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Topics - Rozina Akter

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1
Faculty Forum / Taking care of the Sundarbans
« on: February 27, 2020, 11:08:46 AM »


A veritable natural green wall, or what environmentalists would like to call 'natural shell,' sheltering the coastal belt settlements of Bangladesh from the cyclones and storm surges, the Sundarbans is facing threats to its sustenance and growth. Consider what a havoc last year's powerful cyclone, Bulbul, could have wreaked on the coastal population had the Sundarbans not diverted and dampened its destructive force? From time to time, therefore, we need to take stock of the situation and step up efforts to maintain its intrinsic ecological balance. It has the distinction of being the world's natural heritage site endowed with and home to rich biodiversity reservoir.

Activities involving government as well as privately-run industrial projects are taking place under the ministry of environment, forest and climate change's watch. Are the relevant laws of the department of environment being strictly adhered to while setting up and running those ventures? It is common knowledge that questions have been raised from various pro-environment and right groups about these projects. The government thinks the key concerns are being addressed. But questions remain in the minds of environmental and rights groups which they press for answers. A balance needs to be struck between differing perceptions in order to reflect a pursuit of best practice methods.

The role of the private sector is not beyond question. Fishing activities using non-conventional means, plying of water transports that sometimes carry cargoes harmful for aquatic life in the rivers, various freshwater reservoirs and wetlands are but to mention a few. Oil spills from some cargo vessels have been a matter of concern. Even the seasonal tourists are hardly showing any respect for this forest when they carelessly litter its floor with non-biodegradable detritus - plastic cans, bottles, packets, you name it.

Reduced flow of water in the Padma River due to Farakka Barrage in its upstream has caused the rise in salinity in the rivers, wetlands and soils of the Sundarbans. Shrimp culture, the way it is being practised currently, does also need a rethinking as it brings brackish water into the inland freshwater reserves. These are not only causing its delicate hydro-ecology to compromise affecting aquatic life, it is also leaving its impact on the vegetations on land. The sundari tree, for example, from which the forest gets its name and fame, is now facing a challenge from a syndrome called 'top dying disease'. Similar problems are afflicting other important trees that contribute most to the composition and look of this unique mangrove forest. A correct policy to address this problem to keep sundari and other important trees in good health needs to be adopted.

 Of course, the all-pervasive climate-change may also have a hand in jeopardizing the Sundarbans' biodiversity. We must take guard and provide against such a possibility. However, there seems to be no shortage of goodwill, whether at the government or at private levels, when the issue of saving the Sundarbans comes to the fore. Because, it is the only planet we have and it is the only Sundarbans we have. The Sundarbans is nothing short of the nation's lifeline. It cannot be allowed to fall into decline on our watch. Awareness must be heightened at all levels to arrive at a national consensus to save it.

2
BBA Discussion Forum / Health-tech start-ups to bridge gap
« on: February 27, 2020, 11:05:22 AM »
When there is already quite a good number of hospitals in the country and more are being built both in the public and private sectors, we are witnessing the contrasting sight of an increasing number of patients going abroad for treatment every year. What it makes evident is that something is missing from our prevailing health service delivery regime which cannot be addressed simply by a quantitative increase in the number of hospitals. Since the traditional approach to address this missing link has so far proved inadequate, the so-called health-tech start-ups have appeared on the scene with their novel ideas and packages of health service to address it. Making use of the information and communication technology (ICT), this new genre of healthcare providers are trying to make the service more efficient and accessible in a hassle-free and cost-effective manner. They also aim to increase their beneficiaries' awareness about the types of healthcare service available in the market and help them to make an informed choice. However, each such health-tech entity has its own philosophy, the problem areas it gives priority to and the solutions it offers.

Leaders of some health-tech companies as well as local and international experts in this field at a recent event in the city  in partnership with this paper tried to shed light on the critical areas of healthcare needs in Bangladesh, ways to address those and the challenges facing the health-tech companies in this regard. Of the challenges, the most important one is to decide what should be the starting point of all such efforts. Needless to say, primary health care at the community level comes first and to address it the thrust must be on preventive health care, rather than the curative one. It may be noted at this point that our traditional public and private health care infrastructures are geared mainly to providing curative healthcare to the people. That, in other words, is to say that the focus of this service is more on curing the patient of the disease, rather than preventing the disease from attacking its victim in the first place.

