Revised underwriting obligations of 4 banks, one NBFI from Nov 1
Monday, 27 October 2008
Siddique Islam
The central bank has revised the underwriting obligations of four primary dealer (PD) banks and a non-banking financial institution (NBFI) in primary auctions of the government securities, which will come into effect from November 1.
Under the new provision, three state-owned commercial banks (SCBs) - Sonali, Janata and Agrani - will have to maintain 12.50 per cent of underwriting obligations in primary auctions of the government securities instead of the existing 12.00 per cent.
On the other hand, 11.50 per cent underwriting obligations has been re-fixed for Jamuna Bank Limited instead of the existing 12.00 per cent, while Intentional Leasing and Financial Services Limited will have to maintain 3.00 per cent from the existing 4.00 per cent.
The underwriting obligations of four other PDs have remained unchanged.
The central bank earlier selected nine PDs - eight banks and a NBFI - to handle government-approved securities in the secondary market.
"We've revised the underwriting obligations of the PDs to bring dynamism in the country's secondary securities market," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
He also said the central bank reviewed the use of government securities for fulfillment of statutory liquidity ratio (SLR) of the respective PDs.
"We've already informed the PDs concerned about the new underwriting obligations in primary auction of the government securities," the BB official added.
The BB's decision came against the backdrop of weak performances of the SCBs in trading government securities in the secondary market during the fiscal 2007-08 (FY '08).
The central bank has revised the underwriting obligations of four primary dealer (PD) banks and a non-banking financial institution (NBFI) in primary auctions of the government securities, which will come into effect from November 1.
Under the new provision, three state-owned commercial banks (SCBs) - Sonali, Janata and Agrani - will have to maintain 12.50 per cent of underwriting obligations in primary auctions of the government securities instead of the existing 12.00 per cent.
On the other hand, 11.50 per cent underwriting obligations has been re-fixed for Jamuna Bank Limited instead of the existing 12.00 per cent, while Intentional Leasing and Financial Services Limited will have to maintain 3.00 per cent from the existing 4.00 per cent.
The underwriting obligations of four other PDs have remained unchanged.
The central bank earlier selected nine PDs - eight banks and a NBFI - to handle government-approved securities in the secondary market.
"We've revised the underwriting obligations of the PDs to bring dynamism in the country's secondary securities market," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
He also said the central bank reviewed the use of government securities for fulfillment of statutory liquidity ratio (SLR) of the respective PDs.
"We've already informed the PDs concerned about the new underwriting obligations in primary auction of the government securities," the BB official added.
The BB's decision came against the backdrop of weak performances of the SCBs in trading government securities in the secondary market during the fiscal 2007-08 (FY '08).