BSEC revises margin loan limit
Bangladesh Securities and Exchange Commission (BSEC) Thursday revised the limit of margin loan facilities based on the key index of the stock exchange.
According to the new BSEC policy, which will be effective from the next trading day, merchant banks and brokerage firms will be able to provide margin loans to their customers at a maximum rate of 1:0.80 when the DSEX index is below 8,000.
In other words, a maximum margin loan of Tk0.80 can be given against customers' own investment of Tk1.
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It will also be able to give a margin loan at the rate of 1:0.50 with the index stays above 8,000 points.
BSEC Executive Director and Spokesman Mohammad Rezaul Karim told The Business Standard, "The commission has taken this decision to maintain a normal trend in trading volume amid the pandemic."
"If the index goes above 7,000 points, then merchant banks and brokerage firms would have to adjust the margin ratio. As a result, it would influence the trading volume of the market," he added.
Earlier, the margin loan ratio was 1:0.80 when the index remained below 7,000 points and the ratio was 1:0.50 when the index remained above 7,000 points.
