A file photo shows investors staging street protest in front of the Dhaka Stock Exchange. Almost all of the merchant banks and brokerage firms will not waive margin loan interest of the small-scale investors within Tuesday deadline set by the SEC. — New Age photo

Almost all of the merchant banks and brokerage firms will not waive margin loan interest of the small-scale investors within Tuesday deadline set by the Securities and Exchange Commission, said leaders of both the groups.
Officials of Dhaka and Chittagong stock exchanges said that although the time for submission of compliance reports on SEC directive on the loan waiver would end tomorrow none of the brokerage houses submitted any reports till Sunday.
The Bangladesh Merchant Bankers’ Association, on the other hand, submitted an application on Sunday with the SEC requesting for three months extension of the deadline.
The SEC on July 30 issued an order asking the brokerage houses and merchant banks to waive by August 14 half of the interest on margin loans which were taken by investors, in 2011. The houses and banks were also asked to submit the compliance reports to the bourses and association on the same day.
The SEC also asked the Dhaka and the Chittagong stock exchanges to submit a report of compliance status of the order by August 30 to the commission.
The loan waiver issue is a part of the stock market compensation package announced by the government for the affected investors in 2011 market crash.
The investors who had investment up to Tk 10 lakh in 2009 and 2010 will get the compensation, including the interest waiver.
‘The brokerages houses have faced numerous difficulties in implementing the SEC decision on interest waiver. We will sit with the SEC to tell them about our problems,’ DSE president Rakibur Rahman told New Age on Sunday evening.
He, however, could not immediately reveal the difficulties they were facing.
A number of stockbrokers said that they were facing fund crisis because of the ongoing depression at the market.
Merchant bankers’ association chief Mohammad A Hafiz on Sunday told New Age that they had applied for time extension to the SEC as they were in liquidity crisis and needed credit facility from the government to comply with the order,
He said that some of the state-run merchant banks would be able to comply with the order in time. ‘But for others it will not be possible due to lack of funds,’ he said.
Hafiz also said that the BMBA would place a formal application with the Bangladesh Bank for a Tk 900-crore credit facility for three years with an interest rate of 10 per cent.
‘The credit is needed for rescheduling the margin loan of investors,’ he said.
Hafiz said the demand for credit with 10 per cent interest rate was ‘justified’ as the government asked them not to charge more than that from investors. 
‘We are already in big trouble due to prolong market depression. It will be suicidal for us to borrow money in higher interest rates from banks to provide compensation for investors,’ he said.
After a free-fall in share prices in 2011, prime minister Sheikh Hasina in November last year had asked the SEC to work out a package to minimise the losses incurred by investors in the crash.
Finance minister Abul Maal Abdul Muhith on March 7 said that 50 per cent of last year’s margin loan interests will be waived and a 20 per cent quota in IPOs will be allotted for small-scale investors who suffered losses because of the 2011 stock plunge.