'Most of the big businessmen are the owners of the banks. So some profits go through the bench'

Bangladesh Bank has planned to encourage big industrial conglomerate to raise fund from the stock market to meet their investment needs.

The monetary policy statement announced yesterday said the central bank will continue to encourage big borrowers to access the capital market as banks will need to comply with the recently revised regulation on single borrower exposure limits for business groups.

“In order to fill the gaps in the financial landscape, BB intends to facilitate the role of private equity or venture capital sources of finance.”

Deputy Governor SK Sur Chowdhury said the central bank will ask the banks to take necessary measures so the big borrowers go to capital market for financing their projects.

Analysts appreciated the central bank move, but remained skeptical about implementation of the policy measure.

“It is a good move as financing to any business from the capital market is relatively lower than the banking sector. It will infuse dynamism in the capital market too,” said finance adviser to the last caretaker government Mirza Azizul Islam.

Big business people generally feel shy to go to the capital market, as it will ensure accountability and transparency of the business, he said. “Most of the big businessmen are the owners of the banks. So some profits go through the bench.”

But it will also affect in the profitability of the banks already sitting on huge idle fund, he added.

Recently, the central bank has tightened the single borrower exposure limit, saying if the rating of a credit risk grading turns out to be “marginal,” banks must not sanction the large loans.

If the big borrowers fail to provide sufficient collateral against the loans, they will fall into the “marginal” group on a scale of eight categories in credit risk assessment. Previously, the borrowers with insufficient collateral had qualified for such loans.