Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has given assures to all other regulatory bodies for the country’s money and capital markets to provide all-out cooperation to bring back stability in the stock market.

The assurance came at a joint review meeting of the watchdogs — the Bangladesh Bank (BB), the Securities and Exchange Commission (SEC), the Office of the Registrar of Joint Stock Companies and Firms and the Insurance Development and Regulatory Authority (IDRA) — held at the central bank in the capital Dhaka on Wednesday.

“The central bank will provide all-out support in line with the existing rules and regulations to bring back stability to the stock market,” an executive director of the BB said, adding that there is a scope to invest in the capital market by the commercial banks because of average capital market exposure of all banks stood at around 3.0 per cent of their total liabilities this month.

Presided over by BB Governor Atiur Rahman, the meeting was attended, among others, by SEC Chairman M Khairul Hossain and high officials of the concerned watchdogs.

Currently, the banks are allowed to invest maximum 10 per cent of such liabilities in the capital market.

For improving the overall liquidity situation in the market, the central bank proposed to the regulatory bodies concerned to take necessary measures to encourage the insurance companies, particularly life insurance ones and mutual fund companies, to purchase the government bonds from the secondary market

Currently, four government bonds — five-year, 10-year, 15-year and 20-year — are being traded in the market.

“We’ve discussed the prevailing situation in the capital market,” SEC Member Helal Uddin Nizami told reporters after the meeting, adding that the SEC proposed some measures, including inflow of more funds or money to help improve the overall situation in the country’s stock exchanges.

The meeting also agreed that Office of the Registrar of Joint Stock Companies and Firms will have to take no objection certificate (NOC) from the central bank, before issuing any fresh licence for operating business relating to finance and investment.

BBN/SSR/AD-13Oct11-10:35 am (BST)