CIB Reports For Stock Loan
BSEC unlikely to consider merchant bankers’ proposal
The Bangladesh Securities and Exchange Commission is unlikely to consider a Bangladesh Merchant Bankers Association proposal to include Credit Information Bureau reporting for margin account holders. The BMBA has made the proposal to include margin account holders with above Tk 1 crore under CIB reporting of Bangladesh Bank to facilitate the entities in recovering the loans, a BSEC senior official told New Age on Tuesday.
‘As the investors reacted negatively to the BMBA proposal and the market fell sharply on the day as soon as they (investors) got the information, the commission may not consider the proposal,’ the BSEC official said.
After the media reports on the BMBA proposal, the key index of the Dhaka Stock Exchange, DSEX, on Monday fell by 1.43 per cent, or 69.20 points, to close at 4,768.90 points on the day as the investors feared further decline in share prices and sold shares in bulk amount.
BSEC executive director Saifur Rahman said, ‘Stakeholders reserve the rights to make proposals regarding the matters they think best from their perspective.’
‘But, the regulator has to consider everything in broader aspect of the capital market and its investors,’ he said.
‘If any proposal of a segment of the capital market hurt the investors as well as capital market sentiment, the BSEC will not consider that sort of proposals,’ Saifur said.
The BMBA on November 20, requested the capital market regulator that the investors having loans above Tk 1 crore in merchant banks and brokerage houses should brought under the CIB reporting to facilitate them to recover margin loans.
Merchant banks and brokerage houses during the years 2009–2010 disbursed huge amount of margin loans to their clients without assessing the clients’ capacity.
After the market crash in 2010–2011 amid regulators bar on making forced sell major amount of margin loans remained unrealised.
The BMBA letter issued by its president Tanjil Chowdhury also
said, ‘To facilitate the recovery of huge defaulted margin loans, we propose that clients having loan
with more than Tk 1 crore should come under the CIB reporting, as we do not have any other functional recourses.’
-With New Age input
