Committee to be formed to find ways for long-term fund from capital market

A joint committee will be formed soon to explore avenues for long-term financing from the capital market, establish a vibrant bond market, and reduce excessive reliance on bank loans.

The committee will comprise representatives from the finance ministry, Bangladesh Bank, and the Bangladesh Securities and Exchange Commission (BSEC).

The decision came following a meeting between the central bank and the BSEC held at the BB headquarters in Dhaka today, presided over by Bangladesh Bank Governor Ahsan H Mansur.

The meeting discussed leveraging the potential of the capital market as a key source of long-term financing, according to officials from the central bank and the BSEC.

Emphasis was placed on utilising the opportunity to raise long-term capital from the capital market, thereby reducing excessive reliance and associated risks on bank loans in the economy, and ensuring overall macroeconomic development, they added.

The meeting also discussed how and through which processes long-term capital can be supplied from the capital market.

In addition, the establishment of a vibrant bond market and increasing its liquidity were also discussed.

Finally, the meeting decided to form a joint committee to address these issues.

Participants from Bangladesh Bank included Deputy Governor Md Habibur Rahman and Adviser to the Governor Md Ahsan Ullah, while from the BSEC, Chairman Khondkar Rashid Maksud and Commissioner Farzana Lalarukh attended along with others.

Earlier, on May 11 this year, a high-level meeting was held at the residence of the chief adviser, chaired by Chief Adviser Professor Muhammad Yunus, to review the current state of the capital market and determine the necessary steps for its improvement.

At the meeting, Yunus gave five directives for the development of the capital market, one of which was: "Large companies in the country should raise capital through the capital market by issuing bonds or shares instead of relying on bank loans for long-term financing, and necessary measures should be taken in this regard."