The Investment Corporation of Bangladesh (ICB), a state-owned investment institution, invests in the capital market by raising funds from various sources. The company has taken huge amount from public sector banks. However, at present, there is a lot of pressure on ICB to repay loans and deposits. The company has also had to sell shares in the recent past to raise money in the capital market.
At the end of March 31 this year, the amount of short and long-term loans taken by ICBs from the government and various banks was around Rs 1,303 crore. At that time, deposits from various banks, non-bank financial institutions (NBFIs) and other institutions stood at Rs 9,311 crore. The company has to pay regular interest on these loans and deposits.
In the nine months from July last year to March this year, the government deposited Rs 80 crore, Sonali Bank deposited Rs 200 crore and call money loan of Rs 49 crore, General Insurance Corporation Rs 36.64 crore and Janata Bank Rs 16. crore in call money loan paid by ICB. In all, the company had to repay loans and deposits of Rs 538 crore at this time. On the other hand, ICB has taken a call money loan of Rs 32 crore from Agrani Bank and Rs 100 crore deposit from Janata Bank.
At the end of March this year, Sonali Bank had the highest deposits of Rs 1,300 crore with ICB. The bank has also given a call money loan of Rs 69 crore. Agrani Bank has given Rs 1,050 crore as deposits and Rs 32 crore as call money loans to ICB. The bank has Rs 560 crore as deposits and Rs 12 crore as call money. Apart from this, Rs 26 crore of Bangladesh Development Bank Limited (BDBL) and Rs 261 crore of General Insurance Corporation are also deposited with ICB.
On 26 April this year, Somali Bank had written to the Managing Director of ICB seeking an adjustment of Rs 565 crore. It said Sonali Bank has a total investment of Rs 1,300 crore in five fund placement areas in favor of ICB. As per Bangladesh Bank guidelines, there is an additional investment of Rs 575 crore in this case. Sonali Bank’s investment in the fund placement sector in the ICB on behalf of Bangladesh Bank is an additional investment in the capital markets.
It has imposed conditions on renewal of investment along with several directives. Under this condition, the investment in the fund placement area can be rolledover up to a maximum of 75% for each renewal. Accordingly, Sonali Bank has requested the ICB to adjust the additional investment of Rs 565 crore as per the single customer loan limit before renewing the investment to meet the conditions of Bangladesh Bank.
The ICB has been under a lot of pressure since receiving a letter from Sonali Bank for additional investment coordination. Apart from Sonali Bank, the company will also have to pay installments along with interest to Karmasansthan Bank and other institutions. Overall, around Rs 800 crore will have to be paid within this month. Meanwhile, the ICB has sold shares to raise money in the capital market. Notably during the period 9-11 May, around 93 crore shares of ACI formulations were traded in the traditional and block markets of the capital market, of which the lion’s share was sold by the ICB. On the other hand, a major part of the shares has been bought by the Deputy Investigator of the Department of Cooperation, a major government investor in the capital market. Abul Khair Hiru. Also, during the recent downturn in the capital markets, ICBs have sold more shares than they bought. For this reason, the Bangladesh Securities and Exchange Commission (BSEC) last week sought an explanation from the institution. There is a lot of pressure on the ICB to repay the bank as well as have a negative impact on the capital market due to the sale of shares.
If you want to know about the Managing Director of ICB. Abul Hussain told Banik Barta that Sonali Bank, Karmasansthan Bank and other institutions will have to pay around Rs 600 crore within this month. It has to be paid by selling shares and raising funds from other sources. But we are trying to find out if it can be done step by step without paying all at once. If the banks agree to our proposal, the repayment pressure will be reduced significantly. But if the bank does not agree, then the ICB will have to come under a lot of pressure.