Banks now can invest max Tk 2.0b in spl instruments

Country's commercial banks now can invest maximum Tk 2.0 billion in some instruments like Special Purpose Vehicle (SPV) and Alternative Investment Fund (AIF), officials said.
The central bank issued a circular Tuesday to this effect, paving the way for circulating the banks' excess liquidity.
"We've created a new window for investment by the banks through issuing the directive," a senior official of the Bangladesh Bank (BB) told the FE.
He also said the banks may take the opportunity for investing their excess liquidity in the funds, which are registered with the Bangladesh Securities and Exchange Commission (BSEC).
"Investment in such funds shall not be included in the capital market investment under the Banking Companies Act 1991 (Amended up to 2013) of the investor bank," the central banker explained.
Before making any firm commitment to investment in such funds, the investor bank company will have to apply for permission from the Department of Off-site Supervision of the BB, according to the circular.
"The investor bank company shall enter into an agreement with the trustee of such fund(s) so that  no  investment  shall  be  made  by  such  fund(s)with  any  related  party  of  the  investor  bank company   or   no   investment   shall   be   made   to   purchase   the   share/debenture/bond   or similar instruments of the investor bank or no fund shall be deployed in such investment which constitutes a  financial  claim over  any  other  bank  or  financial institution  in  future  certifying  that  no  such investment  has  already  been  made," the central bank said in its circular.
The BSEC earlier had approved Special Purpose Asset-back Securities Issuing Policy and the 'Bangladesh Securities and Exchange Commission (Alternative Investment) Rules 2015' to promote the venture-financing and equity-investment facilities for non-listed local firms having fund shortages.
Under the rules, Alternative Investment funds will have to be managed professionally by the fund managers and the trustees.
Both the trustees and fund managers will have to be registered with the securities regulator.
According to the rules, the trustees will raise funds from the eligible investors, who may be Bangladeshi, foreign and non-resident Bangladeshis (NRBs), by issuing units.
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