ICB secures Tk3,000cr fund, but raises concerns over interest rate
The central bank approved a Tk3,000-crore loan in favour of Investment Corporation of Bangladesh (ICB) to support its investment for stabilising capital market and repay its high cost deposits.
The Bangladesh Bank (BB) on Wednesday approved the loans at 10% interest rate against the state guarantee provided, according to a letter from the Department of Off-site Supervision of the central bank to the ICB.
However, ICB had applied for the loan at a 4% interest rate to manage its high-cost borrowings as well as enhancing investment in the capital market.
The central bank approved the loan at the existing policy rate, but ICB believes it will not be viable to execute its plans at the 10% interest rate.
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As a result, ICB's management is in discussions with the government and senior officials of the Bangladesh Bank to reconsider the interest rate.
An official at ICB confirmed that its chairman will meet with the finance adviser and the central bank governor in the next week.
Abu Ahmed, chairman of ICB, on Wednesday told TBS, "The Bangladesh Bank has set the interest rate at 10%. We had requested the loan at around 4%."
He noted that implementing the plan with the loan would be very difficult and might even render it ineffective.
"We plan to meet with the finance adviser to discuss and finalise the interest rate," he added.
The BB conditions
According to the letter, the loan will be treated as a demand loan and tenure will be 18 months after disbursement.
The fixed 10% interest must be paid on a quarterly basis within two working days after the end of each quarter.
If fails, an additional 2% penal interest will be charged on unpaid interest, the letter reads.
The principal and remaining interest of the loan must be paid in full on the maturity date.
The letter to ICB's managing director advised to communicate at the Motijeheel office of the central bank to execute the necessary documents, including the agreement related to the approved demand loan, promissory note and letter of continuity.
ICB owed Tk150cr dues to BB
According to the BB letter, ICB owed a Tk150-crore demand loan for a long time from the central bank.
The BB letter stated that the total amount, including accrued interest, must be paid within 5 working days from the date of receiving the fresh loan.
ICB's Jul-Sep financials
The ICB reported that its loss decreased by 68% to Tk75.28 crore in the July-September quarter of fiscal year 2024-25. It incurred a loss of Tk236.52 crore during the same period last year.
In FY24, ICB managed to make a profit despite incurring significant losses of Tk267 crore during the first nine months. However, it made a profit of Tk32.28 crore for FY24.
