Bulletin Vol.17

ADVISOR
Dr. Toufic Ahmad Choudhury

Director General
EDITOR
Dr. Prashanta Kumar Banerjee
Professor and Director (Research, Development & Consultancy)
EXECUTIVE MEMBERS
Ashraf Al Mamun, Associate Professor
Atul Chandra Pandit, Assistant Professor
Tahmina Rahman, Lecturer
Tofayel Ahmed, Lecturer
SUPPORT TEAM
Md. Golam Kabir, Publication-cum-Public Relation Officer (In-charge)
Papon Tabassum, Research Officer
Md. Morshadur Rahman, Proof Reader
GRAPHICS & DESIGN

Md. Nasir Uddin, CSSA
Published in September, 2014
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EDITORIAL
Excess Liquidity: Challenge or Opportunity?
Bangladesh has positioned herself as a forward
looking nation in the world economy through its
steady and stable growth performance over the years
amid natural calamities, external shock and political
turmoil. The growth potential of Bangladesh has
been recognized by many global surveys. JP Morgan
Chase placed Bangladesh as one of the frontier five
markets and Goldman Sachs ranked the country
among 11 emerging markets after BRICS. The
countrys economy has also achieved Ba 3 and BBwith stable outlook in consecutive years (2010-13)
by S&P and Moodys, respectively.
bank credit services except in Dhaka and Chittagong,

tighter lending practices by banks, reducing
investment opportunity in the share market as well as
the fact that entrepreneurs can access overseas
lenders who offer lower cost financing (Bangladesh
Bank, Monetary Policy Statement, JanuaryJune
2014). As a result, apparently banking sector is under
pressure of excess liquidity. The overall excess
liquidity with commercial banks stood at Tk. 1022.23
billion as on May 1, 2014 (The Financial Express,
June 24, 2014) which is now mostly invested in
government approved-securities.
Banks through financing production and

consumption act as a catalyst in the economic growth
of the country. It is also empirically documented
because the entire economy of Bangladesh distinctly
depends on bank financing leaving other two sources
of financing, namely, equity and bond financing
underutilized or almost non-utilized. An empirical
study conducted by Banerjee et al. (2003) found that
bank financing has both short and long term positive
significant impact on economic growth of the
country. As banks assets and economic growth have
bi-directional causality, bank assets go up congruent
with the economic growth of the country. London
based research firm Business Monitor International
(BMI) finds that total banking assets in Bangladesh
witnessed a 19.1 per cent compound average growth
rate in the past five years followed by 18 per cent in
Sri Lanka, 17.2 per cent in Pakistan, and 16.7 per
cent in India (The Daily Star, April 4, 2014).
Does this excess liquidity mean that real economy is

flooded with finance and it does not have the capacity
to absorb this excess liquidity? If we look at our
neighboring countries, a different picture prevails
over there. The percentage of private sector credit to
GDP was 68.98 per cent in Bangladesh in 2012.
However, the corresponding rates were 155.12
per cent, 128.7 per cent and 75.88 per cent in China,
Malaysia and India, respectively at the same time.
It indicates that Bangladesh has still more space to
increase its bank finance GDP ratio through
financing all types of investments particularly private
investment.
But the current excess liquidity of banks is a cause of

concern for both policy makers as well as
practitioners. Outstanding bank credit during 2013
rose by Tk. 365.58 billion or 8.88 per cent as against
an increase of 18.40 per cent in 2012 (Bangladesh
Bank, Annual Report 2012-1013). This slowdown is
partly due to sluggish investment demand in the
lead-up to the national elections, less penetration of
March & June, 2014
Factors like congenial investment climate, good

infrastructure, rationalization of interest rate,
openness of the economy, overall growth of GDP,
status of international economy are considered as
determinants of growth of private investment which
creates demand for bank financing. Apart from
ensuring above factors, Government investment in
the productive sector is an important driving force for
private investment. A large body of empirical studies
supports this relationship. In the 2014-2015 budget,
allocation for ADP has been of a hefty amount of
Tk. 86,000 crore. Sectors like transport, power,
education, physical planning, water supply, housing
sector, rural development, agriculture, and health
sector will get priority in allocating the amount of

ADP. As these sectors are considered as the promoter
of private investment, it is expected that private
investment will be revitalized with this investment.
Moreover, many backward and forward linkage
industries linked with Government investment will
get opportunity to expand their business.
International economy is also coming out of the
recession era which may encourage private sector to
invest more for participating in international trade on
a greater scale.
This expected surge in private investment will
essentially escalate the demand of bank financing.
Planning for Govt. borrowing from the banking
sector on a large scale may also create pressure on
banks which will siphon off of current excess
liquidity. Apart from this, recent increase in CRR
which may raise interest rate on loans will also mop
up liquidity from the market. However, as supply
sides of loan financing, banks and, NBFIs
(Non-Bank Financial Institutions) may also take
some steps to create demand of its excess funds. This
can be done through ensuring uninterrupted credit
flows to the agriculture sector, and small and medium
enterprises together with other important existing and
new sectors. Apart from continuation of urban
financing at a higher rate, banks may consider to
ensure credit flow at a progressive rate in the rural
area covering traditionally un-served farm and

nonfarm SMEs and other innovative niche area
entrepreneurs. Businesses and productions like rice
bran oil, wooden business, agro-based industry, food
industry, floriculture, light engineering, mushroom
cultivation, etc. are gradually expanding in the
semi-urban and rural areas where banks can finance
increasingly. To make the banking system of the
country more entrepreneur-friendly, Bangladesh
Bank has undertaken multidimensional initiatives
and is working for the implementation of these
initiatives. Creating congenial business environment
through controlling macroeconomic indicators,
bringing down the interest rate spread between
lending rate and deposit rate, introducing more and
more refincncing schemes covering new areas of
business, offering advocacy services to entrepreneurs
through arranging seminars, symposiums and
conferences, creating awareness through its
publications and imparting training to the bank
employees are the well-known initiatives undertaken
by Bangladesh Bank in this context. Bangladesh
Institute of Bank Management (BIBM) also plays a
supportive role through its training, research and
different types of advocacy services. It is expected
that these collective initiatives will enable banks to
find out the areas and sectors where the current
excess liquidity of banks will be utilized.
March & June, 2014
FEATURE
Online Frauds and Security Issues in Banks
Md. Mahbubur Rahman Alam*
Online banking is a wing, which is being considered
as a highly profitable channel for banking and
financial institutions. It provides customers
convenience and flexibility to enjoy financial
services at a lower cost than traditional branch
banking. Due to proper application of Information
Technology (IT) with mobile phone and internet,
banks are now able to provide online products and
services on 24 365 hours basis to any customer in
the globe. At present, approximately 90% banks of
Bangladesh are providing online banking services
under centralized or distributed system.
Information is one of the financial institutions most
important assets. Timely and reliable information is
necessary to process transactions and support
financial institution and customer decisions.
A financial institutions earnings and capital can be
adversely affected if information is known to
unauthorized parties, is altered, or is not available
when it is needed. But protection of information
assets is also necessary to establish and maintain trust
between the financial institution and its customers.
With the rapid growth of electronic money transfers,
paying bills and accessing critical information
online, banking sector has been plagued by cyber
criminals and fraudsters attempting to steal customer
information and transfer money illegally. Phishing,
Pharming, Social Engineering, Card Skimming,
alteration of MICR (Magnetic-Ink Character
Recognition) cheque, SIM (Subscriber Identity
Module) cloning are widely used as a means for
fraudsters to obtain information from customers and
access online banking accounts to transfer money
fraudulently.
challenge not only to the customers who use such

facilities, but also to the institutions who offer them.
The larger proportion of technology related frauds is
expected in the financial services sector as there has
been a remarkable shift in the service delivery model
with greater technology integration. Banks are
increasingly nudging their customers to adopt newer
service delivery platforms like mobile, internet and
social media, for enhanced efficiency and
cost-cutting. But while banks customers have
become tech-savvy and started using online banking
services and products, fraudsters are devising newer
ways of perpetrating frauds by exploiting the
loopholes in technology systems and processes.
In the fiscal year 2012-2013, a total of 4296
complaints related to fraud and forgery were received
by the Financial Integrity and Customer Services
Department (FICSD) of Bangladesh Bank. A closer
examination of the reported fraud cases has revealed
that around 11.2% of the reported fraud cases were
technology related frauds.
A recent study of BIBM (Khan et al. 2013) has found
that about 68% of total technology related frauds
involved mobile banking, ATM and plastic card
transactions (Figure 1).
Figure 1: Technology Based Banking Frauds
Banking
Applica on
So ware
3%
Mobile Banking
25%
Swi and Others

2%
ATM and Plas c
Card
43%
ACPS and EFT

15%
Internet Banking
12%
Source: BIBM Survey 2013
Online criminals work day and night to steal

identities, online credentials, credit card information,
or any other information that they can efficiently
monetize. The number of malicious applications
targeting online banking transactions has increased
dramatically in recent years. This represents a
March & June, 2014
In that study, it is also seen that bank employees,

either general bankers or IT professionals or both, are
involved in 78% cases (Figure-2). A good number of
unauthorized external users (15%) are also
responsible for online frauds.
Figure 2: Category of Fraudsters Committed

Financial Frauds in Banks
Bankers, IT
Ptofessionals and
Vendors
9%
Unauthorized
Users/Customers
15%
Reasons for Perceived Risk
IT Professionals
11%
General Banker
18%
Bankers and IT
Ptofessionals
40%
Vendor/Service
Provider
7%

At the end of March 2014, total number of mobile
banking customers in Bangladesh crossed 15.2
million and number of plastic card users crossed 8.0
million (approximately). With the rapid growth of
these two categories, frauds related to ATM and
mobile banking is also increasing in our country
(Figure-1).
With the increase of online business and transactions,
banks have been facing more and more online
threats. One more study of BIBM conducted by Khan
et al. (2012) reveals that 23% banks faced malware
attack, 31% banks faced attack through E-mail, 54%
banks faced Spam-related threats and 23% banks
faced Phishing attack in 2013. Moreover, opinion of
CTOs (Chief Technical Officers) revealed that
approximately 85% of banks perceive moderate, high
or very high IT security risk (Figure-3).
Figure 3: Degree of Information Security Risk
Perceived by Banks
Low
10%
Very Low
5%
Table 1: Reasons for Perceived Riskier

Information Environment
Very High
30%
Moderate
15%
High
40%

According to the CTOs opinion, the reasons behind
perceived risks are summarized in the following table
(Table 1).
Absence of Multi-Factor Authentication

Method
Customers Awareness Regarding Use and
Security Issues of IT Products
Availability of Qualified IT Auditors
Weakness in Decision Making, IT Policy
Development and Implementation
Lack of ICT Security Awareness among Bank
Employees
Poor Job Satisfaction and High Job Switching
Rate of IT Professionals
Insufficient IT Employees
% of
Banks
78
82
88
76
77
38
42
Lack of Proper Manpower Training

Lack of Adequate Knowledge on IT Security
Measures
Inadequate Support of Top Level Management
Lack of Security Awareness of Top Level
Management
Inadequate Budget for IT, Especially for IT
Security Measures
Lack of Skilled IT Security Professionals
Gap between Top Level Management and IT
Management
43
Lack of Quick Response by the Vendors
23
Not Updated with the High Tech Solution

Regularly (Time Lag Exists)
52
39
7
13
29
48
13
Source: BIBM Survey (2011, 2012, 2013)
For protection of the banks IT operations from the

threats, a number of points can be considered by
banks- assessing technology environment regularly,
adapting updated security policy, having a rigorous
and effective user awareness plan, putting policies
and procedures into action effectively, and finally
assess effectiveness and revising policies, if needed.
To ensure better IT security and minimize online
frauds, banks should ensure sufficient IT budget.
Awareness of management, employees and
customers can be increased by organizing training
programs, workshops and seminars. Banks should
recruit/develop certified IT security professionals
and IT auditors quickly. Multifactor Authentication
(MFA) should be implemented immediately, at least
for ATM (Automoted Teller Machine) and Internet
transactions. Top level management must give
priority to IT security without any hesitation to
protect the valuable banking information.
March & June, 2014
BIBM has been organizing a good number of training

courses, workshops and seminars on IT security
issues. Specialized certification program like
Certified Online Banker for general bankers and
Certified IT Professional for technical employees
working in the IT department can be arranged jointly
by BIBM, Bangladesh Bank and renowned
international vendors like Oracle, Microsoft, CISCO,

etc. Bangladesh Bank may tightly monitor
commercial banks for security issues and provide
guidelines. It is important to note that the future will
be obviously harder as the information technology
advances very quickly. Therefore, a very
concentrated effort is required to be implemented.
References
Bangladesh Bank (2013), Annual Report of FICSD,
Dhaka, Bangladesh.
Bangladesh Bank (2010), Guideline for ICT Security
for Scheduled Banks and Financial Institutions,
Dhaka, Bangladesh.
Khan, S. U., M. R. Alam and K. Rabbi (2013)
Information System Security in Banks: Bangladesh
Perspective, Research Monograph 007, Bangladesh
Institute of Bank Management (BIBM), Dhaka,
Bangladesh.
March & June, 2014
Khan, S. U., M. R. Alam and K. Rabbi (2012),

Online Frauds and Security Issues in Banks:
Bangladesh Perspective, Banking Research
Series-2013, pp. 149-199, Bangladesh Institute of
Bank Management (BIBM), Dhaka, Bangladesh.
RBI Report (2013), Retrieved from www.rbi.org.in,
Accessed on: 19/06/2013.
* The author is Assistant Professor, Bangladesh
Institute of Bank Management (BIBM), Dhaka.
Views expressed in this feature are the authors own.
FEATURE
How Supply Chain can be Converted into Value Chain
Rexona Yesmin*
Supply Chain
A supply chain is a system of organizations, people,
activities, information, and resources involved in
producing and/or moving a product or service from
supplier to customer. Supply chain activities
transform natural resources, raw materials, and
components into a finished product that is delivered
to the end customer. It is in fact the network created
among different companies producing, handling
and/or distributing a specific product. Specifically,
the supply chain encompasses the steps it takes to get
a good or service from the supplier to the customer.
A supply chain comprises not only various business
functions, but also a number of firms specialized in
different productive tasks. Hence, the efficiency of
the entire chain depends highly on the way
companies are interconnected. This brings in the
concept of vertical integration, which describes the
degree to which a company owns its upstream
suppliers and downstream buyers. For most of the
20th century, vertical integration was conducted
domestically.
Value Chain
In general, a value chain refers to the full range of
value adding activities to bring a product or service
through different stages of production. This includes
design and development; inputs i.e. raw materials
and other factors; collection and assembly; physical
transformation and processing; attainment of
required services such as transport, warehouse,
insurance and finance; and ultimately response to
consumer demand. These activities can be controlled
within a single firm or divided among different firms,
as well as within a single geographical location or
spread over wider areas. The term value chain refers
to the fact that value is added to preliminary products
through combination with other resources (for
example, tools, manpower, knowledge and skills,
other raw materials or preliminary products). As the
product passes through the stages of the value chain,
its value increases (ILO 2009).
Value chain deals with the dynamics of inter-linkages

and suggests a relationship between consumer and
producer. It is concerned with the whole process of
value creation from conception to consumption
(Altenburg 2007). Value chain is particularly useful
for poor producers and low-income countries that are
trying to create domestic market and preparing to
enter international markets.
However, to reap the benefits of globalization,
countries no longer export exclusively finished
products rather have a tendency to specialize in
specific stages of production process. Then, the
various steps to obtain finished products can be
associated through the concept of a value chain,
which refers to the entire sequence of value-added
activities, from the conception of a product to its
manufacturing and commercialization.
Moreover, globalization has allowed consumers to
purchase value based products that are not produced
locally. In addition to that, the dominated
manufacturing since the 19th century has been
replaced with a network of individual suppliers
specializing in specific services or phases of
production.
Why Value Chain?
Globalization does not only patch up market gaps and
brings producers and consumers closer; it also brings
regional and international competition into local
markets (Kaplinsky and Morris 2000). It is widely
accepted that value chains shape market access.
However, developing country producers do not able
to easily gain access to developed country markets if
they are not a part of the value chain. Especially, it is
not easy for small producers to get into these export
markets. Producers who gain access to the chain, are
able to become major export producers (Gereffi
1999; Keesing and Lall 1992).
Value chain is a development approach that fosters
economic growth by making sure that the additional
March & June, 2014
income generated actually benefits poor and

