Bangladesh Bank governor Ahsan H Mansur on Monday said that national savings certificates and corporate bonds should be made tradable in the secondary market in order to strengthen the country鈥檚 underdeveloped bond market.
He made the comments at a seminar on bond and sukuk markets in Dhaka on Monday, jointly organised by the Bangladesh Securities and Exchange Commission (BSEC) and the Dhaka Stock Exchange (DSE).
The governor said savings instruments are only partially linked to the market and must be made fully tradable.
This, he argued, would benefit savers, create a secondary market, and boost overall liquidity. He however said there should be sufficient political will to do such reforms.
The governor also urged the government to establish a separate platform for private bond trading.
He noted that, while ordinary citizens can now purchase government bonds, private bonds also need to be made tradable under a proper regulatory framework.
If that happens, the bond market will double overnight and become much more vibrant, he said.
The governor pointed out that Bangladesh鈥檚 financial structure remains overwhelmingly bank-dependent, in sharp contrast to global economies where bond markets dominate.
Worldwide, he said, bonds worth about $130 trillion have been issued, equivalent to 130 per cent of global GDP, compared with a $90 trillion stock market and a money market of $60 trillion.
In contrast, Bangladesh鈥檚 corporate sector largely relies on bank loans instead of issuing bonds, partly due to incentives that allow businesses to benefit from political influence or avoid repayment.
鈥榃e must move away from this bank-dependent corporate culture,鈥� he said.
Mansur added that long-term funds such as government pensions, corporate pension schemes, provident funds, and benevolent funds could be tapped to build a sustainable bond market, but this would require a strong pension regulatory authority.
He highlighted the potential of securitising revenue streams from infrastructure projects like bridges, metro rail, and toll roads to issue sukuk and finance new development.
He suggested establishing a dedicated unit in the finance ministry for the purpose.
Bangladesh鈥檚 sukuk market remains very small, with only six issues worth Tk 24,000 crore to date, despite many projects generating stable cash flows.
He further noted that Bangladesh Bank has already prepared a research report on bond market development and will soon present detailed recommendations to the government, covering both conventional and Islamic instruments.
At the same seminar, finance adviser Salehuddin Ahmed cautioned investors against expecting guaranteed profits from the capital market, saying that both stocks and bonds carry inherent risks.
He warned that overreliance on banks for financing large projects has led to loan defaults and misuse of funds.
True risk-sharing requires investment in bonds, debentures, and equities. Simply taking loans from banks and misusing them is no solution, he said, urging greater private sector participation in the capital market.