BB to continue efforts to restore investors’ confidence

Posted by BankInfo on Tue, Jan 25 2011 07:21 am

Bangladesh Bank will keep on its efforts to restore the normalcy at the bourses and will do everything possible to bring back investors confidence, BB high officials said yesterday.

They, however, ruled out the criticisms that BB initiatives to contain soaring inflation contributed to the debacle of the capital market. Rather, some vested quarters’ interests and somewhat policy makers’ failure were active behind the fall, they observed.

“BB mainly deals with the containment of the inflation through an increased reserve. But, it can’t be blamed for the volatility of the share market,” SK Sur Choudhury, executive director, said.

Choudhury ruled out the scheduled banks’ excessive involvement in the share business saying that banks’ present exposure to the capital market is only 3.58 percent or Tk 125.41 billion of the total market of Tk 3508 billion, which played little role in the debacle.

“You won’t see too much problem in the country’s banking sector, but it would have been in a danger if the central bank didn’t take some timely measures in line with the Bank Company Act,” he told journalists adding that banks are now well below their exposure limit--10 percent of their total liabilities--as of this January.

The heated call money rate has also been tamed to 4 to 8 percent, even lower than the rate set by the regulator, he said adding: “The call money rate rose due to mismanagement in some banks.”

News: Daily Sun/Bangladesh/24 Jan 2011