The regulators concerned Wednesday approved a supervisory approach that puts emphasis on coordination between themselves to ensure stability in the country's entire financial sector, officials said.
The approval was given at a coordination meeting of the watchdogs-the Bangladesh Bank (BB), the Bangladesh Securities and Exchange Commission (BSEC), the Office of the Registrar of Joint Stock Companies and Firms, the Insurance Development and Regulatory Authority (IDRA), the Micro-credit Regulatory Authority (MRA), the Department of Cooperatives (DoC), and the Bangladesh Telecommunication Regulatory Commission (BTRC).
The meeting was held at the central bank headquarters in the capital with BB Governor Atiur Rahman in the chair.
Under the new approach, the regulators will be taking coordinated efforts to minimise any risk that might leave a destabilising impact on the country's financial sector.
"We've approved a supervisory concept paper that emphasises on coordination to ensure stability in the country's financial sector," BB Deputy Governor SK Sur Chowdhury told reporters after the meeting.
Different issues, including capital market, interest rates on agriculture credit disbursed by the MRA members, mobile banking and compliance of anti-money laundering rules and regulations, particularly amendment of Companies Act 1994, were discussed at the meeting.
During the meeting, the BB assured the securities regulator taking into consideration the policy on maintaining provision of open-end mutual funds by the commercial banks.
"We'll consider the matter with an open mind," the BB deputy governor said.
He also said the BSEC has submitted a letter to BB in this connection.
On March 12, the central bank relaxed loan provisioning rules on mutual fund units to bring dynamism in the country's capital market. The banks are allowed to keep provisioning considering both market value (MV) and net asset value (NAV) in current market price.
Earlier, the banks used to maintain provisioning against their investment in mutual fund units considering only MV.
Such relaxation will help the banks to reduce about Tk 7.0-8.0 billion provisioning requirement, opined the BB deputy governor.
"The central bank is always supportive towards development of the country's capital market," Mr. Sur Chowdhury noted.
He also said the BB has also relaxed its reporting requirement on capital market activities of the banks to facilitate the market.
Under the revised provision, the banks are now allowed to submit their consolidated reports on daily capital market activities once in a week on each Thursday, instead submitting the same on the same day.
Regarding the extension of timeline for adjustment of the banks' excess investment in the capital market, the BB deputy governor said it is a matter of the Banking Companies Act, and not of the central bank.
"We've issued the directive under the Banking Companies (Amended) Act 1991 to ensure implementation of the law," he said while replying to a query.
The BB earlier asked the banks to bring down their overall capital market investment within 25 per cent of total capital by July 21, 2016 in line with the provision concerned of the Banking Companies Act 1991 (amendment up to 2013).
According to the act, total capital comprises four components: paid-up capital, balance in share-premium account, statutory reserve, and retained earnings as stated in the latest audited financial statement.
In calculating total investment in the capital market different components, including all types of shares, debentures, corporate bonds, mutual fund units and other capital market securities, have to be considered.
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