The health-tech companies can come in a big way with their various tools like electronic recording system (of health-related data and medical history of the beneficiary), video-conferencing, telemedicine, portal technology (online facility for the physician and the patient to interact), electronic health monitoring devices and so on to work in this high priority area, especially among the rural communities. This is also the area with its ever-widening rural-urban healthcare gap that should get serious attention, if the slogan of ensuring 'inclusive healthcare' raised by many health-tech companies is to be a reality. Given that Bangladesh has a low 'health professional' versus 'population' ratio (only 6 physicians, nurses and midwifes per 10,000 people), the health-tech ventures can play an important role by way of enabling the suffering public to get the service they need from health care professionals in the right time at the right place at an affordable cost.

In essence, the health-tech start-ups, however do need to have a framework of policy guidelines and set some standards to operate and practice their trade.  That would help them to avoid any overlap and unhealthy competition, keep updated about developments in the sector, create a healthy environment of mutual cooperation and information sharing and ensure security of beneficiaries' medical records. All this can help reduce the prevailing trust gap between health service providers and the recipient public.

3
BBA Discussion Forum / Women entrepreneurs: What do they need?
« on: February 27, 2020, 11:00:41 AM »


A silent revolution has taken place in Bangladesh society over the last four decades. It has added a new dimension to Bangladesh economy with the prospect of changing its structure or reinforce the existing ones that have stood the test of time. Motivated by non-governmental organisations (NGOs), rural women have engaged in various income generating activities taking the non-traditional role of small entrepreneurs. By all accounts, they are the most dynamic in whatever small-scale business activities they are engaged in. For some of them the limit to what their business acumen can accomplish is determined by the availability of credit and access to market. It has been proved empirically that they are better endowed with entrepreneurial skills than their male counterparts in many business undertakings. The two inhibiting factors mentioned above, viz. access to credit and market act as disincentives to the full utilisation of their potentials.

The first hurdle that rural women entrepreneurs have to overcome is the social prejudice that discourage taking up business activities out of doors. One aspect of this handicap is the stigma that is tagged to those who defy traditional social norms meant for women. The other is the lack of facilities for marketing their produce. A third one, not so inconsequential, is the harassment by their male counterparts in the market. The experience of the female agro-producers is a case in point, particularly in respect of market accessibility.

Female agro-producers in rural areas have been playing an important role for a long time. But the majority of them come up against the same hurdle and struggle to sale their produce in local and regional markets. As a result of this they are deprived of fair prices. Often they are forced to sell to wholesalers at home accepting whatever price they offer. Though rural markets are the hubs for agro-based traders very few female entrepreneurs can find their place there because of dominance by male traders. Very often rural women entrepreneurs have to depend on their husbands for help to transport their goods to the market. In many cases this become problematic as husbands have their own economic activities to take care. When they agree to carry and sell the products of their wives the control over sale proceeds remain with them, placing the women entrepreneurs at disadvantage for carrying on their production of agro crops. For those  women entrepreneurs who brave to weather the obstacle and venture to sell their products in the village market there are no designated places that act as a handicap. Study by reporters from an English daily (The Daily Star, January 24) found that rural markets are not gender inclusive because male traders are not favourably disposed towards women engaged in selling their goods    alongside men. To make matters worse, the few women traders who venture to sell in village markets are often subjected to sexual harassment, according to the newspaper report. Another handicap is that women traders have to return home before evening because of safety consideration. Though  women producers and traders have increased in number, they continue to face discrimination and harassment from male traders in the market. They can not give vent to their grievances as they are not represented in market management committees.

Women entrepreneurs in urban areas face no better conditions though discrimination against them is more subtle. Like their rural counterparts, urban women entrepreneurs have little or inadequate access to market (supply chain) in local markets. In case of foreign supply chain their handicap is even greater. As regards moving up the value chain (producing high value goods), for the majority of them it is next to impossible.

Realising that female-owned businesses in Bangladesh need better access to markets and corporate value chains to boost inclusive growth, the World Bank  has recently launched a project to help 1200 women entrepreneurs in collaboration with WE Connect International. Based on the results of a successfully completed pilot project, the second phase of the project will start soon helping business firms run by women to have access to supply and value chains so that they can expand their business operations. The pilot project that has just been completed promoted capacity building through training of 150 women entrepreneurs and has facilitated linkages with large corporations through business network. As a result of this intervention nearly 90 per cent of the trainees registered improvement in their business operations. The project also led to the creation of the country's first Suppliers Diversity Advisory Committee, designed to promote bargaining  power of women entrepreneurs.

Like the rural women entrepreneurs their urban counterparts urgently need access to existing supply chain in the local market. In addition, because of the type of some products they also need to move up the value chain. In both respects they find themselves at a disadvantage because of lack of networking and wilful neglect by male counterparts. The World Bank and the collaborating agencies in the project envisage to help create a data base  of women entrepreneurs in order to increase their participation in corporate value chain. Unfortunately this data base will not include rural women entrepreneurs as they are not the target group in the project. In view of this the government of Bangladesh should come forward and create a data base of rural women entrepreneurs for inclusive growth in the agricultural sector. This may take more time than the preparation of a data base for urban women entrepreneurs because of the number and dispersal all over the country. But this is an initiative whose time has come. In this case the goal will be to facilitate the participation of rural women entrepreneurs in the local (district and regional) markets.

