Bangladesh Bank has created an opportunity to take a large loan against Treasury Bonds. As a result, anyone who invests in Treasury Bonds will be able to take a loan of up to 75 percent against it.
Bangladesh Bank issued a notification announcing this opportunity on Wednesday (March 11).
The notification states that lien government bonds are included as eligible collateral. Therefore, Bangladesh Bank has come to know that banks are interested in disbursing loans to customers by keeping Treasury Bonds as collateral. For this, banks can disburse loans by keeping Treasury Bonds as collateral in accordance with the instructions.
It also states that before providing overdraft or term loan facilities to customers against Treasury Bonds, the bank must identify that Treasury Bond as a lien. Loan facilities can be provided up to a maximum of 75 percent of the face value of the bond. However, the loan balance cannot exceed the face value of the bond due to interest charges. The loan term will not exceed the term of the bond in any way. In addition, no loan can be given from the bank to purchase the bond.
Once upon a time, only banks, financial institutions and insurance companies used to invest in treasury bonds. Due to tax exemptions and good profits, now private institutions are also investing in treasury bonds along with individual investors.
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