NRBC Bank fined for over exposure to stocks

The central bank has fined NRB Commercial (NRBC) Bank Tk 23.5 lakh for overexposure to the stock markets.

A commercial bank is allowed to invest a maximum of 25 percent of its total capital alone and another 25 percent through its subsidiaries, according to rules.

The bank was penalised on Sunday as it crossed the regulatory investment limit on stocks, said a source at the Bangladesh Bank.

In July, NRBC Bank’s investment in the stock market stood at 27.25 percent of its total capital, he said.

A senior official said, “The central bank instructed the bank to explain the reasons for the over investment. But it failed to give a satisfactory answer.”

The stock market remained bullish as the key index witnessed a record-breaking rally. So at present, investment in stocks offered healthy return, attracting the institutions to pump funds on the stock markets.