Bangladesh received $1.68 billion in remittance through legal channels during the first 25 days of January.
On average, expatriates sent $67.04 million per day during this period.According to the latest data from Bangladesh Bank (BB), the total remittance flow for January is likely to surpass $2 billion if the current trend continues.
A breakdown of the central bank’s data shows that of the $1.68 billion received: $354.28 million came through state-owned banks, $74.4 million through a specialised bank, $1,242.53 million from private banks, and $479 million via foreign banks.
However, eight banks did not record any remittance inflow during this period. These include the state-owned Bangladesh Development Bank (BDBL) and the specialised Rajshahi Krishi Unnayan Bank.
Private banks such as Community Bank, ICB Islami Bank, and Padma Bank also failed to report any remittance. Among foreign banks, Habib Bank, National Bank of Pakistan and State Bank of India did not receive any remittance.
During the first half of FY2024-25 (July–December), remittance inflows totalled $13.78 billion, compared to $10.8 billion during the same period last year—an increase of $2.98 billion.
]]>Head of the committee to investigate the irregularities and corruption in the country’s economic sector, Debapriya Bhattacharya, hands over white paper to Chief Adviser Professor Muhammad Yunus at the Chief Advisor’s Office in Tejgaon, Dhaka, on 1 December 2024BSS
A total of USD 234 billion or approximately Tk 28 trillion was siphoned off aboard during the tenures of the Awami League governments between 2009 and 2023, thus, an average of Tk 1.80 trillion was laundered annually. Corrupt politicians, businessmen, financial players, middlemen and government officials moved these funds during the Awami League terms
This estimation on money laundering came to light after the committee to prepare a white paper on state of economy in Bangladesh handed over the white paper titled ‘Dissection of a Development Narrative’ to the Chief Adviser to the interim government Dr Muhammad Yunus on Sunday. The Committee prepared the report based on the Global Financial Integrity Reports (GFIRs) and certain assumptions.
The White Paper said, “Over the recent past years, illicit financial outflows have emerged as an alarmingly growing phenomenon in Bangladesh, a malignant tumour that was devouring a significant part of the country’s economy and wealth.”
The average illicit outflow was equivalent to 3.4 per cent of Bangladesh’s current GDP (gross domestic products) or about one-fifth of export earnings and remittance inflows in the 2023-24 fiscal. The illicit outflows, on average, was more than twice the net flows of foreign aid and FDI flows over the corresponding period.
The head of the White Paper Committee 2024 and distinguished fellow of the Centre for Policy Dialogue (CPD) , Debapriya Bhattacharya handed over the White Paper to the chief adviser at an event at the Chief Adviser’s Office. Other members of the committee were also present.
The White Paper highlighted various aspects that include the banking sector, stock markets, looting of project funds and use of statistics on political motives. The report shed light on the macro economy saying GPD growth dropped and expressed concern over sleepwalking into the middle-income trap. The 397-page White Paper highlighted a total of 22 issues. These are development, GDP growth, inflation, public debt, domestic revenue mobilisation, public investment, food security, private investment, banking system, power and energy sector, external trade, poverty, inequality, human development, disability-inclusive development, gender issues, employability and labour market, remittance, environment and climate change, megaprojects, illicit financial outflows, declining national development, data ecosystem and development narrative, as well as a strategic outlook.
The White Paper delved into the money launderers, their methods, as well as the destinations of illicit capital flights. According to the White Paper, such outflows constituted a complex web of shadow economy that thrived on criminal activities of diverse nature and drew sustenance from an unholy alliance of sections of corrupt politicians, businessmen, financial players, middlemen, government officials, influence peddlers and wheeler-dealers of different types. A large part of laundered money was accumulated within the country through a range of illegal and criminal activities e.g. bribes and corruption, financial crimes, trade-mispricing, embezzlement of bank money and non-repayment of loans, rent-seeking, misuse of political power and influence peddling, over-costing of projects, share market scams, exploitation of migrant workers, tax dodging, drugs and human trafficking, and a host of other means.
Illicit financial outflows from Bangladesh were found to be destined to, or routed primarily through UAE, UK, Canada, USA, Hong Kong, Malaysia, Singapore, India, as also a number of tax havens. An increasing amount of stolen money was being converted to real estate, business enterprises and commercial activities of various kinds.
Citing various international research organisations, the White Paper stated that 532 property owners of Bangladeshi origin had real estate worth USD 375.0 million in Dubai. Bangladeshis owned a total of 972 residential properties in Dubai worth about USD 315.0 million. Till March 2024, Malaysian Second Homeowners of Bangladeshi origin numbered more than 3,600. According to the EU Tax Observatory Report 2023, the estimate of offshore financial wealth held by Bangladeshis was about USD 8.15 billion in 2021.
