Commercial Bank – Pivdencom Bank http://pivdencombank.com/ Mon, 27 Jun 2022 18:22:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://pivdencombank.com/wp-content/uploads/2021/06/cropped-favicon-32x32.png Commercial Bank – Pivdencom Bank http://pivdencombank.com/ 32 32 Prime Minister says government is working on communication to accelerate industrialization https://pivdencombank.com/prime-minister-says-government-is-working-on-communication-to-accelerate-industrialization/ Mon, 27 Jun 2022 18:22:00 +0000 https://pivdencombank.com/prime-minister-says-government-is-working-on-communication-to-accelerate-industrialization/

Prime Minister Sheikh Hasina said on Monday that the government is developing communication systems across the country, as developed communications accelerate industrialization and boost trade and business.

“We are reviving rail communication, laying new railway lines and reactivating rivers through dredging, alongside building bridges. . . . A developed communication system accelerates industrialization and boosts trade and business,” she said.

The Prime Minister said this during a financial donation ceremony at the Prime Minister’s Office, joining virtually from his official residence, Ganabhaban in Dhaka.

Various banks and financial institutions have made donations to the Prime Minister’s Relief and Welfare Fund. Principal Secretary to the Prime Minister Ahmad Kaikaus, on behalf of the Prime Minister, received the donation checks.

Mentioning that the government has established a network of road communication across the country by building bridges and the like, Sheikh Hasina said that they are reactivating the rivers by dredging while reviving railway communication, although the previous government almost did it. abandoned.

Referring to the recently inaugurated Padma multi-purpose bridge, she hopes it will change the fate of people in 21 districts.

She said the Padma Bridge has opened up the vast field of industrialization in the southern region of the country which could bring economic development to the rural people.

She also noted that it would also increase the purchasing capacity of rural people, which would also create a market for locally produced goods.

The Prime Minister again expressed his deep gratitude to compatriots saying, “People are my strength. The construction of the Padma Bridge with their own funds was possible because the people of the country stood by my side.

A total of 45 banks and financial institutions donated a total of Tk 304.41 crore.

These are – Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Rajshahi Krishi Unnayan Bank, BDBL, EDCOL, BIFFL, Exim Bank, Al Arafah Islami Bank, United Commercial Bank, AB Bank, Bank Asia, Bengal Commercial Bank, Brac Bank , City Bank, Dhaka Bank, Dutch-Bangla Bank, Eastern Bank, First Security Islami Bank, Global Islami Bank, IFIC Bank, Islami Bank, Jamuna Bank, Meghna Bank, Mercantile Bank, Midland Bank, Madhumati Bank, Mutual Trust Bank, National Bank, NCC Bank, NRB Bank, NRB Commercial Bank, One Bank, Padma Bank, Premier Bank, Prime Bank, Pubali Bank, SBAC Bank, Shahjalal Islami Bank, Social Islami Bank, Southeast Bank, Standard Bank, Union Bank and Uttara Bank.

In the context of the spread of the coronavirus again in the country, the Prime Minister reiterated her call for all to maintain health security protocols to protect against infection with Covid-19.

“Wear a face mask and follow health safety rules so you don’t get infected,” she added.

The head of government also expressed his gratitude to the banks and financial institutions, saying that “there should be no tension because you always stand with the compatriots in this way”. We will move the country forward.

With regard to exports, she again emphasized the diversification of export baskets.

To this end, she urged entrepreneurs to invest in producing new products beyond traditional items, exploring demand in different countries.

Sheikh Hasina said his government was also working to increase people’s purchasing power to create a local market.

“We will not only export our items, but also focus on creating the domestic market for the benefit of local industrialization,” she said.

In this perspective, she mentioned the government’s efforts to develop economic activities at the local level through various projects and programs.

She also mentioned her government’s efforts to establish 100 special economic zones.

Bangladesh is an agricultural country, but it lacks land, and that is why all development activities will have to be done while preserving arable land and the environment, she said.

“We have to pursue development, and at the same time we have to ensure food security,” she said.

Regarding floods and natural disasters, the Prime Minister said that the government is trying to solve all the problems, but nature goes on in its own way and human beings have no control over it.

Mentioning that problems follow one after another, she said that before the ill effects of the Covid pandemic ended, the war in Ukraine began, which not only affected the world but also Bangladesh.

Then the flood hit the Sylhet region of the country three times as well as other parts downstream, she said, adding: “There will be problems, but we have to move on. forward to deal with these problems”.

Sheikh Hasina also highlighted his government’s initiatives and financial assistance to keep the country’s economic wheel running while providing support to people from different walks of life, such as farmers and others, to manage their livelihoods.

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The current line of credit is no longer suitable | Company https://pivdencombank.com/the-current-line-of-credit-is-no-longer-suitable-company/ Fri, 24 Jun 2022 02:24:44 +0000 https://pivdencombank.com/the-current-line-of-credit-is-no-longer-suitable-company/ Association Teacher. Dr. DANG NGOC DUC, former Director of Banking and Finance Institute of National University of Economics recently shared his thoughts on this issue with Saigon Investment.

