BB asks banks to invest in infrastructure to keep credit ratings stable
Friday, 30 April 2010
FE Report
The Bangladesh Bank (BB) has advised the commercial banks to move forward for investment in infrastructure sectors for keeping the existing sovereign credit ratings stable.
"The commercial banks may invest in infrastructure sectors through syndication loans along with the government," Bangladesh Bank governor Atiur Rahman said Wednesday while speaking at a discussion meeting in the city.
The Bangladesh Association of Banks (BAB) organised the discussion meeting on the overall situation of the banking sector as whole, the private banking sector in particular.
The BB governor also said the central bank is now planning to float an infrastructural bond to raise funds for investment in the key infrastructure sectors including power and gas.
"We're now discussing the issue with the government," the central bank chief said, adding that the central bank is offering new innovative products to the government as an economic adviser.
He also said the country is now capable of achieving 8.0 per cent economic growth if the infrastructure constraints could be removed.
The BB governor urged the country's banking community to take full advantage of sovereign credit ratings through negotiation on foreign borrowing and credit confirmation lines.
Moody's Investors Service announced for the first time its sovereign credit rating for Bangladesh as Ba3 on April 12, just a week after Standard & Poor's (S&P's) sovereign credit rating announcement of BB.
"As a primary tool for a country's advertising and branding, a rating provides value to all stakeholders, from the sovereign to the private sector to investors," BB deputy governor Ziaul Hassan Siddique said in a report, presented at the meeting, adding that these positive benefits can be found across a number of areas.
BAB senior leaders and bankers have agreed to improve negotiation capability taking full advantage of the ratings, saying that the existing credit ratings position will have to maintain through strengthening investments in infrastructure sectors.
BAB chairman Nazrul Islam Mazumder said the BAB earlier requested the central bank for taking initiatives to prepare the sovereign credit rating to know about the country's overall economic position.
Chairman of the BRAC Bank Limited and vice chairman of the BAB Muhammad A (Rumee) Ali said the chief executives of banks must renegotiate their terms and conditions with foreign commercial banks when they ask for any confirmation of any business.
Chairman of the Association of Bankers Bangladesh (ABB) K Mahmood Sattar identified infrastructure problem as a big challenge for the economy, which may hinder the country's industrial productions.
"Industrial growth will have to increase through ensuring smooth supply of gas and electricity to the factories," the ABB chief noted.
Taking part in the discussion, chief executive officer and managing director of the Janata Bank Limited SM Aminur Rahman said the negotiation efficiency should be increased to reduce foreign trade confirmation fees with the foreign commercial banks.
"We've to have diversify our exports and reduce non-performing loans," the state-owned bank chief executive said, adding that the inflow of remittances will be enhanced in the near future through providing better services to the beneficiaries.
Former BAB chairmen Syed Manzur Elahi and Kazi Akramuddin Ahmed, chairman of the Rupali Bank Limited Ahmed Al-Kabir, chairman of the United Commercial Bank Limited MA Hashem, managing director of the Pubali Bank Limited Helal Ahmed Chowdhury and managing director of the Dutch-Bangla Bank Limited Yeasin Ali also spoke on the occasion.
Ratings of the two global top agencies will be reviewed annually. The Standard Chartered Bank and the Hong Kong and Shanghai Banking Corporation Limited, known as HSBC, were advisors to the Bangladesh government for S&P's rating, while Citibank advised for rating from Moody's.
The Bangladesh Bank (BB) has advised the commercial banks to move forward for investment in infrastructure sectors for keeping the existing sovereign credit ratings stable.
"The commercial banks may invest in infrastructure sectors through syndication loans along with the government," Bangladesh Bank governor Atiur Rahman said Wednesday while speaking at a discussion meeting in the city.
The Bangladesh Association of Banks (BAB) organised the discussion meeting on the overall situation of the banking sector as whole, the private banking sector in particular.
The BB governor also said the central bank is now planning to float an infrastructural bond to raise funds for investment in the key infrastructure sectors including power and gas.
"We're now discussing the issue with the government," the central bank chief said, adding that the central bank is offering new innovative products to the government as an economic adviser.
He also said the country is now capable of achieving 8.0 per cent economic growth if the infrastructure constraints could be removed.
The BB governor urged the country's banking community to take full advantage of sovereign credit ratings through negotiation on foreign borrowing and credit confirmation lines.
Moody's Investors Service announced for the first time its sovereign credit rating for Bangladesh as Ba3 on April 12, just a week after Standard & Poor's (S&P's) sovereign credit rating announcement of BB.
"As a primary tool for a country's advertising and branding, a rating provides value to all stakeholders, from the sovereign to the private sector to investors," BB deputy governor Ziaul Hassan Siddique said in a report, presented at the meeting, adding that these positive benefits can be found across a number of areas.
BAB senior leaders and bankers have agreed to improve negotiation capability taking full advantage of the ratings, saying that the existing credit ratings position will have to maintain through strengthening investments in infrastructure sectors.
BAB chairman Nazrul Islam Mazumder said the BAB earlier requested the central bank for taking initiatives to prepare the sovereign credit rating to know about the country's overall economic position.
Chairman of the BRAC Bank Limited and vice chairman of the BAB Muhammad A (Rumee) Ali said the chief executives of banks must renegotiate their terms and conditions with foreign commercial banks when they ask for any confirmation of any business.
Chairman of the Association of Bankers Bangladesh (ABB) K Mahmood Sattar identified infrastructure problem as a big challenge for the economy, which may hinder the country's industrial productions.
"Industrial growth will have to increase through ensuring smooth supply of gas and electricity to the factories," the ABB chief noted.
Taking part in the discussion, chief executive officer and managing director of the Janata Bank Limited SM Aminur Rahman said the negotiation efficiency should be increased to reduce foreign trade confirmation fees with the foreign commercial banks.
"We've to have diversify our exports and reduce non-performing loans," the state-owned bank chief executive said, adding that the inflow of remittances will be enhanced in the near future through providing better services to the beneficiaries.
Former BAB chairmen Syed Manzur Elahi and Kazi Akramuddin Ahmed, chairman of the Rupali Bank Limited Ahmed Al-Kabir, chairman of the United Commercial Bank Limited MA Hashem, managing director of the Pubali Bank Limited Helal Ahmed Chowdhury and managing director of the Dutch-Bangla Bank Limited Yeasin Ali also spoke on the occasion.
Ratings of the two global top agencies will be reviewed annually. The Standard Chartered Bank and the Hong Kong and Shanghai Banking Corporation Limited, known as HSBC, were advisors to the Bangladesh government for S&P's rating, while Citibank advised for rating from Moody's.