BB governor pleads for blacklisting dishonest foreign buyers, suppliers
Thursday, 19 July 2007
FE Report
Bangladesh Bank (BB) governor Salehuddin Ahmed Wednesday suggested the local trade bodies to black list the unscrupulous overseas suppliers and buyers who frequently cheat their members.
"Not the Bangladesh Bank, rather I urge you (trade organisations) to prepare a list of those buyers and suppliers who cheat you frequently in the international payments system," BB governor added.
The BB governor was addressing a seminar on international trade payment methods in Bangladesh held at the auditorium of Dhaka Chamber of Commerce and Industry (DCCI).
The International Chamber of Commerce (ICC)-Bangladesh and Bangladesh Institute of Bank Management (BIBM) jointly organised the seminar.
ICC-B President Mahbubur Rahman delivered the welcome address.
Managing director and country officer of Citigroup Bangladesh, Mamum Rashid, managing director of National Bank Limited (NBL) M Aminuzzaman spoke at the seminar.
The central bank chief also said measures are underway to get a sovereign rating for the country to attract foreign investment and enhance the country's image abroad adding, "We have discussed the issue with the government".
The BB governor Salehuddin said transparency should be established in the remittance issue and asked the banks to transact with the overseas commercial organisations after ensuring covered fund.
He also said it is now allowing open account transactions following increased demand on the international payment method despite the fact that there is no such provision in the existing manual.
"We are not sitting idle. We are revising and bringing changes in the light of modern needs," BB chief added.
The central bank governor underscored the need for imparting necessary training to bank officials to cope with the international payments methods, especially the UCP-600.
He said the latest rules under the UCP-600, which came into effect on 1st July this year, have been made more user-friendly to suit the needs of modern business.
ICC-B president Mahbubur Rahman said the recent statistics show about 20 per cent of global trade are now transacted through letters of credit (L/C).
International Standby Practices (ISP), open account transactions and documentary collection are also widely used in settlement of trade payment world wide.
The ICC-B Chief said the BB may also review these alternative methods for adoption in line with international practices.
He said the ICC has modified the Incoterms, international commercial terms applied and used by importers and exporters, in 2000.
"Bangladesh is yet to implement all the 13 articles of Incoterms 2000 and we urge for early adoption of all articles in order to avoid confusion in terms of obligations of the contracting parties," ICC-B chief added.
The ICC-B president said the central bank has resorted to a contractionary monetary policy to rein in the rising inflation, which has been questioned not only by the private sector but also by the economic analysts.
"Such policy not necessarily automatically help contain inflation and we apprehend that the cost of doing business will increase due to such policy," ICC-B president added.
He said interests on bank loans are expected to rise and, as a result, the private sector led growth may slow down further affecting the projected growth of GDP in fiscal 2008.
He said Bangladesh needs higher levels of investment to boost growth and reduce poverty adding, "the economists are warning that macro-economic instability will hinder progress, with political instability also adding to the country's woes".
Mahbub said, "The effect of macro-economic uncertainty is now being felt in the form of high interest rates, a perennially weak currency, high level of inflation and poverty".
He said the reported price hike of gas and fuel may also cast negative impact on already soaring price of essential commodities and may contribute to further inflation.
The inflationary pressure has mounted more on rural economy thus curtailing the real income of poor and limited earning people, the ICC-B president pointed out.
"Both food and non-food inflation rates are higher in rural areas than in urban areas in the latest count," he said.
According to Bangladesh Bureau of Statistics (BBS), the rural non-food inflation rate stood at 8.15 per cent while it was only 6.78 per cent in urban areas in May.
The food inflation in rural area was 7.98 per cent in May against 7.21 per cent earlier, according to the BBS.
ICC-B chief said farm credit continued to decline causing lower injection of institutional fund in the rural economy.
During July-April period of fiscal 07, the disbursement of agricultural credit dropped by around 8.0 per cent over the period of fiscal 06.
"In this context, we highly commend the initiative of the governor for inducing the commercial banks to provide more than Tk 10 billion as agricultural credit during the 2008 fiscal," ICC-B president added.
Mamun Rashid said leading buyers often exerts pressure to the local exporters to follow their instructions on international payments and such practices might hurt the small exporters.
He also said the country's foreign exchange regulation should be modernised to cope with the modern banking needs.
NBL managing director M Aminuzzaman said the central bank should remove barriers to transactions through open account in case of imports.
Bangladesh Knit Manufactures and Exporters Association President Fazlul Hoque said local exporters are being forced to pay penalties and rejection of payments by unscrupulous buyers.
He advocated for introducing new laws to protect the interest of the local exporters and boost export.
BIBM Professor Toufic A Chowdhury presented a research work on the evaluation of the operations of international trade payment methods in Bangladesh in the seminar.
Besides, BIBM director general Mohd Ruhul Amin, Managing director of Mutual Trust Bank Md Shafique Rahman, Premier Bank Managing Director Abu Hanif Khan and others spoke at the seminar.
