Asset Backed Securitization in Bangladesh: Prospects and Hindrances

Journal of Banking & Financial Services, Vol. 3, No. 1, July 2009, University of Dhaka, Bangladesh

22 Pages Posted: 4 Dec 2009 Last revised: 2 Jul 2011

See all articles by Muhammad Saifuddin Khan

Muhammad Saifuddin Khan

University of Technology Sydney (UTS) - School of Finance and Economics; University of Dhaka - Department of Finance

Hashibul Hassan

Jagannath University - Department of Finance; Monash University - Department of Economics

Farhana Islam

Southeast University (Bangladesh)

Date Written: December 2, 2009

Abstract

Structured finance covers all advanced financial arrangements that serve to refinance and hedge any profitable asset efficiently beyond the scope of conventional forms of on-balance sheet securities to lower cost of capital, to mitigate agency costs of market impediments on liquidity and to bypass regulatory requirement. Asset Backed securities (ABS), leading form of structured finance, is growing rapidly in developed country as well as developing country. In Bangladesh, it is first issued privately by Industrial Promotion and Development Company (IPDC) in November, 2004. But so far the development of this potential sector is impeded. Basic reasons for the impediment are unsophisticated debt market for government and corporate bond, lack of legislation, capacity lacking of related parties. Some other problems like tax incentive, tax neutrality among all fixed income securities etc. are not very profound. Furnishing dynamic securitization act, mobilizing the formal debt market, market, strengthen the primary dealer network, acting market maker role by government etc. can pull up the ABS market with wide variety of prospects.

Keywords: Asset Backed Securities, Securitization, Special Purpose Entity, Pass Through Securitization, Originator

Suggested Citation

Khan, Muhammad Saifuddin and Hassan, Md. Hashibul and Islam, Farhana, Asset Backed Securitization in Bangladesh: Prospects and Hindrances (December 2, 2009). Journal of Banking & Financial Services, Vol. 3, No. 1, July 2009, University of Dhaka, Bangladesh , Available at SSRN: https://ssrn.com/abstract=1517219

Muhammad Saifuddin Khan (Contact Author)

University of Technology Sydney (UTS) - School of Finance and Economics ( email )

Haymarket
Sydney, NSW 2007
Australia
+61406520897 (Phone)

University of Dhaka - Department of Finance ( email )

Department of Finance
University of Dhaka
Dhaka, 1000
Bangladesh

Md. Hashibul Hassan

Jagannath University - Department of Finance ( email )

Dhaka
Bangladesh

HOME PAGE: http://www.jnu.ac.bd

Monash University - Department of Economics ( email )

Australia

Farhana Islam

Southeast University (Bangladesh) ( email )

Banani
Dhaka, 1230
Bangladesh

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