marginalized groups (GTZ 2007). It is achieved by
improving market access to the poor by playing the
roles as producers and suppliers of marketable
products.
Moreover, Fries and Banu (2004) opined that value
chain is used to avoid market failure because many of
the products are produced now a days based on
buyers requirements. Sometimes buyers require
ongoing communication with the supplier to explain
what exactly is wanted. Thats why in a value chain,
producers are linked to consumers through working
closely with processors that ensure flows of
information.
How to Convert?
Conceptually, a value chain builds on the supply
chain concept. It follows a similar step-by-step
sequence, but focuses on the values added at each
step. When we talk about supply chain, the focal
point is on moving raw materials to finish goods i.e.
developing a vertical linkage. Managing value chain
is different. The intent here is to recognize the
strengths of the whole process and invest in them so
that all the stakeholders in the process can get the full
benefits. The idea is to identify where change would
add the most value, and leverage them. At its core, a
value chain helps to differentiate between 'needs' and
'wants'.
In converting a supply chain to a value chain, the
question is not if it is possible to integrate all the
actors in the chain rather how to integrate. In the
integration forming different types of cooperatives in
every stages of the chain is important. Through the
integration, the weaknesses and bottlenecks is
identified and it contributes to further development
and improvement. After integration the second most
important thing is finance in the chain. Because for
smallholders, it is a pre-requisite to access the
finance to facilitate investing in higher-quality
production so that they can be able to access the
competitive market while becoming more
market-integrated. Moreover, to bring a product from
the design stage to transforming inputs and to the
final market, finance is required on a series of
transactions rather than a given stage in the chain.
March & June, 2014
Without access to finance, value chain development

will be impossible.
The sources of finance may be internal i.e. financing
that takes place within the chain or external i.e.
financing from outside the chain made possible by
value chain relationships and mechanisms.
In external value chain financing, a bank issues a
loan to a producer based on a contract with a trusted
buyer or a warehouse receipt from a recognized
storage facility.
It is evident that in forming the value chain or
financing the value chain, the most dominant sources
of finance are external. According to Johnston and
Meyer (2007), financial instruments such as supplier
credit, trader credit, warehouse receipts, and in-kind
lending are referred to as value chain finance.
Finance may also involve short-term or seasonal
loans, long term project loans, working capital loans,
export financing, import financing, letter of credit
financing, equity and debt financing, leasing, etc.
Creating a successful value chain is an act of
entrepreneurship, where a financial institution/donor
can play a supporting role. In designing and assessing
interventions of the chain, it is critical to understand
where the initiative originates. In a producer-driven
initiative, the main challenge is to turn a supply chain
into a value chain. In a buyer-driven model, the
challenge is to identify competitive production areas
and tailor products to buyers needs. Sometimes
a facilitator (NGO, government, technical agency)
links producers and buyers in a chain. Whatever the
entry point, a vital characteristic of a promising value
chain approach is that a leading chain actor is
prepared to invest time and resources in building
relationships between suppliers (primary producers)
and buyers to high-value markets (IFAD 2012).
While value chain development is one thing,
financing the chain is another though both are closely
linked. The nature of the intervention of these two
fields differs. Value chain development focuses on
the creation of appropriate marketing channels and
linkages, and the financing focuses on the sustainable
provision of financial services.
However, finance is very crucial in value chain

development. Moreover, financial institutions are not
yet active in value chain financing. So, they need
help in understanding value chains and how to
manage the risks i.e. production risks, supply risks,
finance risks, marketing risks, price risks, climate
risks, etc. associated with lending to the value chain.
References
Altenburg, T. (2007), Donor Approaches to
Supporting Pro-poor Value Chain, A Report
Prepared for the Donor Committee for Enterprise
Development, Germany: German Development
Institute.
Fries, R. and A. Banu (2004), Value Chains and
Their Significance for Addressing the Rural Finance
Challenge, Report-20, Accelerated Micro Enterprise
Development Project, USAID, Washington, D.C.,
USA.
Gereffi, G. (1999), International Trade and
Industrial Upgrading in the Apparel Commodity
Chain, Journal of International Economics, Vol.
48(1), pp. 37-70.
GTZ (2007), Value Link Manual- The Methodology
of Value Chain Promotion, 1st ed. Germany: GTZ
(German Agency for Technical Cooperation).
IFAD (2012), Agricultural Value Chain Finance
Strategy and Design, Technical Note, Rome:
International Fund for Agricultural Development
(IFAD).
There are many ways in which banks or MFIs

(Monetary Financial Institutions) can be involved in
risk mitigation measures. In general, if all trade
transactions pass through the financial institution
concerned, this will provide real-time information on
chain performance and boost institutional confidence
in supporting the chain.
ILO (2009), Value Chain Development for Decent

Work: A Guide for Practitioners, Government and
Private Sector Initiatives, Geneva, September.
Johnston, C. and R. L. Meyer (2007), Value Chain
Governance and Access to Finance-Maize,
SugarCane and Sunflower Oil in Uganda, Micro
Report # 88, Washington, D.C.: USAID.
Kaplinsky, Raphael and Mike Morris (2000), A
Handbook for Value Chain Research, Prepared for
the IDRC, Canada.
Keesing, D. and S. Lall (1992), Marketing
Manufactured Exports from Developing Countries:
Learning Sequences and Public Support, In G,
Helleiner (ed.), Trade Policy, Industrialisation and
Development, Oxford: Oxford University Press.
* The author is Lecturer, Bangladesh Institute of

Bank Management (BIBM), Dhaka. Views expressed
in this feature are the authors own.
March & June, 2014
FEATURE
BASEL-III: The New Capital Adequacy Guideline
Nur Al Faisal*
According to many regulators and commentators, the
1
Basel-I and Basel-II based capital regulation in
the United States (U.S.) and European Union (E.U.)
was one of the key contributing factors to the
financial crisis. The minimum regulatory capital
levels of banks, under the pre-crisis Basel-I and
Basel-II framework, were inadequate in relation to
the exposures and actual losses, the banks suffered
during the financial crisis. Besides that, the quality of
regulatory capital appeared often insufficient to
absorb bank losses efficiently. Basel-I is static and
not easily adaptable to new banking activities and
risk management techniques (Saidenberg and
Schuermann 2003). According to Ong (2006),
BaselI was centered around credit risk, ignoring
other important risks, viz., operation risk and market
risk which resulted in inadequate capital adequacy
for the banks in meeting risks. On the other side,
some of the recommendations proposed in BaselII
accord have tended to increase systemic risk. It is
evident that regulatory rules can add to ongoing
macro-economic and asset quality cyclicality
(Greenspan 2002). What is more, Basel-I and -II
focused on capital only, with no internationally
agreed quantitative standards for liquidity. This is
often perceived to have been a serious shortcoming
when the financial crisis unfolded in 2007 and
liquidity evaporated in the key funding markets used
by many banks and bank-sponsored vehicles.
With a view to prevent financial crisis in future, the
Basel Committee undertook initiatives to develop
standards to supplement and, in certain respects,
substitute, the existing standards of Basel-I and
Basel-II. The Basel Committee released proposed
revisions, generally known as July 2009 Release,
principally addressing risk-based capital and
disclosure requirements for a banks trading book2

in July, 2009. Subsequently proposals, generally
known as December 2009 Release, regarding
revised risk-based capital requirements, the
introduction of a leverage ratio requirement, and new
liquidity standards followed in December, 2009. In
September, 2010, the Basel Committee formally
adopted the name Basel-III for the reforms that
developed from these releases. So the Basel-III
Accord is the second revision of the Basel-I
agreement from 1988. Basel-III proposes a number
of new capital, leverage and liquidity standards to
strengthen the regulation, supervision and risk
management of the banking sector. The capital
standards and new capital buffers will require banks
to hold more capital and higher quality of capital than
under current Basel-II rules. The new leverage ratio
introduces a non-risk based measure to supplement
the risk-based minimum capital requirements. The
new liquidity ratios ensure that adequate funding is
maintained in case of crisis.
To understand easily what the new framework really
(Figure-1) means, in terms of factual regulatory
changes, one may produce a short comparison
between Basel-II and Basel-III (Figure-1). Under
Pillar-I, Basel-III is going to increase the quantity
and the quality of capital. Basel-III will also enhance
the coverage of the risks, especially related to capital
markets activities. Basel-III has strengthened the
Pillar-II supervisory review process of the Basel
capital framework, including corporate governance,
risk appetite, risk aggregation, and stress testing. In
case of Pillar-III, transparency requirements for more
complex capital markets activities are introduced in
Basel-III.
A worldwide regulatory framework for banks and financial institutions, and is developed by the Basel Committee on Banking
Supervision (BCBS) and the Bank for International Settlements (BIS), both situated in the Swiss city of Basel.
2
A trading book that includes all securities that the institution regularly buys and sells on the stock market. These securities are accounted
for in a different way than those in the banking book, which are meant to be held by the institution until they mature and are not usually
affected by market activity.
March & June, 2014
Figure 1: Comparison between Basel-II & Basel-III
Source: Moodys Analytics on Basel-III
Below follows a brief summary of how the Basel

Accord is changing for banks and financial
institutions connected to the BIS.
Tier-1 and Core Tier-1 Capital
Tier-1 capital is mainly composed of core Tier-1
capital but may also include non-redeemable
non-cumulative preferred stock. In Basel-III, Tier-1
capital requirement has been raised to 6 percent from
4 percent of Basel-II. Core Tier-1 capital is, from a
regulator's point of view, a measure of a bank's or
financial institutions financial strength. It is
primarily composed of common stock and retained
earnings (disclosed reserves). In case of Core Tier-1
capital, the requirement is raised to 4.5 percent from
2 percent. The difference between the total capital
requirement of 8 percent and the Tier-1 requirement
can be met with Tier-2 capital.
Capital Conservation Buffer
The capital conservation buffer is the amount of
capital banks will have to hold in addition to the
minimum level of Tier-1 capital as described above.
If the bank has a capital reserve above the required
core Tier-1 capital, they aren't operationally
constrained, but they won't be allowed to (or to a
certain extent constrained) distribute earnings in the
form of, say, dividends to its shareholders if they do
not meet the conservation buffer of 2.5 percent.
The main objective of keeping conservation buffer is
to ensure that banks and financial institutions
maintain a capital reserve for the sole purpose of
being used to absorb losses during periods of
financial and economic stress. While banks are
allowed to draw on the buffer during economic
downturns, the closer their regulatory capital ratios
approach the minimum requirements, the greater the
constraints on the earnings distribution.
March & June, 2014
Countercyclical Capital Buffer

In addition to the requirements described above,
Basel-III also introduces a new countercyclical
capital buffer composed of common equity in the
range of 0 to 2.5 percent of total capital asset value.
The main purpose of this buffer is to provide a
macro prudential goal of protecting the banking
sector from periods of excess aggregate credit
growth". This means that the actual percentage
values will be set in accordance with national
circumstances and will only be in effect during times
of excessive credit growth and a build up of systemic
risk.
Capital for Systemically Important Banks Only
Basel-II doesn't make any clear distinction between
banks of different size, whereas the new regulations
demand additional loss absorbing capacity beyond
the standards, announced in September 13, 2010, by
the Basel Committee on Banking Supervision
(BCBS). The Financial Stability Board (FSB) and the
BCBS are in the process of developing the approach
for systemically important banks and financial
institutions.
Leverage Ratio
Basel-III also recommends supplementing the
risk-based capital of Basel-II with a bank leverage
ratio. This leverage ratio is based on banks total
exposure and is expected to protect against their
model risks and measurement errors. While the
numerator of the leverage ratio consists of high
quality capital, the denominator includes both the
on-balance sheet and off-balance sheet assets. The
aim of the leverage ratio is to limit the banks
leverage and discourage rapid deleveraging that may
destabilize the overall economy.
Liquidity Ratios
Basel-III introduces liquidity requirement to ensure
the availability of liquid funds for banks. Liquidity
Coverage Ratio (LCR) is going to fulfill the need of
liquidity at short term. Banks will require from 2015
to maintain a liquid assets buffer calibrated by
reference to net cash outflow over a 30 day stressed
period. On the other hand, Net Stable Funding Ratio
(NSFR) will fulfill the longer term liquidity
requirements. Banks will be required to have stable
funding in place to address funding needs over a

stressed one year period.
Basel-III is an evolution rather than a revolution for
many banks. It was developed from the existing
Basel-II framework, and the most significant
differences for banks are the introduction of liquidity
and leverage ratios, and enhanced minimum capital
requirements.
An effective implementation of Basel-III will
demonstrate to regulators, customers, and
shareholders that the bank is doing well and it will
provide a positive signal. A speedy implementation
will also contribute to enhance a banks
References
Greenspan, A. (2002), Cyclicality and Banking
Regulation, Remarks at the Conference on Bank
Structure and Competition, Federal Reserve Bank of
Chicago, Chicago, IL, May 10.
Ong, K. M. (2006), Introduction of Second Edition,
The Basel Handbook, 2nd Edition, Risk Books.
Saidenberg, M. and T. Schuermann (2003), The
New Basel Capital Accord and Questions for
Research, Working Paper Series, 03-14, Economic
Policy Review, The Wharton Financial Institutions
Center.
competitiveness by delivering better management

insight into the business, allowing it to take
advantage of future opportunities. Although
implementing Basel-III will only be an evolutionary
step for many organizations, the impact of Basel-III
on banks and the banking sector should not be
underestimated, because it will pose significant
challenges that need to be understood and addressed.
Bangladesh Bank conducted Quantitative Impact
Study (QIS) to assess the preparedness of banks for
implementing Basel-III in Bangladesh. Based on the
findings of QIS, Bangladesh Bank has already
prepared a roadmap for implementing Basel-III in
our country. The process will start from July, 2014
and will be completed by January, 2019.
http://www.en.wikipedia.org
http://www.bangladesh-bank.org
http://www.basel-iii-accord.com
http://www.bis.org/publ/bcbs109.htm
http://www.thefinancialexpress-bd.com/more.php?ne
ws_id=69881
http://www.investorwords.com/6949/trading_book.ht
ml#ixzz347oxFI8j
* The author is Lecturer, Bangladesh Institute of
Bank Management (BIBM), Dhaka. Views expressed
in this feature are the authors own.
March & June, 2014
BIBM NEWS
1. Training Courses and Training Workshops
Bangladesh Institute of Bank Management (BIBM) organized a number of training courses, training
workshops, outreach training courses, outreach workshops, outreach e-workshop and foundation & special
training courses during January to June, 2014. A total of 3541 participants attended the above mentioned
programs.
2. Training Courses Organized in BIBM During January-June, 2014

#
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Title of the Course and Date

Management of Working Capital Financing
(January 12-16)
Human Resource Management in Banks for
Branch Excellence (January 19-23)
Financial Analysis for Bankers
(January 19-28)
Computer Spreadsheet Analysis in Banking
Operation (January 26-30)
Credit Appraisal and Management
(February 02-11)
Foreign Exchange and Money Market
Products (February 02-06)
Islamic Banking and Finance
(February 09-13)
SME Credit Risk Management
(February 10-13)
Branch Management (February 16-24)
Risk Management and Capital Adequacy
(February 23-27)
International Trade Payment and Finance
(February 23-March 04)
Agricultural and Rural Banking
(March 16-20)
Asset-Liability Management in Banks
(March 30-April 03)
Investment and Merchant Banking
(March 02-06)
Online Banking for Non-IT Executives
(March 02-06)
March & June, 2014
Coordination Team
Participants
A.N.K. Mizan
Nur Al Faisal
30
Ashraf Al Mamun
Md. Masudul Haque
32
Md. Mosharref Hossain
Md. Zakir Hossain
36
Md. Mahbubur Rahman Alam
Md. Shihab Uddin Khan
23
Atul Chandra Pandit
Tahmina Rahman
39
Md. Alamgir
Tofayel Ahmed
30
Md. Mahabbat Hossain
Maksuda Khatun
24
Ashraf Al Mamun
A.N.K. Mizan
46
D.R. Karmaker
Md. Alamgir
55
Md. Nehal Ahmed
Md. Zakir Hossain
37
Antara Zareen
Tofayel Ahmed
64
Abdul Jalil Choudhury
Md. Mosharref Hossain
30
Md. Shahid Ullah
Nur Al Faisal
46
Md. Ruhul Amin
Tahmina Rahman
30
Kaniz Rabbi
32
#
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Title of the Course and Date

Legal Aspects of General Banking and
Credit (March 09-13)
International Financial Reporting Standard
(IFRS) and Financial Statements of Banks
(March 18-20)
Internal Control Mechanism and Bank
Supervision
(March 23-27)
SME Delinquency Management
(March 31-April 03)
IT Application for Branch Managers
(April 06-10)
Prevention of Malpractices in Banks
(April 07-10)
Marketing of Financial Services
(April 13-17)
Risk Management in Banks
(April 20-24)
Financing Agro-based Business
(April 27-30)
Capital Adequacy Assessment for Branch
Executives (May 04-06)
Leadership, Team Building and Negotiation
Skills for Branch Managers (May 18-22)
Entrepreneurship Development and Bank
Financing (May 25-27)
Bank Management for Senior Executives
(June 01-012)
(June 08-17)
Coordination Team
Participants
Abed Ali
D.R. Karmaker
50
Maksuda Khatun
40
Sk. Nazibul Islam
Md. Shahid Ullah
50
A.N.K. Mizan
Maksuda Khatun
40
Kaniz Rabbi
34
D.R. Karmaker
44
Md. Masudul Haque
Rexona Yesmin
34
Md. Ruhul Amin
Nur Al Faisal
44
Sk. Nazibul Islam
Maksuda Khatun
39
Atul Chandra Pandit
Md. Zakir Hossain
33
Fahmida Chowdhury
Rexona Yesmin
34
Md. Masudul Haque
A.N.K. Mizan
29
D.R. Karmaker
Sk. Nazibul Islam
40
A.N.K. Mizan
Tahmina Rahman
56
3. Training Workshops Organized in BIBM During January-June 2014

