Bank insurance

Defaulted loans have increased by $ 3,500 crore in three months

Despite providing various benefits, the defaulted loan has increased by $ 3,500 crore at the end of June. One of these benefits is not to identify the customer as a defaulter till September 30 and to reschedule the defaulted loan under the existing policy. Even after that, in the March-June quarter, the amount of bad debts increased to $ 3,608 crore and the amount of bad debts stood at $ 98,116 crore.

According to the latest bank defaulted loans, the amount of loans disbursed by banks till June this year stood at $ 1,049,725 crore. Of this, the default amount is $ 96,117 crore, which is 9.18 percent of the total debt.

According to the central bank, the amount of loans disbursed by the banks till March this year was $ 10,024,496 crore. Of this, the default amount is $92,510 crore, which is 9.3 percent of the total debt. As a result, defaulted loans have increased by $ 3,606 crore in three months. Earlier, in December last year, the amount of defaulters was $ 94,331 crore or 9.32 percent out of a loan of $10,11,627 crore.

According to the bank’s statistics, at the end of June 2019, the defaulted loans in the banking sector was 1 lakh 12 thousand 425 crore. Which is 11.69 percent of the total loan disbursed. As compared to June last year, the defaulted loan has decreased by $ 16,309 crore in June this year.

The central bank rescheduled the banks to reduce the defaulted loans of the banks. With 2 percent down payment, the defaulters have got the opportunity to repay the loan in 10 years with a grace period of one year. Since the concession was given in the policy on May 16, 2019, defaulted loans of more than $50,000 crore have been rescheduled last year with special consideration. Despite taking so many benefits, the amount of defaulted loans in the banking sector is not decreasing.


Insurance is compulsory to work abroad

The state-owned Life Insurance Corporation has started compulsory insurance for employees who go to work abroad.

At present, many workers in different parts of the world who work in the workplace with various risks do not get any insurance benefits. According to the Life Insurance Corporation, an agreement has been reached with the concerned authorities to insure expatriate workers for them.

Before going to work abroad, a worker has to get insurance from the Wage Earner Welfare Board. He can’t go abroad without insurance. ”

Dr Afroza said workers with a one-time fixed amount of money would have to be insured, which would be effective for two years.

“500$ of the one-time premium of 990$ will be paid by the Wage Earner Welfare Board and the rest will be paid to those who want to go abroad,” said Dr Afroza.

The Wage Earner Welfare Board will then coordinate all the information of the workers willing to go abroad with the Life Insurance Corporation through software. The Life Insurance Corporation will then issue a certificate to the migrant worker, making him an insured.

Shelina Afroza said workers who are currently abroad can also insure themselves if they wish by sending a representative or by contacting the Life Insurance Corporation.

Bank insurance

Bank will provide unsecured loans to MSME entrepreneurs

Private Prime Bank Limited will provide unsecured loans to small, medium and medium enterprises (MSMEs). To this end, the bank has signed a memorandum of understanding with the country’s renowned online marketplace Priyshop.

Under this agreement, MSME merchants associated with Priyashop will get easy financing facility from Prime Bank. According to the agreement, Priyashop’s merchants will get unsecured loans up to a maximum of Tk 5 million and other specialized financing services from Prime Bank. Will get internet banking-altitude service for deposit facility and e-transaction. The loan will require two years of business experience and a letter of recommendation from Priyashop. Prime Bank has appointed a dedicated relationship manager so that the merchants of Priyashop can easily avail all the banking services including loan application at home or in the office.

As a result of this agreement, SMEs will be able to finance working capital (CC, OD and demand loans), term loans for fixed asset purchase and capital expenditure, international trade solutions (LC, LATR, IDBP), bank guarantees, work orders, etc.

The main objective of this agreement between Prime Bank and Priyashop is to make them interested in conducting business on digital platforms. Prime Bank and Priyashop will work for the economic development of these MSME entrepreneurs by meeting all the banking needs of the merchants.


What is the structure of banking?

There are different types of banking institutions operating in a country. One type of bank performs one type of banking.

