Trading of treasury bills in this secondary market will be conducted through the electronic register of the Bangladesh Bank, the top central bank and commercial bank officials agreed in principle at a joint meeting yesterday.

It was also decided in the meeting that settlement of the treasury bills will be done through the central depository system (CDS) which is expected to start its operation in November.

The meeting observed that for facilitating such electronic settlement of T-bills, the commercial banks will have to have link-up with the Central Depository Bangladesh Limited (CDBL).

In line with the observation, the central bank governor directed all the banks' chief executive officers (CEOs) to complete required link-up with the CDBL by August 21 for getting an interface to their system.

The central bank informed the CEOs of commercial banks that steps have already been taken to launch a mock operation with the CDBL using the electronic treasury bill register of the Bangladesh Bank.

Bangladesh Bank Governor Dr Fakhruddin Ahmed said for getting the settlement facility from the CDBL, all the commercial banks must install a software from the CDBL.

"It would not be possible to get desired result if electronic register is launched without participation of the commercial banks. So all the commercial banks are advised to install the depository software," the governor told the meeting.

The central bank officials said once the secondary treasury bill market starts operation, general investors will be able to participate in online trading of the government bonds through the integration of the banks with the depository.

Speaking on the issues of appointment the primary dealers (PDs), the meeting observed that appointment of such dealers would help financial institutions to utilise their idle funds.

It will also add a new trend in balancing the liquidity supply and demand in the money market, the meeting observed.

The central bank has already invited applications for primary dealership and the aspirant dealers have been asked to submit their applications by August 21.

The primary dealers will operate and conduct transactions of treasury bills in all primary auctions and issues of treasury bills and tradable securities.

They will have to engage themselves actively in secondary trading, quoting two-way prices and keeping its trading window open throughout each business day.