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The government plans to vibrate bond market here through applying push and pull factors to systematically force or encourage corporate to meet their long-term financing needs from outside banks.

The move will not only help overcome prevailing liquidity mismatch in banks through lessening NPLs (non-performing loans) buildup but also ensure comparatively low-cost and long-term funding instruments for the enterprises, according to a joint study titled “Bond Market Development in Bangladesh: Challenges and Recommendations” revealed on Monday.

Bangladesh Bank (BB) being instructed by the chief adviser to ease mounting pressure on banks took the initiative and made the study paper in collaboration with Bangladesh Securities and Exchange Commission (BSEC) and Financial Institution Division (FID).

The finance adviser Dr Salehuddin Ahmed was supposed to be present as the chief guest in the seminar sharing the study findings and recommendations but he did not attend the programme reportedly on health ground. BB governor Dr. Ahsan H. Mansur has chaired the event.

Talking about the supply side in developing bond market, the BB governor said they plan to bring corporate sector under push factor. They will push the corporate entities out of the banking sector, not entirely but partial financing requirement must be met through the bond market.

He said the central bank will soon sit with the corporate bodies having lower bond market exposure to understand what kinds of supports they need from the regulators to get encouraged into the bond market.

“We will not allow corporate to exceed single borrower exposure limit. To meet their funding requirements, they either go for overseas borrowing, or look for bond and capital markets. We want to apply such push factors,” he said.

At the same time, the central bank governor said, they need to provide them pull factors through which the corporate entities will be attracted to explore the untapped potentials available in the bond market.

Under the pull factors, according to him, the government might consider steps to cut bond-issuing timeline and costs along with revisiting prevailing tax treatment and other forms of incentives.

Mr. Mansur, who took the central bank leadership soon after July-August mass-uprising in 2024, said private sector bond market will not be developed through a liquid, strong and vibrant public sector bond market.

The country has a huge saving certificate market of around Tk 6.0 trillion. “If we make it tradable at the secondary market so that the investors can sale it at a discounted premium whatever the market rate prevails at the time, it will increase the bond market size by Tk 6.0 trillion very quickly. It is easily doable. Just a decision is needed,” the government said.

President of International Chamber of Commerce (ICC)-Bangladesh Mahbubur Rahman said the country’s capital market suffers a lot due to lack of equities and stocks.

“If bond market is developed here, it will be easier for private enterprises to mobilise funds for their capital,” he said.

The country’s renowned business leader said the corporate bond market would also help lessen NPLs burden on banks. “It has huge potentials and all need to be worked jointly to make it a success,” he added.

Director General of Bangladesh Institute of Bank Management (BIBM) Dr. Md Ezazul Islam, one of the two lead authors of the study paper, said the individual ceiling in savings certificate needs to be lifted with aligning the rate with the market and make its tradable on the secondary market.

It will certainly help allow savers to invest in the saving instruments as much as they can and it will make the market more competitive.

Dr. Islam prepared the study along with when he was leading the monetary policy department of the central bank before his recent joining as BIBM director general.

Sharing global market scenario, he said the global market size of bonds, stock market and money market was $130 billion, $90 billion and $60 billion in the first half of 2025 respectively.

But Bangladesh’s financial sector remains heavily bank-dependent, around 80 per cent of debt financing in Bangladesh comes from banks.

“The excessive dependence on bank’s financing is neither good for the health of the banking system nor for the enterprises,” he added.

Finance secretary Dr. Md Khairuzzaman Mozumder said credit mismatch emerges as a serious problem badly hurting the banking sector. To ease the pressure on banks, they plan to develop the bond market.

He said they plan to take the national saving certificate into the secondary market soon. “We have already formed a committee comprising officials from BB, FID and BESEC to this effect.”

BSEC Chairman Khondoker Rashed Maqsood said the chief adviser had instructed them to make a plan how the heavily bank-depended economy can be converted into a capital market-dependent economy.

Since then, he said, they sat with the central bankers several times to find out challenges and ways-out to facilitate the transition.

BB research director Md. Abdul Wahab, other lead author of the paper, said successful implementation of the proposed action plan will facilitate the development of a vibrant and robust bond market in the near term, that will support for sustainable economic growth and strengthening financial stability.

BB deputy governors Dr Md Habibur Rahman and Nurun Nahar, vice chairman of PRAN Group Uzma Chowdhury, BSEC commissioner Md. Saifuddin, ABB (Association of Bankers Bangladesh) Mashrur Arefin, DSE (Dhaka Stock Exchange) Chairman Mominul Islam and Dhaka University Professor Mahmud Osman Imam, among others, spoke at the seminar.