According to WE Connect International globally, women-owned small and medium businesses earn less than 1.0 (one) per cent of the money spent by corporations and governments on supplies. WE Connect International envisages a movement of women entrepreneurs to take off based on their project co-sponsored with the World Bank and financed by Women Enterprises Finance Initiative that will help buyers gain a competitive edge and women-owned business to reach a broader market with their goods and services.

Considering the commonality of problems, a holistic approach has to be taken to help women entrepreneurs in both rural and urban areas. Urban women entrepreneurs should not be the only beneficiaries of initiatives by international development agencies to improve access to market and supply chain. Though rural women entrepreneurs are not in a position now to think of, not to speak of actually doing so, moving up the value chain they have to be helped to overcome the hurdles to access local markets with no less urgency. An integrated approach to the problems of marketing by women entrepreneurs should  be taken jointly by government of Bangladesh and donor/lender agencies with varying emphasis on the needs of women entrepreneurs in the two segments.

Though access to market by both rural and urban women entrepreneurs and moving up the value chain by the latter are important, more important is the availability of credit. According to available data less than 5.0 per cent of credit disbursed by financial institutions have been available to small and medium-scale industries. When it comes to rural women entrepreneurs the figure is almost negligible. In any programme or project for improvement of business by women entrepreneurs availability of credit at concessionary rate should find a central role. Focusing exclusively on access to market, the World Bank co-sponsored project is not only narrow but also gives the wrong signal about the priority need of women entrepreneurs. The government should not be carried away by initiatives of donor/lending agencies because of their novelty. All projects and programmes meant for target groups, including women entrepreneurs, should fit in with the overall strategy for their development.

hasnat.hye5@gmail.com

4
On Saturday (February 22), the curtains were brought down on Career Expo 2020 organised by Economics Career Alliance (ECA). The three-day event started on February 20.

Launched by ECA-- a club at the economics department of University of Dhaka -- the event aimed to reduce the communication gaps between the students and their future employers. This event created a precedence of being one of the first of its kind in the country, with activities and competitions ranging from public speaking, poster making, quiz and case competitions and concluding with a day-long job fair on the final day of the event.

On the second day of the event, the students tackled a case competition in teams of three to four people, where they brainstormed up with policy solutions to revive the jute industry within a timeframe of two years. Each team presented their solutions in front of a panel of judges and the top ten teams qualified to the final round of the competition.

A daylong display of posters and photographs went on alongside the case competition. The poster making competition was based on the theme of socio-economic ideas, on the topics of green economy, era of social businesses and reducing inequality. The students also competed in a quiz competition in teams of three to four. The teams were tested on their knowledge about economics, business and the financial sector.

The key highlight of the final day of the event was the day long job fair held at the Department of Economics, University of Dhaka. The job fair had stalls of renowned institutions and firms such as SANEM, BDjobs, BYLC and Polar. The students were given the opportunity to simultaneously approach these top companies and submit their resumes.

The final day of the event commenced with a panel discussion on  'Career in Research: How to Proceed?' moderated by Dr Selim Raihan, CEO of SANEM, with Dr Sayema Haque Bidisha, Atonu Rabbani and Mahtab Uddin as panellists. The session began with a trigger presentation by Zubayer Ahmed, research associate at SANEM, outlining the basics of conducting research. He stressed the importance of learning technological skills, such as STATA, Excel and data analysis, alongside acquiring academic knowledge of their respective disciplines. Dr Sayema Haque Bidisha remarked, "Back when we were students, neither were we were as keen towards being involved in research nor did we know how one could get involved in conducting research. This scenario has changed in recent times."

The second panel discussion on creating opportunities in the job sector, moderated by Rubaiya Morshed, assistant professor at the economics department, Dhaka University. Farzeen Ferdous Alam, chairman at OGGRO Dairy Ventures and Sazzad Hossain Mukit, CEO at Career Key were the other panellists, all of whom shared their insights on the current job sector.

Alongside these panel discussions, the final round of the case competition was held, where the top ten teams competed against each other, trying to come up with policy suggestions towards diversifying jute products in order to increase their inclusivity in the country's export basket.

The event concluded through the award giving ceremony of the four competitions: public speech, poster making, quiz and case competition.

