The dollar gains back against other major currencies in Asian trade on March 12 as an overnight rally sparked by central bank action to bolster ailing credit markets ran out of steam, dealers said.

The euro was quoted at 1.5376 dollars in Tokyo afternoon trade, up slightly from 1.5333 in New York late March 11.

The dollar fell to 102.93 yen from 103.42, pressured by selling by Japanese exporters, dealers said. The euro bought 158.25 yen, down from 158.63.

The greenback rallied in US trade, pulling the euro down from a record high of 1.5495 dollars, on news that the Federal Reserve and other central banks were pumping hundreds of billions of dollars into stressed financial markets.

Meanwhile, the euro struck a new record high against the dollar on March 13, breaching 1.56 dollars for the first time amid mounting concerns over the US economy, dealers said.

In early morning deals, the European single currency rose as high as 1.5625 dollars.

The dollar plunged below the key 100 yen level on March 13 for the first time in 12 years, falling as low as 99.80 yen - which was the weakest level since November 10, 1995.

The US currency is under intense selling pressure because of widespread worries about a potential recession in the United States, dealers said.

GB/March 14,2008

After two years of deals and negotiations the Advisory Committee on Economic Affairs on March 10 cancelled the process of Rupali Bank sale to Saudi Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud.

"The process to sell Rupali Bank to the Saudi prince has been cancelled as we didn't get timely response from him," Finance Adviser Mirza Azizul Islam told reporters after a meeting of the committee.

The finance adviser who chaired the meeting said the bank's bidder, Saudi prince, has failed to pay the selling price despite repeated reminders. For this the government dropped Rupali Bank's name from the privatization list for the time being.

Asked about any legal barrier for canceling the deal with the Saudi prince, he said the law ministry has been consulted in this regard. The ministry has opined that there is no legal barrier at the present stage of the deal.

The process to sell 97 percent shares of the crisis-ridden state-owned bank started two years ago.

Several investors had submitted expressions of interest and the government in February 2007 approved the sale to the prince with an offer of over $458 million.

In December, 2007, Prince Bandar in a letter to General Moeen U Ahmed, chief of army staff, said he was willing to pay only $185 million instead of the $458 million he had offered earlier.

GB/March 11

HONG KONG, March 9(Sunday): Asian currencies were mostly up against the struggling US dollar amid ongoing concerns about the poor health of the US economy and credit markets.

JAPANESE YEN: The yen soared to a three-year high against the dollar in Tokyo amid growing fears of recession in the United States.

The release of disappointing US job data on March 7 was seen likely to further depress the dollar after it hit a fresh three- year low against the yen and a record low against the euro earlier in the day.

The yen stood at 102.43-45 to the dollar here at the end of daytime trading Friday after touching 102.32 to the dollar, its highest since January 2005. The rate compared with 104.33-35 to the dollar a week earlier.

AUSTRALIAN DOLLAR: The Australian dollar is expected to fall next week as fallout from the global credit crunch continues to weigh on foreign exchange markets, dealers said.

The Australian dollar was trading at 93.26 US cents at 5:00 pm (0600 GMT) on March 7, down sharply from the previous week's 94.56 US cents.

NEW ZEALAND DOLLAR: The New Zealand dollar ended the week at 79.50 US cents, down from 81.52 US cents the previous on March 7.

CHINESE YUAN: The yuan closed at 7.1075 to the dollar on  March 7 on the exchange-traded market, compared with 7.1107 the week before.

On the over-the-counter market, it ended at 7.1110 to the dollar against 7.1059 the previous day.

The central bank had set the yuan central parity rate at 7.1090 to the dollar on March 7, compared with 7.1168 March 6.

The People's Bank of China allows a trading band of 0.5 per cent on either side of the midpoint.

HONG KONG DOLLAR: The city's currency finished the week at 7.786 to the US dollar, compared with 7.779 the previous on March 7.

INDONESIAN RUPIAH: The rupiah ended the week trading on March 6 at 9,062/9,072 to the dollar compared 9,062/9,068 to the dollar a week earlier. The Jakarta Stock Exchange was closed March 7 for the Hindu New Year holiday.

