BSEC bats for raising banks' special fund to Tk300 crore, extend tenure for 5 years
The tenure of the current fund is set to expire in February next year
The Bangladesh Securities and Exchange Commission (BSEC) has requested the Bangladesh Bank to extend the tenure of the commercial banks' special Tk200 crore capital market investment fund for another five years till February 2030.
Additionally, the BSEC has requested to increase the fund size to Tk300 crore for each scheduled bank.
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BSEC Chairman Khondoker Rashed Maqsood made the requests during a meeting with the central bank Governor Dr Ahsan H Mansur this (27 November) afternoon.
During the early 2020 stock market downturn, the BB on 10 February that year allowed each bank to build a Tk200 crore special fund out of their own funds or borrow from the central bank at a concessional rate of 5% for five years, with the tenure set to end in February 2025.
According to BSEC, more than 20 banks had over Tk1,600 crore capital market investments under the special arrangement by mid 2024.
To make the offer lucrative, the central bank also excluded the investment from the banks' capital market exposure calculation.
After today's meeting, BSEC officials told TBS that the BB governor was "cordial and positive" to the BSEC proposals.
The BSEC chairman also sought BB support in capital market development.
For listing fundamentally strong companies, BSEC suggested the central bank to direct the companies looking for long term loans to the capital market so that they can raise equity capital from the stock market and some debt capital from the corporate bond market instead of overburdening the banks.
For a stronger collaboration and coordination between the regulators of the money market and the capital market, BSEC also requested a modern IT ecosystem that would let capital market intermediaries report to BB online.
BSEC, eying a robust modern online surveillance system in the capital market, also requested the BB to include capital market infrastructure modernisation in the World Bank-financed development agenda, according to the BSEC officials.