The writer is a sophomore student at the Department of Economics, University of Dhaka. She can be reached at
ntasnim335@gmail.com

5


On Saturday (February 22), the curtains were brought down on Career Expo 2020 organised by Economics Career Alliance (ECA). The three-day event started on February 20.

Launched by ECA-- a club at the economics department of University of Dhaka -- the event aimed to reduce the communication gaps between the students and their future employers. This event created a precedence of being one of the first of its kind in the country, with activities and competitions ranging from public speaking, poster making, quiz and case competitions and concluding with a day-long job fair on the final day of the event.

On the second day of the event, the students tackled a case competition in teams of three to four people, where they brainstormed up with policy solutions to revive the jute industry within a timeframe of two years. Each team presented their solutions in front of a panel of judges and the top ten teams qualified to the final round of the competition.

A daylong display of posters and photographs went on alongside the case competition. The poster making competition was based on the theme of socio-economic ideas, on the topics of green economy, era of social businesses and reducing inequality. The students also competed in a quiz competition in teams of three to four. The teams were tested on their knowledge about economics, business and the financial sector.

The key highlight of the final day of the event was the day long job fair held at the Department of Economics, University of Dhaka. The job fair had stalls of renowned institutions and firms such as SANEM, BDjobs, BYLC and Polar. The students were given the opportunity to simultaneously approach these top companies and submit their resumes.

The final day of the event commenced with a panel discussion on  'Career in Research: How to Proceed?' moderated by Dr Selim Raihan, CEO of SANEM, with Dr Sayema Haque Bidisha, Atonu Rabbani and Mahtab Uddin as panellists. The session began with a trigger presentation by Zubayer Ahmed, research associate at SANEM, outlining the basics of conducting research. He stressed the importance of learning technological skills, such as STATA, Excel and data analysis, alongside acquiring academic knowledge of their respective disciplines. Dr Sayema Haque Bidisha remarked, "Back when we were students, neither were we were as keen towards being involved in research nor did we know how one could get involved in conducting research. This scenario has changed in recent times."

The second panel discussion on creating opportunities in the job sector, moderated by Rubaiya Morshed, assistant professor at the economics department, Dhaka University. Farzeen Ferdous Alam, chairman at OGGRO Dairy Ventures and Sazzad Hossain Mukit, CEO at Career Key were the other panellists, all of whom shared their insights on the current job sector.

Alongside these panel discussions, the final round of the case competition was held, where the top ten teams competed against each other, trying to come up with policy suggestions towards diversifying jute products in order to increase their inclusivity in the country's export basket.

The event concluded through the award giving ceremony of the four competitions: public speech, poster making, quiz and case competition.

The writer is a sophomore student at the Department of Economics, University of Dhaka. She can be reached at
ntasnim335@gmail.com

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6
Research Publications / scoups publication
« on: February 26, 2020, 07:45:37 PM »


1.'A Study on the Implementation of Basel III: Bangladesh Perspective’ has been published in Academy of Strategic Management Journal, 2019 Vol: 18 Issue: 6
https://www.abacademies.org/…/a-study-on-the-implementation…

2.'A Strategic Analysis on the User Acceptance, Challenges and Prospect of Internet Banking in Bangladesh’ has been published in Academy of Strategic Management Journal, 2019 Vol: 18 Issue: 6
https://www.abacademies.org/…/a-strategic-analysis-on-the-u…

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MetLife Bangladesh has taken a set of initiatives to popularise the actuarial profession with a view to making the inert insurance sector vibrant, said Andrew D Rallis, global chief actuary of the American insurer.

"Insurance is an important part of the economy, so there is an urgency to develop the actuarial profession," he told The Daily Star in an interview recently.  Rallis, who is based in the US, called in to Bangladesh earlier this month.

Inclusive economic growth of a nation has strong links with the insurance sector. As Bangladesh's economy is growing fast, the insurance sector should get a better shape.

There is an operational and business risk for insurance companies if they set premiums and reserves for clients without calculations by an actuary.

"If an insurance company suffers, it is not good for the industry, regulators and the population as a whole."

An actuary applies mathematical and statistical models to specific institutional and financial problems based on solid knowledge of business context and behavioural implication. Knowledge of actuarial science is the base of actuarial profession.

Actuaries, who are trained in the theory and applications of mathematics, statistics, economics and finance, apply their analytical skills to manage financial and other risks stemming from running business of insurance.

MetLife, the largest life insurer in Bangladesh, has been providing scholarships to students of the University of Dhaka for the last three years to promote the professional growth of actuaries, said Rallis, who is an executive vice-president of MetLife.

The students of the applied mathematics department of the university are eligible for the scholarship.

