Acquisition policy unlikely in near future
FE Report | Tuesday, 8 July 2008
Bangladesh Bank Governor Dr Salehuddin Ahmed said Monday the country is unlikely to have an acquisition policy in the near future.
It is not possible to allow the acquisition of the companies. Even, country like India has not allowed acquisition fully except for some limited cases," he said replying a question of a businessman at a meeting in the city.
The central bank governor was taking part at a question and answer session after delivering his speech on "Financial Sector Reforms in Bangladesh" at the luncheon meeting of the France-Bangladesh Chamber of Commerce and Industry.
President of the chamber Alamgir M Rahman presided over the meeting.
Dr Ahmed said: "In future, we will consider introduction of acquisition system for the companies in the country when such a situation arises."
Acquisition usually refers to a purchase of a smaller firm by a larger one.
The Bangladesh Bank has already issued a guideline for merger/amalgamation of banks/financial institutions with a view to structure and discipline the process of merger/amalgamation of banking companies/financial institutions.
Describing different financial reforms, the central bank governor in his speech said: "To start implementation of the Basel II (a new capital accord for international-standard banking system) from January 2009, a roadmap has been prepared."
"The economy is facing a number of challenges to keep our price level at a tolerable limit due to internal shocks (repeated natural disasters, loss of domestic production, slowdown in real sector, political uncertainty etc) and the external shocks like change in world prices of fuel and food, financial crisis in the developed countries, recessionary tendency in the US economy etc," Dr. Ahmed said.
"However, the prospect of Bangladesh economy in the near future is positive as we are working to consolidate our reforms, taking further actions to create enabling environment for business and economic activities," he said.
He said: "Recently, we observe a substantial growth in the private sector credit in which the industrial term loan and also credit to industrial working capital are somewhat higher than the projected level which may be ensured substantial growth in the real sector of our economy as well as employment generation."
Thanking the private commercial banks for widening their financing to the agricultural sector, the central bank chief requested all the financial institutions to come forward further to increase their credit in agricultural, manufacturing and service sectors.
"We have taken steps in simplifying foreign borrowing by the private sector. We are also talking steps in rationalising the foreign exchange transaction to encourage increased FDI (foreign direct investment) and foreign portfolio investment in Bangladesh," Dr. Ahmed said.
The BB Governor said: "BB and Securities and Exchange Commission (SEC) agreed to allow the government bonds to be traded in the stock exchange."
French ambassador in Bangladesh Charley Causeret said the Bangladesh economy is doing well through export diversification moving away from traditional jute sector.
Now the country is exporting chemicals, shoes, ships, furniture and information and communications technology to France along with the RMG," he said adding the trade between the two countries has been increasing substantially over the years.
Bangladesh's export earnings from France in FY2004 were US$553 million, which increased to $732 million in FY2007. On the other hand, the import payment to France also went up to $107 million in FY 2007 from $66 million in FY2004.
It is not possible to allow the acquisition of the companies. Even, country like India has not allowed acquisition fully except for some limited cases," he said replying a question of a businessman at a meeting in the city.
The central bank governor was taking part at a question and answer session after delivering his speech on "Financial Sector Reforms in Bangladesh" at the luncheon meeting of the France-Bangladesh Chamber of Commerce and Industry.
President of the chamber Alamgir M Rahman presided over the meeting.
Dr Ahmed said: "In future, we will consider introduction of acquisition system for the companies in the country when such a situation arises."
Acquisition usually refers to a purchase of a smaller firm by a larger one.
The Bangladesh Bank has already issued a guideline for merger/amalgamation of banks/financial institutions with a view to structure and discipline the process of merger/amalgamation of banking companies/financial institutions.
Describing different financial reforms, the central bank governor in his speech said: "To start implementation of the Basel II (a new capital accord for international-standard banking system) from January 2009, a roadmap has been prepared."
"The economy is facing a number of challenges to keep our price level at a tolerable limit due to internal shocks (repeated natural disasters, loss of domestic production, slowdown in real sector, political uncertainty etc) and the external shocks like change in world prices of fuel and food, financial crisis in the developed countries, recessionary tendency in the US economy etc," Dr. Ahmed said.
"However, the prospect of Bangladesh economy in the near future is positive as we are working to consolidate our reforms, taking further actions to create enabling environment for business and economic activities," he said.
He said: "Recently, we observe a substantial growth in the private sector credit in which the industrial term loan and also credit to industrial working capital are somewhat higher than the projected level which may be ensured substantial growth in the real sector of our economy as well as employment generation."
Thanking the private commercial banks for widening their financing to the agricultural sector, the central bank chief requested all the financial institutions to come forward further to increase their credit in agricultural, manufacturing and service sectors.
"We have taken steps in simplifying foreign borrowing by the private sector. We are also talking steps in rationalising the foreign exchange transaction to encourage increased FDI (foreign direct investment) and foreign portfolio investment in Bangladesh," Dr. Ahmed said.
The BB Governor said: "BB and Securities and Exchange Commission (SEC) agreed to allow the government bonds to be traded in the stock exchange."
French ambassador in Bangladesh Charley Causeret said the Bangladesh economy is doing well through export diversification moving away from traditional jute sector.
Now the country is exporting chemicals, shoes, ships, furniture and information and communications technology to France along with the RMG," he said adding the trade between the two countries has been increasing substantially over the years.
Bangladesh's export earnings from France in FY2004 were US$553 million, which increased to $732 million in FY2007. On the other hand, the import payment to France also went up to $107 million in FY 2007 from $66 million in FY2004.