Govt considers extending special fund, easing rules to boost mutual fund investment

The Ministry of Finance held a high‑level meeting yesterday (23 June) to review policies and explore ways to encourage greater investment in mutual funds and the capital market.

The meeting was attended by the Chief Adviser's Special Assistant Anisuzzaman Chowdhury, BSEC Chairman Khondoker Rashed Maqsud, Financial Institutions Division Secretary Nazma Mobarek, Bangladesh Bank Deputy Governor Nurun Nahar, Additional Secretary Sayeed Qutub, as well as Managing Directors and senior representatives from Sonali Bank, Investment Corporation of Bangladesh, United Commercial Bank, Bank Asia, Eastern Bank, and other leading state‑owned and private sector banks, according to a finance ministry source.

A key focus of the discussion was the special Tk200 crore fund set up by scheduled banks for investment in the capital market, which has already been extended until 31 December, 2026. 

The meeting considered further extending the term of the special fund to help ensure long‑term stability in the country's capital market and financial sector.

Participants also reviewed the fund's existing investment policies, which currently allow investments of up to 10% of total units in closed‑end mutual funds and 15% of total units in open‑end mutual funds.

At present, the fund can only invest in closed‑end mutual funds that have paid at least 5% cash dividends for three consecutive years, and in open‑end mutual funds with a Net Asset Value (NAV) higher than their face value and a record of at least 5% cash dividend payments for the past three years.

The meeting emphasised making these conditions more flexible to attract greater institutional investment, making the process more accessible and straightforward.

In addition, participants discussed facilitating the listing of well‑established companies in the capital market, strengthening investor confidence, and promoting the overall growth and development of mutual funds in Bangladesh.