BANGLADESH BANK starts automated clearinghouse trial

The central bank finally launched an automated clearinghouse on trial yesterday for faster settlement of transactions and payment systems. Three commercial banks -- Janata, Dutch-Bangla and Eastern Bank -- took part in the trial operation, posting 40 cheques each for online clearing at Bangladesh Bank (BB). The system will significantly reduce settlement time -- from three days to only two hours. "We moved one step ahead of many other countries by introducing this modern technology-based payment and transaction system," BB Governor Atiur Rahman told reporters at the inauguration of the trial run. Rahman said the automated clearinghouse will formally be operational once all the banks operating here are fully prepared. But he hinted it will take several months. The Department for International Development (DFID) of United Kingdom funded $8.5 million to implement the Bangladesh Automated Clearing House (BACH). The BB had earlier marked August 3 to begin the trial run, but the deadline was later extended till today, based on poor preparation by most banks. Cash and cheques are the two main mediums of transactions in Bangladesh. Of these, cheques dominate in terms of payment value. Cheques are settled through the clearinghouses of BB and the state-owned Sonali Bank. According to BB officials, the existing clearinghouses settled over two and a half crore-payment instruments worth nearly Tk 4 , 50 ,000 crore in 2008. So, the system takes up to 10 days, depending on the location of the bank branch to settle a transaction. Under the new system, banks will not physically need to send cheques to the clearinghouse at BB. Banks can do the job online from their own offices using machine-readable cheques and the funds will be transferred electronically. Banks will have to issue magnetic ink character recognition (MICR) chequebooks and set up communication links, hardware and software that are a must for the system. Initially, the automated clearinghouse will run for about 1 ,100 bank branches in Dhaka. All branches will come under the system in phases. The BB governor said the trial run will continue until all banks are ready to integrate with the new system. Rahman hoped the remaining banks will gear up soon. Quoting a World Bank study, Stefan Austin, DFID chief in Bangladesh, said modern payment systems contributed up to one percent of economic growth in many countries. He hoped adoption of the new technology-based payment system will help Bangladesh achieve higher growth in future. In a statement, BRAC Bank said it will integrate with the BB automation system from today.

UK businessmen keen on perfume, shipbuilding in BANGLADESH

A visiting business delegation from the United Kingdom yesterday said it wanted to explore trade and investment in perfume distribution, property development and shipbuilding. "We are here to explore the possibilities of doing business," said Shahagir Bakth Faruk, chairman of British Bangladesh Chamber of Commerce (BBCC), at a press conference. UK Trade and Investment in cooperation with BBCC arranged the visit. The delegation, comprising representatives from perfume makers, restaurants and catering, property developers, legal service providers and shipbuilding, is expected to meet policy makers and business leaders in a bid to forge business collaborations between the two countries. "We want to showcase British products in Bangladesh. We believe companies doing business in the UK should explore potential abroad for market expansion," said Faruk at Dhaka Regency Hotel. He said Bangladesh is now moving forward with a section of people attaining the capacity to spend on upmarket products like perfumes and the traditional British fish and chips. "The change now taking place in Bangladesh is actually phenomenal," he said. Rafiqul Islam, chairman of Maritimus Ltd, a shipbuilding company, said it is setting up a shipbuilding yard in Narayanganj to tap the global demand for small ocean-going vessels. He said the company selected Bangladesh for shipbuilding by considering the cheap labour costs. "We hope it will be ready by next year. We are also going to have a marine academy here."

