Bangladesh: Govt under pressure to inject bailout funds into SoBs

The government is under pressure to inject fresh funds into the state-owned banks and to bail them out of the capital crunch spawned by a recent series of financial scams, officials said.

The state-owned banks, including the country’s largest commercial bank Sonali, have already sought fresh funds, after the little-known Hallmark Group had embezzled around Tk 3,600 crore from a Sonali Bank branch allegedly by the blessings of certain ruling alliance quarters, they said.

Fund crisis at Sonali Bank has been so acute that it could not provide a loan to Biman Bangladesh Airlines for procuring new aircraft late last year.

The government was forced to arrange the loan from the Sonali Bank incorporated in the UK. 

Economists have already called on the government to inject fresh capital into the beleaguered SoBs to revive them.

They, however, suggested that the government should maintain certain criteria in injecting fresh funds and enhance monitoring to prevent any misappropriation of funds in the future.

 The International Monetary Fund has echoed the economists, saying the government should inject fresh capital into the SoBs to bail them out of the crisis, officials said.

‘Recapitalise the state-owned banks in FY14,’ said the multilateral lending agency in a letter to the government, following the visit of an IMF delegation to Dhaka early this month.

The IMF also advised the government to formulate a strategy for strengthening the SoBs, including Sonali and BASIC Bank, after making a ‘special diagnosis’ by next June.

The IMF team visited here to assess the overall economic situation in the outgoing fiscal year in line with its Extended Credit Facility deal with the government.

The team members said recapitalisation of the SoBs should aim at covering the fund shortage being faced by them.

The SoBs have landed in a serious fund constraint after being swindled by certain vested quarters, they observed.

The fund embezzlement by Hallmark Group from Sonali Bank Ruposhi Bangla Branch early last year can be described as the single biggest financial fraud in the country’s history.

Finance minister AMA Muhith on February 26 told parliament that eight state-owned specialised and private commercial banks had a total capital deficit of Tk 7,149.56 crore as of September 30, 2012.

Officials said the situation deteriorated further as the Bangladesh Bank unearthed unreported defaulted loans to the tune of Tk 4,359.11 crore in the four state-owned commercial banks – Sonali, Janata, Agrani, and Rupali.

Former Bangladesh Bank governor Saleh Uddin Ahmed said the state-owned banks were facing capital shortfall due to unprecedented loan scams.

‘Loan disbursement on political considerations and lack of monitoring by the authorities concerned are mainly blamed for the situation,’ he said.

Former caretaker government adviser Mirza Azizul Islam said the law should be changed to stop political interference in bank operations.

He said the masterminds behind the Hallmark Group scam and the Sonali Bank officials involved in it should be brought to justice.

Officials said the IMF suggested the government should set aside a bank recapitalisation fund in the new budget to be announced early June.

The IMF also has asked the government to chalk out a new strategy for running the SoBs. It wanted the government to sign a revised memorandum of understanding on the SoBs by this month. The IMF said the government should make a ‘special diagnosis’ of the SoBs by a special wing under the central bank.

The IMF has made a commitment to provide the government with around $1 billion in seven instalments under the ECF. It has already disbursed two instalments in the past one year, after the government complied with some major conditions. (Source)

Bangladesh: Consumers reel under frequent power outages

Overloaded transformers are causing frequent power outages, particularly in rural areas, as nearly 14.5 per cent transformers in the country are forced to operate beyond their supply capacity.

Nearly one lakh of the 6.43 lakh transformers of three power utilities are running overloaded as the number of power connections provided is far more than their capacity allows, said a Power Division report.

Overloading of transformers joined with a huge supply shortfall have resulted in a sharp rise in both frequency and duration of power outages, causing immense sufferings for the consumers amid the scorching heat of this time of year as well as interrupting boro irrigation in rural areas, a Power Division official told New Age.

To compensate for the interruptions in irrigation, the Power Division on April 11 decided to extend the time approved for boro irrigation by two hours. According to the new decision, farmers are now allowed to run electric water pumps from 10:00pm to 8:00am a day instead of the previous time slot from 11:00pm to 7:00am.

Rural clients of Palli Bidyut Samitis under the Rural Electrification Board are suffering the most due to overloading of transformers as 91,731 of approximately 6.27 lakh transformers of the samitis, or rural power associations, are running overloaded.

Rural consumers face power outage up to 15 times a day, said an REB official.

The pace of increasing the capacity of their power supply system has been slower than that at which the samities have been providing new power connections, he said.

The REB, however, had promised the consumers to raise the capacities of overloaded transformers ahead of the boro irrigation season comprising December and January.

REB chairman Moin Uddin could not be reached over telephone for his comments on the problem.

Dhaka Power Distribution Company has 1,015 of its 10,565 transformers overloaded while West Zone Power Distribution Company has 232 of its 5,563 transformers in the same state.

