4 years ago

BSEC seeks banks' reports on spl funds  

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The securities regulator has sought information from all listed and four non-listed banks regarding their formation of special funds worth Tk 2.0 billion each as announced earlier to support the capital market.

Besides, the banks which have already formed the fund have been requested to provide their investment status in the capital market.

In the letters sent to the 35 banks, including four non-listed ones, the Bangladesh Securities and Exchange Commission (BSEC) has requested them to submit information within seven working days.

Apart from listed banks, the non-listed ones which have been asked to submit information regarding formation of special funds and investments made in the capital market are Janata, Sonali, Agrani and Bangladesh Development Bank Limited.

"…you are requested under the section 11(2) of the Securities and Exchange Ordinance, 1969 to inform the commission regarding the status of creation of special fund and its investments in the capital market as on February 10, 2020 and June 28, 2020 respectively," said the letter of the securities regulator.

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

The BB's move came following the merchant banks' request for forming a Tk 100 billion fund to support the cash-hungry capital market.

According to the BB's circular, a bank can create such a special fund with its own resources or with any fund received from the BB through the repo or re-financing mechanism.

According to BB's information, Janata Bank and The City Bank earlier received Tk 800 million and Tk 500 million respectively from the central bank through repo.

Premier Bank and Exim Bank also had started the job of forming the special fund.

Of other private commercial banks (PCBs), United Commercial Bank, Shahjalal Islami Bank, and Islami Bank Bangladesh Ltd earlier informed the central bank about formation of their special fund for the capital market.

Of the state-owned commercial banks (SCBs), the Rupali Bank earlier formed a Tk 850 million (85 crore) fund with their own resources in line with the BB circular.

Sonali Bank, the largest state-owned commercial bank formed a Tk 2.0 billion fund with its own resources.

The circular said the special fund will be allowed to be invested in equity shares, mutual funds, bonds or debentures, and special purpose funds maintaining the prescribed criteria.

And the banks will not need to make any provision for a decrease in market value of their investments, the circular said.

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