Dhaka,  Friday
19 April 2024

Capital market liquidity support

Intermediaries to get Tk100cr loan at 8.25pc interest

Staff Reporter 

Published: 09:01, 3 April 2024

Intermediaries to get Tk100cr loan at 8.25pc interest

Photo : Courtesy

To enhance liquidity support for the stock market, the Capital Market Stabilisation Fund (CMSF) has signed a Memorandum of Understanding (MoU) with Community Bank Bangladesh, a concern of Bangladesh Police Kallyan Trust, to disburse Tk100 crore loan among the intermediaries at 8.25 per cent interest.

Md Monowar Hossain, chief of operations of CMSF, and Shamsul Haque Sufiani of Community Bank signed the MoU on behalf of their respective organisations at the office of CMSF on Tuesday.

The CMSF will provide the loan from its funds, and the bank will disburse it among the selected intermediaries by keeping proper collateral and documents. 

The fund was created in 2021 by collecting the unclaimed and undistributed dividends of investors that remained in the listed companies for years.

The intermediaries – stock brokers, stock dealers, merchant banks, asset management companies, and market makers – will get Tk 2-5 crore loan to invest in the capital market.

The signing of the MoU on Monday marked the official start of the loan disbursement process, officials said.

To avail the loan, intermediaries must maintain deposits equivalent to the loan amount in their own accounts. Thus, the fund injected into the market will be Tk 200 crore, with the Tk 100 crore loan from the CMSF and another Tk 100 crore from brokers.

The fund would be invested mainly in A-category companies.

On 4 January, the CMSF board approved lending Tk 100 crore to the intermediaries at a fixed interest rate of 7 per cent, with an additional service charge of around 1 per cent, which was flexible as it could be more or less than 1 per cent.

After receiving applications from the interested intermediaries, the CMSF selected a dozen brokerage firms to lend Tk 2-5 crore to each.

During Tuesday’s MoU signing programme, CMSF Chairman Najibur Rahman; Member of CMSF Board of Governors and Policy Development Committee Chairman Delwar Hossain; Md Khairul Alam, head of internal control and compliance at Community Bank; Md Ariful Islam, vice-president of the bank and Motijheel branch manager; and CMSF Head of Operations Md Wasi Azam were present along with other senior officials.