BSEC seeks banks’ exposure status to stocks

The Bangladesh Securities and Exchange Commission (BSEC) has sought the latest positions of banks’ exposure to the capital market.

The BSEC wrote to the listed banks on Monday, instructing them to furnish information regarding their investment status within three working days from the date of the letter’s issuance.

The instruction comes four days after the regulator had a meeting with the chief financial officers of the listed banks against the backdrop of the continuous downfall of the market.

The meeting was called to raise the exposure for those banks having investments lower than the regulatory limit in stocks. At present, banks are allowed to invest 25 per cent of their capital in the capital market. “The banks that have investments lower than their regulatory limit have been asked to increase investment by at least 2 per cent in the next few days,” said BSEC spokesman Rezaul Karim after the meeting.

The banks have also been instructed to form a special fund for increasing investment in the stock market, he said.

On March 9, 2020, banks were allowed to form a Tk 200-crore special fund each by taking soft loans from the central bank to invest in the stock market. The fund will remain valid until February 2025, and the banks can take advantage of the loans until January 13, 2025.

To prevent the market fall caused by the Russia-Ukraine conflict, the BSEC took a series of measures. On March 8, the BSEC instructed stock exchanges to calculate the lower limit circuit breaker at 2 per cent instead of 10 per cent.

The measures successfully prevented the market fall. The benchmark DSEX index added around 300 points after the mechanisms. Before the measures, the index continued to plunge and shed almost 500 points.