BHBFC forms squad to curb graft, irregularities

Bangladesh House Building Finance Corporation (BHBFC) has constituted a squad aiming to check corruption and irregularities at its loan processing and sanctioning level, officials said.
The state-owned specialised financial institution has formed the squad headed by its deputy general manager, they added.
The officials also said the squad will take necessary measures to identify the causes of delay and remove complexities in loan processing.
On the other hand, a committee set up with its director will monitor the activities of the squad from time to time, they mentioned.
Currently, sanction and disbursement of different loans by the corporation are going on at a snail's pace. Many applicants have not received their next cheques for loan even after taking first and second cheques. The loan receivers are not providing mortgage documents on their flats against loan, a senior BHBFC official told the FE.
A good number of initial and formal loan applications are being cancelled due to various reasons. Besides, in many cases, the corporation's loan processing activities are also being delayed, he added.
The committee will take necessary steps according to the policy on flat loan if the borrowers do not receive the third cheque for loan and mortgage the flats, he said, adding that it is high time to reduce unnecessary delays and complexities in processing and disbursement of different loans.
The committee will also make necessary correction and addition in the policy on sanction and disbursement of loan for the interest of the agency, he mentioned.
The state-owned entity has already informed the finance ministry on the formation of the squad, a ministry official said.
HBFC has recently decided to lower the interest rate of loan by 2.5 per cent to compete with other banks and financial institutions, sources said.
After getting endorsement from its board of directors, the corporation sought approval of late from the ministry of finance in this regard.
The present rates of HBFC lending for house construction in Dhaka and Chittagong metropolitan areas and rest of the areas are 12 per cent and 10 per cent respectively. The corporation's board has proposed that the government lower the rates to 9.50 per cent and 8.50 per cent respectively.  
According to the proposal sent to the MoF, construction cost of house and apartment has increased significantly in recent years due to hike in the prices of construction materials. The upper limit of HBFC loan is Tk 5.0 million which is found inadequate, considering the present high cost.
HBFC proposed raising the loan ceiling for Dhaka and Chittagong metropolitan areas to Tk 10 million from existing Tk 5.0 million and doubling the limit for other areas.
"On the one hand, it has become essential to go for vertical expansion in rural areas for saving arable lands and on the other hand, we want to provide rural people with housing facilities in line with the government's initiatives by 2021," an official of HBFC said.
He further said HBFC looks forward to set up new offices in 30 districts of the country to attain the goal with financial support of Tk 8.0 billion from Islamic Development Bank (IDB).
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