Three more newly-established commercial banks will be enlisted with the central bank as primary dealers of the government securities from February 1, said Bangladesh Bank officials.
The three banks are NRB Bank, NRB Global Bank and Modhumati Bank.
Earlier, five newly-established banks — NRB Commercial Bank, South Bangla Agriculture and Commerce Bank, Midland Bank, Farmers Bank and Meghna Bank — got listed with the central bank as primary dealers of the government securities on December 1, 2013.
A BB official told New Age on Monday that the central bank would arrange one-to-one meetings with the three banks between January 15 and January 16 to ask them to take preparations in this regard.
The BB gave licences to nine new commercial banks in 2013 on condition that they would have to act as PD banks, they said.
Union Bank, one of the nine banks, will not play as a PD bank as it later converted its business to Islamic banking from traditional banking, he said.
PD banks have to participate in the auction for government securities to make possible government borrowing.
Seventeen scheduled banks including five new banks are now acting as PDs of government securities.
The BB official said that the central bank would relax the rules of investment in the government securities for the new banks.
The central bank will set minimum Tk 1 crore for a new bank to invest in the government securities on a mandatory basis in each auction.
The new PD banks will purchase the government securities if the bids for an auction from the old PD banks fail to meet government demand, he said.
As per the BB regulation, treasury bills and T-bonds are devolved on PD and non-PD banks if PD banks fail to acquire the entire securities put in an auction, he said.
Under the process, 60 per cent of the unsold securities are distributed to PD banks and the rest 40 per cent to non-PD banks.
The BB official said that the new banks would face difficult situation due to lower deposit collection by them if the existing rules for distribution of the government securities would be imposed on them.
So, the BB has decided to set minimum Tk 1 crore for the new banks to invest in T-bills and T-bonds in an auction if the government securities put in the sales need to be devolved, he said.
-With New Age input
