Business Desk :
The Bangladesh Securities and Exchange Commission has asked banks to submit their data on investment exposure to the stock market. The commission has recently sent separate letters to the scheduled banks in this regard.
The Banking Companies Act 1991, which was amended in 2013, has limited a bank’s stock market exposure to up to 25% of its capital which includes paid-up capital, share premium, statutory reserve and retained earnings.
According to BSEC officials, many banks’ exposure limit was below 15%.
The banks committed to increase investments in the capital market several times, but to no avail, they also said.
The BSEC held a meeting with the representatives of 33 scheduled banks on March 9 where the banks said that they would increase investments in the stock market by 2%.
Bankers said that banks were very reluctant to invest in the stock market considering high risks and instability on the market.
Earlier on February 10, 2020, the BB allowed banks to form a Tk200 crore special fund each by taking low-interest loans from the central bank to invest in the stock market.
The central bank created an opportunity for 61 banks to invest an aggregate amount of Tk12,000 crore in the stock market.
However, only 36 banks formed a total Tk5,700 crore of special funds and invested Tk3,400 crore from the special funds.
The BSEC is pressing the banks to inject fresh funds in the market.
The regulator has of late decided to delay approving bonds issued by the banks which did not invest in the market at an expected level, the BSEC officials added.
