A file photo shows the Bangladesh Bank headquarters in Dhaka. The BB’s operating profits dropped in FY16 because of increase in interest payment against investment by banks in Reverse Repo and Bangladesh Bank Bill and implementation of new pay scale.
The net operating profit of Bangladesh Bank decreased by 25.63 per cent to Tk 772.51 crore in the financial year 2015-16 although the central bank had avoided keeping provision against IS$ 81 million stolen from its reserve.
The BB’s operating profits dropped in FY16 because of increase in interest payment against investment by banks in Reverse Repo and Bangladesh Bank Bill and implementation of new pay scale, said BB officials.
The profit of the BB in FY 2014-15 was Tk 1,038.80 crore.
BB officials said that the central bank’s profit would have slumped to around Tk 132 crore in FY16 if BB had kept provision of Tk 632 crore against US$ 81 million stolen from its reserve with New York Federal Reserve Bank in February.
The BB board of directors at a meeting on Monday exempted the central bank from keeping provision against the stolen fund by showing it as ‘other receivable asset’.
According to the central bank’s financial balance sheet, the net operating profit of the BB declined as the central bank had to pay an interest amount of Tk 614.59 crore in FY16 to the scheduled banks against their investment in Reverse Repo and Bangladesh Bank Bill.
The central bank has to pay interest to the scheduled banks against their reverse Repo and Bangladesh Bank Bill, through which the BB takes loan from banks to control money supply in the market.
Besides, the central bank had to pay more wage and salary to its staff in line with the new pay scale than that of the previous fiscal year which put an adverse impact on the BB’s net operating profit.
The central bank earned a lower income of Tk 292.98 crore from the government borrowing in FY16 than that of the previous fiscal year.
The interest earnings of the BB declined massively from the government borrowing as it (government) borrowed a little amount from the central bank in the FY15.
The BB also faced a lower income of Tk 147.05 crore from Repo than that of FY15 as maximum banks suffered huge excess liquidity in FY16 due to dull business amid political uncertainty and delicate situation in law and order.
The board of directors of the BB on Monday approved the financial balance sheet at a meeting which was presided over by BB governor Fazle Kabir.
The central bank, however, posted a net profit of Tk 153.02 crore in FY16 from a loss amount of Tk 2,622.96 crore in FY15 as the foreign currency revaluation loss of the BB decreased, the financial balance sheet data showed.
BB calculates loss or profits from foreign currency separately.
The total income of the central bank increased by 24.74 per cent to Tk 3,502.18 crore in FY16 from Tk 2,807.48 crore in FY15, the balance sheet data showed.
A BB official told New Age on Tuesday that the exchange rate of local currency against US dollar maintained a stable situation in the last fiscal year which played a positive role in decreasing the loss amount to maintain foreign exchange reserve.
The BB board decided to show US$ 81-million fund stolen from its foreign exchange reserve as ‘other receivable asset’ in its balance sheet for the FY16 to avoid keeping provision.
The central bank’s net operating profit would have to decline significantly if it kept the provision against the stolen fund, the official said.
The BB’s US$ 101 million was stolen from the its account with the Federal Reserve Bank of New York on February 4.
A total of US$ 81 million was transferred to Philippines’ Rizal Commercial Banking Corp and then laundered into casinos in the Southeast Asian country.
In the unprecedented reserve theft, US$ 20 million was transferred to Sri Lanka where the fund was blocked by its central bank for suspected money laundering. The BB later recovered the fund.
Source: New Age