The pace of development is not the same in all countries of the world. Different countries have different economic organizations and different countries have different banking systems. However, there are some influences at the root of all kinds of economic and banking development. Based on these effects and effectiveness, different types of classifications are made in terms of the structure of the banking system. The structure of banking is briefly discussed below-

1- Single banking

A bank that conducts banking activities in a specific area or population through only one office is called single banking. The scope of this bank is limited as it provides services through a single branch or office. Such banks are generally called one-stop banks. However, it can also be a single banking partnership and joint venture company. There is no single banking in our country. The first single banking system was introduced in the United States.

2- Branch Banking

The banking activities that are conducted through different branches under a principal or main branch are called branch banking system. This means that the branches are operated at home and abroad through the main branch and provide various banking services.

In short, the branch banking system is a massive banking system. This type of banking system originated in the United Kingdom. All the bank branches operated in our country are covered under banking.

3- Chain banking

Some individual banks, while maintaining their own entity, are consolidated into a common banking institution through special strategies and are called chain banking if they are to be managed and regulated under a single control. In fact, the main purpose of chain banking is to stop mutual competition and manage banking activities in the interest of each other, divisionalization, achieving economy, joint promotion, etc. There is no introduction of chain banking in our country.

4- Group Banking

When similar but relatively weak banks merge and perform functions under one strong bank, it is called group banking. Consolidated banks are called subordinate banks and the bank under which weak banks are consolidated is called holding bank.

5- Mixed banking

The type of bank that performs the functions of both specialized and commercial banks is called a mixed bank. In other words, mixed banks, on the one hand, perform specialized functions as well as commercial functions. Such banks provide long-term and medium-term loans to industrial and other manufacturing companies and short-term loans to business organizations. Mixed banks accept people’s savings as deposits and invest them in various sectors. However, the big commercial banks in our country provide long-term loans and also perform the functions of some mixed banks.

6- Merchant Banking

Merchant Bank is a bank formed by a combination of exchange banking and investment banking. In foreign trade, these banks issue certificates to the customers, recognize the bills raised by the exporters and pay the bills. Merchant banks provide long-term loans, invest in joint ventures, and act as creditors.


The insurance policy will be sold through the bank

Bancassurance system is going to be introduced in the country. In this system, the commercial banks will sell the products and services (insurance policy) of the insurance company. The Insurance Development and Regulatory Authority (IDRA) has prepared a draft policy for conducting these activities. Many banks are showing interest in this. Meanwhile, nine private and foreign sector banks have also applied to Bangladesh Bank for no-objection to conduct insurance marketing activities. However, Bangladesh Bank is reviewing the legal aspects and risk issues of whether the banks can provide such services. It has been decided to take the opinion of two lawyers for this. It is also learned that a seminar will be organized soon with interested banks to review the legal aspects, economy and its impact and risk in the banking sector.

Bancassurance is a French word, which means selling insurance products through banks. The first bancassurance concept was introduced in France and Spain in the 1960’s. Over the past decades, banks and insurance companies around the world have been quite successful in selling their products through bancassurance. The business has expanded to many countries in Asia, sub-Saharan Africa and Latin America, such as Malaysia, Korea, Singapore, Indonesia and the Philippines. At present, bancassurance is also popular in Asian countries. It has become the top medium especially in selling life insurance policies.

Banks act as an effective alternative channel to the bancassurance system, say people in the banking and insurance sectors. This reduces the cost of collecting premiums for insurance companies. On the other hand, the bank can offer various insurance benefits to its customers at no extra cost. Apart from that, as the customers have more confidence in the bank, the customers are also more attracted towards buying insurance policies.

It is learned that after receiving views from IDRA and the Ministry of Finance at a meeting of bankers held with the chief executives of commercial banks on December 19, 2016 under the chairmanship of the governor, it was decided to take further steps to approve the sale of insurance products in the bank’s proposed bancassurance system. IDRA has already formulated a draft policy in this regard. The policy emphasizes on the expansion of the business of the insurance company and the control system of the IDRA in conducting this business. Meanwhile, about nine banks have applied to Bangladesh Bank for no-objection to conduct marketing of insurance products of IDRA-approved insurance companies. These are private sector Citibank, Eastern Bank, BRAC Bank, United Commercial Bank, Bank Asia, Mutual Trust Bank, Bangladesh Commerce Bank and ICB Islamic Bank and Standard Chartered Bank in the foreign sector.

