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The Dhaka Stock Exchange Brokers Association of Bangladesh (DBA) has urged the Bangladesh Bank to raise the ceiling of the special fund for each scheduled bank to Tk300 crore from the existing Tk200 crore to ease the ongoing liquidity crisis in the capital market.
The association has also proposed extending the facility for another five years.
DBA submitted a formal letter to Bangladesh Bank Governor Md Mostaqur Rahman on October 6. A copy of the letter, signed by DBA President Saiful Islam, was also sent to Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan.
At present, each scheduled bank can create a special fund of up to Tk200 crore to invest in the capital market. However, the current facility is scheduled to expire on November 30.
The DBA said the liquidity shortage in the market, coupled with uncertainty in the global economy stemming from ongoing tensions in the Middle East, was affecting the capital market.
In such circumstances, the association said the special fund facility should not be discontinued but expanded.
Under its proposal, the ceiling should be raised to Tk300 crore for each scheduled bank from December 1 and the facility extended until November 30, 2031.
The DBA said increasing the fund ceiling and extending its tenure would encourage greater participation by banks and other institutional investors in the capital market.
It said the move would also increase market liquidity and depth while helping restore investor confidence.
The association believes the initiative could contribute to making the country’s capital market more stable and sustainable in the long term.
The DBA expressed hope that Bangladesh Bank would take a positive decision considering the current market situation and broader economic realities.
It also pledged to work in coordination with Bangladesh Bank and other regulatory agencies to implement various government initiatives aimed at developing the capital market.