To address investments in the stock market and repay existing loans, the Bangladesh Bank has sanctioned a loan of BDT 3,000 crore to the state-owned Investment Corporation of Bangladesh (ICB), backed by a government guarantee. The interest rate on this loan has been set at 10%, which has prompted concerns from ICB.

ICB has formally requested a reduction in the interest rate, sending a letter to the Governor of Bangladesh Bank. Additionally, the institution has sought the intervention of the financial adviser, with a meeting scheduled with Adviser Salehuddin Ahmed this Sunday to discuss the matter.

ICB sources reveal that the institution had originally sought a fund support package of BDT 5,000 crore from the government to boost its financial capacity, intending to invest in the stock market and repay older, high-interest loans. The recently restructured ICB board held meetings with the interim government to secure this funding.

Subsequently, the Financial Institutions Division of the government issued a sovereign guarantee on November 13, allowing the Bangladesh Bank to provide a loan of BDT 3,000 crore. Last Wednesday, the central bank communicated its approval to ICB, stipulating a 10% interest rate and a repayment period of 1.5 years.

Senior officials at ICB have expressed their reservations about the high-interest rate, arguing that it would be challenging for the institution to improve its financial stability under such conditions. A top ICB official stated:
"An interest rate of 10% leaves little room for ICB to profitably invest in the stock market or efficiently repay old debts. We have requested the rate to be reduced to 4%. Otherwise, this high-interest loan may become a financial burden for ICB. We are now turning to the financial adviser for support, and a meeting has been scheduled for Sunday."

According to sources at the Finance Ministry and ICB, the loan is intended to enhance ICB’s financial capabilities. The funds are expected to stabilize the stock market and settle high-interest debts. The ministry's letter assures that in the event ICB fails to repay the loan principal or interest, the government will cover the liabilities.

This development underscores the challenges faced by ICB in achieving financial recovery while adhering to the terms of the government-backed loan. The outcome of the upcoming discussions may significantly impact the institution's strategy moving forward.