The New Nation - Internet Edition

Commercial bank branches to remain open today

BUSINESS REPORT

Bangladesh Bank has ordered private banks to open some of their branches in Dhaka and Chittagong half day today (Sunday), although the day falls on a public holiday, following the appeals of manufacturers' associations BGMEA and BKMEA. The Bangladesh Bank sent a circular on the matter to the banks' chief executives on Wednesday last. According to the BB order, the foreign exchange branches, branches located at the Export Processing Zone, land and sea ports, and at Customs Houses in the two cities will remain open from 9:00am to 12:00pm on Sept 28. Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association appealed to Bangladesh Bank to open all branches of state-owned and private commercial banks either on Saturday or Sunday for the convenience of export trade and workers' payments. BKMEA in a statement urged the government to keep the main commercial branches open during the holiday season for at least for one day before Eid-ul-Fitr.

BGMEA also requested the government to keep banks open from Sept 27 to 30 for financial transactions and other emergencies.

Bangladesh 'economically repressed' country: Country ranks 149th in Index of Economic Freedom

BUSINESS REPORT

Bangladesh has been ranked 149th among 179 countries in freedom of trade in the 'Index of Economic Freedom' report released by The Heritage Foundation, a Washington-based think-tank and The Wall Street Journal yesterday.

Making an assessment, the Heritage Foundation said Bangladesh's economy is only 44.9 percent free.

Countries with scores from 49.9 and below are rated as economically repressed. They included Maldives, Bhutan, Bangladesh, Djibouti, Seychelles, Comoros and North Korea.

The Heritage Foundation said Bangladesh's overall score is 3.1 percentage points lower than last year-one of the biggest declines in the world, reflecting lower investment, business, and labor freedom. Bangladesh is ranked 27th out of 30 countries in the Asia-Pacific region.

Bangladesh's fiscal freedom and government size score relatively well, which probably reflects severe underdevelopment and black market activity more than genuine freedom. Restrictions on starting new businesses and obtaining commercial licenses are fairly loose. Closing a business, however, is not quite as simple.

Bangladesh's barriers to trade freedom are disastrous. Tariffs are prohibitively high. The country also suffers from weak investment freedom, property rights, and financial freedom. Corruption is common. Chaotic regulations and restricted market sectors impede greater foreign investment, as does a haphazard and politicized approach to the rule of law. The banking sector is plagued by similar problems.

The 'Index of Economic Freedom' is produced annually by The Heritage Foundation and The Wall Street Journal, appraises economic freedom based on 10 categories, namely trade freedom, labour freedom, fiscal freedom, business freedom, government size, investment freedom, property rights, financial freedom, freedom from corruption and monetary freedom.

Countries whose scores fall between 80 and 100 percent in the index are said to have free economies while mostly free economies are those scoring between 70 and 79.9, moderately free (between 60 and 69.9) and mostly non-free (between 50 and 59.9).

Countries with scores from 49.9 and below are rated as economically repressed.

Background:

The People's Republic of Bangladesh, formerly a parliamentary democracy, is now run by a military-backed regime that overthrew the elected government in January 2007. The generals have promised to hold elections by the end of this year. One of the world's poorest nations, Bangladesh had made progress in recent years with growth in its export sector, particularly in the garment industry.

The formal financial system remains weak. The majority of Bangladeshis work in agriculture, though service industries now account for around half of GDP. Natural disasters and inadequate infrastructure hamper economic development.

Business Freedom - Not Graded

The overall freedom to start, operate, and close a business is limited by Bangladesh's national regulatory environment. Starting a business takes an average of 74 days, compared to the world average of 43 days. Obtaining a business license requires less than the world average of 19 procedures. However, commercial regulations can be unclear and inconsistent, and the lack of transparency raises start-up and operational costs. Closing a business is a lengthy process.

Trade Freedom - Not Graded

Bangladesh's weighted average tariff rate was 55.8 percent in 2005. Import and export restrictions; numerous border taxes and fees; restrictive labeling requirements; burdensome import licensing rules; export subsidies and other support programs; government monopolies and state trading boards; complex, non-transparent government procurement; inefficient and corrupt customs administration; and weak enforcement of intellectual property rights also add to the cost of trade. An additional 20 percentage points is deducted from Bangladesh's trade freedom score to account for these non-tariff barriers.

