68pc of stockmarket fund disbursed

The government has disbursed about 68 percent of its Tk 900-crore refinancing scheme among stockmarket investors affected by the 2011 market crash.

As much as Tk 616 crore has been disbursed among 24,320 investors through 43 merchant banks and stockbrokers, said Saifur Rahman, convenor of the scheme's surveillance committee, adding that documentation for another Tk 19.91 crore for 637 investors has also been completed.

As of October 26, the scheme's manager, the Investment Corporation of Bangladesh or ICB, has sanctioned another Tk 30.58 crore for 842 retail investors, to be disbursed through six merchant banks and stockbrokers.

“We are continuing our efforts to disburse the total amount so that the affected investors can be benefited,” said Rahman, also an executive director of Bangladesh Securities and Exchange Commission.

Meanwhile, the recovery rate has been impressive, with hardly any incidence of failure, he said.

To date, the ICB has realised Tk 208.68 crore in instalments from investors who took credit from the scheme through 29 merchant banks and stockbrokers, according to Rahman.

Approved in August 2013 in line with a government compensation package announced in March 2012, the scheme is open to retail investors whose stockmarket exposure was lower than Tk 10 lakh between January 2009 and November 2011.

Bangladesh Bank disburses the amount, in three instalments, at 5 percent interest to the ICB, who then lends it to merchant banks and stockbrokers at 7 percent.

The merchant banks and the stockbrokers then disburse the fund to retail investors at 9 percent interest rate, according to the guideline of the refinance scheme.

The borrowers will have to repay the loans every three months and should give corporate guarantee against the loans to the ICB, who will deposit the received amount to the refinance fund.

The regulator has the authority to cancel licences of merchant banks and stockbrokers if they fail to repay the loans in time, according to the guideline.

A surveillance panel, comprising representatives from the central bank, BSEC and the ICB, is responsible for monitoring the scheme's operations and submitting a report to the finance ministry every quarter.