The government has provided a loan of Tk 10 billion to the Investment Corporation of Bangladesh (ICB), a state-owned investment institution, to overcome its liquidity crisis and increase its investment capacity in the stock market.

ICB Chairman Abu Ahmed said on Wednesday that the loan, approved 10-12 days ago, was received the previous day, saying: "The government has provided a loan of Tk 10 billion with a grace period of one and a half years."

The 10-year loan carries an interest rate of 5 percent. A separate account for savings will be maintained for the loan.

Abu Ahmed said that the loan will "relieve the burden of the institution's liquidity crisis to some extent," saying: "The government had arranged loans before. We wanted Tk 100 billion, but we did not get that much. So, we still have to make do with what we got."

Previously, Bangladesh Bank had provided a loan of Tk 30 billion to the ICB from a special fund in November 2024. The government had acted as the guarantor of that loan.

As it is acting as guarantor, if, for some reason, the institution is unable to repay the loan, the government will have to pay it.

The ICB has had to repay high-interest loans amounting to about Tk 9 billion every year. To ease that interest pressure, the institution is moving towards low-interest and easy-to-pay loans and cutting down the amount of high-cost loans. In addition, it will invest a portion of the loan amount in Class A shares.