To enhance the stability of the share market and improve its financial capacity by repaying high-interest borrowed funds and making new investments, the Investment Corporation of Bangladesh (ICB) has been granted a loan of 3,000 crore taka against a sovereign guarantee by the Bangladesh Bank.
This information was disclosed by sources at the Bangladesh Bank on Monday (December 9).
According to the central bank, the loan will be provided to ICB through four private banks. Of this, Dutch-Bangla Bank will provide 700 crore taka, Prime Bank will contribute 1,000 crore taka, Dhaka Bank will offer 500 crore taka, and Mercantile Bank will give 800 crore taka.
Additionally, the funds will be used to repay loans taken at 4% interest and invest in quality stocks in the stock market. ICB will have 18 months, or one and a half years, to repay the loan including interest.
It is worth mentioning that ICB had applied for a sovereign guarantee from the Bangladesh Bank on October 14 to obtain the 3,000 crore taka loan. On October 17, a meeting was held involving officials from the Bangladesh Bank, the stock market regulatory authority (BSEC), and ICB to discuss the matter.
During the meeting, it was informed that Bangladesh Bank would not object to granting the loan subject to the government’s guarantee. Given the need to strengthen financial capacity for stock market investment, the meeting recommended to the Finance Division to provide the sovereign guarantee.
After a summary of the discussion was presented, the economic advisor gave his consent. A letter was then sent to the Bangladesh Bank indicating that the government would be responsible for repaying the loan in case of ICB’s failure to do so.
Dhk/MK