#
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Title of the Workshop and Date

Case-based Credit Analysis (April 15-17)
Corporate Governance and Corporate Social
Responsibility (March 12-13)
Credit Risk Grading for Lending Decision
(January 28-30)
Crisis Management in Banks (April 02-03)
Debt Securities in Bangladesh (March 19-20)
E-Commerce and E-Banking
(April 22-24)
Factoring, Leasing and Venture Financing
(March 11-13)
Financing for Inclusive Growth
(February 12-13)
Green Banking (January 29-30)
ICC Guidelines for Trade Facilitation
(May 20-22)
Information System Audit and Risk
Management in E-Banking (June 10-12)
Investment and Foreign Exchange Operations
under Islamic Banking (May 07-08)
Legal Aspects of Security and Documentation
(May 11-12)
Management of Non-performing Loans and
Recovery Strategies (May 28-29)
Coordination Team
Tahmina Rahman
Participants
45
Sheikh Mozaffar Hossain
Ashraf Al Mamun
22
Devaki Kumar Saha
34

Md. Alamgir
Tahmina Rahman
Md. Zakir Hossain
30
26
Kaniz Rabbi
38
Md. Ruhul Amin
Tahmina Rahman
31
Devaki Kumar Saha
Md. Mohiuddin Siddique
29
Md. Shahid Ullah
Antara Zareen
28
Dr. Shah Md. Ahsan Habib
Antara Zareen
38
Kaniz Rabbi
40
Md. Alamgir
Tofayel Ahmed
33
Devaki Kumar Saha
D.R. Karmaker
47
Sheikh Mozaffar Hossain
Md. Shahid Ullah
42
March & June, 2014
#
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Title of the Workshop and Date

Managing Risk in Agro-Sector Financing
(May 14-15)
Negotiation Skills in Banking (April 29-30)
Operational Risk Management in Banks
(May 21-22)
Prevention of Money Laundering and
Terrorist Financing (January 12-13)
Project Financing and Public Private
Partnership (PPP) (January 21-23)
Recent Banking Issues and Strengthening
Internal Control and Compliance (June 18-19)
Retail Banking (February 05-06)
Risk Based Capital Management in Banks
(June 04-05)
Risk Based Internal Audit in Banks
(February 19-20)
Stress Management and Counseling for
Branch Managers (March 24-25)
Work Environment, Behavior and Job
Performance for Employee Excellence
(February 26-27)
Coordination Team
30
Md. Masudul Haque
Tofayel Ahmed
33
Md. Nehal Ahmed
Atul Chandra Pandit
36
Abed Ali
Sk. Nazibul Islam
23
Md. Ruhul Amin
21
Sk. Nazibul Islam
Md. Shahid Ullah
Md. Masudul Haque
Rexona Yesmin
32
Md. Alamgir
Md. Zakir Hossain
36
Atul Chandra Pandit
Nur Al Faisal
47
Fahmida Chowdhury
Md. Masudul Haque
40
Fahmida Chowdhury
Rexona Yesmin
28
4. Review Workshops
Bangladesh Institute of Bank Management (BIBM)
organized a series of Review Workshop during
April-June, 2014. These were on Islamic Banking
Operations of Banks, Internal Control and
Compliance of Banks, IT Operations of Banks,
Credit Operations of Banks, Human Resource
Management in Banks, Trade Services Operations in
Banks and Treasury Operations of Banks. The
objectives of these workshops is to discuss the
different functional areas and activities performed by
different departments of banks in 2013. In each case,
a Keynote Paper was presented by the team leader of
the review team. A number of experts in the relevant
area were invited as designated discussants to
provide their professional opinion.
Professor Dr. Toufic Ahmad Choudhury, Director
General of BIBM gave his speech as session
chairman in different review workshops and
Professor Dr. Shah Md. Ahsan Habib, Director
(Training) of BIBM gave concluding remarks on
various occasions. Senior executives of different
banks participated in the review workshops.
(i) Islamic Banking Operations of Banks: The first
review workshop in the titled Islamic Banking
Operations of Banks was held on April 24, 2014.
March & June, 2014
Participants
34
BIBM organized this workshop for the first time at

BIBM. Dr. Shah Md. Ahsan Habib, Professor &
Director (Training) of BIBM presented a keynote
paper on the subject. He noted that main objective of
the workshop is to review conceptual aspects of
Shariah-based banking, to discuss Islamic banking
products and its operational procedure, to examine
regulatory aspects of Islamic banking shariah
guidelines, to identify success factors and problem
areas of Islamic banking operations and to
recommend courses of action for the improvement of
Islamic banking operations in Bangladesh. He is the
team leader of the review team comprising among
others of Sk. Nazibul Islam, Faculty Member, BIBM;
Md. Alamgir, Assistant Professor, BIBM; Md. Saidur
Rahman, Senior Vice President, Islami Bank
Training & Research Academy; and Md. Mainuddin,
Senior Vice President, Export Import Bank of
Bangladesh Limited.
Mr. Khondkar Ibrahim Khaled, Dr. Muzaffer Ahmad
Chair Professor, BIBM; Mr. M Azizul Huq, Former
Managing Director, Social Islami Bank Limited; Mr.
S. A. Chowdhury, A. K. Gangopadhaya Chair
Professor, BIBM; and Mr. Mohammad Abdul
Mannan, Managing Director, Islami Bank
Bangladesh Limited were present as designated
discussants.
(ii) Internal Control and Compliance of Banks: The

workshop was held on May 6, 2014. Mr. Mohammad
Mohiuddin Siddique, Associate Professor and
Director (DSBM) of BIBM presented a keynote
paper on the subject. He noted that main objective of
the workshop is to review overall activities of
internal control and compliance operations of banks
for the year 2013, to examine the comparative status
of internal control and compliance of banks for
2012-2013, to identify success factors and problem
areas in the internal control and compliance
operations of banks, and to recommend courses of
action for the improvement of internal control and
compliance operations in banks. He is the team
leader of the review team comprising among others
of Mr. SK. Nazibul Islam, Faculty Member, BIBM;
Mr. Md. Mahabbat Hossain, Maksuda Khatun,
Lecturers of BIBM; and Mr. Md. Habibur Rahman
Bhuiyan, FCA, Deputy Managing Director & Head
of Internal Control and Compliance Wing, Islami
Bank Bangladesh Limited.
Mr. S. A. Chowdhury, A. K. Gangopadhaya Chair
Professor, BIBM; Professor N. R. M. Borhan Uddin,
Ph.D., Chairman, Audit Committee, Islami Bank
Bangladesh Limited & Vice Chancellor, City
University; and Mr. Akhtar Kamal Talukder, Deputy
Managing Director, Eastern Bank Limited were
present as designated discussants.
(iii) IT Operations of Banks: BIBM organized a
day-long review workshop on IT Operations of
Banks on May 16, 2013. Mr. Md. Shihab Uddin
Khan, Associate Professor of BIBM and Mr. Md.
Mahbubur Rahman Alam, Assistant Professor of
BIBM presented a keynote paper on the subject as
team members of the review team. The review study
is basically to review overall activities of the IT
operations of banks for the year 2013, to examine the
comparative status of IT operations of banks for
2012-13, to identify success factors and problem
areas in the IT operations of banks, and to
recommend courses of action for the improvement of
IT operations in banks. Other members of the team
were Ms. Kaniz Rabbi, Assistant Professor, BIBM;
and Engr. Shamsur Rahman Chowdhury, Executive
Vice President, Dutch-Bangla Bank Limited.
March & June, 2014
Mr. Gouranga Chakraborty, Executive Director,

Bangladesh Bank; Mr. Md. Sahid Hossain, General
Manager, Sonali Bank Limited; and Mr. Monitur
Rahman, Head of Technology, Standard Chartered
Bank were present as designated discussants.
(iv) Credit Operations of Banks: The review
workshop titled Credit Operations of Banks was
held on May 27, 2014. Dr. Prashanta Kumar
Banerjee, Professor and Director (RD&C) of BIBM
presented a keynote paper on the subject as the team
leader. Other members of the research team were
Mr. D. R. Karmaker, Faculty Member, BIBM; Mr.
Atul Chandra Pandit, Assistant Professor, BIBM; Mr.
Md. Mahabbat Hossain, Lecturer, BIBM; Mr. Nur Al
Faisal, Lecturer, BIBM; and Akhtar Kamal Talukder,
Deputy Managing Director, Eastern Bank Limited.
BIBM arranged this workshop to review overall
activities of credit operations of banks for the year
2013, to examine the comparative status of credit
operations of banks for 2012-13, to identify success
factors and problem areas in the credit operations of
banks, and to recommend courses of action for the
improvement of credit operations in banks.
Chair Professor, BIBM; Mr. S. A. Chowdhury, A.K.
Gangopadhaya Chair Professor, BIBM; Mr. Golam
Hafiz Ahmed, Managing Director & CEO, National
Credit and Commerce Bank Limited; and Mr. Faruq
Moinuddin, Additional Managing Director & Chief
Risk Officer, The City Bank Limited were present as
designated discussants.
(v) Human Resource Management in Banks: The
fifth review workshop was held on June 5, 2014 in
the titled Human Resource Management in Banks.
Ms. Fahmida Chowdhury, Associate Professor of
BIBM presented the keynote paper of the review
workshop. She pointed out that the objective of the
workshop was to review overall activities of human
resources management in banks for the year 2013, to
examine the comparative status of human resources
management in banks for 2012-13, to identify
success factors and problem areas in the human
resources management of banks, and to recommend
courses of action for the improvement of human
resources management in banks. She was the team

leader of the review workshop comprising others of
Mr. Md. Masudul Haque, Assistant Professor, BIBM;
Ms. Rexona Yesmin, Lecturer, BIBM; and Mr. Kaiser
Alam Mojumder, Manager HR & AVP, Mutual Trust
Bank Limited.
were present as designated discussants. Mr.

Mohammad Masum Kamal Bhuiyan, Executive
Director, Bangladesh Bank, Chittagong gave also
inaugural speech on this occasion along with Dr.
Shah Md. Ahsan Habib, Director (Training), BIBM
through video-conferencing.

Chair Professor, BIBM; Mr. S. A. Chowdhury, A. K.
Gangopadhaya Chair Professor, BIBM; and Mr.
Mohammad Abu Abdullah, Deputy Managing
Director, United Commercial Bank Limited were
present as designated discussants.
(vii)Treasury Operations of Banks: This was the last

in the series of the review workshop and was held on
June 19, 2014. Mr. Md. Nehal Ahmed, Associate
Professor, BIBM presented a keynote paper on the
subject as team leader of review team. Other
members of the review team were Mr. Md. Alamgir,
Assistant Professor, BIBM; Mr. Md. Zakir Hossain,
Lecturer, BIBM; Ms. Antara Zareen, Lecturer,
BIBM; and Mr. Mehdi Zaman, Senior Vice President,
Eastern Bank Limited. The objectives of the
workshop were to review overall activities of
treasury operations of banks for the year 2013, to
examine the comparative status of treasury
operations of banks for 2012-13, to identify success
factors and problem areas in the treasury operations
of banks, and to recommend courses of action for the
improvement of treasury operations of banks.
(vi) Trade Services Operations in Banks: The sixth

review workshop in the titled Trade Services
Operations in Banks was held on April 28, 2013.
For the first time, BIBM arranged this E-review
workshop which was simultaneously held at
Bangladesh Bank, Chittagong Office. BIBM
arranged
this
e-workshop
through
video-conferencing to review overall activities of
trade services operation of banks for the year 2013, to
examine the comparative status of trade services
operation of banks for 2012-13, to identify success
factors and problem areas in the trade services
operation of banks, and to recommend courses of
action for the improvement of trade services
operation of banks. Professor Dr. Shah Md. Ahsan
Habib, Director (Training), BIBM presented a
Keynote Paper about different functional areas and
activities performed by the trade service department
of the bank. Other members of the review team were
Ms. Antara Zareen, Lecturer, BIBM; Mr. Tofayel
Ahmed, Lecturer, BIBM; and Mr. A.T.M. Nessarul
Haque, Senior Assistant Vice President, Mutual Trust
Bank Limited. The participants from different banks
of Dhaka and Chittagong expressed their views on
the paper and joined the discussion with the penalists.
Mr. Kaiser A Chowdhury, Former Managing
Director, AB Bank Limited; Mr. Faruq Moinuddin,
Additional Managing Director, The City Bank
Limited; Mr. Md. Mahbub Ul Alam, Deputy
Managing Director, Islami Bank Bangladesh
Limited; and Mr. Md. Shoaib Ahmed, Deputy
Managing Director, NRB Commercial Bank Limited
Mr. Mirza Elias Uddin Ahmed, Deputy Managing

Director, Jamuna Bank Limited; Mr. A K M
Shameem, Deputy Managing Director, The Farmers
Bank Limited; and Mr. Syed Mohammad Bariqullah,
Deputy Managing Director, National Bank Limited
were present as designated discussants.
5. National Seminars
organized three seminars on various important issues
during January to June, 2014. Three key note papers
were presented in those seminars.
(i) International Financial Regulations: Necessity
and Implications for Banks in Bangladesh: A
day-long national seminar on International
Financial Regulations: Necessity and Implications
for Banks in Bangladesh was held at the Bangladesh
Institute of Bank Management (BIBM) on May 17,
2014 in its auditorium. One keynote paper was
presented in the Seminar. Dr. Shah Md. Ahsan Habib,
Professor & Director (Training), BIBM presented the
March & June, 2014
paper on the mentioned subject. The other members

of the research team were Mr. Sheikh Mozaffar
Hossain, Faculty Member, BIBM & General
Manager, Bangladesh Bank; Mr. Md. Nehal Ahmed,
Associate Professor, BIBM; and Mr. Atul Chandra
Pandit, Assistant Professor, BIBM. BIBM arranged
this Seminar to understand the relevance of
international regulatory framework for banking and
financial operations, to discuss the necessity of
international financial regulations for improving
operational efficiency and risk management practices
of banks and to examine the implications of
international financial regulations for the banking
operations of Bangladesh.
Mr. Md. Abul Quasem, Chairman, Executive
Committee, BIBM and Deputy Governor,
Bangladesh Bank was present in the Seminar as the
chief guest. Mr. Khondkar Ibrahim Khaled,
Dr. Muzaffer Ahmad Chair Professor, BIBM;
Mr. Shamim Ahmed Chaudhury, President &
Managing Director, AB Bank Ltd.; and Mr. Ishtiaque
Ahmed Chowdhury, Managing Director & CEO,
Trust Bank Ltd. were present in the seminar as
designated discussants. Professor Dr. Prashanta
Kumar Banerjee, Director (RD&C) delivered his
welcome address on the occasion. Dr. Toufic Ahmad
Choudhury, Director General of BIBM chaired the
Seminar. A total of 200 Chief Executives and other
high officials from different banks, financials
institutions, academic institutions, reporters and all
faculty members, officers and students of BIBM
participated in the Seminar.
(ii) Raising Public Awareness Against Fake Notes:
BIBM arranged two seminars on Raising Public
Awareness Against Fake Notes in Khulna and
Sylhet on April 26, 2014 and June 15, 2014,
respectively. BIBM arranged these seminars to
discuss the various techniques to detect fake notes
and raise the public awareness against fake notes.
Mr. Md. Abul Quasem, Chairman BIBM Executive
Committee and Deputy Governor, Bangladesh Bank
was present as the chief guest in both occasions.
He underscored the importance of the seminar and
mentioned that Bangladesh Bank strictly monitors
the situation to prevent the circulation of the fake
March & June, 2014
currency. He appreciated the role of law-enforcement

authority in this regard. Mr. Md. Abdur Rahim,
Executive Director, Bangladesh Bank, Khulna Office
presented the keynote paper on the subject in the
seminar held at Khulna. Mr. Mohammad Mobarak
Hossain, General Manager, Bangladesh Bank, Sylhet
Office presented the keynote paper in the seminar
held at Sylhet.
Mr. Mostafa Jalal Uddin Ahmed, General Manager,
Janata Bank Limited, Khulna; Mr. Md. Mahbub
Hakim, Additional Police Commissioner, Khulna
Metropolitan Police; and Al-Haj Mohammad Jalal
Uddin, Ph.D., President of Excellent Corporation,
Former Honorary Consul of Spain to Bangladesh and
Member of the International Currency Affairs
Association were present as designated discussants in
the Khulna seminar.
Mr. Md. Mukbul Hossain Bhuiyan, Deputy Inspector
General (DIG), Bangladesh Police, Sylhet Range,
Sylhet; Mr. Mohamudul Hoque, General Manager,
Janata Bank Limited, Divisional Office, Sylhet;
Mr. Abu Habib Khairul Kabir, General Manager,
Pubali Bank Limited, Principal Office, Sylhet; and
Al-Haj Mohammad Jalal Uddin, Ph.D., President of
Excellent Corporation, Former Honorary Consul of
Spain to Bangladesh and Member of the International
Currency Affairs Association were present as
designated discussants in the Sylhet seminar.
Professor Dr. Prashanta Kumar Banerjee, Director
(RD&C), BIBM delivered his welcome address on
both the occasions. Mr. Md. Abdur Rahim, Executive
Director, Bangladesh Bank, Khulna Office chaired
the seminar held at Khulna and Dr. Prashanta Kumar
Banerjee, Professor & Director (RD&C), BIBM
chaired Sylhets seminar. Chief Executives from
different banks, financial institutions and
professionals from law enforcing agencies
participated in the seminar.
6. Round Table Discussions
organized roundtable discussions on various
important issues during January to June, 2014. Two
key note papers were presented in those discussions.
(i) Monetary Policy Statement January-June, 2014:

