Citigroup gets permission for merchant banking

---

Refayet Ullah Mirdha
The Securities and Exchange Commission (SEC) Tuesday gave approval to 'Citigroup Global Markets Bangladesh Limited' to operate as merchant bank in the country's securities market.
'Citigroup Global Markets Bangladesh Limited' is the first foreign entity allowed to conduct merchant banking operation in the country.
Market operators said the SEC approval in favour of Citigroup will help attract high-profile multinational companies to go public in the Bangladesh's growing stock market.
The total market capitalisation of Dhaka Stock Exchange (DSE) has already crossed $ 8.0 billion-mark.
The SEC sources said two more foreign banks -Standard Chartered Bank and the HSBC- have shown their interest to conduct merchant banking operations in Bangladesh.
The permission for a merchant bank operation was accorded for the first time in the last one decade, said Executive Director of the SEC Farhad Ahmed.
Currently, there are 28 merchant banks, most of which are inactive in the market.
He said, the SEC will review the performance of all the merchant banks. And if SEC thinks it proper, may revoke the license of merchant banks that are not in operation or not performing up to the mark.
He said the finance ministry recently allowed the SEC to issue licenses up to 35 merchant banks.
Market operators are hopeful that the SEC will soon allow some local private commercial banks (PCBs) to open their merchant banking wings.
Some PCBs had applied to the SEC a few years back to operate as merchant banks but the stock market regulatory body did not permit them due to restrictions imposed by the finance ministry.
In another development, the SEC has decided forfeiting the whole or part of the application money for opening more than two Beneficiary Owner (BO) accounts by a single person.