Govt again extends tenure

Dhaka,  Thu,  24 August 2017
Published : 17 Jun 2017, 21:03:41
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IPO quota facility

Govt again extends tenure

FE Report

The government has again extended the tenure of IPO (initial public offering) quota facility for another six months for small investors who were affected during 2010-11 stock market debacle.

The ministry of finance (MoF) has extended the tenure following the proposal made by the Bangladesh Securities and Exchange Commission (BSEC).

As per the guidelines of capital market refinancing scheme, 20 per cent IPO quota is preserved for affected small investors.

The tenure of IPO quota facility will end on June 30 and as per the decision of the MoF, affected small investors will be able to enjoy facility till December 31 this year.

The MoF has issued a letter regarding extension of tenure to the securities regulator.

Mohammad Saifur Rahman, a BSEC executive director, said tenure of IPO quota facility has been extended to keep pace with the capital market refinancing scheme.

"The IPO quota facility was a part of refinancing scheme. That's why the tenure of IPO quota facility has also been extended till December 31 this year," Rahman said.

After the 2010-11 stock market debacle, the government introduced capital market refinancing scheme setting 20 per cent IPO quota facility, among others, for affected small investors.

As part of the refinancing scheme, the government also disbursed Tk 9.0 billion through three installments.

Meanwhile, the securities regulator has made the proposal of reducing the interest rate to 6.0 per cent from 9.0 per cent against the loans taken under the capital market refinancing scheme.

The BSEC has also requested the government to extend the tenure of the refinancing scheme by two years more.

The BSEC executive director said they are yet to get any decision on their proposal submitted to the MoF.

"The proposed 6.0 per cent interest rate is lower than the bank rate. That's why, the consent of finance division is required to consider our proposal," Rahman said.

As per the guidelines of refinancing scheme, borrowers are not allowed to receive loans for second time.

The securities regulator also urged the government to relax this condition to allow the borrowers to receive loans for the second time.

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