The White Paper said these resources can also originate in illegal activities and deals within the country for which payments are made abroad. While previously a large part of the ill-gotten money originating in the country tended to be invested in the domestic economy, forming a sizeable shadow economy, in more recent times, taking the money out of the country and keeping it abroad, in financial and non-financial assets, was considered to be a more secure way of guaranteeing a safe haven for the ill-gotten money.
The White Paper mentioned several reasons behind money laundering, and those are political indulgence and patronage, institutionalised corruption, legal impunity and overall lack of good governance in economic management. So, an uncompromising political will to address the problem is necessary.
According to the White Paper, approximately Tk 7 trillion has been allocated for procuring various goods and services, including the construction of roads, bridges, power infrastructure, hospitals, and educational facilities, among others. It is thus estimated that between Tk 1.61 trillion and Tk 2.80 trillion have been used as bribes and extortion at various levels, solely derived from public expenditure on development projects. Between Tk 770 billion and Tk 980 billion of these were simply bribes paid to government officials while between Tk 700 billion and Tk 1.40 trillion were extortions by politicians and their accomplices and the rest are spent on collusive payments. Most of them live aboard.
The White Paper compared the banking sector to a blackhole. The default loans of the banking sector amounted to Tk 6.75 trillion in the country, which is equivalent to the cost of constructing 14 metro rails or 24 Padma bridges. Banks were taken over in collusion with the state agencies over the one and a half decades. The next highest amount of money was laundered abroad. Banking sector saw the most corruption, destroying the sector.
At the event, Bangladesh Bank governor Ahsan H Mansur said the defaulted loans will reach 25-30 per cent in the banking sector, and a large portion of those loans was disbursed after 2017.
According to the White Paper, trillions of takas were embezzled from the stock market through fraud, manipulation, placement shares, and deceit in the IPO process. A major manipulation network involving influential entrepreneurs, issue managers, auditors, and a certain class of investors emerged. Stock market intermediaries suffered bankruptcy with negative equity of Tk 130 billion.
The culprits within the banking system are all heavy weights and the same heavyweights demolished confidence in the share market, the White Paper explained.
About USD 60 billion or Tk 7.20 trillion has been spent through the annual development programme (ADP) over the past 15 years, but USD 14 billion (23 per cent) or approximately Tk 1.61 trillion to USD 24 billion (40 per cent) or approximately Tk 2.80 trillion of it was wasted and looted in the name of development projects during this period, according to the committee to prepare white paper on the state of Bangladesh economy.
As muchas USD 14–24 billion (Tk 1.61–2.80 trillion) from annual development programme (ADP) and development projects has been lost to political extortion, bribery, and inflated budgets during the Awami League rule over the past 15 years. Misappropriation of funds during land acquisitions and the appointment of patronised project directors have further strained resources, undermining potential benefits from infrastructure and social investments.
The White Paper also raised objections to data and statistics gathered by the Bangladesh Bureau of Statistics (BBS), which had been a subject to political interferences. Tax exemption also equalled 6 per cent of GDP during the Awami League governments.
At the event, Debapriya Bhattacharya said the Committee worked independently without any inferences from the government. “The problem is deeper than we thought. The 30 chapters of this nearly 400-page long White Paper explained how the capitalist oligarchs were born and how they control the policy formulation.”
Committee member and former lead economist at World Bank Bangladesh, Zahid Hussain said various vanity projects got priority in the name of development during the Awami League government, and the interim government inherited and fragile economy because of the irregularities and lootings of that period.
Chief adviser’s press secretary Shafiqul Alam also shared the speech of Zahid Hussain on Facebook
Zahid Hussain said, “Self-satisfaction took away the vision of then-policymakers. Solutions to problems got no recognition. Our rules and regulations, as well as various local and national institutions, have fallen to pieces. The vicious circle of corruption has surrounded all levels.”
Referring to money laundering, leaders who become beneficiaries of the past government amassed huge money abroad with the help of the oligarchs. Statistics were used as the toll of political campaigns during the Awami League government, Zahid Hussain opined.
Headed by renowned economist, distinguished fellow of the Centre for Policy Dialogue (CPD) and convener of the Citizen’s Platform for SDGs, Bangladesh Debapriya Bhattacharya, the committee was formed on 29 August with the approval of the chief adviser of the interim government.
