The financial Express, 31 July 2012
Restrictions have been imposed on purchase of any land, floor space or taking lease of space for ten years and more than that for any purposes other than the use of their own by the head offices, said a central bank circular.
The circular, issued on Monday, directed that a bank could only purchase a floor or take a space on lease for the use of its branch within the area of the city corporation.
If a bank wants to purchase land, building, floor space and acquire their lease, it will have to get prior permission of the central bank, the circular said.
BB sources said some banks have been purchasing land or permanent structures without any logical ground or need which is a violation of the Bank Company Act.
The central bank also received allegations of corruption in the purchase of land by a number of banks. In many cases, owners are selling low quality lands or lands with legal complications to banks at higher prices, the sources said.
This circular has been sent to the chief executive officers of all banks.
It said giving loans for buying lands is on the rise. The land price has been on a steep rise as a sequel to a growing propensity by institutions like banks to buy land and their increased demand for it.
Because of the flow of money to such unproductive sectors, it is having an adverse impact on the country’s economy, it added.
The sources said the amount of bank loans for purchasing land has been increasing every year.
However, the amount of loans for land purchases is, in real sense, is much higher than what is shown in the books of accounts of banks because of a diversion of a substantial amount of credits, sanctioned for other purposes, to making land-related deals.
A high official of a bank admitted that many borrowers take loans from banks and buy land. In one or two years, the price of the land increases because of its scarcity and the borrowers then sell the land at a higher price, reaping a bonanza.
Bangladesh Economy 
Leave a comment