B Mirror Desk: The effects of a crisis that occurred ten years ago are still being felt by the nation’s financial market. Against the margin loans of investors, billions of taka have vanished! The Finance Ministry is looking into BSEC since the profit and loss statements do not match! In Bangladesh’s capital market, the amount of unpaid losses against investors’ margin loans has reached 7,824.18 crore taka, or net negative equity after contingencies are subtracted.
The accounts of brokerage houses and merchant banks have been burdened by this huge debt, and the crisis has intensified in investor confidence.
The regulatory body BSEC has sent a letter to the Secretary of the Financial Institutions Division of the Finance Ministry seeking intervention in the matter. At the same time, it has called for an emergency meeting, in which the DSE, CSE and all merchant banks will participate.
The letter mentions that due to the collapse of 2010 and subsequent unusual events, a mountain of unpaid losses has built up in the margin accounts of investors. Which **has now stood at a terrible negative equity**. Various past initiatives have also failed to alleviate this burden.
Notably, the total margin debt as of October 31, 2024 was around **Tk 18,128 crore**, a large portion of which has now been converted into negative equity.
Negative equity in DSE:
– Total debt: 11,545 crores
– Actual negative equity: 5,144 crores
– Total negative equity including interest: 6,336 crores
– Provision: only 1,458 crores
Negative equity in CSE:
– Total debt: 35.59 crores
– Actual negative equity and interest: about 30 crores
– Provision: 1,003 crores
Picture of merchant banks:
– Total debt: 6,547 crores
– Actual negative equity: 2,708 crores
– Total including interest: 4,159 crores
– Provision: 1,239 crores
In all, excluding safety reserves, the final negative equity figure stands at 7824 crores**, which is a terrible financial risk in the country’s stock Market.
The DSE Brokers Association (DBA)** has said that the provisioning period should be extended till 2030. It has also demanded a compensation or assistance policy from financial advisors to restore investor confidence.
