A file photo shows Bangladesh Bank governor Atiur Rahman inaugurating an online-based trader work station for transactions of government securities on secondary market at a programme at the BB headquarters in the city recently.

The online-based trader work station introduced by the Bangladesh Bank has so far failed to make the secondary bond market vibrant as clients are reluctant to invest in the treasury bills and treasury bonds through the system, said BB officials.

A BB official told New Age on Wednesday that the primary dealer banks continued to submit a good number of sales orders through the TWS every day but clients were unwilling to participate in the market.

He said that the central bank introduced the TWS on December 17 last year to promote the secondary bond market so that the PD banks and the non-bank financial institutions would sell their securities excess to statutory liquidity ratio to all types of clients.

‘But, securities only worth Tk 4 crore to Tk 5 crore have so far been transacted between the banks and other clients through the TWS,’ he said.

According to the BB data, banks submitted sales orders for the T-bills and T-bonds worth Tk 688 crore on March 4, Tk 1,022 crore on March 5, Tk 692 crore on March 6, Tk 704 crore on March 11, Tk 914 crore on March 12 and Tk 697 crore on March 13 of this month through the TWS, but no transaction was held in the period.

 
The official said that low interest rate of T-bills and T-bonds was the key reason for low investment in the government securities

Banks usually buy three kinds of T-bills — tenures of which range between 91-day to 364-day — and four kinds of T-bonds — tenures of which range between 5-year to 20-year — from the BB.

The BB pays banks maximum interest rate of 12.16 per cent for T-bonds and 11.37 per cent for T-bills.
‘A client usually gets 14 per cent to 16 per cent interest rate for a saving product of a commercial bank,’ the BB official said.

Another BB official said the majority of the clients including corporate business houses had not so far thought much about the secondary government securities market where their provident funds could be invested with proper security.

The BB and the commercial banks should take campaign programmes to gear up the bond market, he said.
He said that the government borrowing from the banks had been increasing since the FY 2011-12 because of a lower net investment in savings bonds and certificates and a decreased flow of foreign loans and grants.

 
‘So, the supply of government securities to the market has recently surpassed the demand for the T-bills and T-bonds. The PD banks would have got a respite from the excess securities they hold if there is a vibrant secondary bond market,’ he said.

He said that the BB would take initiatives soon to boost up the secondary bond market. 
‘The central bank will arrange meetings with the banks one-to-one basis to know their problems. Then, we will take initiatives to resolve the crisis,’ he added.