India seeks more FDI under reform

Indian Prime Minister Manmohan Singh yesterday indicated his government will go for financial reforms in order to attract more foreign direct investment (FDI). Addressing the India Economic Summit here, he said though the global financial crisis did not affect Indian banks or Indian financial market directly, it drew attention to the need to strengthen the financial system in various ways as the country and to ensure that the system can provide the money needed for development, especially for infrastructure development. "We need to develop long-term debt markets and to deepen corporate bond markets. This in turn calls for a strong insurance and pension sub-sectors. Some of the reforms needed, especially in insurance, involve legislative changes," he said, adding that efforts are on to build a political consensus needed for these changes in laws. Singh said the futures markets needed to be improved for better price discovery and regulation and there was a need to remove institutional hurdles to facilitate better intermediation. Singh pointed out that India has done relatively well to counter the effects of global economic crisis but needs to do more to attract investments to ensure a high growth rate. He said India's FDI policy has been greatly liberalised and FDI has been freely allowed in more and more areas under the automatic route and now covers a number of sectors in agro- processing, nearly all areas of industry and also services. Singh said India has been able to face the global economic downturn better than most other countries in the world as its economy grew at a respectable rate of 6.7 percent in 2008-09. He said despite a slowdown in agriculture due to inadequate monsoon the growth is expected to be around 6.5 percent.

China to give Africa $10 b in loans

Chinese Prime Minister Wen Jiabao pledged to give African countries 10 billion dollars in concessional loans as a two-day Forum on China- Africa Cooperation opened in Egypt on Sunday. "We will help Africa build up its financing capabilities... we will provide 10 billion US dollars for Africa in concessional loans," Wen said at the start of the forum in the Red Sea resort of Sharm el-Sheikh. He also pledged to cancel debts of African countries to deepen his country's role in the continent. The Asian giant pledged 5.0 billion dollars in assistance at the last Forum on China-Africa Cooperation summit, held in Beijing in 2006 , and has signed agreements to relieve or cancel the debt of 31 African countries.

Small businesses on front line in Obama's jobs fight

With unemployment fast becoming one of US President Barack Obama's biggest domestic challenges, focus is shifting from "too-big-to- fail" manufacturing and financial giants to struggling small businesses. After months of high-level intervention to save mega-firms like General Motors and Goldman Sachs, Obama's economic team is now looking at small firms amid discouraging indicators about their health. This week the White House received word that the official US unemployment rate passed the symbolic 10 percent mark to 10.2 percent in October, the highest level in 26 years. Obama called the figure "sobering" and quickly said his administration was considering steps to spark job growth and to "increase the flow of credit to small businesses." ADP, a data monitoring firm, this week reported more bad news: that three quarters of jobs lost between September and October in the private sector were in firms with fewer than 500 employees.

Brown’s call for transactions tax gets cold shou lder

British Prime Minister Gordon Brown surprised G20 finance ministers by urging them to consider a tax on global financial transactions, but the idea got a lukewarm response. Brown said Saturday such a levy, often called the Tobin Tax after the US economist who devised it, would force financial institutions to be more responsible and was one of a range of measures that could help curb risky behaviour. It has always been thought that Britain opposed the idea, because of fears it could damage the interests of the City of London, Europe's foremost financial centre. But finance minister Alistair Darling said "times change" after 12 months in which G20 governments had been forced to inject billions of dollars to rescue banks from collapse. A levy, Darling said, was one way that banks could contribute to the "wellbeing of the world" -- and, more pertinently, provide funds to use if they needed bailing out again.

IMF says stimulus needed to aid ' nascent' recovery

The International Monetary Fund on Saturday said emergency stimulus measures must remain to avoid endangering a "nascent" economic recovery, as the G20 agreed here to maintain support. "An overarching risk is that the recovery stalls" owing to early exits from record-low interest rates and massive state cash injections, the IMF said in a report to coincide with a meeting of G20 finance ministers in St Andrews. "Premature exit from accommodative monetary and fiscal policies could undermine the nascent rebound, as the policy-induced rebound could be mistaken for a strong and durable recovery," the IMF said. The world's largest and top emerging economies on Saturday agreed to maintain stimulus measures to support "uneven" economic recovery. "The recovery is uneven and remains dependent on policy support, and high unemployment is a major concern," the G20 said in its final communique. "To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured."

Stimulus needed for recovery: Australia

Withdrawing Australia's government stimulus now would interrupt the recovery underway, Treasurer Wayne Swan said Sunday as he warned the country was not immune to the risks to the global economy. Swan said the government's 70 billion dollar (64 billion US) stimulus, credited with helping Australia avoid a recession, had already peaked and was gradually winding down.

