Release of Fund From Tk 900cr Stock Scheme
Merchant bankers oppose giving directors’ personal guarantee
Bangladesh Merchant Bankers Association opposed a fresh condition imposed by the Investment Corporation of Bangladesh which asked for personal guarantee from directors of merchant banks to release sanctioned fund for affected small investors. BMBA president Tanjil Chowdhury expressed the association’s stance in a letter submitted to Bangladesh Securities and Exchange Commission chairman M Khairul Hossain on Thursday.
The BMBA letter also requested the BSEC to extend the deadline for repaying the loans to give three-year time as the ICB is yet to disburse any loans for the investors affected by the stock market crash in 2010-2011.
The loan approval committee for government refinance scheme of ICB so far has sanctioned around Tk 66.38 crore loans for 2,131 investors.
The ICB in its loan sanction letter for merchant banks said that personal guarantee of directors has to be submitted for the release of the sanctioned amount which was not mentioned in the directives issued by the ministry of finance in this regard.
Most of the merchant banks are wholly owned by the subsidiaries of banks or non-banking financial institutions, but the directors never provide person guarantee even for inter-bank borrowing, neither it requires to provide personal guarantee to get refinancing form the Bangladesh Bank, BMBA said.
Nominated and independent directors are not likely to agree to take personal liabilities, it said.
The BMBA letter requested the government not to impose the additional condition at the eleventh hour as the directors of the respective organisations might not agree to sign personal guarantee.
The Bangladesh Bank on August 26 released Tk 300 crore to ICB as the first installment of the Tk 900-crore refinance scheme.
-With New Age input