The other members are professor A K Enamul Haque, deputy vice chancellor, UCSI University, Bangladesh branch and director, Economic Research Group, Dhaka; Ferdaus Ara Begum, CEO, Business Initiative Leading Development (BUILD); Imran Matin, executive director, BRAC Institute of Governance and Development (BIGD); Kazi Iqbal, research director, Bangladesh Institute of Development Studies (BIDS); M Tamim, professor, Bangladesh University of Engineering and Technology (BUET); Mohammad Abu Eusuf, professor, Department of Development Studies and Director, Centre on Budget and Policy, University of Dhaka and executive director, Research and Policy Integration for Development (RAPID); professor Mustafizur Rahman, distinguished fellow, Centre for Policy Dialogue (CPD); Selim Raihan, professor, Department of Economics, University of Dhaka and executive director, South Asian Network on Economic Modeling (SANEM); Sharmind Neelormi, professor, Department of Economics, Jahangirnagar University; Tasneem Arefa Siddiqui, professor, Department of Political Science, University of Dhaka and founding chair, Refugee and Migratory Movements Research Unit (RMMRU), and Zahid Hussain, former Lead Economist, World Bank Bangladesh.
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The National Board of Revenue (NBR) has uncovered cases of tax evasion worth nearly Tk 3 billion in the first three months of the interim government. Besides, the government agency is also investigating all cases of tax evasion. At the same time, the reform process of Customs, Excise and VAT Office is also underway.
The NBR, on Thursday, reported to the cabinet on their activities in the last 90 days and the future plan. The NBR also sent a report to the cabinet division regarding the reform process of the revenue sector. Earlier, the cabinet division sought a report from the NBR on their activities over the last three months. Sources in the NBR confirmed this.
The incumbent interim government has taken up reform initiatives in various sectors. The reform activities were initiated in the revenue sector also. Three separate committees have been formed to review three laws on tax, VAT (value added tax) and income tax. The NBR has informed the Cabinet Division about the progress in their report.
Speaking to South Asian Network on Economic Modeling (SANEM) executive director Selim Raihan said, “Reform of the revenue sector has become mandatory. Revenue collections from internal sectors must increase. It will reduce the tendency of taking loans, which will ease the pressure on the economy. We have to make an arrangement where people can pay taxes easily without any hassle.”
According to the NBR report, the NBR has uncovered cases of tax evasion worth Tk 2.86 billion in the last three months. The VAT department has found the maximum information of tax evasion. The NBR has information of VAT evasion of Tk 1.67 billion in this sector. A total of 103 cases have been filed over these incidents. Some Tk 680 million has been collected against these cases over the last three months.
Meanwhile the customs department has found evidence of evading duties worth Tk 390 million. Some 57 cases have been filed over these cases of duty evasion. Around Tk 60 million has been collected so far from these cases.
Meanwhile, the Central Intelligence Cell (CIC) has collected a total of Tk 740 million in the last three months. However, the report didn’t disclose the identities of the people accused of tax evasion.
NBR launched investigations into the allegations of tax evasion against six top businesspersons in the country and their companies following the fall of the Awami League government on 5 August.
Those six top businesspersons are – BEXIMCO Group chairman Salman F Rahman, Nasa Group chairman Nazrul Islam Mazumdar, Summit Group chairman Muhammad Aziz Khan, Bashundhara Group Chairman Akbar Sobhan, Orion Group chairman Obaidul Karim and S Alam group chairman Saiful Alam.
They all were known as very close to former prime minister Sheikh Hasina. Apart from that, investigations are underway against several other business conglomerates and former bureaucrats.
Besides, the NBR cancelled the provision of legalising black money within just two months of opening the offer to encourage the honest taxpayers, which is unprecedented in the history of the country.
High inflation is a key challenge for the current government. In response, import duty, VAT, regulatory duty, and advance income tax have been reduced at the import and supply level for essential commodities, including rice, sugar, eggs, and edible oil to help stabilise market prices.
The NBR report also mentioned that goods valued at nearly Tk 80 billion were held in various customs stations for an extended period. Measures have been taken to expedite their release, resulting in the collection of customs taxes amounting to Tk 1.6 billion.
Besides, around 35 kg of gold has been seized over the past three months, along with large amounts of foreign currency, mobile phones, cigarettes, and drugs. Bandrolls and stamps worth Tk 1.53 billion have also been confiscated.
On 9 September, the NBR launched an online system for filing annual income tax returns. Since then, over 200,000 taxpayers have submitted their returns online. Besides, a database has been created to facilitate quick disposal of approximately 30,000 NBR-related cases in the Supreme Court. Around Tk 30 billion has been stuck due to these cases.
