Bangladesh Bank is going to allow banks and non-bank financial institutions (NBFIs) to provide higher dividends to shareholders than what their respective ceilings were set at.

Coming at a meeting with the Bangladesh Securities and Exchange Commission (BSEC) at the securities commission building chaired by BSEC Chairman Prof Shibli Rubayat Ul Islam, the decision would be made public through a circular soon.

The BSEC informed of it through a press release yesterday.

The central bank recently issued two separate circulars saying that the banks were allowed to provide 30 per cent dividend while the NBFIs 15 per cent.

The banking watchdog said to have taken the decision in context to the Covid-19 pandemic.

Now the central bank will allow banks to provide up to 35 per cent while the listed NBFIs over 15 per cent if they have the ability, according to the latest decision.

Both regulators will take necessary steps to encourage banks to form a special fund of Tk 200 crore in order to invest in the stock market.

On February 10, the banking regulator rolled out the package that allows banks to set up a Tk 200 crore fund by taking it from Bangladesh Bank through a repurchase agreement against treasury bills and bonds they own.

Till now, 26 banks have formed funds of around Tk 2,900 crore utilising the Bangladesh Bank incentive. Of the funds, around Tk 1,037 crore has already been invested.

The BSEC and the BB will work together to ensure secondary trade of treasury bonds and bills, reads the press release.

They also will work together to trade banks' perpetual bond.

The central bank officials will work to allow the cost price instead of market price in accounting of market exposure of banks and the NBFIs, the press release added.