Indian businesses sign deals to invest $10 billion in Bangladesh

Indian businesses have signed agreements and memoranda of understanding with their Bangladesh peers to invest $10 billion in power, energy, logistics, education and medical sectors.

The deals were exchanged on Monday, the last day of Prime Minister Sheikh Hasina’s four-day visit to India.

 

Five of those are related to power projects including Rampal plan and supplying power from Nepal and four are related to oil, gas and petroleum sector cooperation, the High Commission of India in Dhaka said in a statement.
A 250-member business delegation led by FBCCI President Abdul Matlub Ahmad interacted with about 150 business leaders from India in New Delhi, where those agreements were exchanged.
Hasina spoke about the achievements of Bangladesh in the last few years in the socio-economic sphere and invited Indian businessmen to invest taking “full advantage” of Bangladesh’s economic growth, high demographic dividends, competitive business cost and large consumer base.

She also invited Indian companies to invest in the special economic zones in Mongla, Bheramara and Mirsarai, which have been exclusively dedicated to Indian investors, according to the statement.
India’s Minister of State for Petroleum and Natural Gas Dharmendra Pradhan was also present during the meeting.

Pradhan highlighted the growing engagement between India and Bangladesh in power and energy and underlined the economic potential of the sub-region, including India’s eastern and northeastern states, and Bangladesh.
During the visit, Indian Prime Minister Narendra Modi announced a $5 billion line of credit for different development projects including $500 million for defence purchase.
The business deals are:
>> Agreement between Bangladesh India Friendship Power Company and EXIM Bank of India for financing construction of 1,320MW Maitree power project in Rampal
>> Implementation and power purchase agreement between Reliance Power and Bangladesh’s Ministry of Power, Energy and Mineral Resources for the first phase (718MW) of the 3,000MW power project at Meghnaghat
>> Supplementary agreement between NTPC Vidyut Vyapar Nigam and Bangladesh Power Development Board for supply of additional 60MW of power from Tripura to Bangladesh

>> MoU between NTPC Vidyut Vyapar Nigam and Bangladesh Power Development Board for supply of power from Nepal
>> Implementation agreement between Adani Power and Bangladesh Power Development Board and power purchase agreement between Adani Power and Power Grid Company of Bangladesh for supply of power from 1,600MW power plant in Jharkhand
>> Understanding on LNG terminal use between India’s Petronet and Bangladesh Oil, Gas and Mineral Corporation or Petrobangla
>> MoU between Reliance Power and Petrobangla for setting up 500mmscfd LNG terminal at Kutubdia Island
>> MoU between India Oil Corporation and Petrobangla for LNG cooperation

>> Agreement between Numaligarh Refinery and Bangladesh Petroleum Corporation for sale and purchase of gasoil
>> MoU between Container Company of Bangladesh and Container Corporation of India to promote and expand cooperation between India and Bangladesh in container transportation
>> MoU between Tamil Nadu Veterinary Sciences University and Chittagong Veterinary and Animal Sciences University
>> MoU between Viswabharati, Santiniketan, India and Northern University of Business and Technology, Khulna, Bangladesh
>> MoU between Tata Medical Centre, India and Directorate General of Medical Services, Bangladesh Armed Forces

Overview of Financial system of Bangladesh

The financial system of Bangladesh is comprised of three broad fragmented sectors:

1. Formal Sector,
2. Semi-Formal Sector,
3. Informal Sector.

The sectors have been categorized in accordance with their degree of regulation.
The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions (FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant Banks etc.; Micro Finance Institutions (MFIs).
The semi formal sector includes those institutions which are regulated otherwise but do not fall under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange Commission or any other enacted financial regulator. This sector is mainly represented by Specialized Financial Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non Governmental Organizations (NGOs and discrete government programs.
The informal sector includes private intermediaries which are completely unregulated.

More at http://mybd.info

Financial Market in Bangladesh

The financial market in Bangladesh is mainly of following types:

1. Money Market: The money market comprises banks and financial institutions as intermediaries, 20 of them are primary dealers in treasury securities. Interbank clean and repo based lending, BB’s repo, reverse repo auctions, BB bills auctions, treasury bills auctions are primary operations in the money market, there is also active secondary trade in treasury bills (upto 1 year maturity).
2. Taka Treasury Bond market: The Taka treasury bond market consists of primary issues of treasury bonds of different maturities (2, 5, 10, 15 and 20 years), and secondary trade therein through primary dealers. 20 banks performing as Primary Dealers participate directly in the primary auctions. Other bank and non bank investors can participate in primary auctions and in secondary trading through their nominated Primary Dealers. Non-resident individual and institutional investors can also participate in primary and secondary market, but only in treasury bonds.
   Monthly data on primary and secondary trade volumes in treasury bills and bonds and data on outstanding volume of treasury bonds held by non residents can be accessed at Monthly data of Treasury Bills & Bonds .
3. Capital market:The primary issues and secondary trading of equity securities of capital market take place through two (02) stock exchanges-Dhaka Stock Exchange and Chittagong Stock Exchange. The instruments in these exchanges are equity securities (shares), debentures and corporate bonds. The capital market is regulated by Bangladesh Securities and Exchange Commission (BSEC).
4. Foreign Exchange Market:Towards liberalization of foreign exchange transactions, a number of measures were adopted since 1990s. Bangladeshi currency, the taka, was declared convertible on current account transactions (as on 24 March 1994), in terms of Article VIII of IMF Article of Agreement (1994). As Taka is not convertible in capital account, resident owned capital is not freely transferable abroad. Repatriation of profits or disinvestment proceeds on non-resident FDI and portfolio investment inflows are permitted freely. Direct investments of non-residents in the industrial sector and portfolio investments of non-residents through stock exchanges are repatriable abroad, as also are capital gains and profits/dividends thereon. Investment abroad of resident-owned capital is subject to prior Bangladesh Bank approval, which is allowed only sparingly. Bangladesh adopted Floating Exchange Rate regime since 31 May 2003. Under the regime, BB does not interfere in the determination of exchange rate, but operates the monetary policy prudently for minimizing extreme swings in exchange rate to avoid adverse repercussion on the domestic economy. The exchange rate is being determined in the market on the basis of market demand and supply forces of the respective currencies. In the forex market banks are free to buy and sale foreign currency in the spot and also in the forward markets. However, to avoid any unusual volatility in the exchange rate, Bangladesh Bank, the regulator of foreign exchange market remains vigilant over the developments in the foreign exchange market and intervenes by buying and selling foreign currencies whenever it deems necessary to maintain stability in the foreign exchange market.