BB, BSEC joint move to reach consensus

Mohammad Mufazzal | Published: March 04, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The Bangladesh Bank (BB) and the securities regulator have initiated negotiation to reach a consensus regarding providing of banks' investment in capital market to the central bank, officials said.
The Bangladesh Securities and Exchange Commission (BSEC) is pursuing the central bank for making a provision so that banks are allowed to submit information on their investment made into capital market fortnightly.
On the other hand, the central bank in a latest meeting held Sunday with the regulators of financial sector expressed its willingness to soften its previous stance regarding providing of banks' investment in capital market on day-to-day basis.
At Sunday's meeting BB, however, has assured the securities regulator of continuing its cooperation in taking capital market-related decisions.
"Our stance is to provide information of banks' investment into capital market to central bank fortnightly considering the sensitivity of the capital market," a BSEC commissioner told the FE.
He said now the issue will have to be settled through a discussion between the central bank and the securities regulator.
"We have not opposed but differed with the central bank's directive on submitting investment related information by banks on day-to-day basis. According to the circular earlier issued by the ministry of finance (MoF), any capital market related decision cannot be taken without prior consultation with the securities regulator," the BSEC commissioner said.
On February 22, 2012 the MoF asked all stakeholders to keep in touch with the BSEC following some previous incidents of taking stock market-related decisions and announcements by other organisations without having any consultation with the securities regulator, leading to confusions among the investors.
The BSEC commissioner said the central bank told the meeting that their directive of submitting day-to-day basis reporting by banks was issued in line with the Banking Companies (Amended) Act 2013.
"But the Act does not say anything regarding the submission of information on day-to-day basis. On the other hand, the MoF's circular regarding the consultation with the BSEC has also not lost its effectiveness," the commissioner added.
In its report Khondker Ibrahim Khaled-led probe committee, formed after the 2010-11 stock market debacle, has stressed on proper coordination between the central bank and the securities regulator for the sake of capital market's development.
The BSEC commissioner, however, said their official concerned will go to the central bank to talk for settling the issue of submitting reports by the banks on their investment made in capital market through their subsidiaries.
Mohammad Saifur Rahman, a BSEC executive director, has said the securities regulator was in favor of providing information regarding banks' investment on monthly basis.
"We want the reporting by banks fortnightly if the reporting is not possible on monthly basis. However, we hope the problem will be solved through discussion," said Mr. Rahman.