[🇧🇩] Banking System in Bangladesh

[Saif]

Deposits in full-fledged Islamic banks fall

Savers are increasingly parking their funds at Islamic banking branches and windows of commercial banks in Bangladesh in a move away from full-fledged Shariah based banks, which were mired by irregularities during the tenure of previous government ousted in August this year.

www.thedailystar.net

Deposits in full-fledged Islamic banks fall

Savers are increasingly parking their funds at Islamic banking branches and windows of commercial banks in Bangladesh in a move away from full-fledged Shariah based banks, which were mired by irregularities during the tenure of previous government ousted in August this year.

Deposits at 10 full-fledged Islamic banks fell 2.9 percent to Tk 390,760 crore at the end of September this year from Tk 402,541 crore at the end of June.

Year-on-year, these banks lost 1.11 percent of their deposits amounting to Tk 395,142 crore in September 2023, according to a Bangladesh Bank quarterly report on Islamic banking.

On the other hand, conventional banks with Islamic banking branches recorded roughly 3 percent growth in deposits to Tk 20,582 crore at the end of September from Tk 19,986 crore at the end of June.

Similarly, banks that have Islamic banking windows recorded growth in the flow of savings during the July-September period, data showed.

It is because these banks are relatively in better health and have not faced any major allegations of irregularities like some of the full-fledged Shariah based banks have, said Syed Mahbubur Rahman managing director and CEO of Mutual Trust Bank, which also offers Islamic banking services.

He said the financial health of full-fledged Islamic banks was not good for many days even before the political changeover in August.

The central bank data showed that as a result of the decline in deposits at fully Shariah based banks, total deposits in the Islamic banking system dropped to Tk 436,667 crore at the end of September this year, down 1.94 percent from Tk 445,309 crore in June.

As such, the share of deposits at Islamic banks compared to total deposits dropped by 25.08 percent as of September from 25.56 percent in June.​

 

[Bilal9]

Bangladeshi credit card usage increasing in Thailand, decreasing in India by 40%​

Ittefaq Digital Desk
Published: 18 December 2024, 01:28




As the political landscape has changed in the country after the anti-discrimination student uprising, so has the use of Bangladeshi credit cards. The use of Bangladeshi credit cards is gradually increasing in Thailand. On the contrary, the use of Bangladeshi credit cards in India is decreasing.

This information was revealed from Bangladesh Bank's updated report on credit card transactions at home and abroad.

Analysis of the report shows that the United States is in first place in credit card usage by Bangladeshis. This was the case before. However, the second place has changed. Previously, India was in second place. Thailand rose to second place in October. In the country, Bangladeshi credit card spending increased by 160 million taka in a span of 1 month. India has dropped to third place. And Singapore has risen to fourth place.

According to the central bank, Bangladeshis abroad spent Tk 4.989 billion on credit cards in October this year to purchase various services and products. On the other hand, foreigners in Bangladesh spent Tk 1.29 billion on credit cards.

Earlier, a large number of Bangladeshis used to travel to India every month for travel and medical treatment and spent the most money on credit cards in the country. But after the change in the political situation in the country, there has been a radical change in the use of credit cards by Bangladeshis abroad. Last September, Bangladeshis spent 420 million taka on credit cards in Thailand. In October, this expenditure increased to 570 million taka. As a result, the country came in second place in the use of credit cards by Bangladeshis abroad. India was also in second place in September. In October, Bangladeshi spending on credit cards in India moved to third place.

Industry insiders say that after the August change of policy, India has tightened visas for Bangladeshis, including travel and medical. Due to which, the number of Bangladeshis traveling to the country has decreased significantly. As a result, the use of credit cards by Bangladeshis in the country has also decreased. Now, Bangladeshis are choosing Thailand, Malaysia and Singapore instead of India for medical treatment and travel. Due to this, the use of credit cards by Bangladeshis in these countries has also increased.

According to Bangladesh Bank data, the use of credit cards at home and abroad increased significantly in October. In the space of one month, credit card spending within the country increased by 197 million taka, or about 7.5 percent. And spending abroad increased by 780 million taka, or more than 18.5 percent.

