BB may extend deadline
Thursday, 28 June 2012
FE Report
The Bangladesh Bank (BB) may extend the deadline for non-bank financial institutions (NBFIs) to raise their capital base to a minimum of Tk 1.0 billion.
In a notice issued last year, the central bank asked the NBFIs to raise their paid-up capital to at least Tk 1.0 billion by June 30 this year from Tk 500 million to minimise risks.
It also asked the non-listed NBFIs to float initial public offering (IPO) within the deadline.
Of the 31 NBFIs operating in the country, five, namely, IIDFC, Fareast Finance and Investment, Hajj Finance, Reliance Finance and National Finance, have requested the central bank for extension of the deadline.
"We'll consider the factors that are beyond their capacity," a senior central bank official told the FE Wednesday.
He said there is still one working day (today i.e. Thursday) left adding: "We'll take up the cases into consideration and give our decisions shortly."
The complexity over floating of IPOs is one of the reasons that could not be overcome by the companies.
The NBFIs found it difficult to raise capital and pointed to the heavy-handed approach of the Securities and Exchange Commission (SEC) in approving their proposals.
The central bank advised the NBFIs to float IPOs, issue rights or bonus shares to mobilise funds required to take their paid-up capital to the new floor.
In an earlier meeting with the NBFIs in May last, BB Deputy Governor SK Sur Chowdhury rejected their pleas to extend time.
Sources claimed that Fareast Finance submitted its IPO proposal three months back, but the SEC is yet to tell the company when the clearance will be given.
Asad Khan, Managing Director of Prime Finance, said one NBFI -- Fareast Finance and Investment -- has already raised its capital to Tk 1.0 billion adding: "It is yet to complete IPOs."
Some 22 NBFIs are listed with the bourses.
The Bangladesh Bank (BB) may extend the deadline for non-bank financial institutions (NBFIs) to raise their capital base to a minimum of Tk 1.0 billion.
In a notice issued last year, the central bank asked the NBFIs to raise their paid-up capital to at least Tk 1.0 billion by June 30 this year from Tk 500 million to minimise risks.
It also asked the non-listed NBFIs to float initial public offering (IPO) within the deadline.
Of the 31 NBFIs operating in the country, five, namely, IIDFC, Fareast Finance and Investment, Hajj Finance, Reliance Finance and National Finance, have requested the central bank for extension of the deadline.
"We'll consider the factors that are beyond their capacity," a senior central bank official told the FE Wednesday.
He said there is still one working day (today i.e. Thursday) left adding: "We'll take up the cases into consideration and give our decisions shortly."
The complexity over floating of IPOs is one of the reasons that could not be overcome by the companies.
The NBFIs found it difficult to raise capital and pointed to the heavy-handed approach of the Securities and Exchange Commission (SEC) in approving their proposals.
The central bank advised the NBFIs to float IPOs, issue rights or bonus shares to mobilise funds required to take their paid-up capital to the new floor.
In an earlier meeting with the NBFIs in May last, BB Deputy Governor SK Sur Chowdhury rejected their pleas to extend time.
Sources claimed that Fareast Finance submitted its IPO proposal three months back, but the SEC is yet to tell the company when the clearance will be given.
Asad Khan, Managing Director of Prime Finance, said one NBFI -- Fareast Finance and Investment -- has already raised its capital to Tk 1.0 billion adding: "It is yet to complete IPOs."
Some 22 NBFIs are listed with the bourses.