Bangladesh Bank (BB) will extend the timeframe to adjust the single borrower exposure limit by the commercial banks for financing the operations of their subsidiaries - brokerage firms and merchant banks, officials said.
SK Sur Chowdhury, an executive director of BB, said this Thursday at a press briefing held at the office of the Securities and Exchange Commission (SEC) after holding a scheduled meeting of the capital market's co-ordination committee.
The meeting of the committee was held to find out the solutions to the existing problems, including the adjustment of single borrower exposure limit.
"The BB will extend the timeframe of adjusting single borrower exposure limit for the sake of the country's stock market," Mr Chowdhury told the reporters.
He said the BB had earlier extended this timeframe twice considering the market situation.
"The BB will evaluate the desire of government and the demands of stakeholders for the development of the market," he added.
Echoing Mr Chowdhury, SEC Executive Director Mohammad Saifur Rahman said the central bank would continue its help in future so that the market gets a stable base for the sake of country's economy.
Mr Chowdhury also said there is nothing to be worried about the upcoming amendment to the Bank Act, which will specify the investment cap of commercial banks in the stock market.
"The upcoming amendment may take two years to be finalised. So we think the market will not be affected at this," he said.
The Section 26 (2) of the Bank Act says in the stock market a commercial bank will be able to invest 10 per cent of liabilities or 25 per cent of its paid-up capital, whichever is lower.
DSE President Shakil Rizvi said after holding Thursday's meeting they have become very much clear about the BB's positive sentiment to the stock market.
"The BB is not rigid about its decision taken previously. Moreover, it is deeply considering the existing problem of the market. So, we are hopeful about the stock market's restoration," Mr Rizvi said.
He said the DSE has provided the netting facilities to the investors and proposed the uniform market lot of 100 shares.
"We have also proposed to reduce the trading cycle period from T+3 to T+2," the DSE president added.
CSE President Fakhor Uddin Ali Ahmed said the charge of Central Depository Bangladesh Limited (CDBL) will be decreased immediately to reduce the cost of doing business in the market.
"At the meeting we have also made some other market supportive proposals, including the activation of Bangladesh Fund, which will help stabilise the market," Mr Ali said.
He said nobody should expect overnight change in the market, adding, "We should wait for market's stability."
Another proposal of investing idle funds of leasing companies in the stock market was also made at the meeting.
At the press briefing the BB executive director opposed the merchant bankers' proposal of raising their capitals, as such banks are licensed to operate business with a fixed capital.
The SEC this week assured merchant bankers to pave the way of their capital expansion through Initial Public Offering (IPO) and Foreign Direct Investment (FDI) or offering bond and securities.
However, the SEC executive director said there will be scope of discussion to solve such problems.
Banking and Financial Institution Division Deputy Secretary Nasir Uddin, SEC Chairman Prof M Khairul Hossain, three members --- Prof Helal Uddin Nizami, Md Amzad Hossain, Arif Khan and A Salam Sikder --- and two chief executive officers of the both the stock exchanges were present at the co-ordination meeting.
Before starting the press briefing, the SEC chairman sought help from the media so that no misinterpretation relating to the regulatory decision can affect the market.
SK Sur Chowdhury, an executive director of BB, said this Thursday at a press briefing held at the office of the Securities and Exchange Commission (SEC) after holding a scheduled meeting of the capital market's co-ordination committee.
The meeting of the committee was held to find out the solutions to the existing problems, including the adjustment of single borrower exposure limit.
"The BB will extend the timeframe of adjusting single borrower exposure limit for the sake of the country's stock market," Mr Chowdhury told the reporters.
He said the BB had earlier extended this timeframe twice considering the market situation.
"The BB will evaluate the desire of government and the demands of stakeholders for the development of the market," he added.
Echoing Mr Chowdhury, SEC Executive Director Mohammad Saifur Rahman said the central bank would continue its help in future so that the market gets a stable base for the sake of country's economy.
Mr Chowdhury also said there is nothing to be worried about the upcoming amendment to the Bank Act, which will specify the investment cap of commercial banks in the stock market.
"The upcoming amendment may take two years to be finalised. So we think the market will not be affected at this," he said.
The Section 26 (2) of the Bank Act says in the stock market a commercial bank will be able to invest 10 per cent of liabilities or 25 per cent of its paid-up capital, whichever is lower.
DSE President Shakil Rizvi said after holding Thursday's meeting they have become very much clear about the BB's positive sentiment to the stock market.
"The BB is not rigid about its decision taken previously. Moreover, it is deeply considering the existing problem of the market. So, we are hopeful about the stock market's restoration," Mr Rizvi said.
He said the DSE has provided the netting facilities to the investors and proposed the uniform market lot of 100 shares.
"We have also proposed to reduce the trading cycle period from T+3 to T+2," the DSE president added.
CSE President Fakhor Uddin Ali Ahmed said the charge of Central Depository Bangladesh Limited (CDBL) will be decreased immediately to reduce the cost of doing business in the market.
"At the meeting we have also made some other market supportive proposals, including the activation of Bangladesh Fund, which will help stabilise the market," Mr Ali said.
He said nobody should expect overnight change in the market, adding, "We should wait for market's stability."
Another proposal of investing idle funds of leasing companies in the stock market was also made at the meeting.
At the press briefing the BB executive director opposed the merchant bankers' proposal of raising their capitals, as such banks are licensed to operate business with a fixed capital.
The SEC this week assured merchant bankers to pave the way of their capital expansion through Initial Public Offering (IPO) and Foreign Direct Investment (FDI) or offering bond and securities.
However, the SEC executive director said there will be scope of discussion to solve such problems.
Banking and Financial Institution Division Deputy Secretary Nasir Uddin, SEC Chairman Prof M Khairul Hossain, three members --- Prof Helal Uddin Nizami, Md Amzad Hossain, Arif Khan and A Salam Sikder --- and two chief executive officers of the both the stock exchanges were present at the co-ordination meeting.
Before starting the press briefing, the SEC chairman sought help from the media so that no misinterpretation relating to the regulatory decision can affect the market.
Source: FE
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