BSEC to urge fin min for weekly reporting
The Bangladesh Securities and Exchange Commission is likely to request the finance ministry to refrain Bangladesh Bank from monitoring on daily basis banks’ capital market investment through their merchant banks, BSEC sources said. The BB in January asked banks to submit to it total fresh investments made by the banks, fresh fund provided to the subsidiaries, fund provided to others for capital market activities and margin loans provided to the customers by the subsidiaries on daily basis.
BSEC high officials, however, said they were yet to be informed by the central bank about such step.
But, Bangladesh Merchant Bankers Association in a recent meeting informed them (BSEC officials) about it, they said.
Banks are feeling discomfort with such reporting as the merchant banks provide investment information to the BSEC on daily basis, they said.
They said the BSEC would request the finance ministry to ask the BB to collect banks’ capital market exposure on weekly basis instead of daily basis.
Asked, BSEC commissioner Helal Uddin Nizami told New Age, ‘I think
the central bank’s move is not feasible. The reporting of banks to the BB regarding their capital market investment through their subsidiary merchant banks should be quarterly or monthly basis.’
He also said that the central bank should reconsider the matter.
‘The BB as the regulatory authority of the banking sector and can ask any bank about any investment-related information without consulting any other entity,’ BB executive director M Mahfuzur Rahman told New Age on Monday.
The BB in January this year issued show-cause notices to several banks in connection with increase of their capital market exposure in December.
The parliament on January 14 passed the Bank Company (Amendment) Bill, 2013 which says that a bank can invest up to 25 per cent of the total of four components of its core capital in the capital market — shares, corporate bond, debenture, mutual fund or any other stock market instrument or funds.
The act also says that banks have to bring down their capital market investment below 25 per cent of their core capital within three years.
The act says no bank would be able to buy shares of a company amounting to more than 10 per cent of the company’s paid-up capital and more than five per cent of the company’s total market borrowings.
-With New Age input
