Shame on AB Baby

Daily Star Reports

AB Bank's merchant banking wing was fined Tk 10 crore yesterday for disbursing excess margin loans in violation of securities rules.The penalty is the highest the regulator has imposed on a listed company since 2001. The Securities and Exchange Commission (SEC) also asked the merchant banking wing to submit the fine to the commission within the next 15 days. Managing director of AB Bank could not be contacted over his cell phone for comments despite repeated attempts. (anybody seen him around?) After an investigation the SEC found AB Bank's merchant banking wing disbursed around Tk 528 crore loans against its paid up capital of only Tk 57 crore during mid 2007 when stock market experienced an abnormal bullish trend due to liquidity glut stemming from excess margin loans. The wing mainly disbursed the loans among its employees and their relatives. (a big happy family...sucknig blood of innocent retail investors). “According to the securities rules, a merchant bank cannot provide margin loan more than five times of its paid up capital whereas AB Bank's merchant banking wing provided loans by around ten times of its paid up capital,” said Farhad Ahmed, executive director of SEC.The loans merchant banks offer to investors to buy shares is commonly known as margin loans. The merchant-banking wing of the bank swindled more than Tk 66 crore during the period last year, according to the SEC investigation report. The investigation found that the bank by disbursing excess loans created a liquidity glut, leading abnormal price hike of shares in some companies. In some cases, the share prices jumped by around 300 percent, the investigation revealed.The SEC investigation also revealed that AB Bank's merchant banking wing through its stockbrokers -- AB Bank Foundation, Ahmed Brothers Securities, Popular Equity, ARC Securities and Country Stock (Bangladesh) - used the netting facilities illegally in selling and buying shares on the spot market.

AB Bank has put on a new avatar these days, trying their best to wash their hands off sins commited in the past. They have a new logo, a new brand repositioning. Its time to start afresh for the happy AB family....they have sucked enough blood of unaware retail investors of the Bangladeshi Stock Markets.

Let me compare

Financial Express reports

City watchdog the Financial Services Authority (FSA) is to launch an independent Web site to help consumers compare credit cards. The move follows recommendations by the Office of Fair Trading (OFT) designed to help consumers get a better credit card deal. Others will include improvements in summary boxes on credit card marketing materials and statements, standardisation of terminology used in product literature and greater consumer education on the benefits of shopping around for a credit card. The OFT report into credit card comparisons follows a super-complaint from consumer group Which? in April last year. Which? said people choose credit cards without understanding all the issues that affect the cost of the card, and OFT research later showed that 70 per cent of credit card holders do not shop around. John Fingleton, chief executive of the OFT, said: "No one wants to throw money away, but consumers who don't shop around for credit cards are doing just that. "It is essential that consumers are given the right tools to make comparisons between credit cards more easily, and we can achieve this through some of the recommendations announced today which have received widespread support." Payments body Apacs said the new comparison Web site would prove an important additional tool to help people make informed choices about the card that best suits their needs. Director of communications Sandra Quinn said: "We are backing the OFT in hoping that these proposals will spur customers on to make better decisions by building upon the work already undertaken by the industry to make credit card products more transparent."

Though the credit wave is pretty new to have hit the shore of Bangladeshi youth/consumers, it would be nice to see some entrepreneurs coming up with a comparison website for not only the desi credit cards but also for comparing various other financial products offered by numerous banks and NBFIs of the country. Experts might argue, but I get a feeling (only) that my bank (guess which one) keeps on siphoning off money from my account with many innovative hidden costs (!) under the banner of 'this VAT', 'that VAT', processing fees, charges etc. Most of the time I don't understand why I am paying for all those charges and wonder if other banks do the same or not. My banker friends are eager to take advantage of my ignorance and really didn't welcome the idea of a comparison based website which would only make the consumers more educated and alert of different banking products. Nevertheless, I am the customer and I believe I am the king and I should have the option to choose. Any financial entrepreneur reading this...can you make out a business model out of this?

AB baby maybe worse...

What is your opinion about AB Bank's new logo? Well..though a good number of poll participants say it is 'better', here is a counterview.

"(AB Bank's new logo is) obviously not better, the previous one might be not interesting or eye catchy as a logo in terms of creative or graphical impression but that was 100% communicative to all classes of people in BD. since AB bank is a 1st generation bank, it has almost or more than 100 branches all over the country. but the new logo seems to what "sun" or nothing. if the name is omitted then individual logo has nothing, bcoz it's not a any consumer product to be popularized very quickly in a lot of mediums, without name ppl couldnt un'stand the logo immediately. whereas say 4 example as a logo of SCB, NBL, or any other bank which is may be rational or graphical type of logo, but ppl can un'stand the logo immediately coz from the 1st day of the bank they are looking a specific logo with a specific name. in this case if we omit the name, although ppl can un'stand what it is. a bank which is more than 20 years old, when it changes it's logo it should be more memorable, more communicative, more r! ationalrather than artistic. we should remember a bank is not like a telecommunication company, that in one road a telco might have 100 dealers, sub dealers, pop's, ad and many more. but in one or more than 2/3 areas covers one bank. so it's definitely worse."

Javed M. Khan Rumi replied to a Facebook message sent from the blog.