Dhaka, Bangladesh (BBN)- The central bank of Bangladesh has asked commercial banks to strengthen monitoring of loan utilization, officials said.
“We’ve to ensure utilization of loans,” a senior official of the Bangladesh Bank (BB) said, adding that the loans could not be used in purposes other than they are sanctioned for.
He also said it is the responsibility of banks to ensure proper utilization of loans that have been sanctioned for specific purposes.
The BB’s instruction came after detection of using loans by borrowers for other purposes taking the advantages of week monitoring system of some banks.
“It has negative impact on the economy as productive sector loans are being used in unproductive areas,” the circular said.
The central bank issued a circular in this connection Thursday and asked the chief executives and managing directors of all scheduled banks to follow the instruction properly.
BBN/SSR/AD-04Nov10-11:42 pm (BST)