• Friday, Jan 27, 2023
  • Last Update : 10:24 am

17 banks form special funds to shore up stock market

  • Published at 03:01 pm March 23rd, 2020
DSE proposes five-point action plans for turnaround in stock market
File photo shows a dejected investor looking at share prices at a brokerage firm Mehedi Hasan/Dhaka Tribune

Earlier, BB directs all scheduled banks to form a special fund of Tk200 crore each for investment in the capital market

Seventeen banks have formed special funds of Tk200 crore each as of yesterday for investing in the capital market complying with a Bangladesh Bank directive to shore up the ailing market.

The banks are– Sonali Bank, Janata Bank, Rupali Bank, United Commercial Bank, Shahjalal Islami Bank, The City Bank, Islami Bank Bangladesh, Social Islami Bank, Pubali Bank, Exim Bank, Dhaka Bank, NCC Bank, AB Bank, Mercantile Bank, Mutual Trust Bank, Southeast Bank and NRBC Bank.

A top Bangladesh Bank (BB) official told Dhaka Tribune that the 17 banks, out of 60, formed their funds as of Monday in compliance with a BB instruction that served last month to all banks in the country.

Confirming the special fund formation, the Sonali Investment Ltd Deputy Chief Executive Officer Jasmine Sultana said: ‘We have set up the fund recently for investment in stock market in line with the BB directives.’

Bangladesh Bank spokesperson and Executive Director Serajul Islam said the BB had asked banks to raise the fund to shore up the ailing stock market.

He hoped the market would revive soon with the injection of fresh liquidity through the banks’ special funds.

Bangladesh Bank on February 10 issued a circular, directing all scheduled banks to form a special fund of Tk200crore each for investment in the capital market. 

The fund can be drawn from the bank’s own resources or borrowing money from the central bank through treasury bills or bond repurchase agreements or repos at a 5% interest rate.

Earlier on March 16, a meeting, attended by the representatives from the finance ministry, the Bangladesh Securities and Exchange Commission (BSEC) and the Bangladesh Association of Banks (BAB), decided that the scheduled banks would invest in the stock market with their special fund from this week.

 Finance Minister AHM Mustafa Kamal presided over the meeting at his Agargaon office in the capital.

Kamal told reporters that bankers and bank directors ensured him of forming special fund by all banks as soon as possible. 

BAB President Nazrul Islam said banks agreed to form special funds for investing in the stock market. The investment would take place very soon by the banks that had already created their special funds to prop up the market, he added.

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