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Dhaka Tribune

Tk9bn stock refinance scheme becomes operational Sunday

Update : 22 Aug 2013, 04:30 PM

Bangladesh Bank, on behalf of the government, has signed a Memorandum of Understanding (MoU) with Bangladesh Securities and Exchange Commission (BSEC) and Investment Corporation of Bangladesh (ICB) yesterday to make Tk9bn capital market refinance scheme operational.

Bangladesh Bank Executive Director SM Moniruzzaman, BSEC Executive Director Saifur Rahman and ICB Managing Director Fayekuzzaman signed the MoU on behalf of their respective organisations.

The refinance scheme activities will start from Sunday and will close on December 2016. During this period, the fund disbursement and repayment will be completed and will be repaid to the government.

“The Merchant banks and broker houses that have already received remission of 50% interest from the affected investors’ accounts, following the government announced bailout package, will get the fund after submitting documentary evidence,” said Saifur Rahman.

The affected investors who had invested less than Tk1m during the period from January 1, 2009 to November 30, 2011 will get support from the scheme, he said.

Earlier on August, 2012 the Bangladesh Merchant Bankers Association (BMBA) had sought Tk9bn loan from the Bangladesh Bank at 10% interest to execute the government announced bailout package to compensate investors who incurred losses after taking margin loans.

Considering the demand, the government decided to go forward with the capital market refinance scheme. As per the guideline approved by the Ministry of Finance, the loan worth Tk9bn, which will be used as fresh loans or for loan rescheduling purpose, will be handed over to ICB in three equal installments.

The maximum tenure of the loan will be for three years.

The loan will be disbursed under the “assistance fund for the affected small investors,” which will be managed by the ICB with a simple interest of 5%.

ICB will the distribute the fund among the merchant banks and stock brokers at an interest rate of 7%, of which 2% will be deducted by ICB as service charge.

The merchant banks and stock brokers will distribute the funds as fresh loans among affected small investors or for the purpose of rescheduling loans at an interest rate of 9%.

The ICB will form a grant committee, which will approve the loans for merchant banks and brokerage firms after justifying necessary papers and documents attested by their respective company auditors.

For receiving the loans from the ICB, the merchant banks and stock brokers will have to provide “corporate guarantee” as mortgage.

The securities regulator could impose penalty or cancel the registration of the borrowers if they fail to repay the loans taken from the ICB within the stipulated timeframe.

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