Though Bangladesh Bank stated banks were not bound to comply with the full investment, 23 listed banks invested Tk 143.63 billion in the country’s stock market as of July 31 last.
The investments ranged from Tk 2.67 billion to Tk 10.95 billion.
Al-Arafa Islami Bank made a consolidated investment worth Tk 10.95 billion, which is 48.99 per cent of the bank’s consolidated capital. The consolidated investment of BRAC Bank stood at Tk 10.07 billion, which is 23.49 per cent of the consolidated capital. United Commercial Bank made a consolidated investment of Tk 10.48 billion, which is 31.86 per cent of the company’s consolidated capital. The City Bank made a consolidated investment of around Tk 11.09 billion, which is 42.46 per cent of the company’s consolidated capital.
Of other banks, the consolidated investment of Eastern Bank was 8.67 billion, Prime Bank Tk 8.58 billion, NCC Bank Tk 7.10 billion, Islami Bank Bangladesh 6.72 billion, Mercantile Bank Tk 6.37 billion, Trust Bank Tk 6.06 billion and Mutual Trust Bank Tk 5.61 billion, as of July 31 last.
There is a requirement for banks where they have to comply with the investment ceiling on a ‘solo basis’. In that case, the banks are allowed to invest the maximum 25 per cent of their total capital in the share market on a ‘solo basis’. The investments made by 23 listed banks are below 25 per cent on a solo basis.
Of the banks, the solo investment of Al-Arafa Islami Bank was 24.92 per cent, Bank Asia 24.78 per cent, One Bank 23.47 per cent, Uttara Bank 21.95 per cent, Eastern Bank 20.66 per cent, Shahjalal Islami Bank 20.39 per cent and Standard Bank 20.02 per cent, as of July 31 last.
Nota bene, The central bank can intervene only when a bank breaches the provision by investing beyond the stipulated limit.
Source: The Financial Express