Power Development Board and Dhaka Electric Supply Company had not provided the power ministry with the number of transformers suffering from overloading till March, a Power Division official told New Age.

‘In most cases, power utilities are forced to provide new power connections to consumers beyond their distribution capacity due to political pressure,’ he said.

A major task of a power utility is to give electricity connections to consumers. But by providing power connections on political pressure before augmenting the distribution capacity the utilities have become enmeshed in an acute transformer overloading problem, alleged officials at the utilities.

Power distribution agencies are forced to suspend supply to one or more 11 kilo volt feeders, when a power transformer gets overloaded during the peak hours.

When a feeder becomes overloaded, the authorities have to impose a blackout in the area concerned as the demand for power then climbs above the feeder’s capacity. (Source)

Bangladesh: 7-year jail for cheating foreign job seekers

The cabinet on Monday approved in principle the draft Overseas Employment and Migrant Workers Bill 2013 stipulating a maximum punishment of seven years jail and Tk one lakh in fine for irregularities in visa trading in sending workers abroad.

The Ministry of Expatriates’ Welfare and Overseas Employment placed the draft bill at the weekly cabinet meeting chaired by prime minister Sheikh Hasina at the Secretariat.

Officials later said that the draft bill was prepared in the wake of rampant incidents of fraudulence and harassments experienced by workers seeking employment abroad.  

The draft bill proposes to repeal the 1982 Immigration Ordinance.

The new bill seeks to introduce stringent punishments for the recruitment agencies for cheating the workers seeking overseas jobs, additional cabinet division secretary Murtaza Ahmed later told reporters. 

It would, following enactment, ensure rights and welfare of these workers, he said.

The new bill stipulates five years’ imprisonment and Tk one lakh in fine for cheating workers aspiring to get jobs abroad or those working in other countries, he added. 

It would enable the cheated workers to go to courts to seek redress, he said.

The proposed law would specify the offences in the schedule of the Mobile Court Act 2009, Murtaza said.

He said that the existing law empowers a magistrate to fine an offender a maximum fine of Tk 10,000.

The proposed law stipulates a wide range of punishments and a maximum fine of Tk one lakh for the offences against overseas job seekers, he said.

It would require the courts to dispose of the cases filed by the aspiring overseas job seekers or those working abroad within four months of charge framing, he said.

The courts would have to record a reasonable ground for the failure to dispose of cases within the stipulated time or for seeking extra time, states the draft bill.

Murtaza said the main objectives of the proposed law were to make the recruitment agencies accountable and transparent and ensure the rights and welfare of these workers. 

The draft law contains 61 clauses under seven sections.

The cabinet also gave final approval to the draft Bangla Academy Bill 2013 to bring the activities of the institution under a legal framework. 

The existing law, ‘The Bengali Academy Ordinance 1978’, which was amended in 1983, is in English and the proposed law would be in Bangla, he said.

He said the responsibilities of Bangla Academy include standardization of spelling method of Bangla language, taking advices from experts in important academic matters and inviting foreign writers and researchers for the development of the language.

The cabinet endorsed in principle the draft Bangla Academy Bill on December 31, 2012, he said. (Source)

Bangladesh: Army to defend constitutionality

The chiefs of the three services on Monday categorically said the armed forces would not intervene in governance and pledged to defend the constitutionality in any situation.

Army chief General Iqbal Karim Bhuiyan, navy chief Vice Admiral Muhammad Farid Habib and air force chief Air Marshal SM Ziaur Rahman told the parliamentary standing committee on ministry of defence that they were oath-bound to stand by the constitution and the elected government at any cost and in any situation.

The 10-member parliamentary watchdog thanked the three services chiefs for their pro-constitution stance and loyalty to the government, M Idris Ali, the committee chief, told newsmen after the meeting at the Jatiya Sangsad Bhaban.

The commitment from the military top brass came three weeks after opposition chief Khaleda Zia made comments on a probable military role should the country plunged into anarchy.

BNP chairperson Khaleda Zia had said in Bogra on Mar 24 that the military ‘will not sit back and watch’ if the country slipped into anarchy. Later the party denied that Khaleda had provoked the military and accused the media of not properly reporting her address.

`The three chiefs have categorically said that the armed forces will not interfere in governance even if there is political turmoil,’ Idris Ali said.

`We are under oath to stand by the government and the constitution; we will in no way deviate from professionalism,’ the chairman quoted the army chief General Iqbal Karim Bhuiyan as telling the standing committee meeting.

The committee has also discussed the law and order.

`We have unanimously condemned the statement of Khaleda Zia who had provoked the army to take over by overthrowing the elected government,’ said Idris Ali.

Committee member and Jatiya Party chief HM Ersahd, who took power in a military coup in 1982, said the armed forces should not get involved in governance and politics.

