The central bank has approved a loan of Tk 3,000 crore to the Investment Corporation of Bangladesh (ICB) to stabilize the capital market. However, the ICB has raised objections to the 10 percent interest rate on the loan of Tk 3,000 crore to the ICB. Basically, against the government guarantee for investment in the capital market and loan repayment, the Bangladesh Bank has fixed the interest rate on the Tk 3,000 crore loan given to the state-owned institution ICB (Investment Corporation of Bangladesh) at 10 percent.
A top ICB official said, “ICB will not make much profit by investing in the stock market and repaying old loans with 10 percent interest. Therefore, we have requested to reduce the loan interest to 4 percent. Otherwise, this high-interest loan will become a burden for ICB. Therefore, we have decided to meet with the financial advisor to reduce the interest rate. The meeting is scheduled to be held on Sunday.”
For this, the ICB has written to the Governor of Bangladesh Bank to reduce the loan interest rate. The company is also seeking the intervention of a financial advisor in the matter. The company’s top officials are scheduled to meet with its financial advisor Salehuddin Ahmed on Sunday.
ICB sources said that ICB had sought Tk 5,000 crore from the government to increase its financial capacity by investing in the capital market and repaying old commercial loans with high interest rates. After the interim government took office, the changed board of ICB held a meeting with the government regarding this. In view of this, the Financial Institutions Department on behalf of the government provided a loan guarantee or sovereign guarantee of Tk 3,000 crore to ICB on November 13. Against that guarantee, Bangladesh Bank is supposed to provide this loan.
Last Wednesday, Bangladesh Bank sent a loan letter of Tk 3,000 to ICB. The interest rate on the loan was fixed at 10 percent in the letter. The loan term was set at one and a half years. But the chairman and top officials of the company believe that it will be difficult for ICB to turn around with a loan for one and a half years at high interest rates. For this, they have formally and informally requested Bangladesh Bank to reduce the interest rate. In addition, top officials of ICB have decided to seek the assistance of a financial advisor.
According to sources from the Ministry of Finance and ICB, the Ministry of Finance issued a letter of guarantee on November 13 regarding the loan to ICB. The letter states that ICB will invest the proposed loan to increase its financial capacity. They will use this money to bring stability to the stock market and repay funds borrowed at high interest.
In this regard, the Ministry of Finance has assured that if ICB fails to repay the loan of Tk 3,000 crore provided by Bangladesh Bank in favor of ICB or the interest or principal charged on the loan, the government will pay it.
