BB restricts buying luxury cars for bankers

Staff Correspondent

21 August, 2019 12:00 AM printer

Bangladesh Bank has imposed restrictions on buying luxury motor vehicles by all the scheduled banks.

No bank will be able to spend money exceeding Tk 50 lakh on buying a Sedan car and Tk 1 crore on a SUV Pajero.

An order issued on Tuesday to this effect was sent to all the bank authorities, sources said.

The central bank has also restricted expenditure of the scheduled banks in buying land, renting and decorating office and holding meeting. Bankers will have to be miser in all other issues.

In its order, the BB said that banks should reduce its costs to win the faith of depositors and shareholders. Banks have been suggested to be attentive to increasing earnings instead of expending money.

If a bank can reduce expenditures, it will gain ability to compete other banks by offering attractive interests on loan and deposit.

Bangladesh Bank said its attention was drawn to excess expenditure on the part of banks for procuring luxurious vehicles, buying lands, decorating offices, entertaining guests and publishing advertisement.

On January 15, 2014, the central bank issued a similar order asking the scheduled banks not to spend much on buying vehicles and other purposes.

 In that order, the central bank asked the scheduled banks not to purchase any more motor car (Sedan) for their own at a cost more than Tk 50 lakh and a SUV (sport utility vehicle) not above Tk1 crore.

“Bank companies should show their cost affordable tendency to maintain confidence of depositors and equity providers on management,’’ the BB said.

Violation of previous order has apparently prompted the central bank to issue a fresh order on expenditure cut by the scheduled banks.