Bangladesh Bank wants people to invest in the capital market without having to buy savings bonds if they have money and entrepreneurs can invest with that investment. In the capital market of Bangladesh, only the stock market has grown, in that sense not the debt or bond market. If the bond market improves, defaulters will lend, and the capital market will improve. And if the capital market is in good shape, everyone benefits.
Bangladesh Bank Governor Abdur Rauf Talukder said in a keynote address at the opening ceremony of World Investors Week on Monday. He also said: “Many are being told what role Bangladesh Bank should play in capital market development. I say, there is no need to discuss this. Bangladesh Bank will play a supporting role in capital market development. I will provide all cooperation necessary for the well-being of the country’s capital market.
Bangladesh Securities and Exchange Commission (SEC) is celebrating this week from October 3-10 to protect the interests of investors and raise awareness about investments, as every year at the call of IOSCO, the global organization of capital market regulators of various to land . Abdur Rauf Talukder opened the week-long program by appearing at the SEC’s Agargaon office in the capital. He is the first governor of Bangladesh Bank, who came to the SEC office of the capital market regulator.
In the keynote address, the governor said: “Even in developed countries, entrepreneurs in neighboring countries take long-term bond market loans and bank loans for working capital. Because if you borrow through bonds, you have to pay interest once a year. The interest must be calculated every one or three months if it is taken from the bank. Yet entrepreneurs take both types of loans from banks in Bangladesh. Banks also give it. Although the banks provide these long-term loans from short-term deposits. Now every company has a ‘season’. Banks don’t understand that. If the business fluctuates a bit, the entrepreneurs cannot repay the loan and they become defaulters. This crisis will subside if the bond market is active.
He said: ‘There are two parts of the capital market. One is the stock or stock market and the other is the debt or bond market. While the stock market has developed in Bangladesh, the bond market has not developed in that sense. Everyone benefits when the bond market is active and efficient. Bangladesh Bank offers all kinds of support to activate the bond market. In the past, banks issued subordinated bonds to ensure capital adequacy, while other banks bought them in full. After taking responsibility, I set limits in this case. Up to 50 percent of one bank’s bonds can be bought by another bank, the rest must be sold outside. All procedures for opening the government bond or government bond market are over. It can also be launched on a trial basis from next Sunday after completing some official formalities. Sukuk or Islamic bonds are already issued by the government. The SEC also approves corporate bond issuance. In this way, the bond market will be effective.
The governor said excessive investment in savings bonds has been curbed to trigger the bond market. A person has been found whose house has savings certificates of 146 crores Tk. Now no one can buy more than 50 lakh rupees of savings paper. Anyone can try it if they want. Government has to pay more due to high interest on savings bonds. Does not want to finance the suffering of the poor with taxpayers money. However, taking into account the elderly and women in social security, high interest rates have been maintained on investments up to 15 lakh Tk in savings bonds. If it’s more than this, it’s reduced by 1 percent and taxed at 10 percent.
Speaking to the special guest, Secretary of the Financial Institutions Department of the Ministry of Finance, Sheikh Mohammad Salim Ullah, said: “The bond market is big in developed countries, but not in Bangladesh. As a middle-income country, Bangladesh is now implementing the Sustainable Development Goals. A strong capital market is needed on the path of development and progress. However, by identifying existing problems in capital market improvement, we must work to solve them.
In the President’s speech, SEC Chairman Professor Shibli Rubaiyat-ul-Islam praised the various initiatives and collaborations of the Governor of Bangladesh Bank and the Secretary of the Financial Institutions Department of the Ministry of Finance for capital market development. He said: ‘The people in the country are lucky, qualified people like the governor and the secretary work for the economy of the country. To stabilize the country’s capital market, we established the Capital Market Stabilization Fund, which contributes to increasing the liquidity of the market.
The opening ceremony of World Investor Week welcomed the beginning of SEC Commissioner Dr. Sheikh Shamsuddin Ahmed. He said: ‘It is very important to secure the investment of the investors. To this end, we have undertaken several awareness-raising activities and initiatives, including training and workshops as part of an investment education program. By including investment education in the national curriculum, we take the initiative to bring investment education to everyone’s doorstep.