The central bank fined two third-generation private commercial banks (PCBs) Tk 50,000 each on Thursday for violating investment rules of the special fund - only for the capital market.
Four other banks, including a leading state-owned commercial bank (SoCB), were excused by the Bangladesh Bank (BB) for ignoring such rules for the first time, officials said.
The central bank imposed a 'token penalty' worth Tk 50,000 to each of the two PCBs after detecting such violation of the rules - by using technology-based offsite supervision, they explained.
The BB earlier sought explanation from the six scheduled banks regarding alleged violation of investment rules of the capital market special fund.
On February 10 last calendar year, the central bank allowed all scheduled banks to create the special fund worth Tk 2.0 billion each - only for investment in the capital market.
The special fund would be allowed to invest in equity shares, mutual funds, bonds or debentures, and special purpose funds by maintaining the prescribed criteria.
The banks were asked to submit reports on the special fund to the central bank in prescribed format on a quarterly basis.
The BB's latest actions came after imposing penalty to two fourth generation banks - NRB Bank Limited and NRB Commercial Bank Limited - for investing aggressively in the capital market by breaching rules.
Currently, the central bank is probing all the money market transactions along with exposures in the capital market to gauge liquidity movements in the banking system, following some already-detected incongruities.
Six teams of the BB are assigned to probe into different transactions of treasury and investment departments of nine banks and three non-banking financial institutions (NBFIs).
The central bank has already strengthened its offsite and onsite monitoring and supervision to manage the money market efficiently.
The latest BB measures came against the backdrop of issuing a forewarning as part of the precautionary measures to avert possible 'asset bubble' with a note for the banks to check diversion of funds to unproductive sectors.
Also, the commercial banks have been directed to ensure right end-use of the fund through conducting necessary inspections by their internal audit departments.
The central bank has already found a portion of the funds under the stimulus packages being diverted and used for unproductive purposes instead of proper utilisation in the selected sectors.
It has been found that in some cases, borrowers have adjusted their other credits with loans under the low-cost funds, the BB said in its two-page letter conveyed to the banks on July 25.