An expert roundtable discussion on Monetary
Policy Statement January-June, 2014 was held at
on 15th February, 2014 in its auditorium.
BIBM arranged this program to disscuss the current
monetary policy statement and to take expert
opinions regarding this which it organizes on regular
basis after publishing half-yearly Monetary Policy
Statement. Dr. Hassan Zaman, Chief Economist,
Bangladesh Bank presented Monetary Policy
Statement January-June, 2014. A number of eminent
economists, researchers and practitioners participated
in this discussion as designated discussants. The
main issues raised by the designated discussants in
the forum were high lending rate, recent decline in
remittance flow, trade-off between growth and
inflation, growth rate of credit, determinants of
investment including rate of interest, recent
sluggishness in the economy due to political turmoil.
The discussants came up with a view that achieving
double-digit growth is attainable even after
considering all the constraints. Monetary Policy
Statement of Bangladesh Bank was largely supported
by the discussants in the context of present economic
scenario.
The designated discussants were Dr. Zakir Ahmed
Khan, Former Secretary of Finance, Government of
Bangladesh & Advisor, Southeast Bank Ltd.;
Mr. Md. Allah Malik Kazemi, Change Management
Advisor & Former Deputy Governor, Bangladesh
Bank; Mr. Ali Reza Iftekhar, Chairman, Association
of Bankers, Bangladesh Limited; Dr. Mustafa K.
Mujeri, Director General, Bangladesh Institute of
Development Studies (BIDS); Mr. Md. Arif Khan,
Member, Bangladesh Securities and Exchange
Commission (BSEC); Dr. Zahid Hussain, Lead
Economist, World Bank, The South Asia Finance and
Poverty Group; Mr. A. Gafur, Executive Director,
Amcham Bangladesh; Dr. Ahsan H. Mansur,
Executive Director, Policy Research Institute (PRI)
of Bangladesh; Dr. Mustafizur Rahman, Executive
Director, Center for Policy Dialogue (CPD),
Dr. Abul Basher, Research Fellow, Bangladesh

Institute of Development Studies (BIDS); and Mr.
Anis A. Khan, Managing Director & CEO, Mutual
Trust Bank Limited.
Mr. M. Syeduzzaman, Former Minister of Finance,
Government of Bangladesh was present in the
discussion as the guest of honour. He emphasized on
fiscal policy and monetary policy coordinations,
increasing tax GDP ratio, efficiency of state-own
enterprises, increasing manpower export, containing
inflation rate and advancing inclusive growth.
Dr. Atiur Rahman, Governor, Bangladesh Bank was
present in the discussion as the chief guest. He said
that inflation will be the first priority of Bangladesh
Bank along with ensuring balanced economic
growth. He highlighted the recent strengthening of
Bangladesh Bank supervision system through the
adoption of real time digitalized approach. He also
pointed out the success of Bangladesh Bank in
maintaining stability in the money market.
Bangladesh Bank is going to introduce monitoring of
each leading group on a regular basis, he added.
Dr. Toufic Ahmad Choudhury, Director General of
BIBM chaired the discussion. Some special guests
from different organizations, faculty members and
students of BIBM were present in the program.
(ii) Cost of Fund Index for NBFIs: A roundtable
discussion on Cost of Fund Index for NBFIs was
held at Bangladesh Institute of Bank Management
(BIBM) on April 17, 2014 in its auditorium.
BIBM arranged this program to make awareness
among the NBFIs in calculating the cost of fund
index and exchanged the views and experiences of
the NBFIs in this regard. Mr. Md. Nehal Ahmed,
Associate Professor, BIBM presented a paper on this
issue. Other team members were Mr. Atul Chandra
Pandit, Assistant Professor, BIBM; Mr. Md. Abdul
Wahab, Joint Director, Bangladesh Bank; and
Mr. Mohammad Ashfaqur Rahman, Deputy Director,
Bangladesh Bank.
March & June, 2014
A number of eminent economists, researchers and

practitioners participated in this discussion as
designated discussants.
Mr. Md. Shah Alam, General Manager, Department
of Financial Institutions and Markets, Bangladesh
Bank, responded to queries and questions raised by
the particiapants. Mr. Shitangshu Kumar Sur
Chowdhury, Deputy Governor, Bangladesh Bank
gave the inaugural speech as the Chief Guest of the
occasion. Dr. Toufic Ahmad Choudhury, Director
General of BIBM chaired the discussion. Some
special guests from different organizations, faculty
members and students of BIBM also participated in

the program.
7. Bankers Participated in Cultural Program and
Sports Events
BIBM arranged cultural night show and sports events
for the bankers participating in different training
courses. The best participant in these events was
awarded by BIBM. Besides, a banker was awarded as
Participant of the Course for his enthusiastic
participation in the class. The participants highly
appreciated these initiatives as they believe this will
create more interactions among participants.
Best Participants in Cultural Programs and Sports Events, January-June, 2014

Date
Participant of the
Program
Best Participant for

Sports
Best Participant for

Cultural Night
Bank Management for

Senior Executives
Jun 01-12
Sadhan Chandra Mondal

Assistant General
Manager
Agrani Bank Ltd.
Md. Bisharot Hossain

Senior Vice President &
Manager
Trust Bank Ltd.
Farjana Khaleque
First Assistant General
Manager
Janata Bank Ltd.
Credit Appraisal and

Management
Jun 08-17
Marvyn Gomez
Principal Officer
Agrani Bank Ltd.
------
Md. Raish Uddin

Executive Officer
Export Import Bank of
Bangladesh Ltd.
Recent Banking Issues

and Strengthening
Internal Control and
Compliance
Jun 18
Syed Eazul Hoque

Assistant General
Manager
Agrani Bank Ltd.
------
------
Foundation Training
Course for the
Management Trainees of
Prime Bank Ltd.
Apr 17 Jun 15
Md. Zeesat Islam

Management Trainee
Prime Bank Ltd.
Md. Robiul Alam Iskandar

Management Trainee
Prime Bank Ltd.
Md. Abu Taraf Bappa

Management Trainee
Prime Bank Ltd.
Foundation Training
Course for the
Management Trainees of
Prime Bank Limited
Apr 20 Jun 16
Md. Nurunabi Sarker

Management Trainee
Prime Bank Ltd.
Md. Anisuzzaman
Management Trainee
Prime Bank Ltd.
Deb Kumar Das

Management Trainee
Prime Bank Ltd.
Foundation Training
Course for the Senior
Officers and Officers (on
Probation) of Pubali Bank
Ltd.
Jun 15 Jul 24
Md. Mostahijur Rahman

Senior Officer
Pubali Bank Ltd.
Md. Abdul Mazid

Senior Officer
Pubali Bank Ltd.
Mohammad Kamal
Hossain
Officer
Pubali Bank Ltd.
Foundation Training
Course for the Officers of
Modhumoti Bank Ltd.
Jun 22 Jul 17
Nahid Akter Nupur

Officer
Modhumoti Bank Ltd.
Md. Shariful Islam

Officer
Modhumoti Bank Ltd.
Title of the Course
March & June, 2014
-----
8. Recommendations of theTraining Workshops

(i) Agricultural Financing and Commodity Market:
BIBM organized a Training workshop on
Agricultural Financing and Commodity Market at
BIBM premises during July 09 10, 2014. A total
number of 19 officers of different banks participated
in the workshop. In the workshop there was a session
titled Formulation of Workshop Recommendations,
participants suggested following issues:
Agri-insurance and disaster risk insurance system
need to be introduced and operate efficiently for
mitigating unexpected losses.
A sound and updated Management Information
System (MIS) is required to ensure price discovery
and make the market vibrant.
Producers Cooperative system may be introduced
with some required modification to safeguard their
interest.
A country wide transport infrastructure is must for
linking both the internal and external market.
For identifying the right agri-borrower, techniques
applied by different NGOs like BRAC may be
considered under Bank-NGO linkage arrangement.
Involvement of middlemen in agri-sector may be
reduced through some rehabilitation arrangement
without hampering the total supply chain
performance.
Banks can encourage agri-entrepreneurs to
developed product specific cold storages,
warehouses and agro-processing centers with low
cost financing facilities.
Central data base for each agri-borrower need to
developed, maintained, monitoring and updated on
regular basis.
The concern authority need to introduce a policy
regarding
organized
commodity
market
incorporating current challenges in agriculture
sector and make it effective with continuous
monitoring and required supports from
Government end.
More training programs need to be offered to the
agri-entrepreneurs by Government, Bangladesh
Bank, BIBM, NGOs and other concern bodies to
keep them updated with upcoming challenges and
opportunities.
March & June, 2014
(ii) Case-Based Credit Analysis: BIBM organized a

Training workshop on Case-Based Credit Analysis
in Banks at BIBM premises during April 15 17,
2014. A total number of 45 officers of different banks
participated in the workshop. In the workshop there
was a session titled Formulation of Workshop
Recommendations participants suggested following
issues:
More sector specific cases are required to be
incorporated in the workshop.
Different financial models are necessary to be
applied to evaluate projects.
Loan classification need to be done properly, so
that Bad loan or NPL are always backed by the
adequate provision.
Banks should go steadily with their surplus funds
with ensuring good credit operations rather
investment in less potential business hurriedly.
In ensuring more transparency in security
valuation, banks should have their own expert
employees in this area rather than depending only
on external surveyor.
More cases are suggested to be discussed on
suitable credit product development.
In case of mortgage, database of proper land
registry, ownership, transfer, etc. should be
maintained to ensure its availability to the banks.
Credit sanctioning authority should be unbiased
and independent from the unexpected interruption.
Cases on post-investment analysis should be
incorporated besides pre-investment analysis.
Cases on bank financing in innovative sectors
should be incorporated besides the traditional
sectors.
Cases on Document discrepancy are required to
be incorporated.
Technical expert from concern sectors should be
appointed by banks for evaluating the technical
matter of the project like, environmental expert for
project financing.
BIBM should organize more workshops with more
practical case studies so that bankers can select
proper borrower accurately.
(iii) Corporate Governance and Corporate Social

Responsibility: BIBM organized a workshop on
Corporate Governance and Corporate Social
Responsibility at BIBM premises during March
12-13, 2014. A total number of 22 officials from
different banks and financial institutions participated
in the workshop. The following recommendations
are drawn from the participants of the Workshop:
Effective Corporate Governance
Bank must recognize that good governance is not
just about compliance and there should have clarity
of the boards role in formulating bank strategy.
The board should formulate a clearly defined
work-plan and strategic plan and there should not
be any influence from them in day to day operation
of bank.
Board must monitor organizational performance.
As a board, the directors should establish an agreed
format for the reports they monitor to ensure that
all matters that should be reported are in fact
reported.
As the board employs the CEO, one of the major
functions of the board is to appoint, review, work
through, and replace (when necessary), the CEO.
The board/CEO relationship is crucial to effective
corporate governance because it is the link between
the boards role in determining the organizations
strategic direction and managements role in
achieving corporate objectives
Bank has to recognize that the governance of risk is
a board responsibility. Establishing a sound system
of risk oversight and management and internal
control is another fundamental role of the board.
Effective risk management supports better
decision making because it develops a deeper
insight into the risk-reward trade-offs that all
organizations face.
Bank must ensure that the directors have the
information they need. Directors need to be able to
find answers to the questions they have, so an
access to independent professional advice policy is
recommended.
Build and maintain an effective governance
infrastructure. Enhancements to board meeting
processes, meeting agendas, board papers and the
boards committee structure can often make the
difference between a mediocre board and a high

performing board. Unethical activities of the
employees should be strictly controlled by the
bank authority for the betterment of the corporate
governance practice in the financial institutions.
Bank must appoint a competent chairperson. As
the leader of the board, the chairperson should
demonstrate strong and acknowledged leadership
ability, the ability to establish a sound relationship
with the CEO, and have the capacity to conduct
meetings and lead group decision-making
processes.
Build a skills-based board. A board should seek to
ensure that its members represent an appropriate
balance between directors with experience and
knowledge of the organization and directors with
specialist expertise or fresh perspective. Directors
should also be considered on the additional
qualities they possess, their behavioral
competencies, as these qualities will influence the
relationships around the boardroom table, between
the board and management, and between directors
and key stakeholders. Training programs should be
arranged by BIBM or BBTA to make the directors
of the banks aware about prudential regulations for
banks.
Bangladesh Bank should evaluate board and
director performance and pursue opportunities for
improvement. Onsite and Off-site monitoring and
supervision activities of the Bangladesh Bank over
the financial institutions needs to be more
strengthened so that the Bank can take proper steps
against any unhealthy governance practice in the
banking sector of Bangladesh.
Corporate Social Responsibility
Regulatory enforcement is required to ascertain
proportion of bank profit to be used for CSR
activities.
Tax incentives should be given for CSR activities.
Integrity regarding CSR activities need to be
monitored regularly.
Required training should be given to the policy
makers of the banks to develop CSR oriented
mindset.
There may have an integrated common fund
collected from banks for CSR activities based on
March & June, 2014
the thrust of the society. Based on the preference

the fund can be allocated on the basis of regional
and geographical context of Bangladesh.
CSR implementation agents might be allowed
through outsourcing. The CSR agents should be
responsible for CSR activities and they should take
care of the CSR project upon approved project
budget.
(iv) Credit Risk Grading for Lending Decision:
BIBM organized a workshop on Credit Risk
Grading for Lending Decision at BIBM premises
during January 28-30, 2014. A total number of 34
officials from different banks and financial
institutions participated in the workshop. The
following recommendations are drawn from the
participants of the Workshop:
Weightage under financial risk may be reduced.
Environmental risk may be considered for adjusted
CRG.
CRG Score sheet should be sector/industry
specific.
More ratios may be used under financial risk.
Size of business may not be measured only by
sales.
Separate CRG Score sheet for new business.
CRG Score Sheet for small enterprise may be
implemented soon.
More weightages may be allocated for coverage
ratio.
Coverage ratio for continuous and term loan
should be different.
The valuation of security and control over security
should be considered for each parameter under
security risk.
Guarantors CIB status should be considered under
security risk.
Credit rating of the obligor should be considered
for CRG.
Accounting system/quality of data may be
included as one of the parameters.
Minimum required score for each principal risk
component should be fixed.
(v) Crisis Management in Banks: BIBM organized a
training workshop on Crisis Management in Banks
at BIBM premises during April 02 03, 2014. A total
March & June, 2014
number of 30 officials from different banks and

financial institutions participated in the workshop.
The following recommendations are drawn from the
participants of the Workshop:
Bank must recognize that crisis management is not
just about compliance and there should have clarity
of the boards role in formulating crisis
management policies and strategies in bank. The
board should formulate a clearly defined
work-plan and strategic plan to manage the crisis
situation.
Crisis management in banks should take into
account banks planning and automatic incident
response, and must dynamically deal with
situations as they unfold, often in unpredictable
ways. Creating escalation rules for banks
employees is an essential element in crisis
prevention, detection, and control. Therefore,
banks must train its employees to bring matters to
the attention of more senior personnel for their
analysis and handling as soon as possible,
preferably before they become critical.
The senior management of the bank should
establish a mechanism for pulling together a crisis
management team and the management should
identify the key players who will be on a crisis
management team, based on their specialties,
willingness to serve, and personalities. The crisis
team manager should be able to be reached 24/7.
Similarly, the crisis manager should be able to
reach the members of his or her crisis team 24/7.
A crisis team in bank should have several features
like: The crisis team manager will be in charge of
the crisis team in absence of the senior manager;
the crisis team manager will serve as key liaison
between the organizational leadership and the
crisis team; and the crisis manager and the senior
manager will need to hear the advice of their crisis
team and make decisions.
Bank should take into consideration that one key
role of the crisis team is to ensure that the best
information available is received by management
and that the orders, decisions and communications
of the organization are able to be shared with their
intended audiences. This will allow the bank
management to manage the crisis as effectively as
possible, and can minimize the risk that
uninformed, dissident, or panicked voices will fill

