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Deadline for share credit applications extended

Investors can seek loans from Tk 900cr scheme

Star Business Report

The surveillance committee of a government refinancing scheme for affected stockmarket investors once again extended the deadline for credit applications by two months to March 31.
Retail investors, who lost money to stockmarket downswings in 2011, can apply for credit from the government's Tk 900-crore scheme.
The finance ministry approved the guideline of the refinancing scheme in August last year.
The committee extended the deadline considering the overall situation, said Saifur Rahman, a committee member and an executive director of Bangladesh Securities and Exchange Commission.
The panel, comprising representatives from the central bank, BSEC and Investment Corporation of Bangladesh, is responsible for monitoring the scheme operations and submitting a report to the finance ministry every quarter.
The affected retail investors with smaller than Tk 10 lakh in exposure from January 2009 to November 2011 are eligible for the fund.
As of last Thursday, some 14,000 retail investors applied for share credit worth around Tk 300 crore through 19 merchant banks and 20 stockbrokers.


Scrutinising the applications, ICB, the scheme manager, has already sanctioned Tk 84.89 crore for 3,030 retail investors through seven merchant banks and stockbrokers.
The state-run investment company received the fund at 5 percent interest from Bangladesh Bank and lent it to merchant banks and stockbrokers at 7 percent.
The merchant banks and the stockbrokers then disbursed the funds among retail investors at 9 percent interest.
The borrowers will have to repay the loans every three months.
On August 25 last year, the central bank released the first instalment of Tk 300 crore in favour of the ICB. The remaining Tk 600 crore will be released in two equal instalments later.
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.

Published: 12:00 am Monday, February 03, 2014

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