The Bangladesh Securities and Exchange Commission (BSEC) has asked the Bangladesh Bank to extend the tenure of the Special Commercial Banks Capital Market Investment Fund amounting to Taka 200 crore for another five years , until February 2030.

Further, BSEC has asked to increase the size of the fund to Taka 300 crore for each scheduled bank.

BSEC Chairman Khondoker Rashed Maqsood made the demands during a meeting with central bank Governor Dr Ahsan H Mansur this afternoon (November 27).

During the stock market downturn in early 2020, on February 10 of the same year, the BB allowed each bank to set up a special fund of Taka 200 crore from its own funds or borrow from the central bank at a concessional rate of 5% for five years, with the duration expected to end in February 2025.

According to BSEC, more than 20 banks had invested over Tk 1,600 crore in the capital market under the special agreement by mid-2024.

To make the offer lucrative, the central bank also excluded the investment from the calculation of banks’ exposure to the capital market.

After today’s meeting, BSEC officials told TBS that the BB governor was “cordial and positive” towards the BSEC proposals.

The BSEC chairman also sought support from BB in developing the capital market.

For listing of fundamentally strong companies, BSEC suggested the central bank to direct companies seeking long-term loans from the capital market so that they can raise equity capital from the stock market and capital from borrowing on the corporate bond market instead of overburdening the banks.

For stronger collaboration and coordination between money market and capital market regulators, BSEC has also called for a modern IT ecosystem that would enable capital market intermediaries to report online to BB.

The BSEC, which envisages a robust and modern online monitoring system in the capital market, also requested the BB to include modernization of capital market infrastructure in the World Bank-funded development programme, according to the officials of the BSEC.