Home ›› 16 Feb 2022 ›› Front
Bangladesh Bank has made its stand clear on financial institutions’ exposure limit to the stock market.
The Non-Bank Financial Institute (NBFI)’s exposure limit is calculated at the current market price but not the cost price as per the rules, said the central bank in a statement on Tuesday.
The BB’s reminder comes as some media outlets recently published about the NBFI’s stock market limit.
Banks and NBFIs have long been demanding to calculate their investment exposure to the capital market at the cost price instead of the current market price.
Following the recent news published by some media, the BB said the clarification was issued to avoid any misunderstanding. NBFIs are required to submit their return on investment in the capital market to the BB within seven working days after the end of each quarter.
It said capital market investments will be considered as the loan given to its subsidiary or any similar company or stock dealer directly or indirectly engaged with the capital market activities.
In addition, contributions to a fund formed to invest in the capital market will also be considered as an investment in the capital market.
According to BB, there are 34 NBFIs operating in the country. Of them, twenty-three are listed on the stock market.