It is in talks with the Insurance Development and Regulatory Authority (IDRA) to promote the actuarial profession, said Rallis, who is also the chief of the US-based Society of Actuaries, the largest professional body for actuaries.

It provides professional certification to individuals upon completion of necessary courses.

"This is an old profession. I have recently visited Japan as a guest speaker to mark the 120-year anniversary of the profession in the country," he said.

MetLife, which is a 150-year old insurer, appointed actuaries from its inception.

It started its journey in Bangladesh in 1952 as Alico until its acquisition by MetLife Inc globally in November 2010, when it was co-branded as MetLife Alico. In 2015 it was renamed MetLife.

It serves more than a million customers and is a major employer in Bangladesh: MetLife has more than 16,000 field forces and employees.

There are 33 life insurance and 46 non-life insurance companies in Bangladesh. But the profession is quite new in Bangladesh, which is why there are only six actuaries in the country.

There are about 500 actuaries in India, more than 100 in Pakistan and about 30 in Sri Lanka. Globally, there are 75,000 actuaries.

Three out of the six actuaries in Bangladesh are working at MetLife, which has a strong presence in 40 countries.

"Bangladesh should widen the profession as a majority of the insurance companies have no dedicated actuary to set premium and reserves for clients and entities," said Rallis, who earned a Bachelors of Science in both Physics and in Mathematics from the Massachusetts Institute of Technology.

The number of actuary depends on the volume of a country's insurance industry.

Actuary is the core theme to develop the insurance sector because everything is dependent on data. Analysing data and statistics is an essential part for insurance companies.

"Everyone needs to understand the importance of insurance in order to realise the merit of the actuarial profession."

If an individual or entity face unexpected things, insurance companies provide financial support as per the commitments made under coverage.

"Commitments made by insurance companies help people plan a life in a way that provides peace of mind. As a result, they will not feel too much worry even if things go bad in life unexpectedly."

An actuary calculates the risk factors of clients by analysing their age, sex, occupation and heath condition and the insurance company sets premiums for customers based upon the risk factors.

"People whose risk factors are high should pay more premiums. An actuary assesses the risk factors in order to set aside required reserves for the clients. For this reason, actuary has a great role in bringing peace in people's mind. That's why I became an actuary. It is one of the best tools to serve the society."

According to Rallis, artificial intelligence (AI) will help the actuarial profession in the days ahead as it will enable accurate prediction of risk factors.   

Actuaries will receive support by using AI and this will increase the value of the profession, Rallis said.

The profession is highly popular in North American countries and it is also getting traction in Asian countries.

Saudi Arabia, the UAE and some other Asian countries are focusing on developing the insurance sector.

Rallis also touched upon the challenges facing Bangladesh's insurance sector.

In Bangladesh, the coverage of insurance is low when compared with global situation.

"The authorities should pay heed to bring more people under insurance coverage."

As of December, around 2 crore people in Bangladesh have insurance coverage, according to data from the IDRA.

"Many educated people in Bangladesh have never heard the name of the profession. Even teachers are unaware of it, which is a barrier for the expansion of the profession," he said, while urging local universities to introduce actuarial-related courses to make the profession popular.

9
MBA Discussion Forum / Dutch-Bangla Bank to issue bond worth Tk 5.0 billion
« on: February 26, 2020, 06:22:42 PM »
The board of directors of Dutch-Bangla Bank Limited has approved the issuance of third subordinated bond worth Tk 5.0 billion, said an official disclosure on Monday.

The bank is going to issue the bond for increasing the Tier 2 capital to meet the capital requirement under Basel III and to strengthen the regulatory capital base of the bank, said the disclosure.

Nature of the instrument: unsecured, non-convertible, subordinated bond, mode of placement: private placement, tenure: seven years.

The board has also decided that any subsequent changes in the features of the bond, if deemed necessary by the bank or required by regulatory authorities, shall be placed for approval of the board of directors of the bank.

The bond issuance is also subject to the approval of Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC).

Each share of the bank, which was listed on the Dhaka bourse in 2001, closed at Tk 68.40 on Sunday at Dhaka Stock Exchange.

Its share traded between Tk 58 and Tk 237.20 in the last year.

The bank’s consolidated EPS was Tk 6.73 in nine months for January-September, 2019 as against Tk 5.32 for January-September, 2018.

Its consolidated NOCFPS was Tk 18.90 for January-September, 2019 as against Tk 16.95 for January-September, 2018.

The consolidated NAV per share was Tk 52.87 as on September 30, 2019 and Tk. 43.08 as on September 30, 2018.

The bank disbursed 150 per cent stock dividend for the year ended on December 31, 2018.

