The prolonged recession in the country’s capital market has pushed not only general investors but also market-related institutions into heavy losses. As a result, 311 institutions connected to the capital market are now facing a massive provisioning shortfall totaling Tk 2,154 crore.

According to official data, the affected institutions include 211 stakeholders of the Dhaka Stock Exchange (DSE), 36 stakeholders of the Chittagong Stock Exchange (CSE), and 44 merchant banks. Despite continuous reminders from the Bangladesh Securities and Exchange Commission (BSEC) since 2016, most institutions have failed to maintain the required provisions against their unrealized losses.

Although the current BSEC commission, led by Rashed Maksud, extended the provisioning deadline to December 31, most institutions have not submitted any acceptable work plans. Consequently, at its November 13 meeting, BSEC granted additional time to 28 merchant banks and brokerage houses to submit their provisioning plans.

BSEC Director and Spokesperson Abul Kalam said the commission is extending deadlines based on the demands of institutions but stressed that they must submit concrete plans before the year-end deadline expires.

Industry insiders say the stock market has been stuck in a long recession, resulting in significant unrealized losses. The previously imposed floor price, limited business activities, and shrinking profits have prevented many institutions from maintaining the required provisions.

Data from August shows unrealized losses of Tk 1,906 crore among DSE stakeholders, Tk 22 crore among CSE institutions, and Tk 1,807 crore across merchant banks. Against the combined Tk 3,735 crore in unrealized losses, only Tk 1,581 crore in provisions has been maintained—leaving a gap of Tk 2,154 crore.

Experts note that the issue stems not only from market decline but also from poor discipline, lack of risk management, and aggressive investments in weak companies. Many institutions, including subsidiaries of banks and financial institutions, invested borrowed funds in the stock market in pursuit of higher profits. After the 2010 market crash, these investments began eroding in value, but institutions avoided selling at a loss, leading to mounting unrealized losses.

As the provisioning burden grows each year, institutions say it has become nearly impossible to comply due to reduced profitability and liquidity constraints. Market analysts warn that this deepening provisioning crisis is contributing further to the ongoing liquidity shortage in the stock market.