the vacuum.
Business continuity in bank relates to those steps
necessary to restore the banking operation to
normal functioning after a crisis. Therefore, bank
should have a disaster recovery plan in place.
(vi) E-commerce and E-banking: BIBM organized a
Training workshop on E-commerce and E-banking
at BIBM premises during April 22 24, 2014. A total
number of 38 officers of different banks participated
in the workshop. In the workshop, there was a session
titled Formulation of Workshop Recommendations,
Lack of security awareness of both customers and
merchants regarding online threats is a big concern
to promote e-commerce in Bangladesh. Bank
should take responsibility to enhance security
awareness of them. However, awareness is
increasing compared to other countries and
comparatively online fraud is less in e-commerce
transactions in Bangladesh. Ethical standard of our
IT professionals is very good.
Transaction volume of e-commerce is not
increasing at satisfactory level due to absence of
2-Factor Authentication (2FA). In case of VISA or
any other branded international cards its
impossible to stop transaction without 2FA. But we
can introduce 2FA in case of local card transactions
in e-commerce with a view to increase trust among
customers and online merchants.
To ensure timely delivery of quality products is an
important challenge in promoting e-commerce in
Bangladesh. Online merchants have to assure this
matter otherwise they will not survive in the
competitive market. The Consumer-Right
Protection Act can contribute a lot to resolve the
problems. In addition, market dynamics will
ensure the customer service quality.
A regulatory board may be formed in order to set
rules and regulations for e-commerce sites. If any
organization wants to launch e-commerce
business, he/she needs to take permission and have
membership of the regulatory body. In this way, we
can control the fake web sites. To combat online
frauds we have to ensure Secure Sockets Layer
(SSL) during transactions. Our local electronic
payment gateway service providers are trying to

improve security from their sides.
PayPal is the most widely used payment system on
the Internet. Unfortunately, PayPal is not showing
their interest to provide e-payment services in
Bangladesh. This means that talented Bangladeshi
freelancers and other individuals are facing
problem to send and receive money via PayPal.
In our experience, most of the buyers want to pay
with PayPal because of flexibility and simplicity.
Due to poor transaction volume of e-commerce
and dissatisfaction with Bangladesh Bank (BB)
guidelines of Online Payment Gateway Service
Providers (OPGSPs), PayPal does not show
interest to start their operation in Bangladesh at
this moment. In view of promoting e-commerce as
well as freelancing services in Bangladesh, both
Govt. and BB should try to make PayPal agree to
provide international payment solutions in our
country as early as possible.
Incidents of communication link down greatly
hamper the business operations of e-banking.
Proper initiatives should be taken by Govt. to
increase the reliability of communication services.
However, reliability, speed, and bandwidth cost are
gradually improving.
The National Payment Switch of Bangladesh
(NPSB) project was taken by the BB to bring all
the ATM card holders of different banks under one
umbrella so that any card holder of any bank can
draw money from any booth through the
inter-operability system. To increase the growth of
online transactions through ATMs, BB has already
declared lower charge for clients of banks under
NPSB for inter-bank ATM transactions from April
1, 2014. All banks should agree with this rate of
charges.
Money laundering through M-banking and
hijacking of cash from agents of M-banking are
increasing alarmingly. To mitigate money
laundering, banks should ensure proper KYC
(Know Your Coustomer) to arrest corruptions
using MFS and access to NID (National Identity
Card) database. If a bank compromises with KYC,
corruption using its MFS account can't be checked.
Currently many banks enforce strict KYC
compliance while others do not with a view to
March & June, 2014
gaining better market share and business. Proper

KYC needs that the bank people check the
genuineness of the information, photograph and
NID for each customer. However, checking the
KYC manually is time consuming and costly. To
ease this, like some other countries, banks may be
allowed to access the NID database online (like
CIB database of the BB). In this way, submitted
NID and KYC information may be checked for
genuineness from the NID database easily. To
control hijacking of cash from agents, Bank should
select agents having good capability of handling
working capital against hijacking. Agents should
maintain appropriate physical/ environmental
security of their business outlets.
(vii) Factoring, Leasing and Venture Financing:
BIBM organized a Training Workshop on Factoring,
Leasing and Venture Financing at BIBM premises
during March 11-13, 2014. A total number of 31
officers of different banks and financial institutions
participated in the workshop. In the workshop, there
was a session titled Group Discussion and
Formulation of Workshop Recommendations on
Factoring, Leasing and Venture Financing in
Bangladesh, participants suggested following
issues:
Appropriate mechanism should be developed for
identifying the authenticity of invoice or delivery
chalan to provide factoring services.
Banks should launch separate window for offering
factoring and leasing products as special skills are
required for such customized product.
Government can support the growth of lease
financing by allowing depreciation tax advantage.
Detailed database regarding technical and
economic value of equipment, estimated life of
technology, etc. are required for providing the
leasing services.
Secondary market for machineries which are
suitable for leasing can be developed.
Non-resident Bangladeshi investors need to be
encouraged to invest in venture firms.
Venture capitalists should train up their staffs for
preparing the accurate feasibility study report of
the targeted projects.
Transparent and smooth exit route through capital
March & June, 2014
market is needed for the venture capitalists.

Extensive pilot survey is required to find out the
potential sectors under venture financing in
Bangladesh and accordingly, suitable project
appraisal techniques, monitoring guideline, market
linkage support, etc. may be devised.
Continuous monitoring and proper structural
change are required to make the existing Equity
and Entrepreneurship Fund (EEF) more effective.
For specialized financial products like Factoring,
Leasing and Venture Financing, capacity building
initiatives for employees should be taken by bank
management as well as by BIBM.
Government and Bangladesh Bank may take
necessary actions separately and jointly to familiar
these special financial products in Bangladesh
through introducing product specific guidelines,
refinancing schemes, etc.
(viii) Green Banking: BIBM organized a workshop
on Green Banking at BIBM premises during
January 29-30, 2014. A total number of 28 officials
from different banks and financial institutions
participated in the workshop. The following
recommendations are drawn from the participants of
the Workshop:
More seminar, symposium workshop, training
programs, etc. should be conducted for enhancing
the awareness level.
Make the environmental risk rating process more
user-friendly. More functional training on
environment risk rating is required.
Disclose the parameters for evaluating top ten
green banks. It is needed to motivate the banks.
Clean development mechanism is a potential
opportunity. More technical expertise is needed in
this field. Banks opportunities needs to be
clarified.
Motivation by central bank as well as the support
from banks top management is required for the
success in green banking.
Netting in green financing is really required for the
overall judgment of the green finance.
Green banking is not the duty only of the green
banking cell but it should be the responsibility of
the whole bank.
(ix) ICC Guideline for Trade Facilitation: BIBM

organized a workshop on ICC Guideline for Trade
Facilitation at BIBM premises during May 20-22,
2014. A total number of 38 officials from different
banks and financial institutions participated in the
workshop. The following recommendations are
drawn from the participants of the Workshop:
More seminar, symposium, workshop, training
programs, etc. should be conducted for enhancing
the understanding level of ICC guidelines.
ICC Bangladesh should play an effective role on
implementation of ICC trade guidelines. Moreover
they should make some functional opinion
regarding Bangladeshi trade in the revision
meeting of different ICC publications.
Bangladesh Bank should incorporate the ICC
guidelines for better enforcement of ICC
publication.
The ICC Bangladesh should rethink about the fees
for dispute resolution under DOCDEX.
(x) Information System Audit and Risk
Management in E-Banking: BIBM organized a
Training workshop on Information System Audit
and Risk Management in E-Banking at BIBM
premises during June 10 12, 2014. A total number
of 40 officers of different banks participated in the
workshop. In the workshop there was a session titled
Formulation of Workshop Recommendations,
where participants suggested the following issues:
A well-documented IT policy is a must for every IT
department of banks and it should comply with the
IT policy of Bangladesh Bank.
When a bank wants to implement a new software,
first they should ensure whether the software meet
the terms of their IT policy.
SLA (Service Level Agreement) with vendor for
outsourced work will be well written.
The job of outside vendor will be properly defined
and well logged.
Bank authority should not permit the outside
vendor to use removable devices in any
circumstances.
An IT auditor can be posted to branches in order to
control IT frauds.
Fraud committed by internal employee can be
mitigated in a number of ways.
-Segregation of duties and documentation of job

description is a must
-All transaction must have separate maker and
checker
-Regular inspection of user activities shall be
conducted and
-Process re-engineering can be done to improve
the whole procedure.
Bangladesh Bank can introduce secure portal for
data sharing. PGP (Pretty Good Privacy) software
can be used by commercial banks and central bank
for sharing of data.
PKI infrastructure can be implemented by all
banks. In that case, participation of all banks is
required for secure data transfer.
(xi) Managing Risk in Agro-Sector Financing:
BIBM organized a Training workshop on Managing
Risk in Agro-Sector Financing at BIBM premises
during May 14-15, 2014. A total number of 30
officers of different banks participated in the
workshop. In the workshop there was a session titled
Formulation of Workshop Recommendations,
Adequate financing for storage of agri-products
has to be ensured.
Banks and financial institution may recruit
agriculture specialist to cater the specific
requirement of agro-sector.
Seminar and workshop are to be arranged in
different level to promote the awareness of the
people.
Professional education may be given to enhance
professional knowledge of the illiterate people.
Bankers may offer a credit package program for
farmer instead of a distinct product.
Agri-insurance may be explored for promoting
agro-financing specially financing for crops and
live-stock.
Well-developed marketing channel for distribution
of agri-products and a strong information system,
especially for price discovery, are necessary for the
development of agro-sector.
Farmer specific and innovative products may be
offered by banks.
Infrastructure development and establishment of
commodity market may be helpful for marginal
farmers.
March & June, 2014
(xii) Project Financing and Public-Private

Partnership (PPP): BIBM organized a training
workshop on Project Financing and Public-Private
Partnership (PPP) at BIBM premises during January
21-23, 2014. A total number of 21 officers of
different banks participated in the workshop. In the
workshop, there was a session on Group Discussion
and Formulation of Workshop Recommendations by
the Participations, participants suggested the
following issues:
Government should play proactive role in
identifying, initiating, awarding concession and
implementing Public-Private Partnership (PPP)
projects with adequate fairness and transparency
so that infrastructure development in the country
gets momentum.
Both appropriate regulatory framework for PPPs
and independence of regulatory body are required
for utilizing full potential of such initiatives.
A proper coordination among different
government bodies as well as private parties is
required to accelerate the implementation of PPP
projects
To attract private sector investors to the PPP
projects, the Government will need to offer a
lucrative incentive package at least at the initial
stage of the development of such initiatives.
Investment Promotion & Financing Facility (IPFF)
should be flexible in terms of approving funds,
disbursement mechanism, repayment terms, etc.
depending on the project nature. IPFF can also take
equity participation in the PPP projects for
encouraging
the
Participatory
Financial
Institutions (PFIs).
For making PPP initiative successful, high level
political commitment, consensus, support and
continuation are required.
Good corporate governance framework is required
that will ensure timely and accurately disclosure of
PPP Projects status to stakeholders.
To make the PPP more lucrative, there is need for
an active secondary bond market and PPP
entrepreneurs should be provided more options for
raising funds from the bond market.
Commercial banks may create a subsidiary
company either individually or jointly for
financing PPP projects.
March & June, 2014
Commercial banks may be asked by the central

bank to allocate a specific portion of their
investable fund for PPP projects each year.
Project feasibility study and project processing
including financial closure time should be
minimum i.e., there should be one stop service at
every stage for quick implementation of projects
under PPP.
More trainings, workshops, seminars, etc. should
be arranged for capacity building of the financial
institutions for handling PPP projects successfully.
Mass level awareness build up towards PPPs is
required.
(xiii) Retail Banking: BIBM organized a training
workshop on Retail Banking during February 05 06, 2014. A total number of 32 senior officials from
different banks and non-bank financial institutions
participated in the above training workshop. In the
workshop, there was a session titled Formulation of
Recommendations on Retail Banking, participants
suggested the following issues:
A clear and easy understandable guideline for retail
banking operation needs to be formulated by
central bank, in which a separate section may be
included for Islamic Banks to finance in retail
banking.
Regulatory body should be aware about the
unethical practice of banks regarding target market
and should develop an effective monitoring system
to avoid unproductive finance in retail banking.
Every bank should develop a clear policy for retail
banking operation emphasizing supervision,
monitoring and recovery process. In addition to
that, ongoing training is vital for developing
expertise in this field.
Banking sector of Bangladesh lack database of the
customers in retail banking. A common database
may be created by different banks for retail
banking operation. Thus banks may mutually share
customers common database for their better
lending decision.
To be successful in retail banking operation,
lending team must be guided by the marketing
team in choosing the right segment and developing
relationship with them.
While lending in retail, every bank must take

initiative to create awareness among the guarantors
of retail loan regarding their responsibility.
Bank branches may introduce separate desk for
retail banking operation.
(xiv) Work Environment, Behavior and Job
Performance for Employee Excellence: BIBM
organized a workshop on Work environment,
Behavior and Job Performance for Employee
Excellence at BIBM premises during February
26-27, 2014. A total number of 28 officials from
In the banking industry, creation of good corporate
culture is needed where employee can get equal
distribution of workload, proper job rotation,
delegation of authority, sufficient logistic support
like expert advice, etc.
To ensure good work environment, employee
motivation is very crucial. Positive motivation
leads to good performance. Thats why, the
performance should be evaluated periodically
without any biasness. In evaluating employee
performance, ACR may be replaced by 360 degree
performance appraisal system.
Employee promotion may be given based on both
the performance and viva-voce so that skilled and
knowledgeable officers can get rewards.
Empowerment and participation is very much
required to ensure better decisions at both
individual and branch level.
Regular training may be arranged to change
positive employee attitude towards job and enrich
employee behavior.
Business target should be rational and realistic to
avoid extra pressure. If the work-load is
unavoidable, job assignments may be segregated
and done on a priority basis.
Proper and regular counseling is needed to avoid
work burden and a healthy work-life balance.
(xv) Investment Banking and Foreign Exchange
Operation under Islamic Banking: BIBM organized
a training workshop on Investment Banking and
Foreign Exchange Operation under Islamic Banking
during May 07 - 08, 2014. A total number of 33

senior bank officials from different banks
participated in the workshop. In the workshop, there
was a session titled Group Discussion and
Formulation of Recommendations on Investment and
Foreign Exchange Operation under Islamic
Banking, participants suggested the following
issues:
For strengthening and monitoring the Islamic
banking activities in Bangladesh, separate Shariah
Supervisory Board and full-fledged division for
Islamic Banking can be established in Bangladesh
Bank.
Since knowledge plays an important role in all
operational activities in banks, so there might be
some clarifications regarding Islamic banking to
all the stakeholders including employees of
respective banks and interested parties to gain a
better concept about it.
Money market for conventional banking is very
much active and efficient in our banking industry
but there could be an active money market for
Islamic banking.
Both conventional banks and Islamic banks have
their own software for banking transactions.
Bangladesh Bank or any competent authority may
provide a unique software for all Islamic banks.
To enrich knowledge, skill and attitude towards
Islamic banking, BIBM can organize more
training, research and seminar in this emerging
area of Islamic banking.
(xvi) Negotiation Skills in Banking: BIBM
organized a training workshop on Negotiation Skills
in Banking during April 29 - 30, 2014. A total
number of 33 senior bank officials from different
banks participated in the workshop. In the workshop,
there was a session titled Group Discussion and
Formulation of Recommendations on Developing
Ideal Business and Dispute Negotiation Model in
Banking, participants suggested the following
issues:
In case of business and dispute negotiation in
banking, knowledge plays a significant role to
reach an amicable solution. Thats why, bankers
should have sound knowledge about the banking
industry, national and international economy,
politics and other issues.
March & June, 2014
Money Loan Court Act assist bankers to settle their

financial disputes though it is time consuming and
difficult to some extent. In this regard, outside the
court settlement can play a very significant role.
Thats why, efficient negotiation skills is vital for
the bankers.
Bankers should be well aware about the rules and
regulations of their respective banks. Moreover,
they should also be aware about the central banks
policy, guidelines, circulars and other issues.
Negotiators should set their goals and need to do
the ground work before sitting for negotiation.
They have to collect sufficient information about
their opponents for better bargaining at the time of
negotiation. Identifying the opponents weak point
is very important in this regard.
Negotiation is a very technical task, thats why
negotiators should be free from any sort of
biasness or influence. Negotiators should possess
professional attitude and mind setup to resolve any
business issue.
Personality of the negotiators plays a very
significant role in case of successful negotiation.
Thats why, negotiators should have strong
personality. Moreover, negotiators should be
acceptable individual from the both parties
viewpoints.
Negotiators should think about the situation
creatively and need to consider the long term
perspective. Giving waiver to more profitable
customers is very vital in case of banking
negotiation. Previous profit volume given by the
customers needs to be considered in case of
banking negotiation.
(xvii) Operational Risk Management in Banks:
BIBM organized a workshop on Operational Risk
Management in Banks at BIBM premises during
May 21-22, 2014. A total number of 36 officials from
Initiatives may be undertaken to increase
awareness of the employees regarding various
forms of operational risks and their prevention
process.
Code of ethics for the bank employees may be
March & June, 2014
developed.
Independent operational risk management division
may be created at the bank level.
Operational risk reporting system may be
improved in the banks.
Functioning of the ICC division may be
strengthened.
Expert and efficient ICT official should be
recruited in the banks to prevent IT related fraud.
Compliance culture should be established in the
banks.
9. Launching Dhaka School of Bank Management
(DSBM)
observed BIBM Day 2014 on 26th February, 2014
in its auditorium. BIBM arranged this program to
formally inaugurate Dhaka School to Bank
Management (DSBM) with the affiliation to Dhaka
University. Dr. Atiur Rahman, Chairman, BIBM
Governing Board & Governor, Bangladesh Bank and
Dr. A. A. M. S. Arefin Siddique, Vice Chancellor,
University of Dhaka were the Chief Guest and Guest
of Honour, respectively in this program. Professor
Shibli Rubayat Ul Islam, Dean, Faculty of Business
Studies, University of Dhaka was present in this
program as a Special Guest. At the beginning of this
program, Director General of BIBM, Dr. Toufic
Ahmad Choudhury presented BIBM Activity Report
2013.
Among invited guests, some renowned personalities,

