Dhaka, Bangladesh (BBN)- The central bank of Bangladesh has proposed to the government to use its BDT 9.0 billion profit as refinancing scheme for stock brokers to revamp capital market.

Bangladesh Bank (BB) Deputy Governor SK Sur Chowdhury put forward the proposal at a press conference held at the central bank conference room on Wednesday.

“We proposed that the government can use the fund under its budget allocation. The central Bank will not take any responsibility of the fund,” Mr Chowdhury said.

He said the bank proposed that the Investment Corporation of Bangladesh (ICB) and Bangladesh Securities and Exchange Commission (BSEC) will implement the scheme in three phases.

The rate of interest for the scheme was suggested at 10 per cent, he said.”As a banker of the government the central bank is working on the mode of operation of the fund. The ICB and the BSEC will take responsibility about how the money will be refinanced and recovered.”

The share brokers were asked to waive 50 per cent interest on merchant loan and other block loans at 10 per cent interest under the stimulus package that was announced after the debacle in stock market in December (2010)-January (2011).

Earlier, the ministry of finance (MoF) had decided on April 24, 2013 to provide Tk 12.6 billion as stimulus package through Bangladesh Bank to reschedule these loans.

A letter of the MoF says that the proposed funds will be allocated at 10 per cent interest along with the condition of the repayment of funds within three years.

Under the plan, it was decided that out of the proposed fund BDT 6.3 billion would be provided to 28 merchant banks, BDT 5.3 billion to 205 stockbrokers of Dhaka Stock Exchange and BDT 430 million to 75 stockbrokers of Chittagong Stock Exchange.

The fund will be repaid within three years with a 10 percent interest, as per the decision taken by the ministry, according to the plan.

BBN/SSR/AD-30May13-9:25 am (BST)