BB reins in banks' real estate purchase

Banks will not be able to spend more than 30 percent of their paid-up capital on real estate, the central bank said yesterday.
A Bangladesh Bank official said some banks are extensively buying land and building properties in recent times and along the way, inflating the price beyond the purchasing power of ordinary people.
The central bank also said banks with properties valued more than 30 percent of their paid-up capital will not be allowed to buy any new piece of real estate unless they bring down their portfolio to the new
threshold.
This was not the first time the central bank has moved to rein in banks from investing in properties. A directive last year banned banks from buying floor space for a branch or land for head office in city corporation areas.