According to the data, in October, 2,866 crore taka was spent on credit cards within the country. In September, the amount was 2,669 crore taka. And in October, Bangladeshis spent 4.99 billion taka on credit cards in different countries of the world. In September, the amount was 4.21 billion taka. The highest use of Bangladeshi credit cards abroad is now in the United States. In October, 840 million taka was spent in the country, compared to 770 million taka in September. Accordingly, in the space of one month, Bangladeshi credit card spending in the United States increased by 70 million taka or more than 8.15 percent.

According to Bangladesh Bank data, more than 28 percent, or almost one-third, of the money Bangladeshis spend abroad on credit cards is currently spent in the United States and Thailand. Of the 4.99 billion taka spent abroad in October, 1.41 billion taka was spent in these two countries. India was in third place in terms of credit card spending. Bangladeshis spent 540 million taka in the country in October, which is 40 million taka more than the previous month.

Singapore has seen the biggest growth in credit card spending abroad after Thailand. Bangladeshis spent Tk 430 million in the country in October, up from Tk 300 million in September. That means credit card spending in the country has increased by Tk 130 million in a month.

Meanwhile, cash withdrawals from credit cards have increased. In September, the amount of cash withdrawals was Tk 38 crore. In October, it increased to Tk 46 crore 8 million. Among the different types of cards, Visa card is being used more. Because this card can naturally be used in the international arena. Next are Master Card, Unipay, and Amex.

 

[Saif]

Potential of a green bank

If the sponsors can convince foreign investors to come up with money to form a huge primary capital, there is no reason why it should not be given the go-ahead Even the very nomenclature, 'climate bank' that is, is innovative and highly appealing. Much as the public and priva

thefinancialexpress.com.bd

Potential of a green bank
FE
Published :
Dec 25, 2024 22:01
Updated :
Dec 25, 2024 22:01

If the sponsors can convince foreign investors to come up with money to form a huge primary capital, there is no reason why it should not be given the go-ahead

Even the very nomenclature, 'climate bank' that is, is innovative and highly appealing. Much as the public and private commercial banks may find themselves pitted against overwhelming odds---some of those in an intractable imbroglio, this unique idea of a green bank catering only to the environmental issues demands a closer scrutiny. First of its kind not only in this country but perhaps in the wider world, the bank primarily proposes to help build a green economy. The other important objective it wants to serve is play a crucial role in attaining the country's sustainable development goals (SDGs) scheduled for 2030. An organisation named the Water and Essential (WE) has already submitted its proposal for a licence to the Ministry of Environment, Forest and Climate Change (MoEFC) and the latter has forwarded it to the financial institution division (FID) but not before suggesting the formation of a committee for a feasibility study. But it is the Bangladesh Bank which has the authority to approve a bank.

Notwithstanding the rosy picture the sponsor of the proposed bank paints in favour of mitigating the increasingly growing fragile environment, the details of how its financing will serve the objectives are yet to be available. Even if the bank comes into being, there is no guarantee investors from home and abroad will beeline for investment up to 95 per cent ceiling of capital on offer. More importantly, green banking does not automatically translate into green projects, the majority of which are supposed to be in the energy sector. Production of green energy certainly has immense potential but the technology and set-ups are still costlier than the conventional methods that use fossil fuels. Private companies may not feel particularly encouraged to take up the challenge in this unproven territory of energy. Banks can finance but if there is no taker of loan for investment in power generation or other green initiatives such as developing alternatives to plastic, the green bankability is likely to fall through.

So the sponsors have to convince both the approving authorities and the would-be clientele of the merit of not only green banking but also of gainful use of the capital. One of the veteran economists of the country is reportedly not at all convinced. He has dismissed the idea, saying that at the time of organising a bank or financial institute, its organisers make tall promises only to prove unsubstantial when in practice.

Even without being as much dismissive as this, it is impossible to deny the obtaining reality in the banking sector. The liquidity crisis is acuter now with the exchange rate overshooting the crawling peg of a dollar at Tk120 by Tk6.0-7.0 i.e 1.0 dollar sells at Tk126-127. In such a crunch time, the addition of another bank to the existing 62, far higher than the size of the country's economy can afford, is unlikely to inspire enough enthusiasm much as it may sound appealing. Even its paid-up capital amounting to Tk3.24 billion may not prove lucrative to investors. But if the sponsors can convince foreign investors to come up with money to form a huge primary capital, there is no reason why it should not be given the go-ahead. In that case foreign investors will study every detail before outlaying their money in the venture.​