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13 February, 2017 00:00 00 AM / LAST MODIFIED: 12 February, 2017 09:44:16 PM
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Declining remittance inflow worries BB

Two BB research teams to visit Malaysia and Middle Eastern countries to find out the reasons
Staff Reporter
Declining remittance 
inflow worries BB

Bangladesh Bank (BB) has started working to find out reasons behind the downturn in the inflow of remittances, said governor Fazle Kabir. 

"Two research teams of the central bank will soon visit Malaysia and Middle Eastern countries to find out the reasons of falling trend in the inflow of remittance," said the governor while speaking at the first quarterly luncheon meeting of MCCI in the capital yesterday.
Metropolitan Chamber of Commerce and Industry (MCCI) president Barrister Nihad Kabir and its former vice-president Anis A Khan also spoke on the occasion. 
Inward flow of foreign currency through illegal channels is the main reason behind recent decline in remittance, the BB governor said.
Fazle Kabir said 'informal' channel for sending money from Malaysia and different Middle-East countries is still strong. So BB is thinking to reduce the cost for sending remittances from these countries using formal channel, he added. 
He, however, said there is nothing to worry because of fall in the flow of remittances because the country has enough forex reserves to meet import costs of eight months.
The central bank governor said, “Bangladesh Bank recently conducted a diagnostic survey on foreign currency and found that inward flow of foreign currency through illegal channel (outside banking channel) is the main reason behind the low remittance flow in Bangladesh.” 
Speaking at the occasion, the BB governor also said that banks are giving out loans to the same sectors to their preference repeatedly which hinders the economy.   
Talking about SMEs, the BB chief said financial institutions should come forward with more investment for creating more employment.
According to the Bangladesh Labour Force Survey, every year 1.8 million job seekers enter into the job market.
The BB chief said collateral security is the main problem of SME loan, not the interest rate. Moveable collateral like, training, education, skills, inventory, crops, equipment could also be an example of collateral security, he noted.
SMEs in manufacturing sector should be prioritised for getting loans because it has the capacity to create a large number of jobs, Fazle Kabir informed. 
Throughout the programme, Fazle Kabir discussed the economic progress of the country and addressed some following issues like, SME, foreign exchange regulations, monetary policy supply, banks, and interest rate.      
Despite the low inward remittance we have the ability to pay the footing import of bills of eight and half months, BB governor added.
Describing the Non-Performing Loan (NPL) of State-Owned Commercial Banks, Fazle Kabir said four out of six state-owned commercial banks have higher NPL ratio, whereas lending rates of the industry average is only 9.94 per cent.    
From the BB data, the NPL ratio in the banking sector has gradually been growing and it  stood at Tk 633 billion in financial year 2016.    
When asked a question to the governor about how to finance start-up companies through venture capital, the BB governor replied that there is a slight difference between venture capital and start-up capital and BB has already formed Equity and Entrepreneurship Fund (EEF) to boost up the risky agro-based, food processing and IT sectors.   
Distinguished MCCI members, business individuals, stakeholders were present at the luncheon meeting.

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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