Bangladesh Bank (BB) has extended the tenure of banks' capital market special funds until December 31, 2026, a move aimed at stabilizing the financial sector in light of current market conditions, reports BSS.
In a circular issued today, the central bank stated that the extension is intended to provide continued support to the capital market while ensuring overall financial sector stability. The move follows an ongoing review of the market's performance and the current economic landscape.
Furthermore, BB has directed banks that established special funds and invested in the stock market to gradually reduce their investments within the extended period. The directive aims to balance liquidity support for the capital market with sustainable financial management.
The special fund was introduced in 2020 during the pandemic as a liquidity-boosting measure, allowing each bank to create a Tk200 crore fund with a five-year tenure. This tenure officially expired in February 2025.
The circular also mandates that within the extended period, each bank must submit a specific action plan to Bangladesh Bank within 30 days. This plan, approved by the respective bank's board of directors, must outline a gradual reduction in the investment balance within the special fund.
The extension and its associated guidelines reflect Bangladesh Bank's ongoing efforts to stabilize the capital market and ensure long-term sustainability of the banking and financial sectors.
Bd-pratidin English/ Jisan