such as Mr. Md. Ehsan Khasru, Managing Director &
CEO, Prime Bank Ltd.; Md. Abdul Hakim, Professor,
Department of Accounting & Information Systems,
University of Dhaka shared their views on the
occassion. At the end, Dr. A. A. M. S. Arefin
Siddique and Dr. Atiur Rahman jointly unveiled the
curtain of the plaque marking formal launching of
Dhaka School of Bank Management. A large number
of guests from Dhaka University, different banks and
non-bank financial institutions, media persons and

students, faculty members and officers of BIBM
were present in the program.
10. Bangladesh Bank Governor Addresses
Frankfurt School of Finance & Management on
Impact of Remittance Inflows into Developing
Economies and Signed MOU with Frankfurt
School of Finance & Management
Bangladesh Bank Governor, Dr. Atiur Rahman
addressed the Frankfurt School of Finance &
Management, Frankfurt faculty on 30 June, 2014 on
the subject of impact of remittance inflows into
developing economies. In his presentation, Governor
Rahman highlighted significance of wage earners
remittances in socioeconomic development of
Bangladesh.
Governors address at Frankfurt School was
preceded by a MOU signing ceremony between
Bangladesh Bank and Frankfurt School on
Cooperation on Human Resource Development for
Bangladesh Bank Training Academy (BBTA) and
Bangladesh Institute of Bank Management (BIBM).
11. Universiti Utara Malaysia Delegates Visited
BIBM
A four member delegation from Universiti Utara
Malaysia (UUM) visited the Bangladesh Institute of
Bank Management (BIBM) on 24 June, 2014. The
team was headed by Prof. Dr. Yusnidah Ibrahim,
Dean, School of Economics, Finance and Banking.
The Director General of BIBM, Dr. Toufic Ahmad
Choudhury cordially welcomed the team. The team
presented the academic activities before the faculty
members and the MBM students in a brief
presentation session held in the BIBM Auditorium.
They discussed about the possible future areas of
cooperation between UUM and BIBM.
12. BIBM Faculties in International Programs/
Visit
Honorable Director General of BIBM, Dr. Toufic
Ahmad Choudhury has recently gone to Finland to
receive Associate Membership Certificate of
European Banking and Financial Services Training
Association (EBTN). The Certificate was awarded
to BIBM on 27 June, 2014. Through this
membership, BIBM will be able to participate in

EBTNs program and also conduct certificate
course in Bangladesh.
Dr. Shah Md. Ahsan Habib, Professor & Director
(Training) participated in the 17th World Congress
of the International Economics Association,
Jordan, from 06-09 June, 2014.
Mr. Ashraf Al Mamun, Associate Professor, BIBM
participated in a workshop CSR for Advancement
and Social Emancipation held in Asian Institute of
Technology (AIT), Thailand from 6 11 June,
2014 and jointly organized by Bangladesh Bank
and Management of Research Development
Initiative (MRDI).
Mr. Sukomal Sinha Chowdhry, SME Faculty
Consultant, BIBM participated in a Roundtable
Discussion on CEO & Senior Leaders
Roundtable: The Future of SME Finance from
29-30 May, 2014 in Istanbul, Turkey.
Mr. Md. Alamgir, Assistant Professor and Mr.
Tofayel Ahmed, Lecturer of BIBM participated in
Workshop on ICC Rules and Tools for
International Trade Finance: Operations, legal
cases and proven trade finance strategies from
April 23-25, 2014, held in Kuala Lumpur,
Malaysia and jointly organized by ICC,
Bangladesh and ICC, Malaysia.
Mr. Nur Al Faisal, Lecturer, BIBM participated in
Training for the Trainers from February 10-15,
2014 held in Indian Institute of Banking &
Finance, Mumbai, India.
From February 1, 2014 to February 8, 2014
Honorable Director General of BIBM, Dr. Toufic
Ahmad Choudhury along with Dr. Prashanta
Kumar Banerjee, Ms. Fahmida Chowdhury, Mr.
Ashraf Al Mamun, Mr. Md. Mahbubur Rahman
Alam, Mr. Md. Shahid Ullah and Ms. Maksuda
Khatun participated in a study visit of 7 days in
Germany. Mr. Parwez Anzam Moonir from
SMESPD, Bangladesh Bank and Mr. Leif
Andersen, Key Expert 2, INSPIRED-Component 3
also participated in the study visit. They visited
Academy of German Cooperatives Banks,
Frankfurt School of Finance & Management and a
number of commercial banks during their visit.
March & June, 2014
Mr. Md. Mohiuddin Siddique, Associate Professor

& Director (DSBM), BIBM participated in a
Lecture Program as an Speaker from January
26-31, 2014 in Ritsumeikan University, Japan.
13. Participation of BIBM Faculties in Domestic
Programs
Dr. Prashanta Kumar Banerjee, Professor &
Director (RD&C) and Mr. Md. Mohiuddin
Siddique, Associate Professor & Director
(DSBM), BIBM participated in a Seminar on
Dissemination of Recent Policy Research on 08
June, 2014, which was held in Chief Economists
Unit and Research Department of Bangladesh
Bank.
Dr. Shah Md. Ahsan Habib, Professor & Director
(Training), participated in SAARCFINANCE
March & June, 2014
Seminar on Management of External Sector

Openness-South Asian Country Experience, on
29 April, 2014 held in Bangladesh Bank.
Mr. A.N.K. Mizan, Assistant Professor, BIBM
participated in a training on Research Methods
and Impact Analysis from 11-29 May, 2014 in
Institute of Microfinance, Dhaka.
Ms. Antara Zareen and Mr. Tofayel Ahmed,
Lecturers of BIBM participated in Workshop on
Inco terms 2010 and Uniform Rules for Demand
Guarantees (URDG) 758 on 31 May, 2014
organized by ICC, Bangladesh.
14. BIBM Faculty Gets Promotion
Recently two faculty members of BIBM, Mr. Md.
Mosharref Hossain and Mr. A.N.K. Mizan have been
promoted from the position of Lecturer to Assistant
Professor. The promotion will be effective from April
1, 2014.
15. BIBM Faculty on Study Leave
Mr. Md. Mosharref Hossain, Assistant Professor,
BIBM is on study leave in Malaysia for pursuing
Ph.D. from April 01, 2014 to March 31, 2016.
Mr. A. N. K. Mizan, Assistant Professor, BIBM is
on study leave in Canada for obtaining Masters
from June 20, 2014 to June 19, 2016.
BANKING AND FINANCIAL NEWS

Domestic News
Bank Asia Limited and NRB Commercial Bank
Limited Got Approval for Agent Banking
Bangladesh Bank gave permission to two banks to
provide agent-banking services, taking the banking
sector one step ahead in financial inclusion. Bank
Asia Limited can appoint 30 agents and NRB
Commercial Bank Limited 20 agents to extend
modern banking services to clients, according to the
central bank decision. On behalf of the banks, the
agents can transact cash, distribute remittance, gather
information for bank accounts, accept loan
applications, transact and recover loans and receive
applications for credit and debit cards. Bank agents
can also receive utility bills and passport fees and
distribute government assistance under social safety
net programmes. In agent banking, a third party will
sign an agreement with the bank and will provide
some banking services directly to the client on behalf
of the bank. Instead of setting up branches, the agent
banking system has been accepted in many countries
as a means of financial inclusion. The initiative is
expected to accelerate the pace of financial inclusion
in the country. The move will also encourage many
small entrepreneurs to start businesses in rural areas
which will spur employment generation and reduce
the tendency of the rural population to move to urban
areas.
Source: www.thedailystar.net (May 30, 2014)
BB Raises Reserve Requirement for Banks

Bangladesh Bank has recently raised the daily
average Cash Reserve Ratio (CRR) requirement for
banks after a pause of four years to 6 percent from 5.5
percent in a bid to contain inflation. Banks are also
asked to keep their CRR at 6.5 percent on a
fortnightly basis. CRR is the minimum fraction of
customer deposits and notes that each commercial
bank must hold as reserves or place with the central
bank rather than lend out. It is an important tool for
monetary policy as it influences the country's
borrowing and interest rates. The higher the reserve
requirement is set, the less funds banks will have to
loan out, leading to lower money creation and
perhaps ultimately to higher purchasing power of the
March & June, 2014
money previously in use. The move comes as banks

sit on excess liquidity in the face of sluggish
investment climate and businesses' increased
tendency to obtain loans from abroad.
Source: www.thedailystar.net (June 24, 2014)
Governments Bank Borrowing Falls Far below
Target
The government's borrowing from the banking
system stood at only 21 percent of its target in the
first 11 months of the outgoing fiscal year due to slow
implementation of development programmes.
Between July 1 last year and June 9 this year, around
Tk. 6,359 crore was borrowed from banks against the
revised target of Tk. 29,982 crore. Initially the
government had a borrowing target of Tk. 25,993
crore, which was raised by 15 percent in the revised
budget. During the period, ministries spent only Tk.
39,982 crore under the government's Annual
Development Programme (ADP), the amount being
67 percent of the revised allocation, according to
Implementation Monitoring and Evaluation Division
(IMED). Low level of ADP implementation and
borrowing through savings instruments contributed
led to lower borrowing from the banks. The
government's net borrowing through savings
instruments was Tk. 8,734 crore in the first 10
months of the outgoing fiscal year that has already
exceeded the target at Tk. 8,000 crore. Though it has
reduced the amount of bank borrowing, the interest
cost will mark a rise.
Bank Account for Street Children with Tk.10

Bangladesh Bank has allowed bank account with
Tk.10 for the street children to save their income. The
central bank issued a guideline through a circular
with immediate effect. Bangladesh Bank will prepare
a list of NGOs (Non Government Organizations)
who are interested to operate bank account of street
children. Interested NGOs are also asked to apply to
be included in the list to the Green Banking and CSR
Department of Bangladesh through a scheduled
bank. NGOs good will, credibility, experience and
infrastructure facilities will be considered in case of
enlistment. No service charge will be taken from the

accounts. Account holder will be allowed to operate
the account reaching the 18 years old.
Source: www.dhakatribune.com (March 10, 2014)
Banks' Lending Rates Dip to a Record Low

Commercial banks' lending rates have gone down to
a three-year low due to a poor demand for money and
a decline in their cost of funds. The trend is also
evident in the money market, which has been in a
high degree of liquidity. Overall, the banks' lending
rates declined to 13-14 percent now from 15-16
percent a year ago. Premium borrowers are offered
11-13 percent. The demand for loans has started to
decline since the beginning of 2013, due to a
wait-and-see approach of investors centering the
national elections. However, investor confidence is
yet to return even after six months of the elections. As
a result, the banking sector is now sitting on an
excess liquidity of around Tk. 110,000 crore. Scarcity
of gas and electricity and poor infrastructure,
including roads, are some of the other reasons behind
the declining demand for loans.
Foreign Funds in Dhaka Stocks Soar

Net foreign investment in Dhaka stocks shot up 111
percent year-on-year in fiscal 2013-14 on the back of
solid economic fundamentals despite political
turmoil in the middle of the year. Overseas investors
bought shares worth Tk. 4,014.86 crore and sold
shares worth Tk. 1,456.39 crore, taking their net
investment to Tk. 2,558.47 crore in the
just-concluded fiscal year, according to data from the
Dhaka Stock Exchange (DSE). In the month of June
alone, the DSE saw net foreign investment of Tk. 234
crore, up 182 percent from May. Going forward, the
perceived political stability, the rising corporate
profitability of listed companies, healthy external
account and stable currency rate might have
contributed to attract foreign investors. While banks
remain the foreign investors' preferred sector, they
also showed interest in non-bank financial
institutions, power and energy, pharmaceuticals,
multinationals, telecoms and IT.
Source: www.thedailystar.net (July 03, 2014)
March & June, 2014
Private Banks Raised Capital Base to Meet Global

Standards
Private Banks are raising their capital base in every
quarter to meet new international standards that will
take effect next year. Their capital base went up
around 1.63 percent in the first quarter of this year,
while state banks are in a weak position in
maintaining capital. In line with Basel-II standards,
banks have to maintain 10 percent capital of their
risk-weighted assets. Basel-II was intended to create
an international standard for banking regulators to
control how much capital banks need to put aside to
guard against financial and operational risks.
However, the condition of state-owned commercial
banks was also weak in the quarter as they
maintained a CAR (Capital Adequacy Ratio) of 9.77
percent on average. Foreign banks always maintain a
higher CAR, which was 22 percent at the end of
March.
FDI Raised 24 Percent Despite Political Shocks

Inflows of Foreign Direct Investment (FDI) into
Bangladesh rose 24 percent year-on-year to $1.6
billion in 2013 although the country witnessed
serious political unrest and an anti-business climate
during the period. FDI inflows increased by 13.75
percent to $1.29 billion in 2012, compared to the
previous year, according to United Nations
Conference on Trade and Development (UNCTAD).
The telecommunications and banking sectors
brought a combined $651 million in FDI last year,
while textiles and weaving received $422 million.
The World Investment Report of the UNCTAD,
released recently, shows Bangladesh is placed as a
distant second favoured investment destination in
South Asia after India, which got $28 billion or 78
percent of the total FDI inflows into the region in
2013.
Source: www.thedailystar.net (June25, 2014)
Banks' Credit Growth Still Lumbering

Banks' credit growth continues to falter despite the
diffusion of political tension in January as banks
exercise caution in lending to avoid bad loans. As of
May 15, the sector's overall credit growth from a year
ago stood at 8.97 percent. The private banks' credit
increased 14.07 percent, with some recording 20
percent to 38 percent growth. But state banks saw

their credit decline 5.11 percent and foreign banks
0.22 percent. However, most of the banks saw their
deposits swell during the period, which squeezed
their profits. As of May 15, overall deposit grew
16.48 percent year-on-year.
Source: www.thedailystar.net (July08, 2014)
BB Scheme for Low Income Groups

Bangladesh Bank has introduced an innovative
scheme of Tk. 200 crore, where loans will be
extended to the poor and banks will enjoy incentives
against recovered loans, in addition to interest. For
the first time, the central bank has introduced the
'revolving refinance fund' to give low interest loans
to low-income professionals, small and marginal
businessmen and farmers. Under the scheme, a
maximum of Tk. 50,000 can be given as loans to an
individual with no collateral. However, each loan
applicant will have to provide a personal guarantee
from an adult Bangladeshi citizen from the area. The
borrower will repay the loan plus interest by a
maximum of one year. However, if any borrower
fails to pay back the loan, the refinance facility will
be cancelled and a market based interest rate will be
applicable.
Source: www.thedailystar.net (May16, 2014)
Non-Banks' Cost of Funds Falls on Poor Demand

The cost of funds of non-bank financial institutions
fell by more than 10 percent in one year due to
surplus money in the market and a poor demand for
loans from businesses. The weighted average cost of
funds for non-banks came down to 11.22 percent in
April this year, from 12.52 percent in the same month
a year ago, according to Bangladesh Bank data.
Economic Progress of Bangladesh Lauded at BEF

Conference
Leading economists met in Dhaka recently to
promote economic reforms and give policy
guidelines to the nation to help build a pluralistic
democracy. They spoke at the first conference of
Bangladesh Economists' Forum (BEF), a
non-political voluntary body of professional
economists. The forum was formed in April last year.
The idea of BEF emerged to help Bangladesh grow

faster than the present 6 percent rate for the past one
decade and achieve a middle-income status by 2021.
Local and foreign economists joining the conference
praised the country's progress on the development
and economic fronts. However, they also reminded
the country of the serious challenges it faces to
sustain the advancement and make further leaps.
Source: www.thedailystar.net (June22, 2014)
Capital Gain Tax Waived in Finance Bill 2014

The Finance Bill-2014 passed by the National
Parliament on 29th June finally waived the much
talked capital gain tax imposition on individual
investors in their stock market investment. Earlier a 3
percent tax on capital gains upwards of Tk. 10 lakh
and 5 percent for gains above Tk. 20 lakh from the
stock market in fiscal 2014-15 was proposed which
left general investors on the back foot. But finally the
feature was ultimately crossed out in the Finance Bill
2014. The market got a real boost with this
withdrawal of capital gains tax on individual
investors. Besides, the government raised the limit
for tax-free dividend income to Tk. 20,000 from Tk.
10,000 though it was proposed to Tk. 15,000. On the
other hand, a 10 percent tax rebate has been allowed
for listed companies that pay 30 percent or more
dividends.
Banks' Exposure to Capital Market