PHILIPPINE PESO: The Philippine peso was at 40.850 to the dollar Friday, down slightly from 40.455 the previous week. SINGAPORE DOLLAR: The dollar was at 1.3864 Singapore dollars Friday from 1.3920 the previous week.

SOUTH KOREAN WON: The won fell to its lowest level against the US dollar in more than 16 months Friday, closing at 957.5 won in Seoul, compared to the previous day's close of 949.6 won and 939.00 won a week earlier.

Dealers said the won was expected to trade between 952 and 962 won per dollar in the early days in accordance with the movement of the US stock market.

TAIWAN DOLLAR: The Taiwan dollar rose 0.65 per cent during the week to close at 30.750 to the US dollar, from 30.950 the previous week.

THAI BAHT: The Thai baht gained against the dollar, still trading near 10-year highs, after the Bank of Thailand scrapped capital controls one week ago, dealers said.

The Thai unit closed on March 7 at 31.52-54 baht to one dollar compared to the previous week's close of 31.96-98.
           
 GB/March 11,2008

The country's foreign exchange dealers have differed with the central bank's method of calculating liquidity position of banks.

They claimed that the commercial banks were facing difficulty to meet their cash reserve requirement (CRR). The central bank, however, reported the presence of excess liquidity between Tk 119 billion and Tk 143 billion during July-December period in the banking sector.

The Bangladesh Foreign Exchange Dealers' Association (BAFEDA) has also urged the Bangladesh Bank (BB) to help offset liquidity problem faced by commercial banks through repurchase agreement (Repo).

The apex forum of the country's foreign exchange dealers also said the rate of interest of Repo can be increased or decreased, depending on the BB's monetary stance.

The recommendations have been made by the technical committee of the BAFEDA in its report relating to recent trend in Bangladesh money market. The report has already been submitted to its Executive Committee for taking necessary steps.

Regarding excess liquidity, the committee said that the market liquidity scenario was tight last month. The commercial banks were consistently finding it difficult to fund their CRR, it said.

The technical committee earlier formed a three-member team to prepare the report on recent trend in Bangladesh money market.

The committee estimated a total outflow of funds worth Tk 98.042 billion from the inter-bank market through the routes during the period July 2007-January 2008.

GB/arch 10,2008

The Securities and Exchange Commission (SEC) has amended the 'Trust Act, 1882' so that the sizeable pension and retirement funds, which mostly remains idle, can be invested in the form of mutual funds in the country's stock market.

Some large foreign and local companies proposed to float their pension and retirement funds as mutual funds, said a source involved with stock market.

Under the existing Act, a company or a statutory body can sponsor a mutual fund but the pension or retirement funds which are established as trust under the existing law of the country are not eligible for the mutual funds.

After the amendment, there will be no bar for a company or statutory body to act as trust for floatation of pension and retirement funds in the form of mutual fund in the stock market, a source said.

The move will help increase the depth of the country's growing stock market.

Mutual funds in the neighboring countries of Bangladesh account for over 30 to 40 per cent of the total market capitalization of those countries while in Bangladesh, mutual funds contribute only three per cent of total capitalization.

The total market capitalization of DSE stood about $ 12 billion March 5. Currently, the market has a total of 14 mutual funds worth $ 13 million.

GB/ March 6, 2008

The private commercial banks have included a 'wish list' in their proposal to cut lending rates, asking for corporate taxes on banks to be lowered in return for such a move.

The proposals Bangladesh Association of Banks and Association of Bankers, Bangladesh submitted their proposals on March 3. According to the proposed plan, the average lending rate will come down to around 11 percent from the existing 12.5 percent, Nazrul Islam Majumder, president of Bangladesh Association Banks (BAB), a platform of bank owners, claimed yesterday.

Currently, listed companies pay tax at the rate of 35 percent, whereas banks pay 45 percent. Banks in India pay taxes at only 30 percent as said by BAB President.

Other points the associations placed for the BB governor and government's perusal are: Ensuring that interest rates on National Savings Certificates are not increased, the ceiling of CRR (cash reserve ratio) and SLR (statutory liquidity ratio) are not raised further, tax exemption for CSR activities and Zakat, withdrawal of restrictions on government's deposits in private banks and reinstatement of two percent tax exemption on total loans and advances.

The BAB president came down heavily on newspaper reports that blamed the bankers for deceiving clients with their latest proposal of reducing the lending rates and charges for different services.

