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বাংলা
Dhaka Tribune

BB releases Tk3bn from stock refinance fund

Update : 26 Aug 2013, 07:50 PM

The Bangladesh Bank (BB) Monday released Tk3bn as first installment of the Tk9bn refinance scheme to prop up the country’s stock markets, official sources said.

The first installment was made after receiving a requisition of money from the Investment Corporation of Bangladesh (ICB) in line with a tripartite Memorandum of Understanding between the central bank, Bangladesh Securities and Exchange Commission (BSEC) and ICB.

Sources said the remaining part of the scheme will be disbursed in next three months in two more installments as per the deal. The installments will be deposited to the ICB account opened in Bangladesh Development Bank Ltd.

A BSEC official said works are going on to form a three-member supervision committee for operation of the refinance fund.

As per tripartite memorandum, the committee will be formed. BSEC has identified 954,000 stock investors to be brought under the facility of refinance scheme.

Earlier, the government approved guideline for the scheme, setting interest rate at 9% on loans to the affected investors who had lost money during a market debacle in 2011.

The affected retail investors, who had investment up to Tk1m from January 2009 to November 2011, will be eligible to receive loan from the specialised fund.

After getting the fund at 5% interest rate from the central bank, the ICB will lend it to merchant banks and stockbrokers at 7%, according to the scheme guideline. The merchant banks and stockbrokers will then disburse the fund to the retail investors at 9% interest rate.

The borrowers will have to repay the loans in three-month installments and should give corporate guarantee to the loans to ICB.

ICB will subsequently deposit the received amount to the refinance fund.

As per guideline, the regulator will have the authority to cancel licence of the merchant banks and stockbrokers if they fail to repay the loans on time.

An inspection committee led by the BSEC and with representatives from the central bank and the regulator will monitor the operation of the scheme and submit a report to the finance ministry in every quarter of calendar year.  

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