The bank’s paid-up capital is Tk 5.0 billion and authorised capital is Tk 15 billion while total number of securities is 500 million, according to statistics from the DSE.

The sponsors/directors own 86.99 per cent stake in the bank while institutional investors own 2.29 per cent, foreign 0.02 per cent, and the general public 10.70 per cent as on January 31, 2020.

babulfexpress@gmail.com

10
MBA Discussion Forum / Dichotomy hurting banking sector
« on: February 26, 2020, 06:18:42 PM »
Instances are many where the government and relevant other institutions themselves have given rise to problems in a number of important areas and then employed both money and time to resolve those, often in vain.

The process is still on. The approval given by the central bank to float yet another private commercial bank and the move to amend the Bank Company Act to facilitate restructuring, merger and liquidation of the troubled banks are glaring examples how the relevant authorities have been making things more complicated in the country's banking sector.

The board of directors of the Bangladesh Bank on February 09 last, approved the floatation of a bank, named, Bengal Commercial Bank Ltd. This approval raises the total number of banks to 60.  The number might go up further soon as the central bank is almost set to approve another bank.

Experts and relevant others have voiced their concern over granting of permission indiscriminately for setting up new banks without taking into cognizance the prevailing situation in the sector. But that could not deter the authorities from giving permission to open more new banks.

There is no denying that those banks and other financial institutions and intermediaries are needed in an economy growing at an impressive rate. But the need cannot be unending or limitless. Moreover, the factors such as performance of the banks already in operation and overall situation prevailing in the financial sector cannot be overlooked while giving permission to set up similar institutions.

Besides, it is important for the relevant regulatory bodies and others to take into account the track record and social standing of the people who are interested in floating new banks or financial institutions where depositors' interests are involved.

In the case of state-owned banks, the depositors are aware that their interests are well-protected. But this is not entirely true in the case of private banks. In the event of any mishap, the depositors stand to lose most part of their money.

Fortunately, no bank has gone bust in Bangladesh until now. The government and the central bank using certain behind-the-scene mechanism have protected depositors' interest in the case of one or two banks. The Oriental Bank (former Al-Baraka Bank and incumbent ICB Islamic Bank) was the first example and the last and the latest one is the Farmers' Bank (now renamed as Padma Bank).

In fact, the process followed to save the two banks has not been identical to the procedures that are in place in most other countries.

In the case of Farmers Bank, the government directed a number of state-owned banks and the Investment Corporation of Bangladesh (ICB) to inject a substantial amount of fund in the form of equity with a view to saving it from going bust. 

The Bangladesh Bank (BB) reportedly has prepared a draft bill that seeks to amend the Bank Companies Act of 1991 enabling it to restructure or merge or liquidate the problem banks. The BB has recommended setting up a permanent unit that would deal with problem banks.

The bill provides for penalties for officials of a 'problem bank' found responsible for creating difficulties for the bank concerned.

The move is most welcome. The need for having a legal mechanism to deal with problem banks or other financial institutions is being felt for long.

What, however, appears more important is exercise of caution while granting permission to float new banks and also about their sponsors. But that is only possible when decisions are taken without any political bias.

Much of the problems do usually surface when politics plays a part in decision making. Many tend to believe that a large part of the existing woes of the banking sector is linked to political connections used in getting permissions for floating new banks, securing loans and rescheduling default loans.

Unless and until the government means business as far as disciplining the banking sector is concerned, it would be foolhardy to expect any result.

That the government is serious about streamlining the banking sector is hard to tell. For, the signals that have come out from high places until now, do not make one much hopeful about any effective change in the situation on the ground.

The reasons behind the apathy of the decision makers towards implementing the suggestion about forming a Banking Commission are also not understandable. The relevant policymakers do know that the banking sector is a very sensitive area. There are some ways to hide the rot. However, it gets exposed at one point of time when fixing the problems turn out to be even more difficult.

 

zahidmar10@gmail.com

11
BBA Discussion Forum / Tourism's potential
« on: February 26, 2020, 06:16:29 PM »
The tourism sector, though looking up given the rising trend in its contribution to the GDP, which was 4.4 per cent in 2018, is yet to grow into a full-fledged service industry. While travel and tourism have over the past few years grown into a major engine of employment generation globally with its share of 20 jobs out of every 100 created, it is time Bangladesh took a fresh resolve to exploit the sector's potential to the fullest.

The country is situated at the vantage point between the South and the Southeast Asia and endowed with the world's longest unbroken sandy sea beach and the unique natural scenic panorama including the Sundarbans. With its people having diverse ethnic, linguistic and religious backgrounds, its historical sites and archaeological treasure-trove bearing marks that hark back to a past long lost and relics of ancient kingdoms stretching far back into antiquity - all of these features point to Bangladesh's inexhaustible potential as a destination of choice for tourists, both foreign and local.

