DHAKA, Sept 29, 2020 (BSS) – Bangladesh Bank (BB) has relaxed its
capital requirement for banks against venture capital.
From now on, banks can maintain 100 percent risk-weighted capital,
down from the existing 150 percent against their investment in
alternative investment tools, as per BB circular issued today.
As per the circular, banks will need to maintain less capital against
such investments.
The notice will come into effect immediately and continue until
September 30, 2022.
A venture capital fund is an alternative investment fund that is
invested primarily in non-listed equity and equity-linked securities
of startups with less than two years’ operational history, or green
field companies or emerging early-stage undertakings mainly involved
in new products.