Banks’ share mkt exposure deadline ends today

Almost all banks have complied with the share market exposure regulations, as the deadline in this regard ends today (Thursday), officials said.
Three banks are set to receive approval from the central bank in this connection today after completing all formalities, they added.
The banks are Janata, IFIC and Bangladesh Development Bank Limited (BDBL).
"The approvals of three banks are now at final stage," a senior official of the Bangladesh Bank (BB) told the FE on Wednesday.
He also said: "We hope that the banks will receive their letters of approval within Thursday."
The central bank earlier provided approvals to ten other commercial banks for adjustment of their capital market overexposures with its policy supports.
On April 27, BB extended policy supports to the banks for adjustment of their stock market overexposures within the stipulated timeframe without selling any shares in the market.
Under the revised policy, the banks are now allowed to adjust their overexposures through restructuring the exposure components and enhancing the capital of their subsidiaries with some internal adjustments.
"We've provided policy supports to the banks for maintaining legal requirements within the stipulated timeframe," BB deputy governor S K Sur Chowdhury told the FE.
The country's banks are able to adjust their overexposure in the capital market within the permissible limit without selling shares in the market, the deputy governor explained.
A total of 13 banks, out of 56, had more than 25 per cent capital market exposures in May 2016, while all banks' average capital market exposures stood at 22 per cent in that time.
"All 13 banks may invest again in the share market after adjustment of their overexposures," Mr. Sur Chowdhury further said.
The central bank earlier instructed the banks to bring down their overall capital market investments within 25 per cent of their respective total capital by July 21, 2016 in line with the Banking Companies (Amended) Act 2013.
According to the Banking Companies Act 1991 (Amended in 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 in the capital market different components, including all types of shares, debentures, corporate bonds, mutual fund units, and other securities, will be considered, it added.
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