Bangladesh Bank on Wednesday asked the scheduled banks and non-bank financial institutions to extend sufficient cooperation to the individuals willing to invest in the government securities.

To this end, the BB issued a circular to managing directors and chief executive officers of all banks and the NBFIs saying that the central bank had been informed that individual-level investors were not getting proper support from their banks in investing treasury bills and T-bonds.

The BB asked the banks to activate their operation in selling and purchasing the government securities in the secondary bond market as the individual-level investors are now more interested in investing in the T-bonds and the T-bills.

‘Some banks are now reluctant to encourage individual-level investment in the government securities and they also mislead their clients in this connection,’ A BB official told New Age on Wednesday.

According to a government ordinance about the issuance of government securities, individuals and institutions resident in Bangladesh such as banks, NBFIs, insurance companies, bodies corporate, authorities responsible for the management of provident funds and pension funds will be eligible to purchase the T-bills and T-bonds, the BB circular said.

Individuals and institutions who are not resident in Bangladesh will also be eligible to purchase the government securities with coupon payments and resale or redemption proceeds transferable abroad in foreign exchange.

Such type of purchase is made with funds from a non-resident foreign currency account with a bank in Bangladesh in the name of purchaser.

Besides, the government securities purchased by a non-resident may freely be resold to a resident in Bangladesh or to another non-resident, the BB circular said.

It said that the banks and the NBFIs, which has MI module account with Motijheel office of the BB, are allowed to purchase the required T-bills and T-bonds from the primary auction for the government securities.

The banks will have to open business partner ID for investors to operate such type of business.
The banks also purchase and sell the government securities through the over the counter and online-based trade work station.

Some primary dealer banks have already used the systems to give support to their clients, the BB circular said.
The BB suggested that other banks should follow the successful PD banks which are now using the systems.