Bangladesh Bank Governor Dr Atiur Rahman yesterday asked banks to reduce their investment portfolio within 25 per cent in the capital market by September 2016.
The governor also directed banks to submit new report regarding their investment in capital market. 
The governor made the direction while addressing a meeting with the chiefs of commercial banks at the BB conference in the city. Some 15 commercial banks have more than 25 per cent investment out of their total investment portfolio which is against the Banking Act 2013, said the governor.
Talking to the reporters, the central bank deputy governor SK Sur Chowdhury informed that the banks who have invested less than 25 per cent can invest more in the capital market.
Meanwhile, the governor also asked banks to cut interest rate for industrial loans and fix it at a reasonable level to boost investment aiming at spurring growth.
Rates of interest of some banks are still high and imposing of such interest rates especially on industrial sector is unexpected at a time when liquidity position is satisfactory.
The governor warned banks against any credit indiscipline and said the central bank will take strict measures against irregularities in loan management in future.
“Bangladesh Bank won’t hesitate to take strict measures against such irregularities,” he said, adding, “You must strengthen internal supervision, become more careful about loan disbursement, send genuine and quality loan proposals to board, face irrational pressure of board tactfully,”.
If necessary, he asked banks to take Bangladesh Bank’s help to create atmosphere of good governance for strengthening credit discipline and help the bank board realise this.
“You must take the responsibility . . . recurrence of irregularity will not be stopped if things go in this way that you will commit irregularities and BB will detect those,” Atiur said. He said some recent irregularities in banking sector got wide media coverage though Bangladesh Bank took strong measures against those banks concerned. 
Over the last five years, the central bank took a number of good steps for the overall development of the banking sector but those issues were not focused in the media, he added.
“It can’t be acceptable that one or two incident of irregularities would obliterate all our good deeds,” he said adding the central bank has strengthened its supervision activities and it will apply its highest power to uphold the confidence bestowed by the people upon it.
Atiur said there is surplus liquidity in the banking system as credit demand from internal sources has witnessed a fall slightly because importers are getting loans at lower interest and easy conditions from foreign sources. For maintaining profitability, banks need to explore new areas for investment, Atiur said.
But bankers must remain alert so that bank investment does not go to unproductive and highly risky sectors due to excessive liquidity pressure, he added.
He said some banks are purchasing credits from other banks and in many cases, those are default loans and purchasing of such credits is alarming. “We’ve kept these under our strict supervision . . . so you must remain alert about it,” he added.