BM Desk :  Sustainable economic growth requires lowering the nation’s excessive reliance on banks for long-term financing and bolstering the capital market as a substitute funding source. According to experts, this objective can only be accomplished by improving the effectiveness and efficiency of the capital market while reducing the regulatory burden on businesses and investors to a manageable level. In order to encourage companies to use the stock market, they underlined the necessity of boosting investor and entrepreneur confidence.

The call took place on Wednesday, November 5, during a conference that IDLC Investments and The Daily Star convened in which bankers, brokers, and regulators came to an agreement on the matter.

Experts recommended that the government ensure policy continuity and simplify and expedite the initial public offering (IPO) process to attract new investors and encourage more companies to list on the stock exchange.

Rupali Chowdhury, president of BAPLC, pointed out that the lengthy process of raising funds through the capital market is a major obstacle, as obtaining bank loans is much easier. She added that the lack of policy consistency also makes the stock market less attractive to entrepreneurs.

Saiful Islam, president of the DSE Brokers Association (DBA), described policy instability as disastrous for the capital market, ultimately harming investors. He urged the establishment of a clear debt–equity ratio to encourage companies to use the stock market for large-scale funding.

Former DBA president Ahmed Rashid Lali identified the lengthy IPO process as a major bottleneck and asked, “If an entrepreneur sees that raising funds from the stock market takes two years, why would he come here?” He proposed reducing the DSE’s IPO review period from the current 45–60 days to just seven days.

However, DSE Chairman Mominul Islam explained that the stock exchange often needs to conduct detailed verification because many applicant companies lack financial transparency. He admitted, “If IPOs were approved based solely on disclosures, it would take just five to seven days.” He also noted that the government now recognizes the need to transition from a bank-dependent economy to a more balanced financial system, and that the DSE is taking steps to accelerate IPO approvals.

Mesbah Uddin Ahmed, Managing Director of IDLC Investments, highlighted the structural imbalance created by excessive reliance on bank loans. He pointed out that while market capitalization-to-GDP ratios exceed 100% in developed economies and range between 50% and 70% in emerging ones, in Bangladesh it is only 7%. This low ratio, he said, worsens systemic weaknesses such as rising non-performing loans and asset–liability mismatches.

BSEC Commissioner Md. Saifuddin observed that the capital market is not limited to equities, yet there is a shortage of risk-free securities. He warned that greed currently dominates the market and manipulation remains widespread.

Former CFA Society Bangladesh president Shahidul Islam cautioned that there are only 25–30 truly investable companies in the stock market. He called for improved reliability in financial reporting and stricter enforcement of regulations.

On a positive note, Reza Uddin Ahmed, Executive Director of City Group, announced that the large conglomerate is preparing to get listed on the stock market.

Experts concluded that to bridge the financing gap, it is essential to list high-quality private and state-owned enterprises, simplify listing procedures, enhance transparency and governance, and restore investor confidence in the market.