The delay in implementing several policy actions in the second tranche under the third capital market development programme (CDMP3) has irked the Asian Development Bank (ADB), people familiar with the situation said.
The Manila-based lender voiced its dissatisfaction as there has been no policy change since the last review mission took place eight months ago.
"...the compliance status has not been changed since the last review mission in July 2018. Eight policy actions remain to be not complied," the lender said in a note this week.
An ADB review mission visited Dhaka this week and clearly mentioned the eight pending policy actions have to be fully completed by May next to ensure the release of the second tranche of the programme amounting to $170 million.
"The mission reiterates that the ADB's loan is intended to provide budgetary support for the government to implement costly measures for capital market development, which includes strengthening the capacity of regulators such as BSEC and IDRA…" it said.
"…therefore, there would be no justification for the second tranche release of $170 million unless the BSEC's capacity enhances," the Asian lender noted.
The ADB said it would not tolerate any further delay in the approval of the new BSEC organogram beyond June.
The lender also urged the financial institution division to endorse the draft asset investment rules for insurance companies by mid-April and send it to the law ministry for vetting immediately.
The other policy actions which remained stuck include the installation of a new information and communications technology (ICT) system, risk-based capital rules for intermediaries, Sukuk rules and derivative rules, issuance of floating rate note, and the issuance of rules for short-selling and securities lending and borrowing covering both corporate and listed government securities.
A senior financial institutions division official acknowledged the unwanted delay in the implementation of policy actions.
But he said the policy actions awaiting completion are complicated ones and need more time.
He was hopeful about implementing the pending policy actions in time.
syful-islam@outlook.com