Only 7,413 small-scale investors out of the 9,53,849 affected by the 2010-2011 stock market crash have got compensation under the government-announced package, a Bangladesh Securities and Exchange Commission data showed.
The commission data sent to the finance ministry on Sunday showed that only five merchant banks and brokerage houses, out of a total of 308 gave compensation to their clients.
The BSEC informed the ministry that only 0.21 per cent of stockbrokers and 13 per cent of merchant banks had implemented the package.
The BSEC data which was sent to the finance ministry showed that till March this year ICB Capital Management Ltd waived margin loan interest amounting Tk 5.20 crore for its 4,025 investors, ICB Securities Trading Company Ltd waived interest amounting Tk 1.95 crore for its 279 investors, Investment Corporation of Bangladesh waived interest amounting Tk 5.30 crore for its 1,629 investors, Agroni Equity Investment Ltd waived interest amounting Tk 45 lakh for its 142 investors and Janata Capital Ltd waived interest amounting Tk 3.88 crore for its 1,338 investors.
The BSEC data also showed that 28 merchant banks were supposed to waive Tk 65.10 crore in interest and reschedule margin loans amounting Tk 913.90 crore for 41,492 investors.
280 brokerage houses of the Dhaka and Chittagong stock exchanges were supposed to waive Tk 49.96 crore in interest and reschedule margin loans amounting Tk 627.37 crore for 9,12,797 investors.
On March 4 last year, finance minister Abul Maal Abdul Muhith announced that 50 per cent of the past year’s margin loan interest would be waived and a 20-per cent quota in IPOs would be allotted for the affected small-scale investors.
The BSEC in July 2012 sent letters to 209 brokerage firms of the DSE, 79 brokerage firms of the CSE and 28 merchant banks to implement the compensation package by September 30.
The interest waiver announced by the government for the investors affected by the 2010 stock market crash has remained unimplemented after eight months of the deadline as the merchant banks and brokerage houses are reluctant to waive the money.
Officials of different merchant banks and brokerage houses admitted that they failed to implement the interest waver directive of the BSEC.
A number of investors said that the merchant banks and brokerage firms were delaying the waiver by showing procedural problem, though the timeline given by the stock market regulator for the waiver ended on September 30, 2012.
‘We have failed to implement the BSEC order as we are suffering from huge losses due to the market downtrend in the last two years,’ a senior official of a merchant bank told New Age.
He said that except some state-owned merchant banks and brokerage houses, most of the merchant banks had failed to comply with the BSEC directive.
‘The compensation package and the interest waiver were not practical decisions. That’s why implementation of the interest waiver is being delayed,’ DSE president Rakibur Rahman earlier told New Age.
He said giving compensation to the retail investors was not possible without refinancing the brokerage houses.
Bangladesh Merchant Bankers Association president Mohammad A Hafiz claimed that most of the merchant banks had already complied with the BSEC directive.
‘We have no data about the implementation status of the 50 per cent interest waiver. But, to my knowledge, all the merchant banks have provided the waiver,’ Hafiz said.
In July 2012, the merchant bankers requested the Bangladesh Bank to provide them Tk 900 crore for implementing the waiver, but the BB did not respond to their demand.
The government formed a committee for implementing the compensation package which recommended that the retail investors who had investment below Tk 10 lakh during 2009-10 will get a waiver of up to 50 per cent of the interest on margin loans.
-With New Age input