REFINANCE SCHEME
Loans at 8pc interest for small-scale investors proposed
A five-member committee formed by the finance ministry has suggested setting the interest rate for the loans under the government’s refinance scheme for the small-scale investors affected by the stock market crash at 8 per cent, BSEC officials said.
Earlier, a finance ministry guideline proposed 10 per cent interest for the loans the small-scale investors will take from the merchant banks and brokerage houses under the scheme.
The BSEC officials said the five-member committee on Thursday submitted a draft guideline to be finalised by the Bank and Financial Institution Division of the finance ministry.
The draft guideline also proposed that the name of the fund would be ‘Capital market affected small investors assistance fund’ and the fund would be of three-year tenure to be expired in December 2016.
A supervision committee will be formed under a memorandum of understanding to be signed among Bangladesh Bank, Bangladesh Securities and Exchange Commission and Investment Corporation of Bangladesh to manage the capital market affected small investors assistance fund, suggested the committee.
According to the draft guideline, the BB will charge 4 per cent interest for the refinance fund, while the ICB will disburse the fund at 6 per cent interest rate to the merchant banks and brokerage houses and the affected small-scale investors will get the fund at 8 per cent interest from them.
The affected small-scale investors will get the loans through the merchant banks and brokerages houses concerned.
The investors have to pay back the loans within three years in a three-month instalment basis, the draft guideline said.
Merchant banks and brokerage houses will apply for the refinance scheme loans to the loan approval committee to be formed by the ICB.
The merchant banks concerned have to provide sufficient documents with the application within the cut-off date to be set by the loan approval committee.
The merchant banks and brokerage houses will provide corporate guarantee against the loans for the security of the fund.
If any merchant bank or brokerage house fails to pay back the loans, regulators will take against it enforcement actions including cancellation of registration.
On July 7, the Bank and Financial Institution Division of the finance ministry formed the five-member committee to prepare a guideline on the fund and asked the committee to submit it within seven days.
The finance ministry on the same day released Tk 300 crore, the first phase of a Tk 900-crore refinance, in favour of the Bangladesh Bank.
The ministry will release the rest Tk 600 crore by December this year.
Following the prime minister Sheikh Hasina’s direction on July 3 to release the fund for the stock market, the BB and the finance ministry on July 4 asked the ICB to collect the first phase of the Tk 900-crore fund to implement the refinance scheme.
The government in March 2012 announced the compensation package that also included waiver of interest on margin loans for the investors who suffered losses during the market crash.
In April this year, almost one year after the announcement of the scheme, the BSEC proposed that the finance ministry give Tk 1,266 crore in refinance for implementation of the compensation package.
The finance ministry in May approved the BSEC’s proposal and asked the BB to find out ways how it could be implemented. The BB in the same month proposed forming a fund worth Tk 900 crore to this end.
-With New Age input
