Merchant bankers want to implement the guideline for investors to set the interest rate on margin loans at 12 per cent from next year.
Although their organization has requested for an extension, the capital market regulator has said it is adamant about its timely implementation.
The Bangladesh Securities and Exchange Commission (BSEC) says it will provide low interest and easy access to funds for merchant bankers if necessary. But the maximum interest rate of 12 percent will be implemented from February.
According to the Bangladesh Merchant Bankers Association (BMBA), the interest rate on margin loans for merchant bankers is 12 to 15 percent.
BMBA Secretary General Riyad Matin said they had written to the BSEC on Monday to implement the 12 per cent margin loan interest rate by December 31, 2021.
“That means after this time we will be able to give margin loans at the rate of 12 percent.”
Bangladesh’s stock brokers and merchant bankers will not be allowed to charge more than 12 per cent interest from investors against margin loans, the BSEC directive said on January 13.
Stock brokers and merchant bankers will be able to keep a maximum of 12 per cent with 3 per cent interest as the cost of funds of the margin loan.
The letter asked for more time to implement the 12 per cent interest rate as well as help in raising money at low interest rates.
“Even though the interest rate in the country is 9 percent, we merchant bankers are not getting loans at this interest rate. Banks do not want to lend to us because the capital market is risky.
“We have to borrow from financial institutions and leasing companies at 12 per cent. Now if the interest rate is 12 percent, we will not be able to repay the loan. ”
Asked about this, BSEC spokesperson and executive director Rezaul Karim said, “We have received the letter.” However, no decision has been taken yet to extend the time. In that case the previous decision of BSEC will remain valid. In addition, we will provide low interest funds in the capital market.
BSEC chairman Shibli Rubaiyat-ul-Islam said, “We have received the letter; Trying to bring money at low interest for the capital market. If that money goes away, it will be an advantage for merchant bankers. ”