MIDAS Financing PLC. extends Loan against Lien of Securities facility in the form of one year term loan (renewable each year) for share market operation and details.
Objectives
The broad objective of the policy is to enable MFL to contribute to the capital market of Bangladesh. The specific objectives are
to enhance the capacity (financial strength) of investors/ traders of capital market by providing short-term loan to them;
to increase fund flow for the growth of capital market;
to encourage marginal propensity of savings of small investors;
Purpose of Loan
MFL Loan against Lien of Securities will be given to eligible investors/ traders of capital market for purchase of publicly traded shares/securities.
Period of Loan
one year
Eligible Securities
Securities/ shares of listed companies traded through Dhaka Stock Exchange (DSE) and/ or Chittagong Stock Exchange (CSE) shall be accepted for lien as security.
Only the securities under demat form with The Central Depository of Bangladesh Ltd. (CDBL) shall be admissible/acceptable for loan.
Only the securities/shares under ‘A’ & ‘B’ Category as specified by The Securities & Exchange Commission (SEC) are eligible for loan.
Open-End Mutual Fund (Unit certificate) securities issued by ICB or its Subsidiaries or other Asset Management Company licensed by SEC are also eligible.
The securities/shares must belong to the borrowers.
In case of sponsors' shares/securities, necessary declaration regarding sale/transfer of securities addressing to SEC, DSE and CSE must be required.
Securities / Shares Valuation and Margin
On the basis of previous six months' average market price or current market price whichever is lower and loan will be provided upto 50% of that value.
Securities are Open-End Mutual Fund (Unit Certificates) issued by ICB or its Subsidiaries, 75% of face value or state price whichever is lower and loan will be provided upto 75%. In that case 'lien mark' on securities must be obtained from the securities issuing authority.
Loan Limit
Minimum Tk- 1.00Lac & maximum Tk.- 35.00Lac of an individual.
Upto Tk. 1.0 crore for Broker Companies.
Loan Disbursement
Loan will be disbursed partly or fully through account payee cheque. Loan will be revolving within sanctioned period and limit. Any amount excess of limit shall be adjusted by MFL through sale of securities.
Service Charges
Service charge is @ 1% on sanctioned amount. All documentation charges and CDBL Charges shall be borne by borrower.
Rate of Interest
Rate of Interest is 18.00% p. a. and quarterly payable.
Repayment
Interest of the previous quarter will be paid within 15 days of the following month and the principal loan amount will be paid within 12 months from the date of disbursement.
Loan call back
If the considered value of Securities falls by 20%, notice will be issued to borrower to make-up the shortfall by giving a time limit of 15 days. On expiry of this time limit securities will be sold to adjust excess amount of loan/ margin shortfall.
In case a borrower violates any terms and conditions of loan agreement or fails to make payment of either interest or principal or both the entire outstanding loan along with accrued interest shall be called back by giving a time limit of 15 days. On expiry of this time limit securities will be sold/confiscated to adjust the loan.