Fiscal Freedom - Not Graded

Bangladesh has moderate tax rates. The top income tax rate is 25 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax (VAT), a property tax, and a tax on interest. In the most recent year, overall tax revenue as a percentage of GDP was 8.7 percent.

Freedom from Government - Not Graded

Total government expenditures, including consumption and transfer payments, are low. In the most recent year, government spending equaled 15.1 percent of GDP. Privatization has been hindered by bureaucratic resistance and opposition from labor unions.

Monetary Freedom - Not Graded

Inflation is moderate, averaging 6.5 percent between 2004 and 2006. Relatively unstable prices explain most of the monetary freedom score. An additional 15 percentage points is deducted from Bangladesh's monetary freedom score to adjust for price-control measures that distort domestic prices for goods produced in state-owned enterprises, some pharmaceuticals, and petroleum products.

Investment Freedom - Not Graded

Officially, foreign investment is generally welcomed, but utilities and other critical sectors are not open to the private sector, and potential investors face a host of challenges: bureaucratic procedures, unnecessary licenses, high levels of corruption, an unpredictable security situation, and uncertainty about contract and regulatory enforcement. Bangladesh is deeply in need of public administration reforms. Most capital transactions are controlled or prohibited. Non-resident companies are subject to a higher corporate tax rate (37.5 percent) than are publicly traded companies (30 percent).

Financial Freedom - Not Graded

Bangladesh's financial services sector is small and underdeveloped. Financial supervision is weak, and fraudulent transactions, mismanagement, and political influence in lending are common. The central bank is not independent. In 2006, the banking system consisted of four nationalized commercial banks, five development financial institutions, 30 private commercial banks, and 10 foreign banks. Foreign banks are generally restricted to offshore and foreign trade business. The nationalized commercial banks dominate the system, controlling over half of banking assets. An extensive microfinance presence is largely unsupervised. There are 30 private insurance companies, including a foreign-owned firm, but the major portion of insurance activity is controlled by two state-owned companies. Bangladesh has two stock exchanges, but market capitalization is low. In 2006, the government strengthened the criteria for the listing of firms on either stock market.

Property Rights - Not Graded

Bangladesh has a civil court system based on the British model. Although the constitution provides for an independent judiciary, the lower courts are considered part of the executive branch and suffer from corruption. Contracts are weakly enforced, and dispute settlement is further hampered by shortcomings in accounting practices and real property registration.

Freedom from Corruption - Not Graded

Corruption is perceived as pervasive. Bangladesh ranks 156th out of 163 countries in Transparency International's Corruption Perceptions Index for 2006. Given that corruption blights all other economic freedoms, this is a key area for improvement.

Labor Freedom - Not Graded

Bangladesh's labor market is burdened by relatively inflexible employment regulations that hinder employment creation and productivity growth. The non-salary cost of employing a worker is low, but dismissing a redundant employee can be difficult. The difficulty of laying off workers creates a risk aversion for companies that would otherwise hire more people and grow.

Sonali Bank Ltd signs loan deal with Premier Leasing

BUSINESS REPORT

Sonali Bank Limited has entered into a loan agreement amounting Tk 80 million with Premier Leasing & Finance Limited on September 24 last.

Md Shahjahan, Deputy General Manager (General Loan Division) of Sonali Bank Limited and Kazi Emdadul Hoque, Managing Director of Premier Leasing & Finance Limited signed the agreement on behalf of their respective organisations.

SA Chowdhury, CEO and Managing Director, Mrs Raihana Aneesa Yusuf Ali and Kazi Faqurul Islam, Deputy Managing Directors and Karabi Mujib General Manager of Sonali Bank Limited and Azizul Hoque, Senior Vice President, Md Golam Mustafa, Senior Vice President and CFO of Premier Leasing & Finance Limited and other General Managers of Sonali Bank Limited, Head Office were present on the occasion.

GP launches 'Tathyo Tori' with CARE

Grameenphone Ltd, in association with CARE Bangladesh, launched the 'Tathyo Tori' (Information Boat), a vessel designed to provide necessary livelihood information in the riverine communities of Bangladesh, at Dhirai, Sunamganj on September 22 last.

The Information Boats, which will move from one place to another on a fixed schedule, will work as an information hub to meet the communication needs of rural communities, especially the Char and Haor areas; people of these areas have limited access to up-to-date livelihood and other information due to their remoteness.

The main objective of this project is to both educate and empower the rural people with the necessary information for their livelihoods. The project will place specific focus on poor and marginalized people of the community.