JOURNALIST: – Sir, many commercial banks are short of credit line while needing to increase their credit balance to support the economic recovery. Many experts believe that controlling credit growth by granting an annual credit limit to commercial banks is an administrative measure that is no longer appropriate. What is your opinion on this issue?

Association Dr. DANG NGOC DUC: – The credit limit has been used by the State Bank of Vietnam as a tool to control credit growth since 2011. The Governor of the State Bank of Vietnam said that he acts as a very effective measure to keep the credit market stable and has prevented interest rates from increasing the scale of deposits and loans.

The use of credit limit tools for commercial banks is based on three fundamental objectives. First, to prevent credit growth from getting too high, which could pose systemic risks. At the same time, credit growth can promote economic growth and an excessive appreciation of the exchange rate. Second, deploy commercial banks with safe business operations to deal with higher level of risk. Third, control the structure of capital investment in the economy.

It is true that this tool has been effective, especially during the years 2011 to 2015. The banking sector or the operation of commercial banks belongs to the official financial sector of the economy, so the credit control of the Bank of State of Vietnam is valid and appropriate. However, the methods and tools used for control and intervention must evolve according to the different stages.

During the question-and-answer session, the President of the National Assembly talked about limiting research and moving towards the abolition of the current management of administrative credit lines. This is not false, because the line of credit is precisely a direct and rigid administrative tool. This tool affects the size of the credit market and is very difficult to guarantee fairness and transparency.

It is true that setting credit growth targets in the banking sector is based on growth targets and other indicators of socio-economic development, but the annual credit limit allocation to commercial banks is currently mainly based on commercial bank ratings, which is not really objective or comprehensive. In addition to the past historical state of the bank’s credit risk, we do not currently have a clear evaluation criteria system for allocating limits. Therefore, the credit chamber easily becomes a form of sublicensing like other administrative regulations.

In my opinion, it is time to consider replacing the credit room with more flexible and indirect management tools. In developed market economies, lines of credit are applied through indirect and flexible tools, such as discount windows and reset interest rates. When it wants to limit credit growth, the central bank narrows the discount window and adjusts the discount interest rate. When you want to reduce the structure of investment capital flows to real estate or the stock market, tools and interest rate policies that affect investors’ income will work. In other words, developed market economies still favor indirect tools over the use of credit lines, administrative tools and direct capital, with many potential consequences.

– Sir, it is realistic for many banks to request a room extension. Like TPBank, BPBank and Techcombank notified borrowers that their credit room or limit had expired. Does it force the State Bank of Vietnam to follow commercial banks?


– When customers need to borrow capital, and capital from these banks is still available to lend, their desire to expand their room is understandable. Under the pressure of a faster economic recovery from the Covid-19 pandemic, the needs of borrowers and the proposition of many bank credit houses could be relaxed.

However, this must be viewed with great caution, because firstly, by making the credit margin more flexible at the request of banks, it could reduce the effectiveness of this policy tool in the near future if it continues to be applied. Second, the risk of runaway credit growth and the pressure to control where credit flows go so as not to enter the stock, real estate and gold markets. Third, difficulties in explaining goals, how room allocation is relaxed, and target standards are relaxed.

In my opinion, the line of credit tool should be abandoned and replaced by indirect tools as many countries do, for five reasons. First, banks must be autonomous and responsible for their business activities, including profits and risks. On the other hand, it is time to trust the banks and this will motivate them to promote their autonomy and social responsibility.

Secondly, the scale of operations of banks was controlled by criteria such as capital size, capital adequacy ratio as well as other safety criteria according to Bank of India Circular 41/2016. State of Vietnam, effective from January 1, 2020. Third, the inspection and supervision activities by the State Bank of Vietnam shall ensure the legitimacy, efficiency and safety of commercial banks on the basis of compliance and risks.

Fourth, the allocation of lines of credit is still a direct administrative tool, adapted to a certain period, and must be replaced by another more indirect and efficient tool. Replacing the credit limit allocation tool will limit management that causes shocks to the financial market and the economy, while helping to enhance fairness and transparency. Fifth, the removal of the credit limit will create an incentive to maximize each commercial bank‘s capacity and resources in transferring capital while being able to ensure basic compliance, as well as security of commercial operations and building a stable customer base.

– Thanks a lot.

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How is the great CBDC experience going? https://pivdencombank.com/how-is-the-great-cbdc-experience-going/ Mon, 20 Jun 2022 21:19:05 +0000 https://pivdencombank.com/how-is-the-great-cbdc-experience-going/

In March 2022, Joe Biden formally asked the Federal Reserve (FED) to urgently begin developing plans for a US central bank digital currency (CBDC), or so-called “digital dollar”. The U.S. government is now beginning to recognize the latent opportunities in the booming digital asset market and hopes to use this technology to create a CBDC that will “preserve the dominant role of the U.S. dollar.” But what is a CBDC? What is the connection with cryptocurrency and what are the latest developments in the great CBDC experiment?

