Regulatory body revises margin loan ratio

The Bangladesh Securities and Exchange Commission has once again revised the margin loan ratio for investors considering the ongoing coronavirus pandemic.

The BSEC issued a directive in this regard following a meeting at the commission on Thursday.

The directive, signed by BSEC Chairman Shibli Rubayat Ul Islam, comes into effect immediately.

According to the revised directive, merchant banks, portfolio managers and brokerage houses at the DSE can provide margin loan to investors based on the movement of DSEX, the benchmark index of the Dhaka Stock Exchange.

The BSEC said if the DSEX remained below 8,000 points, the margin loan would be given at the rate of 1:0.80, which meant the intermediaries could provide a maximum of Tk 0.80 in loan against Tk 1.00 of a client’s deposit in the BO account.

On the other hand, if the DSEX touches 8,001 points or above, the investors of the intermediaries can get the maximum margin loan at the rate of 1:0.50 which is 50 per cent of the client’s margin or deposit.

Earlier on April 4, BSEC had fixed margin loan 1:0.80 ratio below 7,000 points of DSEX and 1:0.50 ratio 7,001 or above points of the key index of the Dhaka bourse.

Investors can enjoy the margin loan facility from the intermediaries under the margin loan rules issued in 1999.

The DSEX index now reached at 6,699 points which is the highest ever after its inception in January 2013.