Shuvashish Priya Barua, Head of CSR, Debashis Roy, DGM, Projects and Partnership, CSR and Shafquat Hossain, DGM, Social Communication, CSR of Grameenphone, and Stav Zotalis - Assistant Country Director, and Asif U Ahmed-Program Director, CARE Bangladesh, were present at the event.

Information boats will be equipped with digital content, such as livelihood and agricultural information, suited for the specific areas serviced by the boats. A typical Information Boat will have computers, Internet and email facilities, photocopiers, fax machines, printers, TV cameras and video machines, scanners, and more, depending on the needs of the community.

Grameenphone hopes to launch three such Information Boats by the end of the year.

Empowerment is one of the key focus areas of Grameenphone's social investments. The information boat project with CARE Bangladesh is part of that empowerment initiative.

CARE Bangladesh, part of CARE International, one of the world's largest private international humanitarian organizations, has been working in Bangladesh since 1949. Their programs are focused on women empowerment, private sector development, agriculture, education, health, reaching around 12 million people in 64 districts of Bangladesh.

As a responsible corporate citizen, Grameenphone aims to work hand in hand with the Government and other development agencies and become the partner in development of the country.

BB releases banknotes worth Tk 5,705 cr

BUSINESS REPORT

Bangladesh Bank releases some 37 crore banknotes worth Tk 5,705 crore of various denominations ahead of Eid-ul-Fitr.

Munsur Ahmed, currency manager of the central bank, told reporters in his office that the banknotes were being released from the bank's local offices too.

Ahmed also acknowledged the allegation that a big chunk of the new banknotes go to the currency traders.

"It is difficult to find out the so-called currency traders from crowds of people. But we are trying our best to stop it (from happening)," he said.

The central bank would release four crore banknotes of Tk 2 denomination, two and a half crore of Tk 5 denomination, 12.5 crore of Tk 10 denomination, three crore of Tk 20 denomination, five crore of Tk 100 denomination and 10 crore bills of Tk 500 denomination.

This correspondent found people waiting in long queues for new banknotes in front of Bangladesh Bank at Motijheel in the city. But the currency traders were selling banknotes in public at higher rates near the bank.

Abdul Quader, who was selling new notes, told The New Nation that he collected the money from the bank booth.

"I stood in a queue, collected the money and am now selling at slightly higher prices," Quader said.

He charges an additional Tk 10 for a bundle of Tk 10 denomination.

Banks are fit enough to start mobile banking

Business Reporter

The number of mobile phone and Internet users is increasing day by day in the country. E-banking system makes banking easier. Mobile banking is not yet applied widely. New Nation talked about the issue with Kamaluddin Ahmed, Chairman of Alif Group of Companies and former first Vice-President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

When Kamaluddin Ahmed asked about his opinion on mobile banking in Bangladesh he said that the news is encouraging and also important for Bangladesh. Mobile banking in some other form, but not actually in the banking mode, got started in Bangladesh already, for example money transfer from one mobile phone to another mobile phone introduced by one mobile network operator (MNO}.

Till recently some MNOs have started the products like paying utility bills to different agencies through mobile phones. People have become used to these kinds of habits and such products are also gaining popularity across the country, even un- educated people who have no formal education background could easily use these facilities. So introducing mobile banking would be some kind of potential development in our country. If people could do some banking operation at their fingertips without visiting any bank counter that could definitely comfort the users he added.

When asked about the suitability of mobile banking for a third world developing country like Bangladesh he replied though Bangladesh is a 3rd world developing country but in case of using mobile phones it has even surpassed many developed countries. Use of modern state-of-the-art technology in Bangladesh has also rapidly taken place here. Many banks are truly online and lots of banks are giving round the clock service 365 days a year through Kiosks, TM/CDM machines etc. Such developed environment in banking and the ever-increasing habit of the people to use mobile phones should be conducive for mobile banking here.

Kamaluddin opined that since many banks of our country use advanced and modern technology, centralized banking software and many banks even have call centers working round the clock, these banks would be enough fit providing mobile banking service to the subscribers

When New Nation sought his evaluation about on going E- banking system in Bangladesh he said, "The scenario of E- banking system is satisfactory. Some banks are doing very good in their E-banking systems, though the number of such banks is not that big. However, most banks are trying to give E- banking facility to their customers. So, with the increase of the use of Internet users the popularity of E- banking shall definitely increase and more banks should also come forward with E- banking systems."