In a letter to the central bank, the banks said they would sell insurance products to their customers on behalf of the insurance company under a partnership agreement executed between the bank and the insurance company in the bancassurance system. This will increase the commission income of the bank and will benefit both the companies by expanding the business of the insurance company. In addition, banks will be able to provide one-stop financial services to their customers if they have the opportunity to conduct insurance marketing activities, and financial inclusion activities will accelerate as well as increase the contribution of the banking and insurance sector to the country’s GDP. It is learned that in the first phase, Guardian Life Insurance has been approved by IDRA to market their products through the bank. Interested banks have signed an agreement with the company and expressed interest in conducting business.

Section 7 (1) (Da) of the Banking Companies Act states that a bank may act as an agency or representative of someone if necessary. In this case, there is no specific mention in the law about the direct or indirect involvement of the bank in the insurance business. However, as directed in Section 7 (3) of the amended Banking Companies Act, no banking company may be directly involved in such business as a stock-broker, stock-dealer, merchant banker, portfolio manager or requiring registration from the Securities and Exchange Commission.

Therefore, Bangladesh Bank is reviewing whether there are legal impediments in conducting bancassurance business and to what extent it would be appropriate to involve banks in non-banking activities such as sale of insurance products. Apart from this, the extent to which the risks of the insurance sector will affect the banking sector if the banks act as agents of the insurance companies is also being examined.


Life insurance known-unknown

Top 9 Benefits of Life Insurance

Life insurance is a very important addition to people’s financial life. Life insurance has many benefits that ensure the financial security of you and your family. Let’s take a look at some of the important benefits of life insurance today.

1- Security in case of risk to life

Problems never come with signals. Life insurance plays an important role in dealing with sudden financial problems. It ensures financial security for you and your family. Life insurance serves as a financial safety net in economic crises. In your absence it will ensure the safe living of your family.

2- Death benefits

Investing in life insurance ensures a secure future for you and your family. Upon the death of the insured, the insurer pays the bereaved family all the money (principal and bonus money). Also, for those whose income has decreased with age, life insurance protects appropriate benefits for accident victims and retirees. In life insurance you can choose the policy that suits your needs from among many policies

3- Flexibility

Many times the insured person becomes concerned that their insurance policies are no longer providing the required benefits or the premium is not being adequate as required. In that case, it is easy to adjust the needs and benefits. Owners of the policy can freely choose the heirs of the insurer, who will later enjoy the benefits of death.

4- Return on investment

Life insurance gives you long term guaranteed income. In life insurance, the insured gets the benefit of term bonus, which is credited with the cash value of the policy. The money invested will return at the end of the term of the policy or after the death of the insured as a guaranteed amount (amount of life insured).

5- Tax benefits

In life insurance you can enjoy many tax benefits. No tax is payable on insurance income or policy loans. Moreover, there is no possibility of imposing additional tax in case of change of insurance policy.

6- Opportunity to take a loan

There is an opportunity to take a loan in life insurance. In case of severe financial need, the insurance company gives you the facility to take a loan. The loan amount largely depends on the rules or regulations of the policy.

7- Low rate premium

In most cases the premium payment rate is much lower in the first years of the insurance period.

8- Long term savings

Life insurance is a great way to save money and build wealth for the future. It is an ideal long-term savings component, which will help meet your post-retirement financial needs. It can even be used to meet future goals, such as child marriage. In this way life insurance offers both protection and savings.

9- Plan of different stages

Through various life insurance plans you can plan to meet different goals in life. At some point in your life, you and your family may face different needs. In those cases life insurance will help meet the need. Your child’s education, marriage, a dream home of your own, spending the next days of leisure – everything is possible with life insurance!


5 benefits of life insurance

Future liberation from borrowed life:- We do not always have money in our hands. But if you have life insurance, it will be a sure savings for your future. And later you can use it in old age. This means that life insurance will be your partner in old age. And God forbid, even if something bad happens, your family will get financial compensation while you have life insurance. And as a result, it will never be difficult for them to run their household expenses. So if you don’t have life insurance, get life insurance today.

Fulfilling long term goals:- Many people think that if you take out life insurance, you will not get any additional financial benefit from it while you are alive. But if you plan for the long term and insure your life accordingly from the beginning, then your goal in the future will definitely be fulfilled. And for that you have to choose a specific financial benefit policy term.

