Special fund for stock market: Banks to invest soon

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The fund can be drawn from the bank’s own resources or borrowing money from the central bank through Treasury bills or bond repurchase agreements or repos at a 5% interest rate

Scheduled banks on Monday decided to invest in the ailing stock market starting tomorrow from their special fund formed to shore up the struggling market.

The decision was taken at a stakeholders’ meeting, comprising representatives from the finance ministry, Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Association of Banks (BAB). Senior bankers, including banks’ CEOs, attended the meeting.

Finance Minister AHM Mustafa Kamal presided over the meeting at his Agargaon office in the capital.

Bangladesh Bank on February 10 issued a circular, allowing scheduled banks to form a special fund of Tk200crore each for investment in the capital market.

The fund can be drawn from the bank’s own resources or borrowing money from the central bank through Treasury bills or bond repurchase agreements or repos at a 5% interest rate.

Kamal told reporters that bankers and bank directors ensured him of forming special fund by all banks as soon as possible. 

“I request all investors not sell off their shares out of fear at  lower prices” he added.

BAB President Nazrul Islam said banks agreed to form special funds for investing in the stock market. The investment would take place from tomorrow by the banks that had already created their special funds to prop up the market, he added.

As per the decision of the meeting, each week the finance ministry, BSEC and Bangladesh Bank will sit with stakeholders to  monitor the investment situation by banks.

Meanwhile, Sonali Bank, Janata Bank, Rupali Bank, United Commercial Bank, Shahjalal Islami Bank, The City Bank, Islami Bank Bangladesh and Social Islami Bank already informed the Bangladesh Bank last week about their fund creation.

 Financial Institutions Division Senior Secretary Md Ashadul Islam, BSEC Chairman M Khairul Hossain, Association of Bankers, Bangladesh (ABB) Chairman Ali Reza Iftekhar and top officials of banks were also present at the meeting.