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The Financial Express

BB, BSEC hold parley to develop capital market

Only small investors to get banks' cash dividends


FE Report | Published: June 02, 2020 10:11:16 | Updated: June 03, 2020 09:55:58


Investors wearing protective gears monitoring stock price movements on computer screens at a brockerage house in the capital city — FE photo Investors wearing protective gears monitoring stock price movements on computer screens at a brockerage house in the capital city — FE photo

The central bank and the securities regulator took a set of decisions in a meeting on Monday, including disbursement of the listed banks' cash dividends only among small investors, considering their woes during the ongoing lockdown.

The decisions were taken in the meeting at the Bangladesh Bank (BB) office to fix strategies to overcome the impacts of Covid-19 pandemic along with strengthening their mutual coordination for further development of both the money market and the capital market.

The BB Governor Fazle Kabir and its deputy governors along with chairman of the Bangladesh Securities and Exchange Commission (BSEC) Prof. Shibli Rubayat Ul Islam and its four commissioners attended the meeting.

The meeting between the central bank and the securities regulator was the first one after the government reformed the BSEC by appointing its new chairman and two commissioners.

As per the meeting's decision, the banks' cash dividends, payment of which was restricted until September, will be disbursed only among small investors.

"The dividends will be disbursed among small investors, other than sponsors and institutional investors, considering their critical situation amid the ongoing lockdown," a meeting participant told the FE.

On May 12, the central bank issued a circular, fixing a timeframe for disbursing dividends by the listed scheduled banks.

The central bank also imposed restriction on disbursement of cash dividends until September besides including the banks' dividends into their capitals.

Considering standstill situation of the market intermediaries, both the BB and the BSEC decided on Monday to include merchant bankers and other market operators in the list of other intermediaries, whose bank interests worth Tk 20 billion will be waived.

Prime Minister Sheikh Hasina announced a new stimulus package on Sunday to waive Tk 20 billion bank interest of the borrowers, affected badly by the lockdown to contain the Covid-19 pandemic. Those borrowers took loans from different banks for doing business.

In the meeting on Monday, both the regulators have fixed two focal points, who will sit thrice in first three months to identify problems, which clash with the interests of both the money market and the capital market.

"Later, the focal points will sit once in two months, and all problems will be solved through consensuses," the meeting participant said.

From now on, the central bank will work to inspire the banks to accelerate formation of the special funds worth Tk 2.0 billion, announced earlier to support the ailing capital market.

The BB issued a circular on February 10, allowing all the scheduled banks to create Tk 2.0 billion special fund each for a period of five years for investment in the market.

The BB circular came in the wake of merchant bankers' request for a Tk 100-billion fund from the government to infuse new life into the capital market.

Except some state-owned commercial banks, most of the private commercial banks were not able to take any concrete decision to that end before the lockdown.

In the meeting on Monday, the BB also assured the BSEC of providing all types of supports to expedite the country's bond market, an official said.

mufazzal.fe@gmail.com

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