Tiger IT of BANGLADESH ranks first in US competition

TigerIT Bangladesh Ltd, a local IT firm, ranked first in the minutiae interoperability exchange test by US-based National Institute of Standards and Technology (NIST). The purpose of the Minutiae Interoperability Exchange Test (MINEX) is to determine the feasibility of using minutiae data as an interchange medium for fingerprint information between different fingerprint matching systems. This is recognition for Bangladesh for developing identity (ID) management, which may help local IT companies to get works from the global market, said Ziaur Rahman, chairman and chief executive officer of TigerIT Bangladesh. "This recognition means we are the best in some sectors, such as making national ID cards and machine readable passports," he said. MINEX is designed to evaluate whether various populations and combinations of encoding schemes, probe templates, gallery templates and fingerprint matchers will produce successful matches. The recently published NIST test results revealed that a combination of the Tiger's AFIS ( automated fingerprint identification system) enrolment template generator and the matcher showed false non-match rate of 0.06 percent at a fixed false match rate of 0.01 for two fingers. It outperformed Japanese NEC's 0.08 percent, US-based Cogent's 0.11 percent and France's Sagem 0.12 percent. TigerIT was earlier ranked second by NIST for developing an automated fingerprint identification system with high accuracy.

Global crisis a chance to change business: Yunus

Nobel Peace Laureate Muhammad Yunus calls the global economic crisis "an excellent opportunity to reflect and redesign" businesses, and devote creative ones to solving social problems. Yunus told the media in Germany on Saturday: " Any problem has a potential of being addressed with a social business." "Social business being a business where you don' t make money," he explained. "Zero profit for the investors." The ground-breaking "microcredit" banker is backed by corporations like food giant Danone, global water group Veolia, sportswear company Adidas, software pioneer SAP and academics at Kyushu University in Japan. The first Global Grameen Meeting of companies, foundations, thinktanks, scientific experts and other institutions was hosted by Europe's largest carmaker Volkswagen at its headquarters in Wolfsburg, northern Germany. Grameen is a Bengali word for village, and "was chosen to indicate that big projects may start small," a statement said. The forum's ambitious goal is to eliminate poverty by 2030 in both the developing world and advanced economies. Ideas that sprouted on the Indian sub-continent are being transplanted in Germany, Europe's biggest economy, and in France, where Danone will draw on its experience with Yunus in Bangladesh to launch a project for the poor in Paris. "It's really a source of inspiration," Danone representative Emmanuel Faber told a press conference in the company of Yunus and the other groups. He underscored the "new processes, new ideas, new ways of working that social business has driven into the mainstream way of Danone doing business." The big group's have not decided to ditch profits altogether but are setting up subsidiaries to work on the social business model in addressing problems with the environment, health care, nutrition and unemployment. "Each one is dedicated to solving a particular social problem," Yunus said. Hans Reitz, co-founder with Yunus and director of the Grameen Creative Lab that brought together varied sectors to brainstorm for solutions, said his group would launch seven small companies in Germany with no more than five to seven employees. "You can start small and give it a try, find out if it works or if it doesn't work," he said, and share the results across what Faber said was now "a global network of people thinking along these lines." Faber quoted Danone founder Antoine Riboud as stressing "there could not be long-term wealth creation without social progress." Peter Graf of SAP warned meanwhile that if they failed to act on global issues, there was "a danger of companies losing their social licence to do business." He called the threat "hugely underestimated as the public gets more and more aware of the crises that we are facing." Danone plans to launch a project to have 300 people deliver fresh dairy products to Paris area shops on electric-powered tricycles. The drivers would be ex-convicts or others faced with marginal living situations and the plan would cut carbon dioxide emissions from delivery vans withdrawn from circulation, he said. In Germany, Reitz is experimenting with business loans to 15- year-old school children to show them they could later be self-employed. Making cakes, candles and music CDs allowed German and immigrant youth to "start a small business and create an identity," he said.