Define Bank Rate and Demated securities

Bank Rate: The bank rate is the rate of interest at which BB re-discounts the first class bills of exchange from commercial banks.  Whenever BB wants to reduce credit, the bank rate is raised and whenever the volume of bank credit is to be expanded the bank rate is lowered. This is because by change in the bank rate. BB seeks to influence the cost of bank credit. The efficacy of bank rate policy depends, to a greater extent, on its power to influence the market rates. There is no organized money market in our country and thereby the market rates seldom respond to bank rate changes. The absence of any kind of conventional relationship between the central bank and other components of the money market further adds to the ineffectiveness of the bank rate policy.

Demated securities: Demate means Conversion of physical securities into electronic form-the move from physical certificates to electronic book keeping. Actual stock certificates are slowly being removed and retired from circulation in exchange for electronic recording. With the age of computers and the Depository Trust Company, securities no longer need to be in certificate form. They can be registered and transferred electronically.

 Participants:

– Investors

– CDBL [central depository Bangladesh ltd.]

– The Depository Participants

The Issuing Company