Bangladesh Bank yesterday asked all banks and financial institutions to send reports by next month on the legal compliance of housing and real estate projects they financed.
The compliance report should also be submitted in cases of the buildings and spaces the banks and FIs have got on their own use.
The reports will have to be submitted by June 30, said a Bangladesh Bank circular issued yesterday.
The central bank move came after the country’s deadliest industrial accident at Rana Plaza that tumbled down on April 24, killing more than 1100 people. A branch of BRAC Bank was housed at the collapsed building.
Before providing credit to any individual and organisation for constructing residential and commercial building, purchasing apartment and floor space, developing land and building, banks need to ensure laws related to building construction, environment and proper documents issued by authorities, said a BB circular.
An official said it has been noticed that some banks were disbursing loans for constructing building and developing land to private sector that does not have appropriate approval.
The banks will provide credit to the housing sector after ensuring laws and regulations, including Building Construction Act – 1952, Bangladesh National Building Code – 2006, Bangladesh Environment Conservation Act – 1995, Environment Conservation Rules – 1997, Fire Protection and Prevention Act – 2003, Private Housing Project Land Development Rules – 2004, Local Government Pourashava Act – 2009 and other necessary laws, according to the circular.
The banks will have to look into whether their clients take approval for housing projects from the National Housing Authority, Rajdhani Unnayan Kartripakkha and other authorities.
Prior to opening office or branch for its own use in any building, the bank required to check if that building was constructed in accordance with the laws and regulations.