The central bank yesterday asked banks to consider insurance papers of the insurers, who have sound credit scores, while giving loans.
Allegations have got recently surfaced that some banking institutions have imposed several circumstances stipulating that businesses have to avail insurance plan from select companies lenders experience listed, according to a circular issued by Bangladesh Bank.
Businesses face difficulties in availing loans from the banking institutions if indeed they do not choose insurance from those select firms according to the instructions of lenders, said the official of a commercial lender.
The insurance companies are generally forced to keep their deposits with the corresponding banks in trade of the facility given by the lenders.
Occasionally, directors of different banks have close business links with insurance firms. This as well helps insurance companies widen their business unethically, said the state.
From this backdrop, the central bank asked banks to consider partnering with insurance companies whose credit ratings are satisfactory.