Bangladesh Bank (BB) governor Salehuddin Ahmed Wednesday suggested the local trade bodies to black list the unscrupulous overseas suppliers and buyers who frequently cheat their members.
"Not the Bangladesh Bank, rather I urge you (trade organisations) to prepare a list of those buyers and suppliers who cheat you frequently in the international payments system," BB governor added.
The BB governor was addressing a seminar on international trade payment methods in Bangladesh held at the auditorium of Dhaka Chamber of Commerce and Industry (DCCI).
The International Chamber of Commerce (ICC)-Bangladesh and Bangladesh Institute of Bank Management (BIBM) jointly organised the seminar.
ICC-B President Mahbubur Rahman delivered the welcome address.
Managing director and country officer of Citigroup Bangladesh, Mamum Rashid, managing director of National Bank Limited (NBL) M Aminuzzaman spoke at the seminar.
The central bank chief also said measures are underway to get a sovereign rating for the country to attract foreign investment and enhance the country's image abroad adding, "We have discussed the issue with the government".
The BB governor Salehuddin said transparency should be established in the remittance issue and asked the banks to transact with the overseas commercial organisations after ensuring covered fund.
He also said it is now allowing open account transactions following increased demand on the international payment method despite the fact that there is no such provision in the existing manual.
"We are not sitting idle. We are revising and bringing changes in the light of modern needs," BB chief added.
The central bank governor underscored the need for imparting necessary training to bank officials to cope with the international payments methods, especially the UCP-600.
He said the latest rules under the UCP-600, which came into effect on 1st July this year, have been made more user-friendly to suit the needs of modern business.
ICC-B president Mahbubur Rahman said the recent statistics show about 20 per cent of global trade are now transacted through letters of credit (L/C).
International Standby Practices (ISP), open account transactions and documentary collection are also widely used in settlement of trade payment world wide.
The ICC-B Chief said the BB may also review these alternative methods for adoption in line with international practices.
He said the ICC has modified the Incoterms, international commercial terms applied and used by importers and exporters, in 2000.
"Bangladesh is yet to implement all the 13 articles of Incoterms 2000 and we urge for early adoption of all articles in order to avoid confusion in terms of obligations of the contracting parties," ICC-B chief added.
The ICC-B president said the central bank has resorted to a contractionary monetary policy to rein in the rising inflation, which has been questioned not only by the private sector but also by the economic analysts.
"Such policy not necessarily automatically help contain inflation and we apprehend that the cost of doing business will increase due to such policy," ICC-B president added.
He said interests on bank loans are expected to rise and, as a result, the private sector led growth may slow down further affecting the projected growth of GDP in fiscal 2008.
He said Bangladesh needs higher levels of investment to boost growth and reduce poverty adding, "the economists are warning that macro-economic instability will hinder progress, with political instability also adding to the country's woes".
Mahbub said, "The effect of macro-economic uncertainty is now being felt in the form of high interest rates, a perennially weak currency, high level of inflation and poverty".
He said the reported price hike of gas and fuel may also cast negative impact on already soaring price of essential commodities and may contribute to further inflation.
The inflationary pressure has mounted more on rural economy thus curtailing the real income of poor and limited earning people, the ICC-B president pointed out.
"Both food and non-food inflation rates are higher in rural areas than in urban areas in the latest count," he said.
According to Bangladesh Bureau of Statistics (BBS), the rural non-food inflation rate stood at 8.15 per cent while it was only 6.78 per cent in urban areas in May.
The food inflation in rural area was 7.98 per cent in May against 7.21 per cent earlier, according to the BBS.
ICC-B chief said farm credit continued to decline causing lower injection of institutional fund in the rural economy.
During July-April period of fiscal 07, the disbursement of agricultural credit dropped by around 8.0 per cent over the period of fiscal 06.
"In this context, we highly commend the initiative of the governor for inducing the commercial banks to provide more than Tk 10 billion as agricultural credit during the 2008 fiscal," ICC-B president added.
Mamun Rashid said leading buyers often exerts pressure to the local exporters to follow their instructions on international payments and such practices might hurt the small exporters.
He also said the country's foreign exchange regulation should be modernised to cope with the modern banking needs.
NBL managing director M Aminuzzaman said the central bank should remove barriers to transactions through open account in case of imports.
Bangladesh Knit Manufactures and Exporters Association President Fazlul Hoque said local exporters are being forced to pay penalties and rejection of payments by unscrupulous buyers.
He advocated for introducing new laws to protect the interest of the local exporters and boost export.
BIBM Professor Toufic A Chowdhury presented a research work on the evaluation of the operations of international trade payment methods in Bangladesh in the seminar.
Besides, BIBM director general Mohd Ruhul Amin, Managing director of Mutual Trust Bank Md Shafique Rahman, Premier Bank Managing Director Abu Hanif Khan and others spoke at the seminar.