Commercial banks asked for taking final preparations

FE Report The commercial banks have been asked for taking final
preparations to connect with the central bank's automated clearing
house, scheduled to go live from early November this year. The
instruction came at a review meeting of the chief executive officers
and managing directors of all commercial banks, held at the central
bank Tuesday, with Bangladesh Bank (BB) Governor Atiur Rahman in the
chair. Under the new system, payments will be settled using automated
cheque clearing system and electronic fund transfer among 1050 bank
branches in Dhaka initially, officials said. "The automated clearing
house will be established by November this year," BB governor told
reporters after the meeting, adding that the central bank has planed
to request Prime Minister Sheikh Hasina for inauguration of the
country's first automated clearing house. The central bank earlier
extended the deadline for introduction of automated clearing house by
three months in consideration of requests from many banks, they added.
The Bangladesh Automated Clearing House (BACH) will be launched from
November 8 instead of August 3 this year, according to the revised
scheduled. The commercial banks have been asked to take necessary
preparations to issue MICR encoded checks in all regions and install
hardware and software and establish connectivity within this
timeframe, the BB said. "After implementation in Dhaka, the automated
process will spread to the regional clearing houses including
Bangladesh Bank offices in Chittagong, Khulna, Rajshahi, Bogra,
Sylhet, Barisal and Rangpur respectively," another BB official said.
The BACH, the automated payment system platform, has two components --
Bangladesh Automated Cheque Processing Systems (BACPS) and Bangladesh
Electronic Funds Transfer Network (BEFTN). The present payment and
settlement system in Bangladesh is not at par with the best
international practices, which emphasises the need for safe and
secured payment and settlement and the reduction of gap between
payment and settlement, according to the BB's annual report for the
fiscal 2007-08.

No non-demat share in A category from next year

The Securities and Exchange Commission has decided that it will not allow
any company to be grouped or remain in 'A' category without having
dematerialised their shares from January 1 next year, said officials. The
stock market regulatory body made the decision at a meeting on Tuesday. SEC
chairman Ziaul Haque Khondker presided over the meeting. 'The companies
which are already in the category without having dematerialised form of
shares will have to transfer their paper shares to electronic system by the
time to remain in the category,' SEC executive director Anwarul Kabir
Bhuiyan told reporters. He said, 'Currently shares of 29 ' A' category
companies are not dematerialised.' 'If they fail to dematerialise their
shares by the time, they will be downgraded to ' B' category,' he said.
As on Tuesday there were 177 companies in 'A' category that accounted for
84.63 per cent of total market capitalisation of Dhaka Stock Exchange,
sources in the DSE said. The dematerialising of share means transfer of
paper shares to electronic system. Demat trading or script-less trading
makes share transaction more transparent, said the SEC official. The
Central Depository Bangladesh Ltd, which operates CDS, got certificate from
SEC on December 23, 2003 to maintain electronic book entry, recording and
securities accounts and registering transfer of securities, changing the
ownership. As on Tuesday, the dematerialised shares accounted for 97.03
per cent of market capitalisation of the DSE. The SEC also decided to
forfeit 10 per cent of application money of investors who applied for
initial public offerings of three companies from more than two accounts each
- one single account and one joint account - in violation of securities
laws. 'We have found that IPOs of Bay Leasing and Investment, Asia
Insurance and Rupali Life Insurance saw illegal applications worth of
Tk 2.10 crore, Tk 70.53 lakh and Tk 1.45 crore respectively,' the official
said. As per rules, an investor is allowed to apply for IPO only with a
single account and a joint account.