He also put forward some reasons of public banks of lagging behind in adopting E - banking system. He said, "the important criterion for E - banking is the technology based environment and the use of a centralized banking software. Our public banks unfortunately lack the technology based environment and could not still adopt any centralized banking software for these banks. So until the time they could make their work environment technology based and could use modern banking software they would leg behind in adapting E-banking system."

The Chairman of Alif Group of Companies however recommended some points which will work out for hacking the banking system/software/technology etc. should be adequately encrypted; the technology team in the banks should be constantly vigilant against the hackers and should endeavor to develop and modify their systems continuously. Moreover, banks should engage independent technology surveillance team to monitor their systems round the clock through out the year apart from such a team in their office.

Kamaluddin thought that the ruling Caretaker Government has been addressed many issues since its onset regarding country's economic progress like structuring discipline in many important government sectors like ports, energy and other public services etc that has touched economic uplift, stability in political situation, fight against corruption and imposition of strict discipline in financial transactions, transparency in many government activities.

All these developments and changes have made positive effect in the economy and as such considerable economic progress is evident in all sectors of the economy in the post 1/11 regime he added.

AKTEL reward for its subscribers

BUSINESS REPORT

AKTEL, one of the leading telecommunications solution providers launched 'AKTEL REWARD' at a press conference in the city on September 23 last.

By this offer all AKTEL customers can enjoy up to 50 percent discount at 194 partner outlets across the country, related to fashion and beauty, home appliance, fitness & sports, hotel, medical services, restaurant, mega shops, and entertainment, etc.

To avail the discount facility from these partner outlets, customers have to SMS respective partner codes to 1213 while purchasing products or services. AKTEL is happy to be able to introduce this new offer which will add more enjoyment and colour to the lives of its customers. AKTEL has partner outlets in all major cities like Dhaka, Chittagong, Rajshahi, Khulna, Sylhet, Bogra and Barisal.

While announcing this offer, the Chief Commercial Officer of AKTEL, Bidyut Kumar Basu said, "The objective of this offer is to strengthen the bondage with all our customers by facilitating them in enjoying and managing their lifestyle. To start with, we are launching this offer with our 194 partner outlets; we will continue to increase the number of partnerships to add more and more outlets for the convenience of our customers."

All AKTEL customers can enjoy discounts in different outlets in many lifestyle areas fashion shops like Ahang, Mantra, Dia Gold, Armani Plus etc in the Fashion and Beauty sector, Akhtar Furnishers, Bistar etc in Home Appliances, Ratan's Health Club, South Avenue Gym, etc in the field of Fitness and Sports, Elenga Resort, Jamuna Resort, Hotel Purbani, Hotel Agrabad, Hotel Sea Crown, Prasad Paradise Hotel & Resort, Baton Rouge, Dish & Dessert Restaurant, Fridays Fast Food, Western Grill, Steak House, MFC, AFC and so many more in Hotel and Restaurant. To meet AKTEL customers' daily family requirements, AKTEL has also carted mega shops like Shop N Save Ltd. under this program.

BCRA holds discussion on Zakat, Iftar Party

Business Reporter

A discussion meeting of Bangladesh Cultural Reporters Association (BCRA) and an Iftar Party at the courtesy of Ashian City were held at Hotel Razmoni Isha Kha in the city on Sunday last.

Dr Mahfuzur Rahman, Chairman of ATN Bangla was present at the discussion as the chief guest.

Jatiya Press Club President Shawkat Mahmud, Bangladesh Federal Union of Journalists Secretary General Abdul Jalil Bhuiyan, Bhorer Kagoj Editor Shyamol Dutt, Dhaka Reporters Unity General Secretary Ilyas Khan, Ashian City's Deputy Managing Director Saiful Islam Bhuiyan, BCRA General Secretary Mehdi Azad Masum and Senior Vice President Dulal Khan were present as special guests.

With BCRA President Shamim Ahmed in the chair, speakers at the discussion on "Role of Zakat on Poverty Alleviation: What We Need to Do" said Zakat was one of the most important five pillars of Islam.

Zakat is a fundamental right of the poor to the rich, and Allah made it obligatory for all the Muslims. Bangladesh is said to be a country of the poor. But, the country would not have any poor if the rich had paid their Zakat properly.

The speakers further said all the real Muslims who are capable must paid their Zakat.

Later, the invited guests took part in an Iftar Party.