Bangladesh Bank on Tuesday asked all scheduled banks and non-banking financial institutions to open separate windows to facilitate transactions of treasury bills and bonds within the next three months.
The central bank's initiative comes at a time when the government has been borrowing heavily from the banking system against treasury bills and bonds to address the budget deficit.
In the previous 2019-2020 fiscal year, the government borrowed more than Tk85,000 crore by issuing treasury bills and bonds from the banks and other entities.
For the current FY21 fiscal, the government plans to borrow Tk84,980 crore against treasury bills and bonds.
A circular was issued on the day, stating that banks and NBFIs were facilitating treasury bill transactions from their treasury divisions located in their respective head offices.
Apart from maintaining treasury bill transactions, they also maintained their own securities portfolio from the same division, which was becoming a burden, the circular added.
In light of this situation, the central bank instructed the banks to set up separate windows for government securities.
The function of the windows would be to educate people on investment procedures in treasury bills and bonds as well as their yield.
The desk will also facilitate accounts opening, yield payments, surrender of bills and bonds.
Along with coordinating with the Bangladesh Bank’s trading platform, the banks and NBFIs were also asked to coordinate with other trading platforms such as Dhaka Stock Exchange.