The banks proposed reduction in the interest rate on term lending to a maximum of 14.75 percent from the existing average rate of 16 percent.

However, banking data contradicts the figure of existing average interest rate on term lending mentioned in the proposal.

According to the last month's BB data, out of 29 private banks, only two kept the interest rate on term lending at 16 percent, six at 15.5 percent and the rest between 12 and 15 percent.

On working capital lending, the banks suggested a maximum cap of 14.5 percent against the current average rate of 15.5 percent for productive sectors. But the current interest rate on capital lending in most of the banks is below 15 percent, the BB data shows.

However, private banks sources said  now the private banks handle some 55 percent of the country's economy, but four state-owned banks deal with 75 percent of the government's funds.

GB/ March 6, 2008

The amount of inward remittances crossed $4.8 billion in the first eight months of the current fiscal year, marking more than 26 percent rise over the same period of the previous fiscal, according to Bangladesh Bank (BB) statistics.

The country received $4.827 billion in remittances during the July-February period of fiscal year 2007-08 compared to $3.824 billion during the corresponding period of FY2006-07.

Meanwhile, the country's foreign exchange reserve reached a new high at $6,015.52 million as of March 4, mainly due to robust growth of remittance and the donor agencies -World Bank and Asian Development Bank -- that have recently paid $100 million and $50 million respectively.

According to BB, Bangladeshi nationals working abroad remitted $676 million in February which was $710 million in January. The monthly remittance figure of January was a record in the country's history, BB sources said.

The country's private and state-owned commercial banks are trying their best to increase the flow of inward remittances from different parts of the world, including the Middle East, United Kingdom, Malaysia and Singapore to meet their growing demands for foreign exchange, sources said.

GB/March 5, 2008

After showing a bearish trend for two consecutive weeks, the Dhaka Stock Exchange (DSE) bounced back amid increased turnover this week ended on February 28.

The week's trading also began with a depressed mood, but fin­ished with an upbeat one with the increasing turnover due to easing of the -margin loan provision through a clarification by the Securities and Exchange Commission (SEC).

Brokers said the clarification on simplifying the margin rules
contributed to the increased turnover while the announcement of offloading government shares of four companies sent out a pos­itive signal to the market, regain­ing the momentum.

They said opening up of sub­scription for Delta-Brae Housing Limited IPOs on March 2 and the possibility of giving approval to the second scheme of Grameen Mutual Fund also gave a positive signal to the market.

This week the total turnover rose by 30 per cent to Tk 8.47 bil­lion from the previous week's Tk 6.53 billion while the turnover in terms of volume increased by 21per cent to 54 million from 45 million in the previous week.
The daily average turnover of the week was also up 4 per cent to Tk 1.69 billion from Tk 1.63 bil­lion.

The benchmark index (DGEN) gained 91 points or 3 per cent to close at 2931 points. In the previ­ous week, it dropped 129 points or 4 per cent to close at 2,840 points.

Market capitalization grew by 2.5 per cent to Tk 804 billion from Tk 784 billion at the closing of the previous week.The top gainers of the week were Renwick Jajneswar,Shyampur Sugar, Libra Infusion, Zeal Bangla Sugar, Rahim Textile, Padma Oil, Eastern Lubricants, Usmania Glass, National Tea and Eastern Cables.

The top losers were Maq Enterprise, Paper Processing, BD Zipper, Rangamati Food, BCIL, Maq Paper, M Hossain garments, Bengal Biscuits, Kay & Que, and Purabi General Insurance.

AB Bank, Jamuna Oil, Meghna Petroleum, UCBL, Grameen One, IFIC Bank,
Uttara Bank, Dutch-Bangla Bank, Summit Power and National Bank were the turnover leaders of the week.

GB/March 1,2008

The dollar dropped to a 3- year low against the yen today amid renewed worries about the U.S. economy, rattling stock markets, bolstering bonds and helping drive up prices of safe-haven gold and oil to all-time highs.

Weak U.S. economic data and a warning from Federal Reserve Chairman Ben Bernanke that some small U.S. banks could fail raised expectations for more interest rate cuts in the world's leading economy and heightened fears of a recession.