Bangladesh Bank asked banks to follow some
instructions additional to its earlier directives in
February, 2014 with a view to keeping their capital
market risk within acceptable limit. As per the
instructions, the market value of total investment of a
banking company in capital market on consolidated
basis shall not exceed 50% of the sum of its
consolidated paid up capital, balance in share
premium account, statutory reserve and retained
earnings as stated in the latest audited financial
statements.
While computing total capital market investment on
consolidated basis, the banks should consider some
components like, a) All except the inter-company
(parent bank to subsidiary/ subsidiaries or vice versa)
March & June, 2014
transactions; b) Subscription by the subsidiary or

subsidiaries of the bank to any fund intended to
invest in the capital market; c) Market value of all
types of shares, debentures, corporate bonds, mutual
fund units and any other capital market leaning
securities held by the subsidiary or subsidiaries of the
bank ; d) Margin loan (outstanding) provided to the
customers by the subsidiary or subsidiaries of the
bank; e) Bridge loans provided to companies by the
subsidiary or subsidiaries of the bank against
expected equity flows/issues; f) Banks shall submit a
report (both soft and hard copy) of their month end
solo and consolidated basis position regarding capital
market investment in the prescribed formats to
Department of Off-site Supervision (DOS) within the
10th of the following month.
Source: www.bssnews.net (February 25, 2014)
Islamic Shariah Index for Institutional Investors

The Dhaka Stock Exchange (DSE) has launched
Islamic Shariah Index only for the institutional
investors intending to make investment in stocks of
the companies which maintain Shariah compliances.
The initiative was taken after a meeting held between
the DSE board of directors and the top officials of the
Islami Banks, Insurance companies, Non-Bank
Financial
Institutions
(NBFIs)
and Asset
Management Companies. This index has been
launched choosing more than 75 listed companies
from the banks, NBFIs, insurance companies and
mutual funds having operations based on Islamic
Shariah. The individuals having intention to make
investments in Shariah based stocks will also be able
to invest through asset management companies. It is
expected that people who believe in Shariah at home
and abroad will be more interested to invest in DSE
after launching this index.
Source: www.thefinancialexpress-bd.com (January 31, 2014)
International News
Rising Asian Investment Banks Revenue
Total investment banking revenues for the
Asian-Pacific region, excluding Japan, rose to their
highest since the second half of 2012. A rush of
merger and acquisitions has added to the improved
performance. The biggest boost for banks came from
the business of underwriting new shares, or equity
March & June, 2014
capital markets, where revenue soared 57% between

January and June compared with a year earlier. There
was brisk business in the debt market, too. Asian
borrowers flocked to sell U.S. dollar bonds as global
interest rates remained at historical lows, attracting
Western investors who are chase higher yields than
those on offer in their home markets.
Source: The Wall Street Journal (July 01, 2014)
Momentum in Demand of European Equities

Europes momentum has taken a knock in recent
weeks. European stocks still look like a decent
buying opportunity. Equity investors are still waiting
for earning to pick up, with the strength of the euro
acting as a headwind. Leading indicators such as
economic surveys and sentiment still are pointing to
an upswing in the European economy. Earnings
growth still stands a good chance of picking up later
this year, with the U.S. outlook brighter and Europe
still gradually recovering. A weaker euro may give a
boost euro-zone results, too. Investors might feel
uncomfortable waiting for hard economic data to
catch up with the optimistic leading indicators. But
with bond yields so low, equities still look like the
better bet.
Source: The Wall Street Journal (May 30 - June 01, 2014)
IMF Warns Banking Reform has not Made

Enough Progress
The International Monetary Fund (IMF) managing
director has recently warned that the banking reforms
aimed at preventing another financial crisis have
failed to make enough progress. IMF managing
director Christine Lagarde blamed a combination of
the complexity involved, industry lobbying and
"fatigue" for the delay. According to her, the industry
still prizes short-term profit over long-term prudence.
Source: www.thedailystar.net (May 29, 2014)
RBI Stops Banks and NBFCs from Charging

Penalties on Loan Pre-payment
The Reserve Bank of India (RBI) has recently barred
Non-Banking Finance Companies (NBFCs) from
charging pre-payment penalties from customers on
floating rate term loans. The regulator asked NBFC
to follow this direction with immediate effect. It has
already banned banks from levying foreclosure
penalties from May, 2014.
The latest decision has brought uniformity in the

market as both banks and non-banks are now on the
same page with regard to prepayment of floating rate
loans.
million in a share sale to increase its capacity to lend

more in the changing anticipated economic
background.
Source: http://economictimes.indiatimes.com
BRICS Bank to Counter Western Hold on Global

Finances
The BRICS group of emerging economic powers Russia, India, China, and South Africa - created the
$100 billion New Development Bank at a summit
held recently in Brazil, to finance infrastructure
projects in developing nations. They also set up a
$100 billion currency reserves pool to help countries
forestall short-term liquidity pressures. The bank will
begin with a subscribed capital of $50 billion divided
equally between its five founders, with an initial total
of $10 billion in cash put in over seven years and $40
billion in guarantees. It is scheduled to start lending
in 2016 and be open to membership by other
countries, but the capital share of the BRICS cannot
drop below 55 percent.
Indian Firms Aim to Raise Capital

The arrival of new government in India has brought
optimism to the economy and could mark the end of
a three-year slowdown in capital raising as firms aim
to sell about $25 billion of shares this year. Indian
firms are lining up to sell stock again aiming to ride
investor euphoria over the countries anticipated
economic rebound. Global investors have recently
poured billions into Indian stocks hoping that the
new government will revamp the economy. The
Mumbai-based Yes Bank raised recently $500
March & June, 2014
Hungary Plans Relief on Foreign Borrowings

Hungary Government plans to covert foreign
currency loans to local currency at below market
rates to ease the financial burden of Hungarians
partly at the expense of the banking sector. The
government initiative, if approved, is expected to
help the foreign currency borrowers whose payment
obligations have risen significantly since the
financial crisis in 2008.
Bad Property Loans Burdens Italian Banks

Italian banks are trying to unload billions of euros of
distressed property loans at prices that have so far
failed to lure investors. Bad loans with a face value of
more than 8 billion euros have been put on the block
this year by banks. Only a fraction of that amount has
been purchased by the foreign private equity funds
and other investors that have expended in Italy in
search of bargains. These funds, however, have been
more active in other hard-hit European markets such
as Spain and Ireland. This is mainly because
real-estate sales in those countries have started to
gather steam, making it easier to value properties. In
a tough regulatory capital framework in Italy, banks
have now two options available to exercise which are
to sale those property at low prices or to increase
costly capital.
PICTORIAL VIEW OF BANK & FINANCIAL NEWS

Weighted Average Interest Rate on
Credit and Deposit : January - May, 2014
Growth of Credit and Deposit : January - April, 2014

14.50
2.6
2.4
2.2
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
13.50
12.50
11.50
10.50
9.50
8.50
Jan 14
Feb 14
Mar 14
Credit Growth (%)
Apr 14
7.50
Jan 14
Deposit Growth (%)
Feb 14
Mar 14
Deposit Interest
Source: www.bb.org.bd
Apr 14
May 14
Credit Interest
Repo Rate and Reverse Repo Rate :

January - May, 2014
T-Bill Rates : January - May, 2014

8
7.75
7.5
7.25
7
6.75
6.5
6.25
6
5.75
5.5
5.25
5
9.4
9
8.6
8.2
7.8
7.4
Jan 14
Feb 14
Mar 14
91 Days
Apr 14
182 Days
May 14
Jan 14
364 Days
Feb 14
Mar 14
Repo Rate
Dhaka Inter Bank Oered Rate (DIBOR) : January - June, 2014

11.50
11.00
10.50
10.00
9.50
9.00
8.50
8.00
7.50
7.00
6.50
6.00
5.50
Jan 6
Jan 20
Feb 3
Feb 17
Over Night
March & June, 2014
Mar 3
Apr 1
1 Week
Apr15
Apr 28
1 Month
May 12
May 26
3 Month
Jun 9
Jun 23
Apr 14
May 14
Reverse Repo Rate
Call Money Rate : January - June, 2014
12000
7.6
7.4
Total
10000
7.2
7.0
Wage Earners' Remi ance : January - June, 2014
7.35
7.17
6.8
Middle East
8000
7.16
7.08
6000
6.50
6.6
Malaysia
4000
6.4
Others (USA, UK, Australia,

Hongkong, Italy, Germany,
Japan, South Korea and
Others)
2000
6.2
6.25
6.0
Jan 14
Feb 14
Mar 14
Apr 14
May 14
0
Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14
Jun 14
Exchange Rates of USD, EUR GBP and KSA_R in

Terms of BDT : January - June, 2014
Foreign Exchange Reserve :

January - June, 2014
135
125
115
105
22000
21500
95
85
21000
75
65
20000
21467
20370
20500
55
45
19500
35
25
15
18500
20267
19294
19000
18000
Jan 14
Feb 14
Mar 14
USD
Apr 14
EUR
May 14
GBP
Jun 14
19150
18119
17500
Jan 14
Feb 14
Mar 14
Apr 14
May 14
Jun 14
KSA_R
Ina on Rate : January - May, 2014
Money Supply : January - May, 2014

800000
7.65
700000
7.6
600000
500000
7.55
400000
7.5
300000
200000
7.45
100000
7.4
Jan 14
Feb 14
Mar 14
Apr 14
May 14
0
Jan 14
Point to Point
March & June, 2014
Monthly Average (Twelve Month)
Feb 14
Mar 14
Money Supply (M1)
Apr 14
May 14
Money Supply (M2)
Dow Jones Industrial Average (DJIA) and

Standard and Poor's (S&P) 500 Index
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Jan Jan Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar Apr Apr Apr Apr Apr May May May May May Jun Jun Jun Jun
07 13 21 28 04 11 18 25 04 11 18 25 01 08 14 21 29 05 13 19 27 29 04 12 19 23
DJIA
S&P
Source: The Wall Street Journal
Indices : DSE - 30 and CSE - 30
Indices : DSE Broad and CSE All Share

13000
12000
11000
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
16000
15000
14000
13000
12000
11000
10000
9000
8000
7000
6000
5000
4000
3000
DSE-Broad Index
CSE-All Share
Source: www.the financialexpress.com
DSE-30
CSE-30
Source: www.the financialexpress.com
March & June, 2014
CIRCULARS AND CIRCULAR LETTERS OF BANGLADESH BANK (JANUARY-JUNE, 2014)

Circulars of Banking Regulation and Policy Department
BRPD Circular No.
BRPD Circular Letter No. 13
Subject and Title

Printing of All Customer Related Forms in Bangla along with
English
Date
09/06/14

BRPD Circular No. 11
Single Borrower Exposure Limit

Policy Regarding Re-finance Scheme of Tk. 200 Crore for
Jute Sector Arranged by Bangladesh Bank
Directives on Agent Banking Operation
09/06/14
09/06/14
Modification of Policy Regarding Establishments of Business

Center by Banks
Issuance of Bank Guarantee According to Specified Format
For Assigning 5-10 Bank Employees in Each District as
Mentor for ICT Entrepreneurship Development
Deduction of Income Tax at Source on Commission Received
by Selling Prize Bond and Saving Certificate
Implementation of Hon'able High Court Division's Interim
Order Regarding Uses of Bengali
02/06/14
Mapping of SME Rating Scales of the External Credit

Assessment Institutions (ECAIs) with Bangladesh Bank's
SME Rating Grades
Deduction of Income Tax at Source on Mobile Banking
Service Related Charge/Commission/Fees/Revenue Share,
etc. under Section 52AA of the Income Tax Ordinance, 1984
15/04/14
Implementation of Basel-III in Bangladesh

Directives on Agent Banking Operation
Deduction of 15% VAT on the Honorarium to the directors
for Attending Board Meeting
Payment of Bills Against Import L/C in Due Time
Banking Services for Street Urchin and Working Children
31/03/14
24/03/14
20/03/14
04/03/14
Tax Deducted at Source on the Payments to Port Inland

Container Depot (ICD)/ Off-Dock Terminal /Container
Freight Station.
Rules and Regulations for Transactions with Bank-Related
Person
Mapping of SME Rating Scales of the External Credit
Assessment Institutions' (ECAIs) with Bangladesh Bank's
SME Rating Grades
Exemption from Compliance of Section 7(3) of the Bank
Company Act, 1991 (Amended upto 2013)
Precautionary Measures to Ensure Safety of the Bank-Vaults

Single Borrower Exposure Limit

Foreign Account Tax Compliance Act of the United States
16/01/14
16/01/14
Avoidance of High Expense for Luxurious Vehicles and

Decoration
Amendment of Guidelines on Risk Based Capital Adequacy
(RBCA). (Revised Regulatory Capital Framework for banks
in Line with Basel II)
16/01/14



March & June, 2014
02/06/14
01/06/14
22/05/14
21/05/14
06/05/14
08/04/14
12/03/14
09/03/14
23/02/14
20/02/14
20/02/14
27/01/14
01/01/14
Circulars of Debt Management Department

DMD Circular No.
Subject and Title
DMD Circular No. 03
Investment of Provident Fund of Employees of Bank
Companies
DMD Circular No. 02
Government Notification Regarding Foreign Investment in
BGTB by NITA
DMD Circular No. 01
Regarding Investment in Government Securities by
Individuals
Circulars of Department of Banking Inspection-2
DBI-2 Circular No.
Subject and Title
DBI-2 Circular No. 01
Submission of Data for Integrated Supervision System
Circulars of Department of Currency Management
DCM Circular No.
Subject and Title
DCM Circular Letter No. 01
Instructions for Exchange and Transactions of Metallic
Coins for the Customers and the Members of Public
Through the Branches of Scheduled Banks
Circulars of Department of Financial Institutions and Markets
DFIM Circular No.
Subject and Title
DFIM Circular Letter No. 09
Prudential Guidelines on Capital Adequacy and Market
Discipline for Financial Institutions
DFIM Circular No. 01
Execution of Honorable Supreme Court's Order against
Writ Petition No. 1696/2014 Regarding Uses of Bengali
Deduction of 15% VAT on the Honorarium to Directors for
Attending Board Meeting.
Foreign Account Tax Compliance Act of the United States
Circulars of Department of Off-Site Supervision
DOS Circular No.
Subject and Title
DOS Circular Letter No. 10
Reporting Government Deposit against Revised Sector
Code through RIT
DOS Circular Letter No. 07
Consolidated Capital Market Investment Limit for the
Scheduled Banks
DOS Circular No. 01 :
Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio
(SLR)
Circulars of Deposit Insurance Department
DID Circular No.
Subject and Title
FSD Circular No. 02
Submit Quarterly Statement of Asset & Liabilities and
Profit & loss
FSD Circular No. 03
Submit Quarterly Statement of Asset & Liabilities and
Profit & Loss
FSD Circular No. 01
User Manual on the Input Template of 'Financial Projection
Model'
Circulars of Foreign Exchange Investment Department
FEID Circular No.
Subject and Title
FEID Circular Letter No. 04
Online Submission of Documents for Permission/Renewal
Procedure under Section 18B of Foreign Exchange
Regulation Act,1947
Medium/Long Term External Borrowing by Industrial
Enterprises in Export Processing Zones (EPZs): Approval
Procedure
Submission of Application along with Other Documents
through on-line for according permission under Section 18A
of Foreign Exchange Regulation (FER) Act, 1947
Inward Remittance against Agency Services on One-off basis
March & June, 2014
Date
30/06/14
08/04/14
22/01/14
Date
24/02/14
Date
04/06/14
Date
24/06/14
05/05/14
31/03/14
28/01/14
Date
24/03/14
25/02/14
19/01/14
Date
30/06/14
30/06/14
03/03/14
Date
30/06/14
06/05/14
08/04/14
19/02/14
Circulars of Foreign Exchange Operation Department

FEOD Circular No.
Subject and Title
FEOD Circular Letter No. 01
SCB Brokerage Charge 0.50%
Date
09/03/14
Circulars of Foreign Exchange Policy Department

