The Bangladesh Securities and Exchange Commission has sent a proposal to the finance ministry that the brokerage houses and merchant banks should get Tk 1,266.69 crore in loans from the Bangladesh Bank to implement the compensation package for the investors affected by the stock market crash. In a report sent to the finance ministry the market regulator also requested the finance ministry to treat the fund of the merchant banks which would be required for waiving the interest of the affected investor as allowable expenses for tax payment.
The capital market regulator in a report on the implementation status of the compensation package, which was announced earlier by the government, showed that almost all of the brokerage houses and merchant banks could not implement the package because of fund shortage.
‘The major portion of the loans of the merchant banks [which were given to investors] has remained unrealised because of an unexpected market condition. On the other hand, merchant banks are repaying the instalments of loans which were taken from the commercial banks at higher interest rate,’ said the SEC report sent to the finance ministry on Sunday.
Under the circumstances, the merchant banks and brokerage houses could be given a re-financing fund of Tk 1,266.69 crore from the Bangladesh Bank, directly or through the Investment Corporation of Bangladesh or any state-owned bank.
The rate of interest for the fund can be set at 10 per cent and the borrowers will return the fund within three years.
‘So, the government would not need to spend any money for that purpose,’ the BSEC report said.
The government in March 2012 announced the compensation package which also included waiver of interest on margin loans for the investors who suffered losses during the market crash in 2010-2011.
After the compensation package was announced, merchant banks and brokerage houses informed the BSEC that the total number of affected investors was 9.53 lakh and Tk 230 crore would be needed for waiving interest of the investors and rescheduling of the loan-interest.
They also informed the regulator that around Tk 1,541 crore would also be needed for rescheduling the loans of the investors.
The BSEC report said that only five merchant banks and brokerage houses, out of total 308, waived only Tk 16.78 crore in interest and rescheduled loans of Tk 274.58 crore in last one year.
Only 7,413 investors out of the total 9.53 lakh got the compensation, it said.
The BSEC report said that as the five organisations had already rescheduled Tk 274.58 crore, the remaining brokerage houses and merchant banks would need Tk 1,266.69 crore in refinancing fund.
Officials of different merchant banks and brokerage houses said that if they got the loan from the Bangladesh bank, they could implement the compensation package.
-With New Age input