Asian stocks fell more than 1 per cent and major European indexes were expected to open lower.

The dollar plunged to 104.58 yen, its lowest since May 2005, after a slide in the U.S. currency below the key 105 yen level triggered a wave of stop-loss orders.

Crude oil hit $103 a barrel, breaking the inflation-adjusted high of $102.53 reached in 1980, fuelled by the weak dollar, a fire at a European gas terminal and problems with a pipeline in Ecuador.

Gold hit a new high of $973.10 an ounce, up more than 16 per cent this year and needing only another 3 per cent spurt to hit the $1,000 mark."Most of the funds are buying inflation hedges such as gold, silver and oil. It's still a bull market, where hedge funds and banks buy precious metals," said William Kwan, a dealer at Phillip Futures in Singapore.

By 0600.GMT, U.S. light crude was quoted at $102.79 a barrel and spot gold stood at $972.90/3.70 an ounce.

GB/March 1,2008

The private commercial banks (PCBs) will request the Bangladesh Bank(BB)governor for taking steps to review tax related matters that will help to minimize the interest rate spread.

Besides, PCBs will raise the issues of interest rates on government approved securities and bonds saying that the banks alone will not be able to bring down the spread unless the government cuts interest rate on savings certificates and bonds.

The decisions were taken at an emergency meeting of the Bangladesh Association of Banks (BAB), held at its office on February 23. The members of Association of Bankers, Bangladesh (ABB), represented by top executives of private, public, and foreign commercial banks, also attended the meeting.

A 10-member high-powered sub-committee, headed by Syed Manzur Elahi, Administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and former chairman of the BAB, has been formed to finalize the recommendations relating to the interest rate spread and different charges of the banks.

 The central bank asked the PCBs to jointly submit concrete proposals by February 28 next for reducing the spread between lending and deposit interest rates.

The proposal will be prepared jointly by the BAB and the ABB mentioning their position about the interest rate spread and different charges of the banks. The meeting decided that the bankers would request the central bank chief for taking necessary steps to create a level playing field for all commercial banks by ensuring equality in sharing government deposits.

Currently, the interest rates on saving certificates range between 11.50 per cent and 12.50 per cent while the government bonds are offered at maximum 13.20 per cent interest.

The BAB will also recommend reducing the corporate tax on banks to 40 per cent from existing 45 per cent.

The PCBs have reached a consensus to introduce a uniform system for different costs and commissions they charge clients for providing various services including opening letters of credit (LCs).

The spread of at least 16 commercial banks out of 48 now ranges between 6.0 and 13 per cent, while that of the state-owned commercial banks, private commercial banks (PCBs), foreign commercial banks (FCBs), specialized banks (SBs) is 5.88 per cent, 6.17 per cent, 8.91 per cent and 2.98 per cent respectively.

 GB/23rd February,2008

Bankers  pleaded reduction of interest on government securities, corporate tax

Bankers have pleaded for reduction in interest rates on government securities and corporate tax on banks to help them lower their interest rate spread.

The plea was made when the Bangladesh Bank (BB) reiterated its advice to the commercial banks on February 20 to submit specific proposals by February 28 next for reducing the spread between lending and deposit interest rates, officials said.

The proposal will be prepared jointly by the Bangladesh Association of Banks (BAB) and the Association of Bankers, Bangladesh (ABB) mentioning their position about the interest rate spread and different charges of the banks.

The central bank instruction came at a meeting with the members of the Association of Bankers, Bangladesh (ABB), represented by top executives of private, public, and foreign commercial banks. The BB Governor Salehuddin Ahmed presided over the meeting while an 18-member delegation of the ABB, led by its Chairman K Mahmood Sattar, participated.

During the meeting, the ABB members drew attention of the BB governor to higher interest rates on government approved securities and sought his cooperation to reduce corporate tax rates for banks and thus help them lower the spread.

The central bank chief assured the senior bankers that the BB will discuss the matters with the authorities concerned. But he wanted the bankers to rationalize the spread."

However, the BB advised the banks to reduce the interest rate spread through slashing their cost of funds without hurting the depositors' interest. According to a meeting insider, the central bank asked the banks to explore the possibility of slashing down their respective administrative and operational costs.

On February 18, the central bank asked representatives of BAB for taking initiative for reducing the spread between lending and deposit interest rates.