As told by the World Travel and Tourism Council (WTTC), this sector provided nearly 2.5 million jobs to the employment market of the country in 2018 with the projection that it would have by now added 30 per cent more jobs till the end of 2019. The contribution is expected to touch the figure of 6.8 per cent of the GDP in 2028, if the present trend continues. The trend so far gives reason to be encouraged, but not enough to be upbeat about, taking into account the range of untapped possibilities that it holds. The need is to allow the tourism sector a full play based on a reappraisal of its strengths and weaknesses in order that its best face can be put forward. Intrinsically, the tourists have to be attracted to the ecological, cultural, educative and recreational values embedded in the modern version of tourism.

It is reassuring that responsible people in the government at a recent city event did come up with the idea of preparing with the help of local and foreign experts a 'tourism master plan' to identify the problems afflicting the industry. For the traditional approach now in practice has proven inadequate to conform to the demands of the time. A comprehensive and well-coordinated plan is essential to promote and strengthen the sector, if the country is to draw the attention of global tourists.

Surprisingly, Bangladesh, whose people are known worldwide for their hospitality and friendliness towards foreign visitors, has been trailing behind many of its Southeast Asian neighbours such as Thailand, Singapore, Malaysia and Indonesia in tourism business. Evidently, the fact that our people have an inbuilt capacity for treating foreigners as friends and are hospitable towards them does not automatically turn this cultural asset into something business-worthy. To overcome the threshold, what is vital is to design an appropriate marketing strategy to turn it into business. The media, the relevant government directorate and the private sector need to work together to package the unique characteristics of Bangladesh's nature, people, culture and history as a brand and sell it to the world at large.  To this end, in addition to the suggested tourism master plan and the idea of establishing tourism-based economic zones (EZs), there should also be some fiscal measures like cash incentive, tax holiday, VAT exemption for private operators for the sector to become marketable, competitive and viable.

12
Faculty Forum / How to protect yourself from coronavirus
« on: February 25, 2020, 03:40:32 PM »
1. Wear gloves before you leave home and keep them on in public spaces.

2. If you have to remove your gloves in a social situation, do not touch your face or eyes afterwards. Wash your hands thoroughly with soap and warm water before you put your gloves back on.

3. Wash your gloves daily and avoid wearing damp gloves.

4. Put on a mask before leaving home and avoid using the same mask daily. Stay away from crowds and keep distance from individual people.

5. Do not shake hands or hug people.

6. Replace old bathroom and kitchen towels with clean towels and instruct everybody in your home to use their own towels. Regularly wash all towels and make sure to keep them dry.

7. Be mindful of not touching your face and wash your hands immediately after touching any object intended for public use.

8. Do not share spoons or cups. Wash all food and kitchenware thoroughly between meals and avoid restaurants that have poor hygiene practices.

9. Do not buy, slaughter, or consume any live animal or fish until it is known what species was the source of the virus.

10. Keep your home and office well-ventilated.

With details from foreignpolicy.com

13
MBA Discussion Forum / Banking commission must operate independently: CPD
« on: February 25, 2020, 03:37:25 PM »
The Centre for Policy Dialogue (CPD) has welcomed the government's decision to form a banking commission in a bid to pull the country's financial services sector out of its current slump.

But the organisation added the caveat that the move will not yield the desired result unless the proposed commission is allowed to operate independently.

Debapriya Bhattacharya, a distinguished fellow at the CPD said, "Citizens feel helpless and panicked by the extremely fragile state of the banking sector. What we found most worrying from the central bank's data is that the entire banking industry is being held hostage by a few individuals and organisations."

Bhattacharya said this at a media briefing at the BRAC Centre on Saturday, reports bdnews24.com.

"The situation is such that people are now fearful of keeping their money in banks. We called for a banking commission after the Hall-Mark scandal eight years ago. In the end, the government has taken the decision to form a commission and we welcome it and wish for its success."

Debapriya urged the government to grant the commission power to function independently and create an environment for it to do so.

Former finance minister Abul Mal Abdul Muhit had initially announced plans to form a regulatory commission for the banking sector in his budget for the fiscal year 2014-15.

But despite several attempts by Muhith, the commission was not ultimately constituted.

Current Finance Minister AHM Mustafa Kamal announced that an oversight commission for the banking industry will be constituted 'soon' as he confirmed the government's final decision on the matter last week. The minister also held a meeting with Prof Wahiduddin Mahmud, a former adviser to the caretaker government, among others, regarding the commission.

