No more bank loans for land purchase | The Daily Star
12:00 AM, April 28, 2010 / LAST MODIFIED: 12:00 AM, April 28, 2010

No more bank loans for land purchase

Bangladesh Bank yesterday directed all commercial banks not to give loans for purchasing land.
It sent a circular to the chief executive officers of all banks of the country saying no loans and investment facilities will be given to the subscribers for purchasing land.
The circular said giving loans for buying lands is on the rise. With an increase in the tendency to buy land and demand for land, the land price has been increasing exorbitantly. Because of the money flow to such unproductive sectors, it is having an adverse impact on the country's economy.
Sources of Bangladesh Bank said the amount of bank loan for purchasing land has been increasing every year.
In 2008, the banks gave Tk 291 crore loan in total to the subscribers for purchasing lands while the amount was Tk 404 crore in 2009.
However, in real sense, the amount of loans for the purpose would be much more as many people take loan showing other purposes and use it for buying land.
Bangladesh Bank's latest quarterly report said the inflated price of land is one of the elements which may create inflation in the near future.
A high official of the bank said many take loan from banks and buy land. In one or two years, the price of the land increases and the subscriber then sells the land at a higher price. In this way, the land price in the country has reached such a level which is quite abnormal.
This trend of buying and selling land is not contributing to the economic productivity, he mentioned.

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