ICB secures Tk3, 000cr with 4pc interest to gear up market
Muhammad Ayub Ali :
The Investment Corporation of Bangladesh (ICB), a state-owned entity responsible for stock investments, has received approval from Bangladesh Bank for a Tk 3,000 crore loan at a reduced interest rate of 4 percent, down from the initial 10 percent, to bolster the capital market.
ICB Chairman Abu Ahmed explained to The New Nation that two-thirds of the loan will be used to repay the corporation’s existing high-interest debts, while the remaining funds will be invested in market support and ICB’s portfolios.
“We are hopeful the market will improve, but investors also need to show interest. Without their participation, the market scenario will not change,” he added.
The financial support aims to enhance ICB’s capacity to meet
its obligations while strengthening investments in the capital market, contributing to broader economic stability, according to Abu Ahmed.
An official from Bangladesh Bank stated that Governor Dr. Ahsan H. Mansur is keen on stabilising the country’s stock market, which led to the approval of ICB’s proposal for the 4 percent interest rate.
“This is a positive move for the stock market, and it demonstrates the government’s commitment to boosting it,” said Md Saiful Islam, president of DAB.
Earlier, on November 13, the government provided a sovereign guarantee to facilitate the Tk 3,000 crore loan.
Based on this guarantee, Bangladesh Bank issued a formal letter to ICB on November 27, approving the loan at a 10 percent interest rate with an 18-month tenure.
However, ICB later requested a reduction in the interest rate to 4 percent, as the 10 percent rate was deemed unsustainable. On November 28, Bangladesh Bank approved the revised interest rate.
According to the letter, the loan will be treated as a demand loan, with a tenure of 18 months after disbursement. A fixed 4 percent interest must be paid quarterly, within two working days after each quarter ends.
If the payment is delayed, an additional 2 percent penal interest will be charged on unpaid interest. The principal and remaining interest must be paid in full at maturity.
ICB also owes Tk 150 crore in dues to Bangladesh Bank, which must be settled within five working days of receiving the new loan.
ICB reported a 68 percent reduction in its loss for the July-September quarter of FY2024-25, bringing the loss down to Tk 75.28 crore, compared to Tk 236.52 crore in the same period last year.
Despite incurring a significant loss of Tk 267 crore in the first nine months of FY24, ICB made a profit of Tk 32.28 crore for the fiscal year