BMBA seek BB intervention as few banks form special fund

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The fund could be formed by banks’ own sources or through collecting liquidity from the central bank through repo of Treasury bills or bonds

The Bangladesh Merchant Bankers’ Association (BMBA) on Sunday sought Bangladesh Bank’s intervention so that all scheduled banks formed special fund for investing in the stock market.

The association leaders made their demand at a discussion with the central bank governor, Fazle Kabir, at the BB headquarters.

The governor informed the BMBA delegation that eleven banks already formed special fund and the rest were instructed to form special fund as soon as possible, said Bangladesh Bank spokesperson and Excutive Director Md Serajul Islam. 

Sonali Bank, Janata Bank, Rupali Bank, United Commercial Bank, Shahjalal Islami Bank, The City Bank, Islami Bank Bangladesh and Social Islami Bank informed the Bangladesh Bank last week about their fund creation, said a high official of the central bank. 

On the other hand, Dhaka Bank, Mercantile Bank and Bank Asia would inform the BB this week about their fund creation, he added. 

Talking to Dhaka Tribune, BMBA President Md Sayadur Rahman said, “We talked with the central bank governor about the overall stock market.” 

“We also wanted BB’s intervention so that scheduled  banks form special fund and  start investing in the ailing stock market as soon as possible,” he added. 

He said the BB governor assured that the banks would come forward to invest in stock market. 

On February 10, BB allowed scheduled banks to form their special fund worth Tk200 crore each to invest in the stock market in an attempt to boost the sagging capital market.

The fund could be formed by banks’ own sources or through collecting liquidity from the central bank through repo of Treasury bills or bonds.

Brokerage houses, merchant banks, and stock market subsidiaries of banks and financial institutions would get access to the fund through the scheduled banks, the BB circular elaborated.

The key index of Dhaka Stock Exchange (DSE), DSEX, on Sunday dipped below the 4,000-point mark for the first time in five years as corona virus crisis deepened globally. 

DSEX closed at 3969.31 points after losing 160.64 points or 3.88% during the session. The key index of DSE lost 209 points in just 15 minutes after the bourse began trading.