launch new system to fix fund shortage for banks (The Daily Star, April 01, 2013)

Bangladesh Bank (BB) will introduce a new system to overcome the liquidity crises experienced by commercial banks. Under the system, BB will adjust a bank’s shortage in the cash reserve requirement (CRR) and statutory liquidity ratio (SLR) with another bank with surplus funds. The borrower bank, in this case, will have to pay an interest rate equivalent to the average call money rate or any other rate fixed by the central bank that the other banks agreed upon.

Sovereign bonds on way to start off Padma bridge (The Daily Star, April 01, 2013) 

The government plans to finance a part of the Padma bridge project by issuing sovereign bonds over the next two years. The bonds will have a maturity period of 15 years and will carry an interest rate of 5.5 percent. The government plans to raise about $1 billion via the bonds, with the first issue coming sometime between April and June. The standing committee members also welcomed the decision to construct the bridge with own resources. The minister said a detailed plan of the project, which would include the financing structure, would be disclosed by April 8.

40,000 tax evading apartment owners found in just one part of city: NBR (New Age, April 01, 2013) 

The tax administrator has identified 40,000 apartment owners who have no Tax Identification Number (TIN). According to the Chairman of National Board of Revenue (NBR) the apartment owners do not have TINs although they have taxable incomes from house rent. Of the 35 lakh people who have TINs, only 13 lakh pay taxes regularly. NBR intends to bring them under the tax net by assessing their income in the next fiscal year.



Bangladesh Bank circular had issued a circular in 2008 to the chief executives and managing directors of all banks and financial institutions for mainstreaming Corporate Social Responsibility (CSR) in their businesses. However, recent findings said that CSR operations go beyond mandatory compliances by law (e.g. ETI in primary health, compulsory primary education in public education) into voluntary engagements to promote equitable and sustainable development.  CSR is not required of banks that are undergoing losses. Among the state-owned banks Sonali and Janata bank incurred a loss of Tk 12.77 billion and Tk. 5.42 billion respectively in 2012.  Agrani and Rupali made a profit of Tk. 6.77 billion and Tk.1.31 billion respectively and spent Tk.60 million (6.0 crore) on CSR activities.

Tour operators count losses in political unrest (The Daily Star, March 31, 2013)

Around 2,500 tourists have cancelled their trips to Bangladesh since January due to political unrest, causing a loss of at least Tk 50 crore to the country. According to tour operators, holidaymakers do not consider Bangladesh as a safe place any more, due to the political violence over the last few months. The tour operators formed a human chain in front of the National Press Club, last Saturday, to voice their concern over the hartals and violence which are hurting the tourism industry. At present, there are around 220 tour operators in Bangladesh, employing over 25,000 people.

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