Two more private commercial banks (PCBs) have applied to the central bank for policy supports for adjustment of their capital-market overexposures, officials said.
The banks - City Bank Limited and One Bank Limited - are still maintaining more than 25 per cent capital-market exposures while all banks' exposures on the market came down to 21 per cent in April-May period from 23 per cent a month ago.
"We're scrutinising the applications for providing policy supports to adjust their capital-market overexposures without needing to sell out any shares on the market," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
He also said the central bank had already provided its policy supports to four PCBs on the same purpose of diverting their capital into their investment outfits.
Under the policy supports, AB Bank, Pubali Bank, Mercantile Bank and Mutual Trust Bank have already transferred loans and shares worth Tk 17 billion to their capital-market subsidiaries as capital.
"It has helped the PCBs in bringing down their capital-market overexposures to a permissible limit," the central banker explained. Â Â
The banks are allowed to adjust their overexposures through restructuring the exposure components and enhancing the capital of their subsidiaries with some internal adjustments, according to the latest policy supports of the BB.Â
Besides, four more PCBs are taking preparations to submit applications to the BB for availing the ongoing policy props from the central bank, according to the BB official.
"All 10 PCBs may invest again in the share market after adjustment of their overexposures," the central banker noted.Â
He also said Bangladesh Securities and Exchange Commission (BSEC) should take prompt decisions on the issue that will help bring positive impact on the share market. Â Â Â
Earlier on May 31 last, the BB advised chief executive officers and managing directors of all banks at a bankers' meeting to avail the latest supports for adjustment of their capital-market overexposures within the time limit.Â
The central bank will take regulatory actions immediately after the end of deadline, set by the BB earlier, another BB official said.
The central bank earlier had asked the banks to bring down their overall capital-market investments within 25 per cent of total capital by July 21, 2016 in line with the Banking Companies (Amended) Act 2013.
According to the Banking Companies Act 1991 (Amended 2013), 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 statements.
While calculating total investment, the investments in capital market's different components, including all types of shares, debentures, corporate bonds, mutual fund units and other securities, will be considered.
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