According to the NBR report, an initiative has been taken to increase the rate of online VAT return submissions from 85 per cent to 100 per cent. Also, it has set a target to implement an online national single window (NSW) system for the customs department by March next year.
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There has been extensive damage to agricultural produce from the floods in the eastern parts of the country in mid-August. In this condition, import of goods should have increased than usual to meet this scarcity. But the traders have cut down on the import of daily essentials alleging the lack of a favourable trade environment. As a result the prices of daily essentials keep rising.
Traders involved with the import of goods say that on one hand the political situation of the country has caused a trade slump, while on the other hand, the price hike in the global market has put them at risk.
In this condition there are uncertainties in case of getting the investment back from importing goods at a higher price. So, despite there being demand they are not going for the import of daily commodities in an adequate amount.
According to National Board of Revenue (NBR) records, the import of daily essentials like edible oil, sugar and onion has dropped in the two months (August-September) after the fall of the Awami League Government. The prices of these commodities are also on the rise in the global market. As a result, there looms a risk of shortage for these commodities ahead if the supply does not increase.
The reduction in import has created a pressure on the supply of daily commodities, which in turn has increased the prices of commodities like flour, soybean oil, palm oil and onions.
According to the Trading Corporation of Bangladesh (TCB) records, the prices of these commodities have increased by 1 to 4.5 per cent in just one week.
The price of sugar has decreased by Tk 3 per kg from the duty tax being slashed, whereas duty worth more or less Tk 11 has been reduced per kg of sugar. Low supply of sugar is the main reason for this.
People’s cost of living had increased due to the price hike of daily commodities during the last government’s tenure.
The Awami League government fell in the face of student-people uprising on 5 August. Since then, the prices of daily commodities didn’t decrease, rather increased in the last two months under the rule of the interim government.
Reason for reducing import
spoke to five top and mid-level importers on the issue of the import going down. They stated that there is an impression of slump in trade because of the chaos in the beginning of the term of the interim government. They took time to observe the situation.
They are not receiving any guidelines from the government either in this changed situation. Besides, the issues regarding the application for letter of credit (LC) in importing consumer items has not been settled completely yet. As a result the supply of import-dependent goods is decreasing.
When asked about the reason for the decline in import, a representative of Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association, on condition of anonymity told that several letters have been sent to the relevant authorities of the government, including the adviser for finance and commerce ministry, from the organisation so far as the price of palm oil keeps increasing in the global market.
Lastly, a letter was sent to the adviser on 6 October. The letter highlighted the lack of progress on the matter of price adjustment as there has been price hike in the global market. That is why the traders are suffering from indecision in the case of opening LCs. But the traders have been discouraged to import for not receiving any guidelines from the government, it added.
Executive director of daily commodity importing company Seacom Group, Amirul Haque, told that before opening LCs to import a commodity, the traders calculate how much it will cost to import the good into the country and what’s the price of that in the local market.
The current price of daily commodities in the global market is higher compared to that in the local market. Meanwhile, the bank interest rate has increased as well. In this condition, a decline in investment in consumer items is normal.
NBR records show that the import of unrefined sugar, the raw material for sugar, has declined the most among all the daily essentials.
After the interim government took charge, a total of 200,000 tonnes of sugar was imported in August and September. The amount was 328,000 tonnes during the same time last year. That means, the import has declined by 37 per cent year on year.
The import of palm oil has decreased as well. Though the import of soybean oil increased a bit, the total import of both the edible oils is less compared to the demand.
As per NBR records, a total of 349,000 tonnes of these two types of edible oil have been imported in the last August and September. During the same time last year, the import was 376,000 tonnes. That means the import has seen a 7 per cent slump.
The demand of another daily essential, onion also has to be met through import.
As much as 94,000 tonnes of onion was imported in August and September, while the import was 230,000 tonnes at the same time last year. There has been a steep 59 per cent decline in the import of this.
However, the import of wheat has not declined though. A total of 1.75 million tonnes of wheat has been imported in the two months. Meanwhile, 1.7 million tonnes of wheat was imported at the same time last year. Among all the daily essentials, there has been a significant rise in the import of lentils.
A total of 119,000 tonnes of lentil has been imported in the last two months, the import of which was just 37,000 tonnes in the same time last year.
According to this record, the import of lentils has more than doubled this year. Basically, a major portion of the LCs for commodities that have been imported during the last two months had been opened earlier.
However, Meghna Group of Industries (MGI) chairman Mostafa Kamal told, “The import of daily essentials has declined a bit due to the demand being dropped. Meanwhile, the main reason behind the decline in sugar import was the increase in smuggling of sugar. However, the smuggling has declined a little now. So, we are increasing the import again.”
