BB okays EEF transfer

Bangladesh Bank has decided in principle to transfer management of the Equity and Entrepreneurship Fund (EEF) to the Investment Corporation of Bangladesh (ICB) for better use of the government fund.
A senior official of the central bank said yesterday the decision had been taken at a meeting of the bank's board of directors and would be sent to the finance ministry for approval.
The ICB had earlier submitted a proposal to the BB seeking to manage the EEF following the government's intention to separate the EEF management from the central bank as the fund management was not a suitable job for the central bank.
The government formed the EEF in 2000 with an initial fund of Tk 100 crore to extend equity support to eligible companies in IT, agriculture and food processing sectors so that investors are encouraged to invest in these risky, yet promising sectors.
Presently, all the scheduled commercial banks and financial institutions are involved in the administration of EEF.
The BB has so far disbursed Tk 444.31 crore against granted Tk 528.60 crore for 197 projects in agriculture and food processing and Tk 44.05 crore against the approved fund of Tk 56.87 crore for 32 projects in the IT sector.
According to the proposal, the ICB will be responsible for project approval, fund disbursement, project inspection, monitoring, buyback of shares issued against the government and legal actions against projects, if necessary.
The EEF unit of Bangladesh Bank will see the EEF policy implementation and performance supervision activities. The ICB will work as sub-agent of the central bank in managing the EEF.
The ICB will disburse fund to the projects, which have already been approved, and supervise the projects.
The ICB will not take responsibility for the projects in which it is not involved as a monitoring or evaluating agency. Other related agencies will be responsible for the projects instead.
However, the ICB will collect details about the projects.
The corporation will take steps as per the EEF policy for re-evaluation and approval of those projects, which are now awaiting approval of the central bank.
The ICB will continue disbursing equity funds to those projects that received a portion of the granted fund and the central bank will provide all necessary documents for the ICB.
The corporation will take decisions directly on approval of new projects, which will be applied for the equity fund. The EEF unit of the BB will release necessary funds to the ICB to this effect.
The central bank's EEF unit will pay all types of taxes or charges for transactions of the equity fund.