Govt to relax conditions for borrowers

Dhaka,  Mon,  25 September 2017
Published : 14 Mar 2017, 21:17:42
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Capital market refinancing scheme

Govt to relax conditions for borrowers

FE Report


The supervisory committee of the capital market refinancing scheme is set to prepare a proposal to relax some conditions for borrowers to ensure complete utilisation of the fund.

The committee's plan to work for relaxing conditions has come as a substantial amount of the fund still remains undisbursed.

According to information of the supervisory committee, out of Tk 9.0 billion, Tk 2.57 billion remained undisbursed as of March 14.

Mohammad Saifur Rahman, the convener of the supervisory committee said they would submit a proposal for relaxing some conditions to the finance ministry soon.

"We want ensure the complete utilisation of the fund. That's why the committee will sit soon for preparing a proposal that will be submitted to the ministry," said Rahman, also an executive director of Bangladesh Securities and Exchange Commission (BSEC).

According to Rahman, their proposal may include the reduction of interest rate and extension of tenure of the scheme.

"Some borrowers are also interested to take loans for second time. Our proposal may include the provision of taking loans for second time," Rahman said.

He said if the proposal of relaxing conditions is approved by the supervisory committee, it will be submitted to the ministry of finance through the securities' regulator.  

 The tenure of the capital market refinancing scheme will end on December 31, 2017.

The government approved the guidelines for the refinancing scheme by setting interest rate at 9.0 per cent on loans to the affected investors who invested up to Tk 1.0 million during the period between January 2009 and November 2011.

After getting the funds at 5.0 per cent interest rate from the central bank, the Investment Corporation of Bangladesh (ICB) is allowed to lend it to merchant banks and stockbrokers at 7.0 per cent, according to the guidelines. And the merchant banks and stockbrokers will disburse the funds to the retail investors at 9.0 per cent interest rate.

After the approval of guideline, ICB received Tk 9.0 billion from the central bank through three installments.

Initially, the borrowers were unwilling to receive funds due to some tough conditions including the corporate guarantee against the loan.

Later, the committee relaxed some tough conditions and Tk 6.42 billion was disbursed among the borrowers as of Monday.

The committee has also realised Tk 6.67 billion, including interests, from the borrowers.     

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