29pc of refinancing fund goes undisbursed

Nearly 29 per cent or Tk 2.58 billion of the Tk 9.0-billion capital market refinancing fund remains undisbursed due to poor response from the investors, who were the victims of the 2010-11 stock market debacle, officials said.
Despite repeated attempts, the fund supervision committee and Investment Corporation of Bangladesh (ICB) could not disburse over Tk 2.58 billion of the fund meant for the affected investors, an ICB official said.
"We are trying to disburse the rest of the funds under the refinancing scheme as the government has extended time for obtaining loan from it," he added.
The timeframe has been extended until January 2019 for smooth implementation of the incentive package. Earlier, the scheme was set to end in December 2016.
In September 2017, the government also reduced the fund's interest rate by 1.5 per cent. At present, the interest rate is 6.0 per cent which was 9.0 per cent earlier.
Some seven entities have applied for over Tk 820 million against 3,197 small investors after reducing the interest rate of the refinancing fund scheme, extending the time for obtaining loan and placing different types of advertisements to disburse the fund by ICB.
The process is now going on to scrutinize the applications aiming to disburse the funds, according to an ICB document.
ICB Managing Director Kazi Sanaul Hoq in a recent letter informed the Ministry of Finance (MoF) about the fund's update.
Despite repeated attempts over phone, Mr Hoq could not be reached for his comments in this regard.
When contacted, a commissioner of Bangladesh Securities and Exchange Commission (BSEC) told the FE on Monday, "A portion of the fund under the capital market refinancing scheme could not be disbursed due to different reasons. We are trying and taking further steps to disburse it. Some investors concerned have applied for the fund recently."
Besides, he said, the time for submission of applications to obtain loan under the scheme has been extended to December 31, 2019 from December 31, 2017.
The supervision committee of the special fund management unit in its 26th meeting held on December 24, 2017 decided to give priority for disbursing loan to merchant banks and stockbrokers that are yet to take loan from the refinancing scheme.
The meeting also took decision to disburse loans among merchant banks and stockbrokers who repaid their loan within the stipulated time, a senior ICB official said.
The government formed the Tk 9.0-billion fund in July 2013 to prop up the capital market, and mitigate the sufferings of investors, affected during the 2010-11 stock market debacle. Later, ICB was appointed as the fund manager.
The central bank disbursed Tk 9.0 billion by three installments against the fund. Until January 31 this year, merchant banks and stockbrokers have disbursed Tk 6.42 billion among 25,262 affected-small investors through 34 entities.
Over Tk 6.89 billion loan along with interest has already been realized from the borrowers.
Before disbursing the fund, the BSEC identified some 954,000 investors, who are eligible for the loan facility, in line with the guidelines set for the capital market refinancing scheme.
The affected-investors, who invested up to Tk 1.0 million during the period between January 2009 and November 2011, were eligible for the loan under the scheme.
In August 2013, state-run ICB received Tk 3.0 billion as the first installment of the refinancing scheme from the central bank. Later, the rest Tk 6.0 billion was disbursed by two more installments.

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