ADB loan disbursement for stock mkt may face delay

Mohammad Mufazzal The second installment worth $ 150 million out of the $ 300 million loan from the Asian Development Bank (ADB) under the Capital Market Development Programme-II (CMDP-II) may face difficulties for not fulfilling the condition regarding the introduction of the Financial Reporting Act (FRA), 2013, officials said. The confusion about the disbursement of the loan by the Manila-based ADB surfaces after the finance minister AMA Muhith recently said that the draft on the FRA will not be placed in the parliament during the tenure of this government. The ADB condition regarding the introduction of the FRA said the draft on the act at least will have to be placed in the parliament. "It is not possible to enact the proposed Act in the ongoing parliament session, but it will be kept with the relevant parliamentary committee for finalising it during the tenure of the present government," Finance Minister AMA Muhith told a delegation of the Institute of Chartered Accountants of Bangladesh (ICAB). The officials of the Bangladesh Securities and Exchange Commission (BSEC) said the disbursement of the second installment under the CMDP-II will depend on the decision of the ADB. "According to the ADB condition, the draft act will have to be placed in the parliament. Now the ADB will take decision regarding the disbursement of the second installment," said Mohammad Saifur Rahman, a BSEC executive director and the project director of the CMDP. Meanwhile, seven conditions out of fifteen under the CMDP-II have been fulfilled for the disbursement of the second installment of the ADB loan. The conditions which have been fulfilled under the CMDP-II are: submission of the demutualisation bill to parliament, exemption of taxes from the share premium and transaction of bonds, amendment to Stamp Act 1899, and the issuance of circular on efficient price discovery mechanism in auctioning of government securities. The other two conditions already fulfilled by the borrower's agencies are: amendment to the mutual fund's rule allowing the asset management companies to reduce their exposure to equity securities below 75 per cent and tax exemption for the investment in private sector open-end mutual funds like the advantage enjoyed by the open-end mutual funds like those of the Investment Corporation of Bangladesh (ICB).