Low interest on margin loans: BMBA wants one year to effective
Sunbd Desk || Published: 2021-03-25 10:44:20 || Updated: 2021-03-25 10:44:20
The regulatory body Bangladesh Securities and Exchange Commission (BSEC) has issued instructions to provide low interest margin loans to capital market investors. However, the Bangladesh Merchant Bankers Association (BMBA), an organization of margin lenders, thinks it is not possible to operate now. The organization wants more than a year to do so.
According to BMBA sources, on March 24, BMBA applied to the BSEC for more than a year for the implementation of low interest margin loans. The organization thinks that at present they will not be able to lend to customers at low interest rates by taking loans at high rates. By the time they get a low interest loan, they will be able to make it effective.
BMBA president said. “We will implement the BSEC directive considering the interests of the capital market and investors,” Chhaedur Rahman told SunBD. But we need time for this. We can do this only if we get a loan at a low interest rate. He said the BSEC was actively considering extending the time.
Earlier this year, the BSEC issued a directive that the interest rate on margin loans would be a maximum of 12 per cent. It was directed to take effect from 1 February. In the light of the applications of various organizations, a directive was issued on March 7 to implement it from next July.
The directive signed by BSEC Executive Director Md. Anwarul Islam said that the maximum 3% spread with cost of funds will be effective from July 1 in case of interest or profit from the customer’s net on margin loan provided by Merchant Bank (Portfolio Manager). . This instruction will remain in force until further notice.
Earlier, the BSEC had issued a directive on January 14 to collect a maximum spread of 3 percent. The directive said the maximum 3 percent spread would be effective from February 1. But on March 6, the BSEC issued another circular stating that the directive would take effect from July 1.
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