Dhaka, April 9 -- Bangladesh Bank (BB) has extended the tenure of banks' capital market special funds by nearly 22 months, until 31 December 2026 in a move aimed at maintaining stability in the financial sector amid ongoing volatility in the capital market.

The central bank also instructed banks that had established such special funds and invested in the stock market to gradually reduce their exposure within the extended period.

The directive was issued through a circular from the Department of Off-site Supervision on Tuesday.

The special fund facility, introduced in 2020 in response to the liquidity challenges during the COVID-19 pandemic, allowed each bank to form a fund of up to Tk200 crore with a five-year maturity. That original t...