Bangladesh Bank on Monday extended the period meant for banks to make adjustments to their overexposure in the stock market in a bid to give relief amid existing bearish trends.
The central bank issued a circular in this regard on the day.
The Banking Companies Act 1991, which was amended in 2013, has limited a bank's stock market exposure to 25% of its capital, which was supposed to be brought about by 2016.
However, some banks made investments exceeding the ceiling, so they were ordered to sell shares to abide by the order.
Considering the fact that the stock market is now bearish, the central bank extended the adjustment period several times, the last being by August 31 of the current year.
Now, it has been extended to December 31 of 2023.
The recent central bank decision allowing exposure calculations based on purchase prices would put pressure on banks to make sales.
The central bank issued a circular in August after getting an order from the Ministry of Finance saying that the purchasing price of shares of other companies, mutual funds, debentures and corporate bonds will be considered during the counting of the highest exposure limit of banks.