BB asks banks
Bangladesh Bank on Wednesday asked the scheduled banks not to sanction loans to private ventures for developing lands, constructing buildings and purchasing flats if they do not have the approval of the authorities concerned. To this end, the BB issued a circular to managing directors and chief executive officers of all the banks saying that the central bank had observed that some banks were disbursing loans to private ventures for developing lands or constructing buildings that do not have the approval of the authorities concerned.
Besides, some banks and non-bank financial institutions are not taking the approval of the municipality office to construct their own structures or buildings, which
is a violation of the rules and regulations of the banking sector, the circular said.
Before disbursing loans, a bank has to check that if the project adheres to all the rules and regulations of the Land Development Act – 2004, it added.
The banks would have to ensure through spot inspection that the land developers do not
use the fund in other real estate projects, it further said.
The banks may not release the mortgaged lands before all the instalments of the loans are paid had they disbursed loans to housing projects that do not have the approval of Rajuk and other organisations concerned.
However, the banks will be able to disburse loans to all government, autonomous, private organisations and personal projects if they take approval
from the municipality office under the Local Government (Municipality) Act – 2009, added the circular.
The BB asked the banks to implement the rules stated in the circular with immediate effect.
-With New Age input
