Dhaka, Bangladesh (BBN) - Bangladesh Merchant Bankers Association (BMBA) said on Wednesday that they would not pursue any of their proposals that could affect the country’s capital market.
“The merchant bankers would not engage in anything which would be detrimental for the wellbeing of the capital market,” said Tanjil Chowdhury, president of BMBA at a press briefing.
He said the BMBA would ‘redress’ any proposal that can cause difficulties in the market.
The BMBA’s latest position came in the backdrop of huge criticisms created following a set of proposals submitted to the Bangladesh Securities and Exchange Commission (BSEC) on Thursday last.
The merchant bankers also proposed better pills to ensure sound financial footing and better corporate governance through re-capitalisation.
The BMBA proposed to bring clients having margin loan above BDT 10.0 million under credit information bureau (CIB) reporting, to facilitate the recovery of ‘huge default’ margin loan.
Merchant bankers’ other proposals include extension of timeframe for provisioning of margin loan up to December 31, 2015 from December, 2014 and ways of boosting their capital base within three years.
Stakeholders and investors mostly criticised the BMBA’s proposal of bringing clients under CIB reporting as it allegedly created panic among investors.
“It’s a proposal to BSEC only and not final. It may be rejected by the regulator if they think that the proposal is not appropriate and practical,” the BMBA president said.
Merchant bankers, however, expressed their surprise following the concern centering the proposal of bringing clients under CIB reporting as the proposal was not something new.
“Same proposal was the number one among a set of proposals submitted to the securities regulator in January 2014,” Tanjil said.
Sources said merchant bankers fell under tremendous pressure from different quarters following their proposals submitted to the securities regulator Thursday.
Under such circumstances the BMBA arranged the press briefing in early morning on Wednesday to clarify their position.
“Before submitting the proposals to the BSEC, the concern committee sent recommendations to all general members seeking their comments. We have not received a single objection on the proposal related to margin loan,” the BMBA representatives said the press briefing.
BBN/SSR/AD-27Nov14-1:16 am (BST)