Govt gives Tk 856cr to affected stock investors | The Daily Star
12:00 AM, May 03, 2019 / LAST MODIFIED: 12:06 AM, May 03, 2019

REFINANCE SCHEME

Govt gives Tk 856cr to affected stock investors

The government has decided to give Tk 856 crore to the affected small stock investors through the Investment Corporation of Bangladesh (ICB) in a bid to revamp the ailing market.

Already, the finance ministry has instructed the Bangladesh Bank on the issue, a top official of the BB confirmed to The Daily Star yesterday.

This is the second refinance scheme for the retail investors who lost money to a price debacle in 2010 and 2011.

In 2013, the central bank started to provide a refinance scheme of Tk 900 crore to the ICB.

The ICB successfully implemented the scheme and has returned Tk 856 crore to the BB. The initiative’s tenure will end in December 2019.

Now the government has sent a letter to re-allocate the fund to small investors under the same mechanism, said the BB official.

This time the refinance scheme’s tenure will come to an end in December 2022.

“The decision has been taken to support the market and boost the confidence of retail investors,” he added.

The government has formed a committee, comprising representatives from the Bangladesh Securities and Exchange Commission, the ICB and BB, to monitor the scheme.

Retail investors with less than Tk 10 lakh in exposure between January 2009 and November 2011 will be eligible for the fund.

The ICB will receive the fund at an interest rate of 5 percent from the BB and lend it out to merchant banks and stockbrokers at 7 percent.

The merchant banks and the stockbrokers will disburse the funds among retail investors at a rate of 9 percent. Borrowers will have to clear instalment payments every three months.

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