BSEC asks 34 banks to submit status of spl funds

Mostafizur Rahman | Published: 23:18, Jun 30,2020

 
 

Bangladesh Securities and Exchange Commission on Tuesday asked all the listed banks and four state-owned banks to submit status reports on creation of special fund and its investment in the capital market.

The BSEC on Tuesday sent letters to managing directors and chief executive officers of the banks asking them to submit the reports, covering duration between February 10 and June 28, within 7 working days.

‘The government and Bangladesh Bank have taken significant initiatives to improve the liquidity position as well as sustainable development of the capital market in the backdrop of the pandemic of COVID-19,’ said the letter.

Earlier on February 10, Bangladesh Bank issued a circular allowing the scheduled banks to form a special fund of Tk 200 crore each to invest in the volatile capital market.

The fresh investments that would be made by the banks under the facility would not be calculated as their solo or consolidated capital market exposure.

But, most of the banks are reluctant to form the special fund even at low interest rate, and invest in the market.

The prolonged bearishness in the market resulted from lack of confidence made the banks pessimistic about the progress of the market, market operators said.

Despite pressure from the BB and the government high ups, 14 banks have so far formed special fund involving around Tk 1,700 crore for investing in the market.

However, a large amount of the funds are yet to be invested in the market, they said.

The BB offered the facility to the banks to enhance the liquidity flow in the market as coronavirus pandemic hit the market harder.

BSEC officials said that the commission wanted to know the actual position of the banks regarding the issue.

After getting the information, the BSEC may pursue, through BB and government high ups, all the banks to form the special fund and investment in the capital market.

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