Of the daily essentials, the price of palm oil has increased the most. According to TCB records, the price of loose palm oil was Tk 125-135 per litre before the fall of the Awami League government. It was sold at Tk 144-145 per litre this Saturday, an increase by Tk 10-19 per litre.
Among all the edible oils, palm oil is used the most. The hike in the price of this oil is augmenting the sufferings of the low income population. Plus, the cost of production for goods in the food industry is increasing as well.
Alongside palm oil, the price of soybean oil has also increased by Tk 7 per litre. Soybean oil sold for Tk 144-145 per litre on 4 August. After an increase of minimum Tk 1 to maximum 7, the price has now risen to Tk 152-156 per litre.
The price of onions was also somewhat stable. A kg of imported onion sold for Tk 100-105 on 4 August. However, the price of onions has also increased now. According to TCB, onions are selling for Tk 105-110 per kg now.
Meanwhile, TCB records show that the price of packaged flour has increased by 3.7 per cent within the difference of a week.
However the price of wheat flour remains the same as before. The price of sugar had increased by Tk 3 per kg. However, the price has decreased and stays stable at the same rate from 4 august due to the reduction in duty tax.
The government is adopting various steps to control the price of daily essentials. Lastly, the regulatory duty on sugar import has been reduced by 15 per cent. From that the duty tax on importing unrefined sugar will be reduced by Tk 11.18 per kg, stated the NBR.
There used to be a duty tax of Tk 38-42 on importing per kg of sugar. Now, the importers will have to pay Tk 27-31 only. The duty tax on edible oil had already been decreased before. Yet, a duty tax of Tk 17-18 has to be paid on per kg.
Researchers, however, have emphasised on increasing supply rather than reducing duty tax to keep the prices of import-dependent commodities under control. They believe the crisis won’t be diffused unless the supply increases.
Research director at CPD Khondaker Golam Moazzem told that the flood in August has damaged the crops. That has created a pressure on the internal production. The pressure on import goods will be increased as well. The shortage will widen if there’s a decrease in import under this condition.
It won’t be possible to handle the situation with market management like reducing duty tax alone. In addition to encouraging the private sector, the government has to take preparations for import as well. Otherwise there will remain the risk of a food crisis, he added.
Golam Moazzem believes the commerce, agriculture and food ministries should take joint steps by estimating the figures of production and demand. Then it will be possible to confirm what will be the amount of deficit and how that can be dealt with.
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Such a decision means the government’s income will increase from fees of various services the ministries, departments, divisions and agencies provide to the people.
The government said, “Service fees will be updated at appropriate times due to necessities or after every three years.” Those, however, will be done taking into consideration cost of providing services, quality of lifestyle, inflation rate and other economic indicators.
This was said in a new guideline the finance division issued Sunday on proper management in collection of non-tax revenue and non-NBR revenue.
It also mentioned that there is a significant possibility that the revenue collection from NTR and non-NBR sources will soar.
This fulfilled the necessity of a timely guideline required for increasing collection from the two sources.
Speaking about this, finance and commerce adviser Salehuddin Ahmed told on Monday that there are many opportunities to expand revenue collection in the country. For now, the finance division has issued the guidelines to increase revenue from NTR and non-NBR sources. The work is underway to raise revenue from NBR sources as well.
The guideline mentioned it was issued with a view to fixing a target of revenue collection from NTR and non-NBR sources, imposing reasonable fees, identifying right sectors, regular collection of the government’s due interest and profit and proper collection, management and distribution of wealth.
It further said the ministries and departments have to take steps to identify sectors to expand NTR and non-NBR tax-revenue ratio. At the same time, it is necessary to ensure competency, transparency, and accountability for revenue collection by NTR and non-NBR sources.
According to the guideline, an automatic Chalan or A-chalan will have to be used to deposit the collected revenue to the state coffer, as well as details on revenue including money, sectors, chalan number will have to be recorded in the specific register.
Fees, toll, lease and rent money, etc. will be deposited on the day of the collection. In case, money is collected after office hours or on a government holiday, money will be deposited to the state coffer on the next working day.
A quarterly review report will be filed to the Finance Division detailing the situation of collection against the NRT and non-NBR tax and revenue target. Ministries or departments will send an analysis report to the Finance Division in October every year highlighting the fixating, re-fixing or determining service values or fees.
The guideline said the Finance Ministry would hold a quarterly review meeting and give opinions on fixing, re-fixing or imposing fees, as well as take measures to formulate policy NTr and non-NBR revenue policy and develop a database on all types of government services.
