INVESTMENT, REMITTANCE AND FINANCIAL BRANDING OF BANGLADESH

Md. Ashraful AlamDeputy General Manager

SME & Special Programmes DepartmentBangladesh Bank, Head Office

Dhaka, Bangladesh

BB’S MISSION FOR PRIVATE SECTORS

Mission Statement of Bangladesh

For the business community, including farm and non-farm SMEs• We shall maintain liquidity conditions and credit

policies ensuring adequate credit flows at market driven flexible interest rates for all productive economic activities, including in sectors like agriculture and MSMEs where markets have not been very responsive.

• We shall foster macroeconomic stability through monetary and external sector management. We shall promote and support development of new financial products, services and instruments.

REMITTANCES FLOW IN THE COUNTRY

2007-2008 2009-2010 2010-2011 2008-2009 2011-2012 2012-2013 2013-2014   2014-2015*0

2000

4000

6000

8000

10000

12000

14000

16000

Remittances In million USD

mill

ion

USD

STABLE EXCHANGE RATE

July,13 Dec, 13 July,14 Dec,14 June, 1577.35

77.45

77.55

77.65

77.75

77.85

Exchnage rate

Taka

per

USD

Exchange rate is stable

ACHIEVEMENT OF BB

Foreign Exchange Reserve (End June 2015 : USD 25020.5

million Enough to meet more than 6 months Import Payments.

DECLINING INFLATION

July, 12Dec, 12 July,13 Dec,13 July, 14 Dec,14 June,150123456789

Rate of Inflation: CPI

in %

Base Year: 2005-06* 12 month average

BB is successful in maintaining the price level; Inflation rate is moderate.

Inadequate physical facilities?

ACHIEVEMENT OF BB

Average spread fell from 5.13 % in July 2014 to 4.83% in May 2015.

Average Lending rate fell from 12.84% in July 2014 to 11.82% in May 2015.

The call money rate has fallen from 8.57% in January 2015 to 5.79% in June 2015.

Lending interest rate is being favorable for private investment.

Declining interest rate spread

ACHIEVEMENT OF BB

Private sector credit growing steadily and reached highest at 13.6% in FY15;

The public sector credit, however, shrinking

The expansion of private sector endowed the economy

to have 6.5% output growth.

Rising private sector credit

GROSS INVEST SCENARIO OF BANGLADESH

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15*

0

500

1000

1500

2000

2500

3000

3500

4000Gross investment Scenario in Bangladesh

Private (Billion BDT) Public (Billion BDT)

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

10

15

20

25

30

35

40

India Pakistan Sri Lanka Bangladesh

Investment as share of GDP is steadily rising

Source: World Economic Outlook (Sept. 2014), IMF

BANGLADESH HAS HIGHEST GROWTH PROSPECTS IN THE REGION.

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

-2

0

2

4

6

8

10

12Bangladesh India PakistanSri Lanka

Projection

Perc

ent

INVESTMENT FRIENDLY FINANCIAL INFRASTRUCTURE Government and Bangladesh Bank has created a financial

infrastructure and environment where any non resident can safely invest in Bangladesh

Government has taken many initiatives that have improved the local financial market to operate efficiently and in friendly way with the private sector.

Bank Led mobile financial services, Electronic fund Transfer Network(EFTN), BACH (Automated Clearing House) , MICAR cheque, core banking software implementation, digitalization of Bangladesh Bank and The national Payment switch and RTGS has created a conducive, fast and reliable payment system in the country.

Mobile bank account, Agent banking and MFIs are involved in the speedy distribution of remittance sent by the NRBs to their beneficiaries

PROMOTION OF REMITTANCES AND INVESTMENT Bangladesh promotes formal channel remittances .

Bangladesh has given license to 3 NRB banks to promote NRBs and Bangladeshi Diaspora investment in Bangladesh.

Bangladesh Bank has engaged with a number of Diaspora organization working in the Europe, America to promote the idea of investment in Bangladesh

Remittances award has been introduced. This year we provided Bangladesh Bank Remittances Award to 33 Bangladeshi

Bangladesh Bank is building up a NRB database which will help us to take targeted intervention for promoting remittances and diaspora investment

The near 26 billion foreign exchange reserve build up is the support of our NRBs

INCENTIVES FOR INVESTMENT IN BANGLADESH For foreign Direct invest a number of incentives

scheme are in place and one of the most liberal FDI policy in place No Restriction on equity participation Foreign investor’s employed technical people are not

subjected to personal tax Full repatriation of capital and profits are allowed Foreign entrepreneurs are, therefore, entitled to the same

facilities as domestic entrepreneurs with respect to tax holiday, payment of royalty, technical know-how fees etc.

Citizen/permanent resident ship are also provided General incentives for investment

Tax Holiday Tax Exemption Concessionary duty on imported capital machineries

INCENTIVES FOR NRBS

For Non-Resident Bangladeshi’s government has created a number of investment opportunity.

Investment of NRBs will be treated at par with FDI. Special incentives are provided to encourage NRBs

to invest in the country. NRBs will enjoy facilities similar to those of foreign

investors.  they can buy newly issued shares/debentures of

Bangladeshi companies .

INCENTIVES FOR NRBS

A quota of 10% has been fixed for NRBs in primary public shares.

Furthermore, they can maintain foreign currency deposits in the Non-resident Foreign Currency Deposit (NFCD) account.

Non Resident Investors taka Account-NITA- for portfolio investment by NRBs

Foreign Exchange regulations has been eased on many areas

Investment in Bond Market The US dollar premium bond The US dollar investment bond The wage earner’s development bond

BB SUPPORT TO PRODUCTIVE INVESTMENT Comprehensive support program for SME financing.

Currently SME credit to total credit in Banking sector is 25% where as our neighboring country share is around 15%.

BB is providing huge support to women entrepreneurs development. Separate Women Development Unit

Special Refinance scheme for agro based product processing

Special fund for New entrepreneurs Emphasis on Energy efficiency and green financing JICA and French Development Bank supported program for

RMG industries compliance financing JICA supported program on FDI promotion

Establishment of SEZ to foster investment by Japanese investors World Bank supported lending support program for

medium to long term credit market

YOU HAVE A COMPLAINT? THEN….

Hotline for customer's complaint: Head Office:Dial 16236Fax : 0088-02-9530273E-mail : bb.cipc@bb.org.bd

Send your complaint using the electronic complaint form: http://www.bb.org.bd/complainbox/complainbox.php

You can also submit your complaint through our Facebook page: https://www.facebook.com/BangladeshBankOfficial?fref=ts

PEOPLE TALK ABOUT US--

Bangladesh Bank is striving for building a positive Bangladesh

Thank you