The central bank will take the final decision after reviewing the proposal of the bankers, the BB officials said.

"We will finalize our recommendations on reducing the interest rates spread through consultation with the BAB," ABB Chairman K Mahmood Sattar told  the media reporters.

The ABB urged the BB governor for taking necessary measures for continuation of the existing tax exemption facility on the amount provisioned by the individual commercial banks, he added.

The BB governor has already suggested the National Board of Revenue (NBR) to continue the facility for the next three tax assessment years, starting 2008-09.

"We request the government to reduce the corporate income tax on banks each year," the ABB chief said, adding that the banks will able to take a collective move to reduce the interest rate spread if the government brings down corporate tax for the banks.

The central bank, of late, has taken up the issue of interest spread seriously since the banks have failed to respond to its repeated request on the plea of higher cost of fund.

The spread between the weighted average lending and deposit rates came down by about 1.0 percentage point in the latter part of 2004 but it started climbing up again from December 2005.

The weighted average spread between lending and deposit rates in the country's banking sector stood at 6.16 per cent as on September 30, 2007 against 5.93 per cent on June 30 last, according to the central bank statistics.

Besides, the weighted average rates on lending stood at 12.92 per cent in September last while the same on deposit at 6.76 per cent, the data showed.

The spread of at least 16 commercial banks out of 48 still ranges between 6.0 and 13 per cent, while that of the state-owned commercial banks, private commercial banks (PCBs), foreign commercial banks (FCBs), specialised banks (SBs) is 5.88 per cent, 6.17 per cent, 8.91 per cent and 2.98 per cent respectively.

The country's business community in the meantime  requested the governor of the central bank for taking initiatives to reduce lending rates to facilitate investment.

GB/21st February, 2008

Violation of securities rules by AB Bank

AB(Arab-Bangladesh) Bank's merchant banking wing was fined Tk 10 crore on 17th February for disbursing excess margin loans in violation of securities rules. The penalty is the highest the regulator has imposed on a listed company since 2001.

The Securities and Exchange Commission (SEC) also asked the merchant banking wing to submit the fine to the commission within the next 15 days.

After an investigation the SEC found AB Bank's merchant banking wing disbursed around Tk 528 crore loans against its paid up capital of only Tk 57 crore during mid 2007 when stock market experienced an abnormal bullish trend due to liquidity glut stemming from excess margin loans. The wing mainly disbursed the loans among its employees and their relatives.

According to the securities rules as said by Farhad Ahmed, executive director of SEC, a merchant bank cannot provide margin loan more than five times of its paid up capital whereas AB Bank's merchant banking wing provided loans by around ten times of its paid up capital.

The merchant-banking wing of the bank swindled more than Tk 66 crore during the period last year, according to the SEC investigation report. The investigation found that the bank by disbursing excess loans created a liquidity glut, leading abnormal price hike of shares in some companies.  In some cases, the share prices jumped by around 300 percent, the investigation revealed.

The SEC investigation also revealed that AB Bank's merchant banking wing through its stockbrokers -- AB Bank Foundation, Ahmed Brothers Securities, Popular Equity, ARC Securities and Country Stock (Bangladesh) - used the netting facilities illegally in selling and buying shares on the spot market.

The SEC formed a probe body on July 30 in 2007 to investigate allegations against the merchant banking wing of AB Bank and the inquiry team submitted its report to the commission on September 12, 2007.

Based on the report, the SEC issued a show-cause-cum hearing notice on the AB Bank's merchant banking wing on January 3 this year and the hearing held on January 21.

The AB Bank's merchant banking wing submitted a written explanation to the commission on February 10 this year.

After scrutinizing the merchant bank's position, the SEC finally found that the merchant bank violated the securities rules, hampering the investors' interests and fined the bank.

GB/18th February

Swiss based firm to buy 50pc stake in Oriental Bank

Switzerland-based ICB Global Finance Group Holdings AG has received the central bank approval to buy 50.1 percent stake in the troubled Oriental Bank settled with the amount of  Tk 350.77 crore.

The Swiss firm has been asked to pay its offered amount before signing of the “sale and purchase” agreement on February 28, Bangladesh Bank Deputy Governor Murshid Kuli Khan told reporters at his office on February 14. Khan headed a five-member committee to evaluate the tender proposals for selling the bank.