Failure to pay or violation of any rules will result in punishment, according to the guidelines.
Replying to a query on the possible action, a senior official of the Finance Division said there is no shortage of government rules and laws to take action.
The size of the budget is Tk 7.97 trillion in the current 2024-25 fiscal. The budget deficit stood at Tk 2.56 trillion excluding aids. Total revenue was estimated at 5.45 trillion including the grants of Tk 44 billion; of the amount, Tk 150 billion will come from non-NBR taxes and Tk 460 billion from the NRT sector, and that means the Finance Ministry wants revenue collection to stand at Tk 610 billion or even more.
The NTR sector includes dividend and profit, administrative fees, fines, rent and lease, toll, non-commercial sales, service receipts, capital revenue and tax, as well as other taxes. Non-NBR taxes include narcotics duty, vehicle tax, land revenue, sale of non-judicial stamp and surcharge.
A target has been set in the current fiscal to collect Tk 100 billion from the sale of stamps, Tk 76.76 billion from dividends and profits, Tk 61.14 billion from interest, Tk 19.15 billion from toll and Tk 22.50 billion from land revenue.
Regarding this, Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said NTR and non-NBR taxes can be updated to increase revenue, but it must be kept in mind that ease of doing business is not hampered, as well as a digital system must be introduced to maximise the entire process.
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Business leaders at a roundtable here today called upon the interim government for restoring fully the law and order especially in the industrial belts, lowering interest rates and carrying out necessary reforms for ensuring smooth operations and sustainability of the industries.
They made the call at a roundtable on “Current State of the Economy and Outlook of Bangladesh” organized by the Dhaka Chamber of Commerce and Industry (DCCI) at the DCCI auditorium.
Speaking at the roundtable, Mir Nasir Hossain, former president of FBCCI, said that the recent labour unrest has shattered the country’s image in the global market.
He said that not only the export-oriented industries but also the domestic market-based industries are important.
Nasir said, the real effective rate of interest is too high in Bangladesh and it often hampers the entrepreneurs to compete with the international market.
Saying that reforms are badly needed in the NBR and customs houses, Nasir said, “Moreover, customs houses should be automated. Although the initiative has been taken few years back, but it is yet to see the light”.
He said although an affluent middle income group has grown up in recent past in the country, but in line with that, the tax net has not been widened, which is not desirable.
The former FBCCI chief said due to lack of uninterrupted gas supply, the manufacturing industries are suffering a lot. To resolve the crisis, he suggested for strengthening on-shore and off-shore gas exploration.
Syed Nasim Manzur, President of Leather Goods and Footwear Manufacturers & Exporters Association said that the businessmen now feel unsecured due to labour unrest and vandalism.
Declining the purchase capacity of people triggered by high inflation of money led to reduce public consumption of food and services remarkably, he noted.
Nasim said that the double-digit rate of interest on industrial loan is not viable for sustaining in the competitive market.
He said, FDI is needed for a country like Bangladesh, but due to low confidence, it remains stagnant now. He hoped that FDI will see a positive move within few days.
Calling for protection of RMG sector, Nasim Monzur said, “We’ve to save the RMG industry as it has a multiplier impact on our overall economic value chain”.
Mohammad Hatem, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that a good understanding and relation between the owners, workers and labour leaders can mitigate any unrest as well as violence in the factories.
He also laid importance on giving industry owners adequate time to repay their loans requesting the Bangladesh Bank to take steps in this regard.
Dr. M. Masrur Reaz, Chairman & CEO, Policy Exchange Bangladesh said, the government could not take the right policy in right time which caused the macro-economic crisis in recent past.
“Confidence level of investors is shattered now, law and order especially disorder in the ‘order’ part, labour unrest, inflation are some of the pressing issues for the macroeconomic challenges for Bangladesh,” he said.
Reaz also said, “We’ve seen a commendable progress in the banking sector reforms recently, but in the other areas we’re yet to see the policy governance.”
“We’ve to keep our forex reserve stable through steady flow of remittance, export earning and FDI to restore confidence of the people,” he said.
Shams Mahmud, former President of DCCI & Managing Director of Shasha Denims Limited mentioned that the labor unrest in Ashulia region disrupts the production in the factories.
“If the law and order situation does not come into normalcy there, buyers’ confidence will be hampered and thus buyers’ order may shift from Bangladesh to other competitors,” he said.
Regarding NPL, he said for the mismanagement of banks, genuine businesses should not suffer in getting loans while the banks should also be accountable for any mismanagement.
