ABB to discuss liquidity support to capital market today

Mohammad MufazzalThe apex body of the country's bankers -- Association of Bankers, Bangladesh (ABB) -- will hold a meeting today (Thursday) to take some decisions about providing liquidity support for the capital market in accordance with the latest guidelines issued by the central bank, officials said. The Bangladesh Bank (BB) and the Securities and Exchange Commission (SEC) reached a unanimous decision on October 12, 2011 to relax some conditions, including the down-payments against margin loans that are provided to the clients. The BB authorities made available Wednesday a copy of the minutes of the meeting held between central bank and the capital market regulator. Meanwhile, Bangladesh Association of Banks (BAB), representing the sponsor-directors of the country's private commercial banks (PCBs), is also likely to meet informally today (Thursday) to discuss the latest situation in the banking sector, in the light of the latest instructions coming from the central bank, for buoying up the stock market through support in the form of liquidity or otherwise, by the banks. ABB Chairman Mr K Mahmood Sattar, who is also the managing director of City Bank, said they are very much positive about considering the recommendations made by the BB to stabilise the situation in the stock market. "The members of our association understand the implications of the current depressed state of the stock market. We will provide our utmost support for the stock market in line with the recommendations by the central bank," Mr Sattar told the FE. He said the present market is only for the buyers, as the PE ratio of many listed issues is in favour of them. "We will try our best to pursue the members of our association so that they do favourably consider the decisions taken at the meeting between the BB and the securities market regulator," Mr Sattar added. However, according to minutes of the meeting between the two key watchdogs on October 12, 2011, both the regulators expressed their views in favour of banks or their subsidiary-firms rescheduling the margin loans that were provided to their clients, in line with the guidelines of the central bank. If the rescheduling is done accordingly, the BB will positively consider the proposal for relaxation of the condition about down-payment, as is applied by respective banks under the normal practice for rescheduling of any loan under standard norms and practices that were set by the central bank.