The apex trade body yesterday insisted it never lobbied with the Bangladesh Bank to extend the deadline for bringing down the banks' exposure to stockmarket as has reportedly been claimed by the central bank.

In a statement, the Federation of Bangladesh Chambers of Commerce and Industry said neither it nor any business organisation made such recommendation.

The FBCCI moved after a number of newspapers reported that it has lobbied with the BB to extend the deadline to cut banks' exposure to the stockmarket.

“During the discussion with the BB governor, we said the BB did not take any initiative to limit the banks' exposure to market.”

“In early 2010, the index was 4,200 and crossed 6,000 by June. The central bank gave warning, but did not fix CRR [cash reserve requirement]. As a result, banks made huge investment that took index unusually to 8,900," said the statement.

“When the BB announced CRR for banks in December, they made unusual profits by selling shares, resulting in a debacle.”

“As a result, small investors suffered huge losses,” the statement said.

Source: The Daily Star/Bangladesh/Jun, 01, 2011