Ahsan Khan Chowdhury, Chairman & Chief Executive Officer (CEO) of PRAN-RFL Group noted that Bangladesh is a land of opportunities and it could be one of the hub of global business for its immense potentials.
He said, the main task of the business community is to create employment, but sometimes, it causes setback due to labour unrest.
Laying importance on active role of police in marinating law and order, he said, “We want to see the police as it should be,…We want to see all law enforcing agencies back again with their full capacity.”
Ahsan also said that with the high rate of bank interest, it is difficult to sustain. “We should have a rewarding system for the good borrowers. There should not be any restriction on opening LCs to create employments and keep operational the wheels of industries.”
Syed Mohammad Kamal, Country Manager of Mastercard Bangladesh said, from July-August, digital spending has remarkably dropped down as consumption was in the downward trend.
He suggested incentivizing digital payment system over cash payment. At present the remitters get 2.5 percent incentive on their remittances sent to Bangladesh. If this facility is withdrawn, they will go for unofficial channel to send remittance to home that may affect foreign currency reserves, he observed.
Ambareen Reza, Co-Founder, Chairman & CEO of Foodpanda Bangladesh urged for low cost fund for the SMEs. She also said that number of loan defaulters in the CMSMEs or startups is very negligible.
DCCI President Ashraf Ahmed said, at present Bangladesh is experiencing an unstable economic growth trajectory with slow GDP growth, coupled with few other challenges.
Currency devaluation, rising inflation, financial instability, labour unrest, concerns over energy security and disruptions in key export industries are making the country’s economy unstable.
He suggested for immediate restoration of law-and-order situation as it required for the stability in the current business environment.
Ashraf also stressed on faster reforms in the banking governance and suggested to address NPL and liquidity shortage issues that must be prioritized to restore confidence in the financial system.
To combat inflation, he said, the government can pursue supply-side reforms to ensure smooth distribution of essential goods and services.
Diversification of the energy mix and new energy supply routes and improving investment in the energy sector are must for safeguarding the industrial productivity, he added.
The DCCI president suggested for planned housing, education and healthcare services in the Ashulia and adjacent areas to provide a low cost living facilities to the workers of that particular area.
DCCI Senior Vice President Malik Talha Ismail Bari was also present on the occasion.
]]>An initiative has been taken to withdraw the upper ceiling on investment in wage earners development bonds for expatriate Bangladeshis. With this, the authorities aim to lure expatriate professionals and businesses to invest at home, clear ways for foreign investments, and increase inflow of remittances.
The expatriate welfare and overseas employment ministry issued a letter to Abdur Rahman, Khan, secretary of the internal resources division (IRD), on Wednesday, asking him to take action in this regard.
The wage earners development bond was introduced in 1981, with a maturity period of five years.
Asked about the issue, the IRD secretary declined to make any comment and claimed that he has not yet received any letter over the issue
According to the Wage Earners Development Bond Rules, 1981 (amended on 23 May, 2015), there was scope to invest any amount in the bond. However, during the Covid-19 outbreak, the IRD issued a notification on 3 December, 2020, imposing an investment limit of Tk 10 million (or its equivalent in foreign currency) on wage earners development bonds, US dollar premium bonds, and US dollar investment bonds.
The cap on US dollar premium bonds and US dollar investment bonds was lifted later on 4 April, 2022, allowing unlimited investments.
However, the investment limit for wage earners development bonds remains unchanged, with no provision for auto reinvestment. Hence, expatriates are being forced to withdraw their investments.
In its letter, the expatriate welfare ministry told the IRD secretary that the upper ceiling on investment should be abolished or relaxed to boost remittance inflows and attract more investment from expatriates.
On Tuesday, expatriate welfare and overseas employment adviser Asif Nazrul told the media that he proposed to cancel the ceiling of Tk 10 million on the purchase of wage earners development bonds.
“It needs the assistance of Bangladesh Bank, and I hope Bangladesh Bank will facilitate this,” he said, expressing optimism for more remittance in the coming days.
These bonds can be purchased from offshore and authorised dealer (AD) branches of Bangladesh Bank, exchange houses, exchange companies, and scheduled banks. Its profits are free from the tax net. Also, there are scopes to take loans against the bonds, and there is no requirement to have a foreign currency (FC) account to buy these bonds.
Foreign exchange earners themselves can invest in these bonds, or invest in the name of their nominee. Government employees who serve in Bangladesh missions abroad are also eligible to invest in Wage Earners Development Bonds.
