STOCK REFINANCE SCHEME : Ministry scraps m-bank directors’ guarantee condition

April 30, 2014

The finance ministry on Tuesday scrapped a condition that directors of merchant banks and brokerage houses would issue personal guarantee for releasing loans to the affected small investors from Tk 900 crore refinance scheme of the government. The Bangladesh Securities and Exchange Commission recently sought permission from the ministry for waiving the condition as the merchant banks and brokerage houses were declining to issue any personal guarantee of their directors against the loans which will be given to the affected investors.
BSEC executive director Saifur Rahman on Tuesday told New Age, ‘The ministry has waived the condition. I think it will help in disbursing the refinance loan promptly.’
Although around Tk 345 crore has so far been sanctioned for 31 merchant banks and brokerage houses, none of them disbursed any loans to the investors, who were affected during the 2010-2011 market crash till date because of the personal-guarantee condition.
A supervision committee on refinance scheme, headed by Saifur, earlier extended the time for submission of applications for the loan for fifth time till April 30.
‘A meeting of the supervision committee will be held on Wednesday to consider the extension of the cut-off date for submitting applications for the loan,’ said Saifur.
As per the latest report, 15,694 affected investors of 40 institutions, including 20 merchant banks and 20 stockbrokers, had so far filed applications to the loan approval committee for Tk 461-crore refinance loans.
As many as 9,38,155 affected investors are yet to file applications to the loan approval committee.
The supervision committee for the first time had set November 30 as deadline to receive applications from the merchant banks and brokerage houses in favour of affected small investors.
As per a Bangladesh Securities and Exchange Commission report sent to the finance ministry in April 2013, only 7,413 small-scale investors out of the 9,53,849 affected by the 2010-11 stock market crash got interest waiver.
Bangladesh Bank on August 26, 2013 released Tk 300 crore to the ICB as the first tranche of the Tk 900-crore refinance scheme.

-With New Age input

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