BB will disburse underwriting commission to PDs soon
FE Report | Wednesday, 18 June 2008
The central bank will soon start disbursing underwriting commission to the primary dealers (PDs) of commercial banks that have traded government-approved treasury bills and bonds, officials said.
"We expect the disbursement of the commission to start by the next week for July-May period of this fiscal year," a senior official of the Bangladesh Bank (BB) told the FE, adding that the government has already allocated fund worth Tk 180 million in this connection.
The government earlier approved underwriting commission fixing rates for treasury bills and bonds for the PDs aiming to bring dynamism in the country's secondary bond market, they added.
Under the government decision, the PDs will receive 0.0025 per cent (2.50 paisa) as underwriting commission for the government approved treasury bills while 0.0075 per cent (7.5 paisa) for the bonds.
"We will pay the commission for the month of June after completing its disbursement for eleven months of fiscal 2007-08," another BB official said.
The BB earlier amended the guidelines for PDs offering commission and liquidity support to activate the country's secondary bond market.
Under the amended guidelines, each of the bank and non-bank PDs can underwrite a minimum of 12 per cent and 4.0 per cent of the auction amount respectively for fiscal 2007-08 until further notice.
"PDs will be paid underwriting commission at a rate as may be determined by the government from time to time," the central bank said in its amended guidelines.
Besides, the PDs will be eligible to avail themselves of normal liquidity support from the central bank through repurchase agreements (repos).
Earlier, the central bank selected nine PDs - eight banks and a non-banking financial institution (NBFI) - to handle government-approved securities and issued a guideline for them.
Meanwhile, the PDs have taken move to form an association aiming to bring dynamism in the country's secondary market.
"We are now working on formation of an association to boost the market through improving our efficiency," a senior official of a private commercial bank told the FE.
They will meet at the Agrani Bank Limited on June 24 to discuss the matter, he added.
"We expect the disbursement of the commission to start by the next week for July-May period of this fiscal year," a senior official of the Bangladesh Bank (BB) told the FE, adding that the government has already allocated fund worth Tk 180 million in this connection.
The government earlier approved underwriting commission fixing rates for treasury bills and bonds for the PDs aiming to bring dynamism in the country's secondary bond market, they added.
Under the government decision, the PDs will receive 0.0025 per cent (2.50 paisa) as underwriting commission for the government approved treasury bills while 0.0075 per cent (7.5 paisa) for the bonds.
"We will pay the commission for the month of June after completing its disbursement for eleven months of fiscal 2007-08," another BB official said.
The BB earlier amended the guidelines for PDs offering commission and liquidity support to activate the country's secondary bond market.
Under the amended guidelines, each of the bank and non-bank PDs can underwrite a minimum of 12 per cent and 4.0 per cent of the auction amount respectively for fiscal 2007-08 until further notice.
"PDs will be paid underwriting commission at a rate as may be determined by the government from time to time," the central bank said in its amended guidelines.
Besides, the PDs will be eligible to avail themselves of normal liquidity support from the central bank through repurchase agreements (repos).
Earlier, the central bank selected nine PDs - eight banks and a non-banking financial institution (NBFI) - to handle government-approved securities and issued a guideline for them.
Meanwhile, the PDs have taken move to form an association aiming to bring dynamism in the country's secondary market.
"We are now working on formation of an association to boost the market through improving our efficiency," a senior official of a private commercial bank told the FE.
They will meet at the Agrani Bank Limited on June 24 to discuss the matter, he added.