Tanvir Shahriar Ghani, the prime minister’s special assistant for investment and capital market affairs, stated that weak coordination among regulators is hindering economic growth in Bangladesh’s capital markets. During a World Investor Week event hosted by the Institute of Chartered Accountants of Bangladesh (ICAB), he criticized the disjointed approach of financial authorities, arguing that it introduces instability for investors.
The core problem lies in the absence of communication between key agencies. The Bangladesh Bank, National Board of Revenue (NBR), Insurance Development and Regulatory Authority (IDRA), and Securities and Exchange Commission (BSEC) function independently, often developing policies without mutual consultation. For instance, the central bank’s decisions on exchange rates impact exporters and importers, while tax policies from the NBR can disrupt financial planning for businesses operating under separate oversight.
Regulatory conflicts further complicate matters. Listed banks, for example, face oversight from both the central bank and the BSEC. When directives from one agency conflict with those of another, shareholders suffer the consequences. Ghani described the current system as unsustainable for a $500 billion economy. “This concept of a non-integrated economy, where everyone acts as they please, doesn’t work,” he said.
Masud Khan, chairman of the BSEC, highlighted corporate governance as a critical factor in building investor confidence. His commission has been refining new regulations following feedback, though delays in the IPO process continue to pose a significant obstacle. The approval process for a bond issuance used to take one and a half years. Apart from making efforts to further ease the public issue rules, the commission has cleared bonds worth Tk 35 billion in the last two months. Khan emphasized that there is no reason for an IPO to take more than three months.
Market observers also identified valuation disputes as a persistent barrier to expansion. Arif Khan, vice chairman of Shanta Asset Management, argued that regulators should not bear responsibility for company valuations, which depend on issuers and investors. He compared Bangladesh’s slow IPO activity to neighboring markets like India, where significant capital was raised in the past 30 months.
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