Saving hard-earned money from income tax:- There are many of us who have fallen under income tax. And one of the great benefits of insurance is that with this insurance you can save a lot of money from income tax as well as save a lot of money monthly or quarterly, half-yearly and annually. So if you are an employee or a businessman, you must do life insurance.

Insurance according to income:- The range of life insurance is very wide. Just like you will get a minimum capital money policy here, you can also take a policy with large financial benefits according to your financial capacity. Various policies of various government companies as well as private companies are in the headlines today. From one year old child to old age senior citizens will get various insurance. So everyone can accomplish future financial benefits. Life insurance is available now with different terms, different coverage and nominees. So take the life insurance of your choice.

Money back as you wish:- You may think that if you keep money in the bank, you can withdraw money at regular intervals with interest. But many people think that such benefits are not available in the case of insurance. But now there are many life insurance money back policies that allow you to withdraw money at regular intervals as per your plan. And this is how life insurance gives you a fair value for your savings.


7 benefits of life insurance within the age of 30

Life insurance is a contract where the insurance company assumes the obligation to pay a stipend or a certain amount of money on the death of the insured or at the end of the stipulated years as opposed to a lump sum payment or a fixed period installment payment. Life insurance is usually not for your own financial benefit. Rather, the main goal of life insurance is to provide financial support to the dependents in the absence of the insured. So life insurance is a very important addition to people’s financial life. Life insurance has many benefits that are able to ensure the financial security of you and your family. Life insurance plays a pioneering role in setting your own life goals for the future of your family. A person can take his future forward in many places by taking out life insurance by the age of 30.

1. Long term savings –

The plan that a young person needs to prepare for the future has to be long term. Life insurance between the ages of 30 plays an important role in saving you money and building long-term savings for the future. This age is an ideal time for savings material, which will help you meet the financial needs of your later life. It will even help you meet your child’s future goals. In this way, life insurance can be used to enjoy both protection and savings. Therefore, one of the first guidelines of the plan developed in the age group of 30 years is to insure life.

2. Investment Return –

Life insurance under the age of 30 can be a great decision because life insurance gives you long-term guaranteed security from a young age. In life insurance, the insured gets the benefit of term bonus, which is credited with the cash value of the policy. The money invested will return at the end of the term of the policy or after the death of the insured as a guaranteed amount (amount of life insured). Which will act as an invisible guardian for your family even if you are not there and you can ensure the safety of your family in your absence. Also, insuring at this age means being less at risk of death. As a result, you will be able to get your desired maturity value (insurance amount + bonus) at the end of the specified time.

3. Loan Opportunity –

Taking a loan to build yourself and your needs helps a person a lot to move forward. In case of extreme financial need, the insurance company gives you the facility to take a loan. The loan amount largely depends on the rules or regulations of the policy. Taking a loan in the last 30 years plays a huge role in building yourself as a successful entrepreneur. And life insurance has the most opportunities to take this loan. Life insurance can play an important role in the current context to position yourself as a future entrepreneur.

4. Tax benefits

Life insurance allows you to enjoy excellent tax benefits. No tax is payable on insurance income or policy loans. Moreover, there is no possibility of imposing additional tax in case of change of insurance policy. If you take out life insurance between the ages of 30, you will be able to enjoy this tax benefit (up to the term of the insurance policy) throughout your employment. And if you have taken or want to take a loan against this policy, you will not have to pay any tax on that loan.

5. Consider adjustability

Many times the insured person becomes concerned that the benefits due from their insurance policies are less than required or the sum insured is not being adequate as required. In that case, it is easy to adjust the needs and benefits. The insured can freely choose the heir of the insured, who will later enjoy the benefit of death. By taking out life insurance between the ages of 30, you can build your own inheritance and give him or her a better idea of ​​the policy. In that case, if necessary, you can adjust the policy within your convenience. Also at this age you can get an insurance policy at a very low price. Because the lower the age, the lower the level of insurance premium will be.

6. Life-threatening safety-

Danger or problem never comes with a sense of time or a signal. The sudden unforeseen accident of the insured can bring extreme financial hardship on his family, which life insurance plays an important role in coping. Life insurance by the age of 30 ensures greater financial security for you and your family. Life insurance in your absence will ensure a safe and comfortable life for your family.