Stocks’ Refinance Scheme
Application deadline extended for fifth time
The supervision committee for Tk 900-crore government refinance scheme for the affected small-scale investors is going to extend the timeline to get loan applications from merchant banks and brokerage houses for the fifth time by another month. The deadline expired on Monday. The supervision committee will extend the timeline by another month as the committee is expecting that more institutions will be interested to get the fund for investors under their organisations once the condition of personal guarantee is waived, Bangladesh Securities and Exchange Commission executive director Saifur Rahman told New Age on Monday.
Waiving personal guarantee of each director of stockbroker and merchant bank for releasing refinance loans of investors is under process, said Saifur, also the head of the supervision committee.
As per the latest report, 15,694 affected investors of 40 institutions, including 20 merchant banks and 20 stockbrokers, had so far filed applications to the loan approval committee for Tk 461-crore refinance loans, he said.
As many as 9,38,155 affected investors are yet to file applications to the loan approval committee.
The loan approval committee has sanctioned loans of around Tk 345 crore for 31 institutions, said Saifur.
But, no loans have been released yet for the investors as brokerage houses and merchant banks denied issuing personal guarantee of directors’ as per a condition imposed by the Investment Corporation of Bangladesh, another BSEC official said.
The supervision committee for the first time had set November 30 as deadline to receive applications from the merchant banks and brokerage houses in favour of affected small investors.
The deadline was extended by another two months in three phases as the scheme did not get enough response from the merchant banks and brokerage houses.
As per a Bangladesh Securities and Exchange Commission report sent to the finance ministry in April 2013, only 7,413 small-scale investors out of the 9,53,849 affected by the 2010-11 stock market crash got interest waiver.
The loan benefit was announced as part of government-set compensation package for the investors who had investment below Tk 10 lakh during the market crash.
Bangladesh Bank on August 26, 2013 released Tk 300 crore to the ICB as the first tranche of the Tk 900-crore refinance scheme.
On November 27, merchant banks and brokerage houses at a meeting with the BSEC had requested the commission to take steps to obtain a directive from the National Board of Revenue allowing the amount of loans waived for the affected small-scale investors as allowable expenses.
They also declined to issue directors’ guarantee against refinance loans.
-With New Age input