The central
bank yesterday asked banks to cut down their spending on luxury vehicles and at
the same time almost doubled the allowance for these purchases.
Bangladesh
Bank's latest notice, which came with the intent to rein in banks'
expenses, said a maximum of Tk 50 lakh can now be spent to acquire a car for
high officials, including the chairman, and Tk 1 crore for a sport utility
vehicle (SUV).
The
purchase ceilings, as per the notice issued in July 2012, were Tk 35 lakh and
Tk 50 lakh respectively.
“The limit
has been increased to make it reasonable. The previous limit was not enough,” SK
Sur Chowdhury, deputy governor of Bangladesh Bank, told The Daily Star.
The latest
notice also forbade banks from buying motor vehicles with lease financing from
other banks or non-bank financial institutions, as some took advantage of the
facility and bought expensive cars with the lease money, Chowdhury said.
It also
stipulated that cars used by the chairman and chief executive officer of a bank
cannot be replaced before five years, and that the expansion of the banks'
transport fleet must be proportional to the expansion of branches and
recruitment of new employees.
The notice
said the BB has observed that some banks
have been spending huge sums on decoration of branches in recent months.
Subsequently,
the central bank has restricted the banks' spending on new branches to Tk 1,500
per square foot and Tk 1,000 per sq ft for relocation of the existing branches
excluding IT infrastructure costs.
It also
said a bank shall not use more than 5,000 sq ft of space for establishing an
urban branch and 2,000 sq ft for a rural branch.
News Source:-Daily
Star
Dated:- 17-Jan-2014
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