The Jatiya Party chief said it was not Jamaat-e-Islami which would protect Islam. Some of its actions were against Islam, said Ershad who made Islam the state religion in 1988 through a constitutional amendment.

In response, Idris Ali said, `Who has given Hefajat the authority to protect Islam? It is only Allah who protects Islam. If anyone thinks Islam is being harmed he lacks in his belief in Islam’.

Awami League lawmaker Abdul Mannan, who represented the prime minister and defence minister Sheikh Hasina, came down hard on Ershad without naming him.

Standing committee members Nurul Mazid Mahmud Humayun and Manzoor Qader Qureishee also attended the meeting. (Source)

Pahela Baishakh celebrated with pledge to resist war criminals

Pahela Baishakh, the first day of Bangla New Year 1420, was celebrated Sunday across the country amid traditional fanfare and festivities, with a call to resist the evil forces, including war criminals of the 1971 independence war.

People from all walks of life greeted the rising sun heralding the advent of the New Year.

People thronged the streets, parks, and other open spaces in the capital and elsewhere joining the nation’s most colourful traditional festival.

Cultural and musical groups ushered in the new Bangla year with songs, dance numbers, poetry recitals, etc.

The festivities began in Dhaka as usual with Chhayanaut, one of the country’s leading performing arts training institutions, holding a musical programme during the sunrise at Ramna Batamul, with thousands of men, women, and children joining the audience amid a heightened security against the background of continued political violence and volatility.

The artistes of Chhayanaut, which has been holding the programme since 1965, wearing red and green sarees symbolising the national flag, started this year’s New Year programme by rendering a classical music composition in Raga Bhairaba, followed by the Tagore song ‘Eso he Baishakh, eso eso’.

After the end of the Chhayanaut programme at around 9:45am, people went to join the Mangal Sobhajatra, or welfare parade, a key feature of the Pahela Baishakh festival.  

Dhaka University fine arts students and youngsters took out a huge Mangal Sobhajatra in the capital this New Year, praying for victory of the benevolent forces against the evil.

The theme of this year’s Pahela Baishakh was ‘Rajakar-mukto Bangladesh, Muktijuddha Onisshesh’ [A Razakar-free Bangladesh, Continued Liberation War].

The Sobhajatra organisers expressed their solidarity with the Shahbagh protesters, who have been continuing with their movement since February 5 in demand of the capital punishment of all war criminals of 1971.

The Shahbgah protesters held a rally in the evening, marking Pahela Baishakh. They also formed a human chain with the theme ‘Baishakher Ongikar Rukhte Hobe Razakar’ [The Pledge of This Baishakh is to resist the Razakars].

The protesters later took out a candle-light procession.

Many people were seen eating panta bhat [boiled rice kept in water overnight] with fried hilsa, lentil soup, and smoked chilli – the traditional Pahela Baishakh morning breakfast – in numerous places of public congregation across the capital city.

Traders in both rural and urban areas opened new ledgers, called Hal Khata, for the newly commenced year, after settling accounts of the year that just had ended. Hal Khata is an age-old business tradition of the Bangali nation.

People in Dhaka also gathered on the Manik Mia Avenue to watch a mammoth Alpana [a painted floral motif] drawn overnight by several hundred artists under a joint initiative of the mobile operator Airtel and the daily Prothom Alo to welcome the new Bangla year.

Besides, the musical group Surerdhara and Channel I television organised jointly a cultural show at the Bangabandhu International Conference Centre in the city’s Sher-e-Bangla Nagor area.

Most of the Pahela Baishakh celebration programmes were hosted this year by corporate entities, mainly multinational companies and mobile operators. Television channels covered most of the programmes live.

The ethnic communities living in the Chittagong Hill Tracts held their New Year celebrations of Baisuk, Sangrai, and Biju, collectively called Baisabi.

The day was a public holiday. State-owned and private radio and television channels aired special programmes and newspapers brought out supplements to mark the festival.

The Bangali people living in the Pashchim Banga and Tripura stated of India also celebrated Pahela Baishakh.

The government took special security measures for this year’s Pahela Baishakh celebrations against the background of a drawn-out political confrontation and violence. Some 12,500 members of the police and the Rapid Action Battalion were deployed in the capital to ensure safety and security of the New Year revellers.

In 2001, the nation suffered the shell shock killing of at least 10 people in a powerful bomb explosion at Ramna Batamul when Pahela Baishakh celebrations were going on.

New Age correspondents in Barisal, Chittgong, Khulna, Rajshahi, Jessore, Sylhet, and other district headquarters reported that Pahela Boishakh was celebrated peacefully in the cities and towns amid colourful festivities.

Bangladesh missions abroad also marked the day with due enthusiasm and celebrations. (Source)