It was learned that the IRD will present a summary of the proposal to finance and commerce adviser Salehuddin Ahmed for approval next week. Once it gets approval, the IRD will issue a notification, while the central bank and the national savings directorate will implement.
When asked about the matter at the secretariat on Thursday, adviser Salehuddin Ahmed told that the proposal should be submitted first before any further comments can be made.
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He believes that if these measures succeed, inflation will decrease. This would be great achievement if people’s anger and suffering are alleviated.
Ahsan H Mansur made these remarks at a roundtable discussion organised by Prothom Alo titled “Where do we want to see the banking sector?”
Ahsan H Mansur said that three task forces are being formed for the reform of the banking sector. One task force has already been established, and several measures have been implemented, including changes to the boards of some banks.
To improve the situation, 10 to 11 weak banks are now under regular supervision, he said adding these banks report on 20 specific issues to Bangladesh Bank every day.
The central bank governor said, “After implementing these measures, deposits in banks have increased by Tk 80 billion. This is a great relief. Once the liquidity crisis is resolved, we will move on to the next steps.”
Ahsan H Mansur noted that if the current trend in the dollar market continues, there will no longer be instability in the market. For the first time, the exchange rate for remittances in dollars is higher than the rate in the open market. The dollar market is stabilising.
The governor said, “Reducing inflation is my primary responsibility. Various measures are being taken to achieve this. Monetary policy is already stringent, and steps are being taken to make it even stricter. While there may be temporary difficulties for businesses, inflation will decrease, ultimately benefiting the overall economy.”
]]>The Bangladesh Bank (BB) has formed a task force for banking sector reform, with six experts on the financial sector as members of the taskforce.BB governor Ahsan H Mansur will serve as the coordinator of the taskforce.Apart from taking different measures to reform the banking sector, the taskforce will also publish a white paper.
The central bank disclosed this in a notification published on Wednesday.
The six members of the taskforce are chief adviser’s special envoy for international affairs Lutfey Siddiqi, former deputy governor Muhammad A Ali, BRAC Bank chairman Mehriar M Hasan, former lead economists at the Dhaka office of the World Bank Zahid Hussain, ZNRF University of Management Science vice chancellor M Zubaidur Rahman and Partner at Hoda Vasi Chowdhury & Co, Sabbir Ahmad.
According to the notification, this taskforce will mainly assess the existing financial situation, bad assets and major risks to maintain economic stability. Besides, the taskforce will conduct financial index review, assess actual conditions of the loans, actual price of assets, security deposit deficiency and will separate the bad assets of banks concerned.
The Bangladesh Bank said the task force will submit proposals related to limiting political and corporate influence on banking decisions, reform of bank ownership and development of the regulatory system under the process of strengthening good governance and risk management systems in the banking sector to achieve crisis time resiliency.
Besides, the taskforce will retrieve the money of the struggling banks, prepare regulations and related policies and will adopt separate policy measures for the weak banks.
The notification further said this taskforce will also amend different laws related to the financial sector, including the Bank Company Act and Bangladesh Bank Order and will propose for legislation, amendment and reform of laws regarding the asset management companies, bank acquisition and unification. It will also take measures to publish a white paper of the banking sector.
Following the ouster of the Awami League government, the interim government declared to form a bank commission for the reform of the financial sector. However, the government has formed a task force now.
The officials say the World Bank (WB) and Asian Development Bank (ADB) are providing loans for the banking sector reform. The money from the loan will also be spent on the modernisation of the central bank and enhancing its capability. At the same time, there has been an assurance of help from the International Monetary Fund (IMF) also.
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The United States is set to launch economic talks this week with Bangladesh’s interim government, including its leader, Muhammad Yunus, the Financial Times reported on Tuesday.
The government led by the Nobel Peace laureate was sworn in last month with the aim of holding elections in the South Asian nation after the ouster of prime minister Sheikh Hasina following deadly protests against quotas for government jobs.
“The United States is optimistic that, by implementing needed reforms, Bangladesh can address its economic vulnerabilities and build a foundation for continued growth and increased prosperity,” Brent Neiman, assistant US Treasury secretary for international finance, told the newspaper.
A delegation of treasury, state and trade officials, is expected to discuss Bangladesh’s fiscal and monetary policy and also the health of its financial system, the paper said. The talks will be held on Saturday and Sunday in the capital, Dhaka, it added.
Officials in Bangladesh’s finance ministry and Yunus’ office said they were not aware of the visit.
Bangladesh’s $450-billion economy has slowed sharply since the Russia-Ukraine war pushed up prices of fuel and food imports, forcing it to turn to the International Monetary Fund last year for a $4.7-billion bailout.
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