B Mirror Report: National Board of Revenue (NBR) Chairman Abdur Rahman Khan has urged people to move away from the tendency to view the capital market as a “gambling market.” He said that no country in the world has achieved industrialisation without a strong capital market.

He made the remarks on Sunday  while speaking as a special guest at a seminar organised by the Capital Market Journalists’ Forum (CMJF), an association of journalists covering the capital market beat. The seminar focused on the challenges and necessary steps for the stock market under the new government.

The NBR chairman said that the concept of public limited companies emerged during the Industrial Revolution, enabling ordinary people to invest small amounts of capital to build the foundation of large industries. However, Bangladesh has not yet been able to strengthen its capital market in line with that concept.

He explained that bank deposits are generally short-term, whereas industrial financing requires long-term investment. As a result, it is difficult for banks to support industries for extended periods. In contrast, funds raised through equity in the capital market do not have to be repaid; investors receive dividends when companies make profits.

He also said that investors come to the capital market expecting higher returns. Therefore, only those companies with long-term profitability and a clear track record should be listed on the market.

According to the NBR chairman, many companies were listed in the past but failed to meet expected standards. Several businesses have shut down and factories have closed, causing significant losses for investors.

To overcome this situation, he said, all stakeholders involved in the listing process must perform their duties with complete integrity. There should be no room for misinformation, false declarations, or misleading financial statements.

Emphasising the importance of building a digital economy, he said bringing the entire economic system onto digital platforms would significantly reduce opportunities for irregularities.

Regarding incentives in the capital market, he noted that the government had previously offered various tax exemptions and incentives. The capital gains tax was even reduced to 15 percent for incomes exceeding Tk 5 million, yet the market did not see a lasting positive impact.

In his view, incentives alone cannot solve the problem. Ensuring discipline and good governance in the market is essential.

Abdur Rahman Khan reiterated that no country can move towards industrialisation without strengthening its capital market. While the capital market is crucial for job creation and industrial development, he said Bangladesh does not lack laws rather, the main problem lies in their implementation.

Referring to weaknesses in the mutual fund sector, the NBR chairman said that theoretically mutual fund management should be the most efficient. In reality, however, many mutual funds have performed poorly.

He added that although laws and regulations exist, there is a major gap in taking effective action against those who commit irregularities and deceive ordinary investors. He also mentioned that some initiatives have recently been taken to restore discipline in the market.

He further said that the National Board of Revenue works with the responsibility of increasing revenue collection, but at the same time it is ready to provide necessary support for the development of the capital market.

“We must also remember that many incentives were given in the past, but the expected results were not achieved,” the NBR chairman added.