214,000 BO accounts close in FY2020-21 so far

Dhaka Tribune   21 September 2020

BO account

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According to the Central Depository Bangladesh Ltd (CDBL) data, the number of active BO accounts was 2.5 million on July 1 in this year, which declined to 2.3 million on September 17

More than 214,000 beneficiary owner (BO) accounts have closed in the first two and a half months of the ongoing 2020-21 fiscal year.

According to the Central Depository Bangladesh Ltd (CDBL) data, the number of active BO accounts was 2.5 million on July 1 in this year, which declined to 2.3 million on September 17.

July is the month for clearing annual renewal fees of BO accounts.

Talking to Dhaka Tribune, stakeholders said a significant number of BO accounts closed due to non-payment of those renewal fees by the stock investors amid sluggish stock business during the Covid-19 pandemic.

The Dhaka Stock Exchange (DSE) officials said that the number of defaulting BO account holders in the given month was the highest this year, as never in the last decade did the number cross 200,000 ever.

Stock market insiders say the investors usually open new BO accounts to apply for initial public offerings (IPOs). Only a small number of BO account holders are typically involved in the secondary market.

Capital losses also contributed to the exodus of investors who did not bother to renew their accounts  by paying the  annual fee, they said.

Currently, out of the total 2.3 million accounts, 1.7 million belonged to males and 609,057 to female investors.

A total of 2.2 million BO accounts were owned by Bangladeshi investors and 128,588 accounts by non-resident Bangladeshis (NRBs), according to the CDBL data.

As per the existing rule, a person can open only a single BO account using his/her national identity card, bank account, and phone number.

Opening a BO account with the CDBL through a depository participant is mandatory for trading shares at stock exchanges.

BSEC also reduced the renewal fee to Tk450 from Tk500 for each BO account back in 2016.

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