Mustafizur Rahman, another distinguished fellow at the think-tank, stressed the need called for the commission to be granted jurisdiction to work on the recovery of laundered money and assets under the relevant law.

"It's not our intention to discourage the government's initiative. We want the commission to be constituted in such a way that it is able to find and implement solutions to problems. Some of the problems in our [banking sector] has already been discussed. But the issue is deep-lying."

"It is undermining the macroeconomic management system. A lot of money is being funnelled abroad so the law for the recovery of these assets must be incorporated with the work of the commission."

Mustafizur stressed the need for a powerful commission capable of formulating and implementing sustainable solutions to get to the root of the problems plaguing the financial sector.

14
BBA Discussion Forum / BB sets 9.0pc interest rate on all loans
« on: February 25, 2020, 03:35:21 PM »
The central bank has instructed banks to fix a maximum 9.0 per cent interest rate on all loans except credit cards as part of the government initiative to bring down the lending rate to a single digit.

The new instruction will come into effect from April 01, 2020, according to a notification, issued by the Bangladesh Bank (BB) on Sunday night.

Borrowers will have to pay an additional 2.0 per cent as panel interest along with the new rate if they become defaulters despite getting the facility, it added.

The BB, however, kept unchanged the interest rate at 7.0 per cent for exporters.

From the current year, banks will not be allowed to disburse loans to the industrial sectors less than their average outstanding credit in the last three years.

The circular said the present high bank interest rates are impeding the growth of the country’s small, medium and large business, and services sector.

Such high lending rates are not only pushing their cost of production, but also affecting the country’s competitive advantage in the global market, it added.

As a result, the businesses, sometimes, are unable to repay their bank loan on time, which affects the discipline of the bank loans and hampers the country’s overall economic development, the BB added.

On December 30 last year, finance minister AHM Mustafa Kamal told reporters that the single digit interest rate on all loans, excepting credit cards, will take effect from April 01.

Earlier on the day, he sat with chairmen and managing directors of private commercial banks to discuss the matter.

Besides, the seven-member committee, led by the BB Deputy Governor S M Moniruzzaman, was formed on December 01 to find ways to cut down ending rates to single-digit from the existing level to facilitate achieving higher economic growth.

siddique.islam@gmail.com

15
BBA Discussion Forum / Economic toll of Coronavirus
« on: February 25, 2020, 03:33:57 PM »
That Coronavirus outbreak, in addition to taking a human toll, would affect the global trade to a notable extent is now almost certain since it is deeply hurting the world's second largest economy, China. The countries that have sizeable dependency on China either for import or export would, naturally, suffer more. Bangladesh is one of those countries. Nearly 30 per cent of its import does come from that country. More importantly, most part of the raw materials and fabrics used by its apparel sector originates from China and this has become a sore point, lately.

Both the volume and value of all imports from China, according to a report published in this paper on Friday last, declined by 20.87 and 8.29 per cent respectively over a period of one and a half months, starting from January 01 last. During the same period, imports of at least 30 manufacturing sectors declined by more than three-fourths. The apparel sector is the worst-hit. Operators in this sector are reportedly finding it hard to locate alternative sources of import at costs that Chinese exporters have been offering. What is worse, local producers of raw materials and other accessories used in the apparel units have hiked their prices taking advantage of the situation.

The prices of most goods imported from China have gone up in the local market. It is natural that traders would try to make use of the opportunity. But, in some cases, the prices they have been asking for some Chinese-made items are irrationally high. This is true even for many goods that are available in sufficient quantities in the local market. All this is happening in the absence any sort of the monitoring by the relevant government agencies.

While both manufacturers and consumers are paying more for goods imported from China, the government too is losing revenue. The decline in transactions, particularly imports, with a dominant trade partner like China is bound to affect the government's revenue, in the form of customs duty, negatively. The National Board of Revenue (NBR) has estimated that if the problem of Coronavirus persists, it might lose 7.0 to 8.0 per cent of its targeted revenue from imports. Since most goods imported by the apparel units are duty-free, the extent of loss is unlikely to be in double-digit.

There is no denying that China remains to be the most stable manufacturer and supplier of all types of goods and services at competitive prices for many countries. Any disruption in that supply chain is bound to create problems. The situation might become serious in the event of any further prolongation of the Coronavirus-related crisis in China.

The government until now has kept its attention confined to blocking the entry of deadly Coronavirus and health issues related to it. But it has not yet taken stock of possible economic impact of the havoc this tiny organism is wreaking now in Asia and some other parts of the world.  It is high time the relevant ministries convened a consultation session attended by health sector people, businesses and policymakers. This might help the government draw a contingency plan for meeting any upcoming challenges arising out of further deterioration of Coronavirus situation.

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