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Private insurers offer investment
The Bangladesh Insurance Association (BIA), a forum of private insurers, on Thursday stepped up to invest Tk 11,000 crore in the Padma bridge project.
BIA Chairman Sheikh Kabir Hossain, also a close relative of Prime Minister Sheikh Hasina, said the country's life insurance companies have Tk 16,299 crore, of which, Tk 11,000 crore could be invested in the project. The remaining fund had already been invested in different government bonds and securities.
“We have offered the fund and now it is up to the government to decide on it,” he told The Daily Star.
BIA's offer came just a day after the premier had announced that if needed, the country would implement its biggest infrastructure project with own fund.
The objective of this investment proposal was to give the government a boost, he said, adding that the BIA would make a formal proposal in this regard on Sunday or Monday.
“The government can raise the fund by issuing special bond like the Padma Bridge Bond,” suggested Kabir.
The Padma bridge issue drew much attention at home and abroad after its main financier World Bank had cancelled its $ 1.2-billion promised fund for the $ 2.9-billion project on June 29 alleging corruption. The Asian Development Bank, which had pledged to contribute $ 610 million to the project, also decided to follow the same path.
Replying to a question, the BIA chairman said, “The interest rate is not a big deal here, as the matter is now a prestige issue for the country.”
Presently, insurers keep the fund in banks as fixed deposits against an annual return of 10 to 12 percent.
Some insurers, seeking anonymity, said if the fund was invested in the bridge project, the return must be similar or higher or else, the policyholders would be deprived of their benefits.
“Given the existing liquidity crisis, banks will not be able to release this big chunk of fund at the moment,” said a managing director of a private life insurance company.
A top official of the Insurance Development and Regulatory Authority (IDRA) said insurers could invest their life fund in government-backed securities or bonds, “but it will be very expensive for the government.”
There are 62 insurance companies in the country. Of them, 18 are life insurance and the rest are general insurance companies.
[ Front Page ] 2012-07-07