The capital market exposure limit for banks is an obstacle to boosting the bond market, said Professor Shibli Rubayat-Ul-Islam, chairman of Bangladesh Securities and Exchange Commission (BSEC).
"Bonds do not get finance because they come under the purview of exposure limit when they get listed on the capital market," he said at a seminar on "Sustainable Finance in Bangladesh: Strategies and Options for Implementation".
Banks are allowed to invest 25% of their capital in the capital market which is called the exposure limit.
Thus banks do not feel encouraged to list bonds on the capital market, resulting in a decline in investment in the debt securities market, the BSEC chairman said at the event organised by the Bangladesh Association of Publicly Listed Companies (BAPLC).
He said it is time to resolve the problem to boost the bond market as the interest in bonds is increasing.
M Anis Ud Dowla, chairman of ACI Group, said sustainable finance not only ensures expected returns but also provides a complete investment plan.
Barrister Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), suggested highlighting the success stories of Bangladesh so that foreign investors get a clear picture.
BSEC Commissioner Dr Sheikh Shamsuddin Ahmed said, "Blue-chip companies need to be listed on the stock market to increase the market size. We need accurate audit reports. But, we often do not get the real picture in the reports."
He said 5,200 companies are listed on the stock market in India and 750 in Vietnam, but there are only 388 firms including mutual funds are listed in Bangladesh.
Ashraf Ahmed, chief executive officer at Riverstone Capital Limited, in his keynote paper said Bangladesh can set a benchmark for sustainable financing as one of the fastest-growing economies.
He said great strides have been made to enhance the local financing market through banking expansion, capital market development, and public spending.
More than $900 billion is needed to meet the SDG goals, he said adding the current SDG financing will require bold initiatives in the short and medium-term options.
DSE Chairman Md Eunusur Rahman and CSE Chairman Asif Ibrahim also spoke at the programme presided over by BAPLC President Azam J Chowdhury.
BAPLC Vice-president Riad Mahmud moderated the seminar.