The central bank in an advertisement on August 2 in 2007 invited expressions of interest (EoI) for selling the problem-ridden bank and six bidders responded. Of those, ICB Global Finance Group and Domestic Investment Consortium submitted technical and financial proposals. The Domestic Investment Consortium offered the price at Tk 251 crore.

The central bank took over the administration of Oriental Bank on June 19, 2006 following mismanagement and rampant corruption by some of the bank's directors.

The Switzerland-based ICB Financial Group Holdings AG operates in 10 countries worldwide.

From the initial issuance of a license to operate a bank in Hungary in 1994, the ICB Banking Group within the last 12 years has established or acquired commercial banks in Eastern Europe, Africa and Asia.

The Group made its foray into Asia in 2003 by acquiring an indirect stake of 11.3 percent in Bank International Indonesia, one of the largest banks in Indonesia. It also acquired a controlling interest in Bank Bumiputera, a mid-size bank from the same country, expanding its frontiers in the banking industry.

To date, the banks operating under the ICB Banking Group are expanding and consolidating their presence in the countries where financial services represent a significant pillar of the economy and constitute the fastest growing sector in the country.

In 2004, the individual ownerships of the ICB Banking Group were corporatized under the umbrella of ICB Financial Group Holdings AG. On 17th May 2007, ICB Financial Group Holdings AG was listed on AIM market of the London Stock Exchange.

GB/15th February

Slower growth in commercial banks:
political uncertainty, Inflation leading sluggish business

The credit and deposit growth in commercial banks dropped 6.29 and 4.18 percentage points in 2007 compared with the year before due to high lending rate and inflationary pressure.  The banks witnessed a slower growth because of huge public demand for cash to cope with high inflation.

In a recent report to the government, Bangladesh Bank (BB) observed that high interest rate and political uncertainty throughout the year resulted in sluggish business activities and credit growth. Both credit and deposit growth as a whole improved slightly at the end of 2007 despite a very unusual situation in the middle of the year, said a central bank official.

According to BB statistics, credit in commercial banks increased by 11.70 percent by the end of last year, while it was 17.99 percent in January-December of 2006. Deposit increased by 15.49 percent last year, compared to 19.69 percent the year before.

The central bank report said with inflationary pressure factored in, the interest rate against deposit was relatively low.

The BB official said the inflation rate last year was even higher considering the banks' offer against deposit.

A high official of central bank said since the government is aiming to boost credit flow in agriculture and small and medium enterprises, the overall credit growth might improve.

BB data also shows that credit growth in state-owned commercial banks was almost nil in 2007. Credit disbursement in those banks decreased by 7.70 percent while in the preceding year it marked an increase of 6.54 percent.

Meanwhile, credit disbursement in private commercial banks increased by 22.59 percent in 2007, which was 27.02 percent in the previous year.

The BB also said credit in specialized banks rose by 6.73 percent as of December 2007 while it was 11.95 percent in the corresponding period a year before.

The total scenario,however, was different in the foreign commercial banks as their credit disbursement shot up by 30.64 percent. The figure was 24.59 percent in 2006.

The overall excess liquidity in the commercial banks stood at Tk 13,672 crore on December 31, 2007. Of that, the state-owned commercial banks had Tk 4,523 crore and private commercial banks Tk 7,007 crore.

According to BB statistics, deposits last year increased by 6.97 percent in state-owned commercial banks and 20.38 percent in private commercial banks. Deposit growth in the foreign commercial banks was 21.58 percent.

In 2006, it was 5.28 percent in state-run commercial banks, 30.65 percent in private commercial banks and 33.84 percent in the foreign commercial banks.

GB/10th February,2008

Asia, Europe stock markets  decline

Turbulence roiled world stock markets again on January 22  with Asian stocks down for a second day on fears of recession in the US. European stocks fell at the opening but then pared their losses in volatile trading.

"Some people think there's going to be a deep fall off a cliff" because of a potential recession in the U.S., said Lawrence Peterman, investment director at Eden Financial, a London-based stockbroker. He saw opportunities in British stocks however.

