Role of Icb in Bangladesh

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Tentative Research proposal for MPhil
Admission in the Dept, of Finance and Banking

Title : Role of investment corporation of Bangladesh

Proposed Supervisor

Prof,Dr. AHM Ziaul Haq
Chairman(Dept of Finance & Banking)
Rajshahi University
Rajshahi-6205

Conducted By

A.K.M Forhad Faruqui
Lecturer and Head of the Dept,
(Finance & Banking)
Kahalu Degree College, Kahalu, Bogra.
March 2012 Role of investment corporation of Bangladesh (1)

1.1 Introduction

The capital market is the engine of growth for an economy, and performs a critical role in acting as an intermediary between savers and companies seeking additional financing for business expansion. Capital market means the market, or realistically, the group of interrelated markets, in which capital in financial form is lent or borrowed for medium and long term and, in cases such as equities, for unspecified periods. A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market (equity securities) and the bond market (debt). Money market and capital markets are parts of financial markets. Capital markets may be classified as primary markets and secondary markets. In primary markets, new stock and bond issues are sold to investors via a mechanism known as underwriting. In the secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, over-the counter, or elsewhere. Industry and commerce as well as government and local authorities raise capital from the capital market which performs several important functions in the process of economic development. Most important among them are the promotion of savings and investment and efficient allocation of funds among competing uses. Participants in the capital markets are many. They include the commercial banks, savings and loan associations, credit unions, mutual saving banks, finance houses, finance companies, merchant bankers, discount houses, venture capital companies, leasing companies, investment clubs, pension funds, stock exchanges, security companies, underwriters, portfolio-managers, and insurance companies.

If we want to evaluate the country’s capital market, the role of investment Corporation of Bangladesh cannot be ignored. The Investment Corporation of Bangladesh (ICB) was established on 1 October 1976, under “ The Investment Corporation of Bangladesh Ordinance 1976”. The establishment of ICB was a major step. To encourage and broaden the base of investments and also to develop the capital market is one of the major objectives. There are different types of business policy which are provided by ICB. To provide financial assistance to projects subject of their economic and commercial viability. Adoption and application of corporate governance principles and guideline receive unremitting attention of ICB. The fundamental features of corporate governance standards exercised by ICB are among others, Peruse ethical norms in all operations ensure full disclosure and greater transparency in financial statements, generate reliability and trust our thickness in business transactions optimize the quality of services to clients and safe guard the interest of the shareholders and others stakeholders. Now ICB is working to meet the objectives- * To encourage and broaden the base of investments.

* To develop the capital market

* To mobilize savings

* To promote and establish subsidiary companies for business expansion

* To provide for matters ancillary thereto.

Investment Corporation of...
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