FE Report
The Bangladesh Bank (BB) has asked the commercial banks to stop financing for land purchase as increased flow of credit in the unproductive sector is adversely affecting the economy.
The central bank has taken the measure after imposing restrictions on purchase or lease of fixed assets including land by the commercial banks to protect public interest.
"We've instructed the banks not to invest in or finance any land purchase in line with the existing bank companies' act," a BB senior official told the FE, adding that the prices of land have abnormally increased following higher demand of the fixed asset.
"We've found that investments in land purchase have increased abnormally. Such increased flow of loans in the unproductive sector has negatively affected the national economy," the central bank official noted.
The central bank issued a circular in this connection Tuesday and asked the chief executives and managing directors of all commercial banks to comply with the instructions properly.
On January 25 this year, the BB imposed restrictions on purchase or lease of fixed assets including land by the commercial banks to protect public interest.
BB asks banks not to finance land buying
FE Team | Published: April 28, 2010 00:00:00 | Updated: February 01, 2018 00:00:00
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