Primary Dealers To Urge Central Bank Of Bangladesh To Allow Only PDs For Auction

January 6, 2009 4:40 a.m. EST

Dhaka, Bangladesh (AHN) - The country's primary dealers will request the central bank of Bangladesh to allow only primary dealers (PDs) for participation in the primary auction of the government securities.

The decision was taken at a Primary Dealers Bangladesh Limited (PDBL) meeting held at the Jamuna Bank head office in the capital, Dhaka on Monday with its Chairman SA Chowdhury in the chair.

"We'll send a letter to the central bank requesting to impose restriction on the participation in primary auction of government securities by the non-PD banks and financial institutions to boost the country's secondary securities market," a senior member of the PDBL told the AHN in the capital, Dhaka.

The member also said the non-PD banks and financial institutions will have to buy the securities from the PDs to meet their statutory liquidity ratio (SLR) if they are not allowed to participate in such auctions.

The central bank of Bangladesh earlier selected nine PDs - eight banks and a non-banking financial institution (NBFI) - to handle government-approved securities in the secondary bond market and issued a guideline for them.

The members of PDBL will meet again in the middle of February next to review the overall market situation and take other decisions aiming to activate the country's secondary market, the member added.