• Sunday, March 01, 2015

Credit scheme starts for stock investors today

Tk 900cr to be disbursed

Star Business Report

The Investment Corporation of Bangladesh (ICB) will release funds from the Tk 900-crore government refinancing scheme for share investors today, as the finance ministry withdrew its condition of providing personal guarantee by the directors of merchant banks and stockbrokers to receive the funds.
In August last year, the finance ministry approved the scheme and the central bank released the first instalment of Tk 300 crore in favour of the ICB, the scheme manager.
The ICB has since sanctioned Tk 345 crore for the retail investors affected by the 2011 market crash, through 31 merchant banks and stockbrokers.

But no fund has so far been released, as the directors of merchant banks and stockbrokers were not giving their “personal guarantee” for company purposes, said Saifur Rahman, a member of the surveillance committee of the refinancing scheme.
The affected retail investors with less than Tk 10 lakh in exposure from January 2009 to November 2011 are eligible for the fund.
The state-run investment company, ICB, will receive the fund at 5 percent interest from Bangladesh Bank and will lend it to merchant banks and stockbrokers at 7 percent.
The merchant banks and the stockbrokers then will disburse the funds among retail investors at 9 percent interest. The borrowers will have to clear one instalment of the loan every three months.
In March 2012, the government announced a compensation package, which also included an interest waiver on margin loans for the investors who suffered losses during the price debacle in 2011.
Meanwhile, the surveillance committee of the refinancing scheme once again extended the deadline for credit applications by three months to June 30.
Retail investors, who lost money to stockmarket downswings in 2011, can apply for credit from the scheme.
The panel, comprising representatives from the central bank, BSEC and ICB, is responsible to monitor the scheme's operations and submitting a report to the finance ministry every quarter.

Published: 12:00 am Sunday, May 04, 2014

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