The central bank has assured the commercial banks of issuing a master circular clarifying the interest and discount calculation method of government securities that will help to boost the country's secondary securities market.
The assurance came at a meeting with the representatives of the primary dealer (PD) banks and a financial institution held at the Bangladesh Bank (BB) Tuesday with General Manager of the Forex Reserve and Treasury Management Department of the central bank Ashok Kumar Dey in the chair.
The newly-formed Primary Dealers Association of Bangladesh (PDAB) earlier urged the central bank governor to clarify, omit and amend some points of its rules relating to the 'marking to market system.'
The 'marking to market' or 'mark to market' system is a process of calculation to determine the market value of an asset.
On May 26 last, the BB amended its rules on calculation of interest and discount of government-approved securities allowing the on-cash-basis accounting method instead of the accrual basis.
"We will provide all cooperation to the banks particularly PDs to bring dynamism in the country's secondary securities market," a BB senior official told the FE after the meeting.
The central bank will issue a master circular clarifying different points of the amended rules aiming to boost the secondary securities market, he added.
Under the amendment, the banks possessing government-approved securities in the 'held to maturity (HTM)' and 'held for trading (HFT)' forms will be allowed to use the bonds to meet their statutory liquidity requirement (SLR).
Earlier, the banks used to meet their SLR requirement with only HTM bonds.
BB to clarify amended rules on calculating govt bond interests
FE Report | Published: August 06, 2008 00:00:00 | Updated: February 01, 2018 00:00:00
Share if you like