The government wants to make a collateral database functional by the next year to prevent document forgery in receiving bank loans.
In many cases, same land and property are used as collateral for getting bank loans, Finance Minister AMA Muhith said in his budget speech on Thursday.
For preventing these fraudulent practices, a database containing information on collaterals used against all types of loans will be maintained in Financial Institutions Division, he added.
"The system will be effective from next year so that any person or institution can verify this information," the finance minister announced.
On the other hand, the central bank had started the process of developing a collateral database in order to prevent document forgery and corruption during sanctioning loans.
All scheduled banks and non-banking financial institutions (NBFIs) have already been asked to collect collateral report of the security which is supposed to be mortgaged while sanctioning a loan.
© 2017 - All Rights with The Financial Express