The Bangladesh central bank fined seven banks an aggregate of 1.5 million taka over alleged violation of stock market rules, The Daily Star reported Oct. 9, citing a senior executive at the central bank.
Bangladesh Bank took the decision last week based on the banks' stock exposure as of August, the official told the publication. The seven banks allegedly violated stock market rules by misreporting on share investment and overexposure.
The central bank launched an investigation in September following upward trends in banks' share prices. The probe found that the banks invested in stocks by providing loans to their subsidiaries, but failed to report the indirect investment to the regulator. The investigation also found that some banks surpassed the allowable limit on stock investments, while others invested further in stocks after exceeding the limit.
Bangladesh's Banking Company Act 2013 lets banks invest up to 25% of their total capital in stocks.
The central bank is also investigating another eight banks over their stock investment activities, while five more banks are expected to come under the probe soon, the publication noted.
As of Oct. 9, US$1 was equivalent to 82.10 Bangladeshi taka.