BB advice for biggies to raise funds from capital mkt lauded

Top bankers in the country have termed the central bank's advices to big businesses to collect funds from the capital market a positive step saying that it will help enhance their financial strength.
 "We're not worried about the latest call by the central bank relating to collecting funds through issuance of initial public offering (IPO) by big businesses," Mr Nurul Amin, former chairman of the Association of Bankers, Bangladesh (ABB), told the FE.
He also said the enterprises including the biggest ones would have to come to the banks for their working capital even after raising funds from the capital market.
On Monday the Bangladesh Bank (BB) advised big corporate houses and conglomerates to collect funds from the country's capital market instead of banks for expanding their business.
Mr. Amin, also managing director and chief executive officer (CEO) of the NCC Bank Limited, said the money market was still bigger than the capital market.
Most of the big businesses were not interested in raising funds from the capital market through issuance of IPOs, because they felt shy as it required them to make disclosures to the authorities concerned before coming to the capital market, he explained.
"It will be good for the country's economy, if big businesses go to the capital market after ensuring their accountability and transparency," the senior banker noted.
Mohammad Abdul Mannan, managing director and CEO of the Islami Bank Bangladesh Limited (IBBL), said the IBBL was diversifying investment portfolios by size, sector, economic purpose and geographical location in line with its ongoing five-year perspective plan.
He also said the IBBL had squeezed investments in big corporate houses and conglomerates to minimise their risks. "We're now increasing investments in rural areas for gearing up implementation of the ongoing financial inclusion programme."
Payment behaviour of small and mid-level entrepreneurs was better than any big corporate house or conglomerate, he explained.
Talking to the FE, Helal Ahmed Chowdhury, managing director and CEO of the Pubali Bank Limited, said such low-cost funds would facilitate the country's industrialisation, if the big business entities become interested in raising funds from the capital market by complying with the related regulatory norms.
"It will also help reduce concentration of loans and minimise risks," Mr. Chowdhury explained.
He also said the banks were now increasing their investments in the SME (small and medium enterprise) sector aiming to cut poverty through employment generation across the country.
The central bank has set the SME credit disbursement target at Tk 887.53 billion for this calendar year, marking nearly 20 per cent growth over that of previous year despite the political uncertainty.
The loans will be given to more than 60 SME sectors including light engineering, handicraft, flower, fish processing, handloom, rice-mill, jamdani, Rajshahi silk, khadi, bio-gas and compost fertiliser.