ADB approves $170 million more

The Asian Development Bank (ADB) has approved the second tranche of loan amounting to $170 million for the Third Capital Market Development Programme in Bangladesh.
The Manila-based lender approved the programme involving a total of $250 million in November 2015 with a first tranche of $80 million loan to support capital market reforms, accompanied by a technical assistance grant of $700,000 for the implementation of the reform actions.
Of the grant, $300,000 was financed by the Korea's e-Asia and Knowledge Partnership Fund, according to a press statement issued by the bank on February 14.
The Third Capital Market Development Programme was introduced in 2015 to build on the foundation established under the second programme to broaden and deepen the reach of the reforms and overcome remaining constraints in sustainable market development, it added.
The programme is aimed at implementing regulatory and institutional reforms, such as strengthening regulatory and supervisory capacity of Bangladesh Securities Exchange Commission (BSEC), establishing a risk-based capital framework for market intermediaries, enhancing the clearing and settlement system, introducing new financial instruments by the two demutualised stock exchanges, establishing a Financial Reporting Council and strengthening governance of the insurance sector.
The ADB has been actively supporting the government's current capital market reform agenda since 2012 when the Second Capital Market Development Programme was approved.
It aimed to rebuild market confidence after stock market turbulence in December 2010 and put the capital market back onto a sustainable development path.
The programme resulted in the 10-year national capital market development master plan and critical legislations for ensuring the independence of the BSEC as a regulator, demutualising the two stock exchanges, better corporate governance, more reliable financial reporting and auditing, and insurance sector development.
"ADB's long-term engagement through its capital market development programmes in Bangladesh have transformed the legal, regulatory, and institutional market frameworks in line with the government's development priority to mobilise long-term financing to productive investments, such as infrastructure, for its sustained economic growth toward middle-income status," ADB Financial Sector Specialist Takuya Hoshino said.
"Significant progress has been made to further strengthen an enabling environment for sustainable capital market development under ADB's programme. The government is encouraged to continue to resolve pending items under its long-term capital market development master plan," he added.
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