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Anton Dzyatkovsky

CEO and co-founder of Platinum Software Development Company. Blockchain enthusiast, blogger.

In March 2022, Joe Biden formally asked the Federal Reserve (FED) to urgently begin developing plans for a US central bank digital currency (CBDC), or so-called “digital dollar”. The U.S. government is now beginning to recognize the latent opportunities in the booming digital asset market and hopes to use this technology to create a CBDC that will “preserve the dominant role of the U.S. dollar.” But what is a CBDC? What is the connection with cryptocurrency and what are the latest developments in the great CBDC experiment?

What is a CBDC?

The FED defines a CBDC as “a digital liability of a central bank that is widely available to the general public.” The “digital” part is not so innovative in that most people already hold money in a digital form in one way or another, such as commercial bank accounts. The particularity of a CBDC lies mainly in the fact that it is a central bank liability rather than a classic commercial bank liability.

When a person holds money in a commercial bank, the commercial bank itself has an obligation to “pay” on demand and exchange the digital record of the money for physical money. However, in a fractional-reserve banking system like ours today, banks have a limited pool of assets to meet these obligations and they must rely on mechanisms such as deposit insurance to maintain consumer confidence and avoid bank runs. Therefore, the “digital currency that is the responsibility of a commercial bank comes with great systemic instability.” At any time, an event can scare off consumers.

People line up around the block to get U.S. dollars from an ATM in St. Petersburg, Russia, March 8, 2022.

For a CBDC, the issuing central bank is the institution with an obligation. Unlike commercial banks, a central bank has a monopoly on increasing the monetary base, and therefore owning a CBDC results in far fewer trust-related vulnerabilities and no obligation to maintain an underlying asset pool. since the central bank could always issue more CBDCs. A CBDC is therefore “analogous to a digital form of paper money” because it can be used without “credit or liquidity risk”.

While acknowledging the huge successes and “explosive growth” of digital currencies like Bitcoin, the president expressed concern about the risks of unregulated crypto-assets to “consumer protection, financial stability, national security and [the] In hopes of mitigating these risks, as well as “harnessing potential benefits” to “strengthen American leadership in the global financial system,” Biden has asked federal agencies to explore the creation of an American CBDC.

How does this relate to the rest of the crypto industry?

Despite these recent announcements from the US administration, the FED is late to the CBDC part. In a BIS article, published in January 2021, 56 out of 65 central banks surveyed were engaged in some sort of CBDC development. One of the main motivations for central banks to pursue research in this area is the [payment] implications” of CBDCs. The FED acknowledged that current cross-border payments “remain slow and costly”. Improving cross-border payments relies on the full use of “new technologies”, which is where private crypto companies come in.

Developing a CBDC isn’t the only form of payments modernization that could bring improvements. A white paper written by an Arab Monetary Fund advisory group listed 3 alternatives, including improvements to messaging protocols, coordination of existing RTP (real-time payment) systems, and the use of cryptocurrencies.

Messaging protocols include providers such as SWIFT, Revolut and RippleNet which essentially increase the efficiency of the old fashioned correspondent banking model where banks use their deposits in different countries to transmit funds through a chain of intermediaries to the recipient final.

“RTP systems coordination” is the approach taken by providers such as The Clearing House and is based on promoting cross-border interoperability between national instant payment systems.

Finally, although typically used more often as a speculative investment, specialty cryptocurrencies designed as a payment solution, like Ripple XRP, have the potential to bypass the entire legacy payment system. They function as standalone currencies that can be instantly transmitted between digital wallets across national borders.

Image credit: blokt

These potential solutions are important to note because, to put it simply, CBDCs could well become redundant if any of these alternative forms of payments modernization are adopted by traditional financial institutions. For example, major banks like Wells Fargo and JP Morgan are already adopting new RTP systems and the FED white paper even called The Clearing House’s RTP network a successful “real-time interbank payment system”. Likewise, if the court rules in favor of Ripple in a now infamous SEC lawsuit, then XRP may face fewer hurdles to widespread adoption.

So where are we now?

CBDCs are by no means faltering despite stiff competition in the FinTech arms race. Perhaps the most promising recent development for future CBDCs is the Dunbar Project paper, titled “International settlements using multi-CBDCs,” published by the Bank for International Settlements in March 2022. In this paper, the BIS outlines its latest project that aims to create a digital currency platform that “would facilitate cross-border transactions between financial institutions”. They have already successfully developed 2 working prototypes, including Patior.

I’m very optimistic about this if you dig into my article exploring the uses of blockchain technology in modern monetary policy, you can probably find:

“The use of blockchain technology…in state monetary policies can be implemented by issuing a digital currency that can become an alternative to the current dollar settlement system.”

While the potential for CBDCs is debatable, it is worth asking whether we should be skeptical of the idea of ​​government-backed CBDCs and whether they would align with general cryptocurrency ethics.