FEPD Circular No.
Subject and Title
FEPD Circular Letter No. 13
Payment of VAT against Fees for Auditing Cases of Cash
Assistance/Subsidy
Regarding Stop Export of Green Chilli, Brinjal, Lemon,
Cucumber & Coriander
FEPD Circular No. 26
Export Development Fund (EDF)
Opening of LC for Import of Consumer Goods
Payment of Additional Cash Incentive against Export of
RMG of Textile Industry
Reporting of Foreign Exchange Transactions of Licensed
Money Changers.
Remittances on Account of IT Related Fees
External Financing (Buyer's/Supplier's Credit) for Imports:
Orderly Repayment
Release of Foreign Exchange against Travel Quota to
Students Proceeding Abroad for Study.
Direction Regarding Opening of Non-Resident Foreign
Currency Deposit Account
Regarding Special Order no-12/VAT/2014 of National
Board of Revenue
Regarding S.R.O No-56-Law/2014/697-Vat, Date: 3
April, 2014
Release of Foreign Exchange on Account of Transit
Expenses to Students Proceeding Abroad for Study
Release of Foreign Exchange on Account of Software
Maintenance/Support Fees
Providing Sufficient Information of Imported Goods in the
L/Cs
Issuance of Guarantee in Foreign Currency Favoring Local
Project Authorities on Behalf of Residents
FEPD(Import
Timely Submission of the Monthly Statement Regarding
Section)/125/2014-2632
Collection of Annual Renewal Fees of IRC to the
Corresponding Regional Office of CCI&E
Release of Foreign Exchange for Private Travel Abroad.
Reporting Procedure of Receipt and Payment of Short Term
Foreign Currency Loan through Discounting of
Direct/Deemed Export Bills as Per FE Circular 03/2013
FEPD Circular Letter No. Performing Hajj Under Private Management-1435 Hijri
FEPD(Remittance)44/2014-05 Year
FEPD Circular Letter No. Performing Hajj under Govt. Management-1435 Hijri year
FEPD(Remittance)44/2014-04
Regarding Online Foreign Exchange Market Monitoring
System
Requirement to Submit Form QA-22 for Accounts of
Foreign Nationals Resident in Bangladesh
FEPD
Circular
Letter Regarding Public Notice on Shrimp Importation for the
No.(Import policy)/123/03
Purpose of Re-Export
Amendment of EXP Form
Foreign Owned/Controlled Industrial Enterprises-Access to
Short Term Interest Free Loan From Parent Companies/
Shareholders Abroad
Date
29/06/14
26/06/14
24/06/14
15/06/14
08/06/14
05/06/14
02/06/14
01/06/14
28/05/14
27/05/14
19/05/14
14/05/14
05/05/14
05/05/14
05/05/14
16/04/14
15/04/14
06/04/14
06/04/14
01/04/14
01/04/14
30/03/14
24/03/14
18/03/14
16/03/14
12/03/14
March & June, 2014
Term lending in Taka to Foreign Owned / Controlled

Companies in Bangladesh.
11/03/14
Business Travel Quota Entitlements-Revision of
10/03/14
Payments through Asian Clearing Union (ACU)
04/03/14
Foreign Currency Accounts for Shipping Lines/

Airlines/Freight Forwarders Handling FOB Export and
Import Cargo
24/02/14
Remittance of Cost of Training and Consultancy Services
18/02/14
Regarding S.R.O. No-05-Law/2014/694-VAT
18/02/14
Reporting of Import Transactions under Buyers'

Credits/Suppliers' Credits and Matching of Bill of Entry
16/02/14
Currency Note Import and Export
30/01/14
Pledging of Collateral in Favor of Overseas Bank Branches

and Correspondents
30/01/14
Use of Foreign Currency Obtained from Discounting of

Direct/Deemed Export bills
27/01/14
Advance Payment Against Import
22/01/14
Remittance of Membership Fees of Foreign Professional

and Scientific Institutions
20/01/14
Issuance of Umrah Hajj Guarantees in Foreign Currency
13/01/14
Providing Cash Incentive against Advanced TT for Textile

Goods
08/01/14
Circulars of Green Banking and CSR Department

GBCRD Circular No.
Subject and Title
GBCSRD Circular No. 02
Guidelines on Agent Banking for the Banks
Refinance for Improvement of Brick Kiln Efficiency
GBCSRD Circular Letter No. 01 Bangladesh Bank's Refinance Scheme for Green Finance
Refinance Scheme for 10 Tk. Account Holders, Small/
Marginal/ Landless/ Natural Disaster Affected Farmers and
Micro/ Small Traders Under Financial Inclusion Program
Circulars of Monetary Policy Department
MPD Circular No.
Subject and Title
MPD Circular No. 01 :
Regarding Cash Reserve Requirement (CRR)
Circulars of Payment Systems Department
PSD Circular No.
Subject and Title
PSD Circular No. 02
Regarding Bangladesh Payment and Settlement Systems
Regulations-2014
PSD Circular No. 03
Regarding Regulations on Electronic Fund Transfer
Network 2014
PSD Circular No. 01
Service Charge of Inter-bank ATM Transaction Made
through National Payment Switch Bangladesh (NPSB)
Circulars of SME & Special Programmes Department
SMESPD Circular No.
Subject and Title
SMESPD Circular No. 01
Refinancing Fund for New Entrepreneurs in Cottage, Micro
& Small sector
March & June, 2014
Date
03/06/14
03/06/14
20/05/14
14/05/14
Date
23/06/14
Date
15/05/14
15/05/14
18/03/14
Date
26/06/14
Circulars of Statistics Department

SD Circular No.
Subject and Title
Date
SD Circular No. 04
Submission of E-banking and E-commerce Teturn through

RIT
15/05/14
SD Circular No. 03
Submission of Returns on Foreign Direct Investment (FDI),

Private Sector External Debt (PSED) and Portfolio
Investment (PI) in Prescribed Form (FI-1, FI-2, ED-1, ED2, STED and PI) / RIT on Monthly/ Quarterly Basis
12/05/14
SD Circular No. 02
Reporting of Remittances of Non-Resident Bangladeshi

Working Abroad on Daily Transactions Basis through New
Rational Input Template T_ME_D_REMITTANCE
10/04/14
SD Circular No. 01
Allocation of New Codes Regarding Invisible Receipts

(Code-5) and Invisible Payments (Code-7) for Foreign
Exchange Reporting in the Guideline Titled "Code Lists for
Reporting of External Sector Transactions by the
Authorized Dealers"
27/02/14
March & June, 2014
Academic Programs of BIBM (July - December, 2014)

A.
1.
Program
Training Courses
Agricultural and Rural Banking
Duration
Target Group
Aug 18-21
Senior Officer or Equivalent Officer and

Above
Above
Head of Branch/Deputy Manager/
Prospective Manager
Above
Above Having Working Experience
in Computer Application Packages and
Computer Hardware Maintenance
Above Working/Likely to Work
in the Credit Department
Above Having Basic Knowledge
of Accounting
Above Working in Treasury
Department and Newly Appointed
Dealers
Above
Above
Above Working / Likely to Work
in International Division of Head Office
and AD Branches
Above
Above Working in IT Security/
IT Audit/ IT Division
Above
Above
Senior Officer or equivalent officer and
Above
Above
Officer or Equivalent Officer and Above
2.
Asset-Liability Management in Banks
3.
Branch Management
4.
Nov 18-20
5.
Capital Adequacy Assessment in

Banks
Computer Network Administration and
Security Management Using Windows
OS
6.
Oct 14-23
7.
8.
Forex Dealing with Bourse Game
Dec 07-11
9.
Green Banking
Aug 18-21
Jul 13-17
Nov 30-Dec 04
Sep 07-15
Sep 21-29
Oct 26-Nov 05
10. Internal Control Mechanism and Bank

Supervision
11. International Trade Payment and
Finance
Nov 17-20
12. Islamic Banking and Finance
Aug 24-28
13. IT Security and Fraud Prevention in

Banks
Nov 09-13
Jul 13-22
Oct 19-28
14. Legal Aspects of General Banking and

Credit
15. Management of Working Capital
Financing
16. Risk Management in Banks
Aug 31-Sep 04
17. SME Credit Risk Management :

Garments and Leather Goods
18. SME Credit Risk Management : Agro
Processing and Agro Machinery
19. Training of Trainers
Aug 11-14
March & June, 2014
Aug 11-14
Sep 21-25
Nov 02-06
Dec 07-11
Trainers Working in Training Institutes/

Center, Principal Officer or Equivalent
Officer and Above Likely to Work as
Trainer

B.
1.
Outreach Training Courses

Banking Laws and Regulations
Rangpur
Oct 19-23
2.
Barisal
Nov 09-13
3.
Chittagong
Sep 14-18
4.
ICT for Banking Business

Enhancement
Sylhet
Aug 24-28
C.
1.
Outreach E-Workshops (Video Conferencing)

Banking Organization and
Chittagong
Management
Organizational Development and
Sylhet
Challenges in Banks
2.
D. Training Workshops
1. Agricultural Financing and
Commodity Market
2. Bank Guarantees
Aug 24
Nov 9
Jul 09-10
Sep 10-11
3. Basel-III: Regulatory Framework for

Resilient Banking Systems
4. Contingency Planning and Crisis
Resolution in Banks
5. Emerging Challenges in HRM of
Banks
6. Health Report of Banks
Aug 13-14
7. Islamic Financial Products and

Regulatory Framework
8. Leadership Excellence for Senior
Executives
9. Legal Aspects of Security and
Documentation
10. Lending Strategies and Loan Portfolio
Management in Banks
11. Management of Non-performing
Loans and Recovery Strategies
12. Mobile Banking
Jul 09-10
13. Prevention of Money Laundering and

Terrorist Financing
14. Security Market Analysis and Portfolio
Management
15. Strategic Human Resource
Management in Bank Branches
16. Structured Finance and Credit
Derivatives
17. Time Management in Banks
March & June, 2014
Nov 02-03
Dec 03-04
Dec 14-15
Nov 12-13
May 11-12
Oct 29-30
Jul 21-22
May 28-29
Sep 17-18
Oct 22-23
Jan 12-13
Sep 24-25
Sep 03-04
Jul 16-17
Aug 20-21
Aug 27-28
Senior Officer or Equivalent Officer

and Above
and Above Working/Likely to Work in
the Credit Department
and Above Having Basic Knowledge
of Accounting
and Above
Regional Heads and Senior Executives

of Different Banks
Regional Heads and Senior Executives
of Different Banks
Senior Principal Officer or Equivalent

Officer and Above
Officer and Above
Officer and Above
Officer and Above
Officer and Above
Officer and Above Preferably Working in
the Internal Control and Compliance
Department of Banks
Officer and Above
Officer and Above
Officer and Above
Officer and Above
Officer and Above
Officer and Above
Officer and Above
Officer and Above
Head/In-charge of Branch/ Operation
Manager/Prospective Branch Manager
Officer and Above
Officer and Above

18. Total Quality Management in Banks
Dec 17-18
19. UCP-600 and Related ICC Guidelines
Nov 18-20
20. Working Capital Financing : Casebased Analysis
Nov 05-06
E.
1.
2.
3.
4.
5.
6.
Research Workshops
Bank Credit Quality in Recent Changing
Business Environment : Issues and
Challenges
Business Process Re-engineering of SME
Loans in Bangladesh : Issues and Challenges
Challenges of Employee Turnover in the
Banking Sector : An Economic Analysis
Issues and Problems Relating to IT Audit in
Banks
Offshore Banking in Export Processing
Zone: Problems and Challenges
Product Innovations in Banking : Status and
Challenges
F.
1.
Roundtable Discussion
Should Bangladesh Introduce International
Factoring Services for Financing Open
Account Trade?
G.
1.
National Seminars
ATM Banking in Bangladesh: Current
Status, Hindrances and Remedies
Deficit Financing, Crowding Out and
Economic Growth: Bangladesh Perspective
SME Cluster Development: Role and
Implication for Banks
Small Enterprise Credit Scoring Model
2.
3.
4.
5.
Large Loan Financing by Banks in

Bangladesh: Implications and Challenges
H.
1.
Banking Conferences
Annual Banking Conference 2014
2.
Annual Conference for the Chief Executives

of Banks 2014
3.
Annual Conference for the Chief Executives

of Non-Bank Financial Institutions 2014

Officer and Above
Officer and Above
Officer and Above Working in Credit
Department
Oct 27
AGM or Equivalent Executive and Above

from the Concerned Department
Oct 20

Dec 11
Nov 20
Sep 4
Sep 25
Aug 7
December
October
December
November
Aug 21
Senior Executives from Banks
Assistant General Manager or Equivalent

Executives or Above
Executives or Above
Executives or Above
Executives or Above
Executives or Above
Last Week
of
November
Sep 13
An Annual Meeting of Researchers, Bank

Executives, Academicians from Different
Universities and Banking Experts
An Annual Meeting of Chief Executives
of All Banks
4th Week
of October
An Annual Meeting of Chief Executives

of Non-Bank Financial Institutions
March & June, 2014
Publications of BIBM
Type of
Publication
Journal
Name of the Publication

1. Bank Parikrama A Quarterly Journal of Banking & Finance
Year of
Publication
Regular
Price
Tk. 200
US$ 10
Tk. 250
US$ 12
2. Bank Parikrama - Special Issue (For the Celebration of 40 Years

Independence of Bangladesh)
2013
Banking
Research
Series
1.
2.
3.
4.
Compilation of Research Workshops of BIBM held in 2010

2011
2012
2013
2014
Tk. 300
Tk. 300
Tk. 400
Tk. 400
Banking
Review
Series
1.
2.
3.
1.
Compilation of Review Workshops of BIBM held in 2012

Compilation
i
of Review Workshops of BIBM held in 2013
Compilation of Review Workshops of BIBM held in 2014
Implication of the Use of Information and Communication
Technology in Channeling Workers Remittances to
Bangladesh, Monograph No. 001
Deposit Behavior in Banks of Bangladesh, Monograph No. 002
SME Financing: Demand Side Problems and Supply Side
Responses, Monograph No. 003
SME Credit Risk Model, Monograph No. 004
Innovations in Rural Banking: Farmers Accounts and
Sharecropper Financing, Monograph No. 005
Inclusive Banking and Inclusive Growth: Bangladesh
Perspective, Monograph No. 006
Information System Security in Banks: Bangladesh Perspective
Monograph No. 007
Millennium Development Goal and Financial Sector
Development, Monograph No. 008
2013
2013
2014
2011
Tk. 400
Tk. 400
Tk. 400
Tk. 75
2011
2013
Tk. 75
Tk. 75
2013
2013
Tk. 75
Tk. 150
2013
2014
Tk. 150
Tk. 150
2014
Tk. 150
2014
Tk. 150
Nurul Matin
Memorial
Lecture
1. Ethics in Banking - Compilation of Ten Years Memorial

Lectures
2. Ethics in Banking by Dr. A. B. Mirza Md. Azizul Islam
3. Trust in Banking by Dr. Yaga Venugopal Reddy
4. Ethical Considerations in the Business of Banking by Prof.
Sanat Kumar Saha
2011
2012
2012
2013
Tk. 300
US$ 25
Tk. 50
Tk. 50
Tk. 50
Independent
Review of
Financial
Sector of
Bangladesh
1.
2.
3.
4.
5.
6.
2012
2013
2014
2012
2013
2014
Tk. 200
Tk. 300
Tk. 300
Tk. 200
Tk. 300
Tk. 300
Regular
Tk. 50
2.
3.
Research
Monograph
4.
5.
6.
7.
8.
BIBM
Bulletin
Conference
Proceeding
Book
Bank Review 2010

Bank Review 2012
Bank Review 2013
Review of Non-Bank Financial Sector 2010
1. BIBM Bulletin A Quarterly-Periodical of BIBM

1. Compilation of Annual Banking Conference held in 2012
2. Compilation of Annual Banking Conference held in 2013
1. Inclusive Finance and Sustainable Development (Occasional
Speeches of Bangladesh Bank Governor 2009-2013) by
Dr. Atiur Rahman
2013
2014
2013
Tk. 500
Tk. 500
Tk.1000
Communication should be addressed to:

Publications-Cum-Public Relations Officer (PPRO), Bangaladesh Institute of Bank Management (BIBM),
Mirpur, Dhaka-1216. Tel: 9004981, 9003031-5 (Ext. 120), Fax: 880-2-9006756, E-mail: office@bibm.org.bd
March & June, 2014

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ADVISOR

Dr. Toufic Ahmad Choudhury

GRAPHICS & DESIGN

Published in September, 2014

Price: BDT 50.00

bank credit services except in Dhaka and Chittagong,

Banks through financing production and

Does this excess liquidity mean that real economy is

But the current excess liquidity of banks is a cause of

March & June, 2014

Factors like congenial investment climate, good

sector will get priority in allocating the amount of

area covering traditionally un-served farm and

March & June, 2014

challenge not only to the customers who use such

Swi and Others

ACPS and EFT

Source: BIBM Survey 2013

Online criminals work day and night to steal

March & June, 2014

In that study, it is also seen that bank employees,

Figure 2: Category of Fraudsters Committed

Reasons for Perceived Risk

Source: BIBM Survey 2013

Table 1: Reasons for Perceived Riskier

Source: BIBM Survey 2013

Absence of Multi-Factor Authentication

Lack of Proper Manpower Training

Lack of Quick Response by the Vendors

Not Updated with the High Tech Solution

Source: BIBM Survey (2011, 2012, 2013)

For protection of the banks IT operations from the

March & June, 2014

BIBM has been organizing a good number of training

international vendors like Oracle, Microsoft, CISCO,

March & June, 2014

Khan, S. U., M. R. Alam and K. Rabbi (2012),

Value chain deals with the dynamics of inter-linkages

March & June, 2014

income generated actually benefits poor and

March & June, 2014

Without access to finance, value chain development

However, finance is very crucial in value chain

There are many ways in which banks or MFIs

ILO (2009), Value Chain Development for Decent

* The author is Lecturer, Bangladesh Institute of

March & June, 2014

disclosure requirements for a banks trading book2

March & June, 2014

Figure 1: Comparison between Basel-II & Basel-III

Source: Moodys Analytics on Basel-III

Below follows a brief summary of how the Basel

March & June, 2014

Countercyclical Capital Buffer

funding in place to address funding needs over a

competitiveness by delivering better management

March & June, 2014

2. Training Courses Organized in BIBM During January-June, 2014

Title of the Course and Date

March & June, 2014

Md. Masudul Haque

Md. Mosharref Hossain

Md. Zakir Hossain

Md. Mahbubur Rahman Alam