Central bank issues directive to banks

The Bangladesh Bank has asked the commercial banks to not approve loan for land development, building construction and purchase of flats in unapproved housing projects.

The central bank’s Banking Regulation and Policy Department issued the directives through a gazette notification on Wednesday.

It said it had been observed of late that some banks were provising credit for land development of unapproved private housing projects, and for construction work and buying houses in such projects.

General Manager of the central bank KM Abdul Wadud told bdnews24.com that some conditions were also set for approving loan in housing projects.

From now on, all activities of the housing projects have to be conducted as per the terms and conditions mentioned in the Private Residential Land Development Rules, 2004 before the loan for land development of the approved housing projects can be disbursed.

The loan money cannot be used for any other land or housing project, except the land of any housing project which is mortgaged with banks.

According to the central bank directives, if any bank disbursed loan in any housing project unapproved by the statuatory organisations including Rajdhani Unnayan Kartripakkha; the mortgaged properties will not be cleared until the disbursed loan is realised or refunded fully.

In addition, if anyone wants to provide fund in any housing project of the government, autonomous and private organisations, it should be approved by the relevant municipality according to the Section 50 (1) (C) of the Local Government (Municipality) Act-2009, and Section 35 and 36 of the second clause of the same law.

Source: Bd news24