BB revises provisioning requirement for MFs

Bangladesh Bank (BB) has revised the provisioning requirements for banks against their investment in mutual funds (MFs).
The central bank in a circular on Sunday said that banks from now on would not have to keep provision for losses against investment in mutual funds if the unit's cost price is equivalent to or lower than 95 per cent of its net asset value (NAV) in current market prices, a news agency report said.
BB, however, said if the cost price of the unit is higher than 95 per cent of the market value or NAV on the basis of current market price, banks should have to keep the provision by deducting the market value of the unit from the cost price.
The central bank asked all scheduled banks to implement the directive immediately.
Currently, 40 closed-end mutual funds worth Tk44.4 billion are listed on the Dhaka Stock Exchange.