The dramatic declines in Asia and Europe so far this week threatened to spread to Wall Street after the three-day Martin Luther King holiday weekend that saw U.S. markets closed on January 21(Monday). Early indicators suggested prices on Wall Street would plunge when the markets open there on January 22.

By midday, the UK's FTSE 100 was down 0.3 percent at 5,560.90, Germany's DAX down 1.7 percent at 6,671.82, while France's CAC 40 dropped 1.3 percent to 4,681.07.

Japan's Nikkei 225 index tumbled 5.7 percent its biggest percentage drop in nearly 10 years to 12,573.05, a day after falling 3.9 percent. Australia's benchmark index sank 7.1 percent, its steepest one-day slide in nearly 20 years.

Hong Kong's Hang Seng index, which slumped 5.5 percent Monday, finished down 8.7 percent. In China, the Shanghai Composite index lost 7.2 percent to 4,559.75, its lowest close since August.

Indian Finance Minister P. Chidambaram urged investors to remain calm after trading in Mumbai was halted for an hour when the stock market there fell 10 percent within minutes of opening. The Sensex rebounded some to close down 5 percent after plunging 7.4 percent on January 21.

"There is no reason at all to allow the worries of the Western world to overwhelm us," Indian minister Chidambaram said.

Investors have dumped shares in frenetic trading the last two days on worries that the U.S. economy, battered by a credit crisis and housing slump, will shrink in coming months, weakening demand for exports.

There is also skepticism that U.S. authorities will be able to prevent a recession. The Federal Reserve has indicated it will lower interest rates further, and President Bush has proposed an economic stimulus package that includes $145 billion in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly.

"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.

Oil and gold prices also fell. Light, sweet crude for February delivery fell to $87.72 a barrel on expectations that slower U.S. growth will lead to less demand for crude. Spot gold, which usually benefits from market uncertainty, fell to a two-week low of $855.20 per troy ounce.

In the U.S. stocks are expected to tumble following the long holiday weekend.

"U.S indices are heading for carnage at the open," said Martin Slaney, a trader at U.K. spreadbettor GFT Global Markets.

U.S. markets were closed on January 21 for a holiday commemorating civil rights leader Martin Luther King Jr. But Wall Street future prices were down sharply. The Dow Jones industrial average futures were down 523 points, or 4.3 percent, while Standard & Poor's 500 futures were down 64.4 points, or 4.8 percent.

Noritsugu Hirakawa, who monitors stock trading at Okasan Securities Co. in Tokyo, said investors were spooked by the drastic falls on Chinese and Indian markets the two emerging economies that are viewed as sustaining global growth even as the U.S. economy sputters.

"The end to the slides in Asian stocks is nowhere in sight," he said. "There is even speculation that China may be exposed to the U.S. sub prime mortgage crisis."

Indonesia's benchmark index closed the day down 7.7 percent, Singapore's Straits Times index sank 6 percent and Taiwan's market fell 6.5 percent.

Asian markets have been in a downward spiral for most of January. Since the start of the year, Japan's Nikkei index has tumbled nearly 18 percent, while the Hang Seng is down a stunning 22 percent.

GB/23 January,2008

Sonali Bank criticized on their performance though best profits during 2007

During the Annual conference 2008 of Sonali Bank on January 21, the speakers, especially Finance Adviser Mirza Azizul Islam and Bangladesh Bank Governor Salehuddin Ahmed, are not happy about their performances and advised the bank, now  public limited company, to reduce lending rates. The bank was also advised to improve efficiency in all financial aspects, including maintenance of capital adequacy and quick decisions making regarding loan proposals with a client friendly attitude.

“It takes one year to make decisions on loan applications in some cases. I hope, you (bankers) will change this,” Financial Adviser Aziz said, inaugurating the daylong conference at Sonargaon Hotel.

He asked the bankers to look into the weak points in the areas of loans and advances, export and financing, rising classified loans and overall growth in remittance inflow to ensure faster growth of the bank. He, however, appreciated the increase in deposits, investment, import financing, and operating profit during the year 2007. Sonali Bank earned an operating profit of Tk 601 crore last year against the set target of Tk 452 crore.

Bangladesh Bank Governor Salehuddin Ahmed asked  the Sonali Bank officials to show good behavior with their customers.

GB/22 January, 2008