DHAKA, Aug 19 (Reuters) - The central bank of Bangladesh has put restrictions on the purchase of cars for top executives of the country's 42 banks, as part of reforms of the financial sector.
"The limit has been set at maximum 2.5 million taka for a motor car and 3.5 million taka for a jeep with immediate effect," a senior central bank official said on Tuesday.
These sums translate to $42,800 and $59,921 respectively.
"It has been a matter of concern that scheduled bank executives are not maintaining rationality in spending on procuring vehicles despite Bangladesh being one of the world's poorest countries," said the official who asked not to be named.
Bangladesh Bank also set limits on the purchases of vehicles.
"The vehicles for the chairmen and chief executives should not be replaced with new cars before at least five years of use," the official said.
Bank executives were not immediately available for comment.
Debapriya Bhattacharya, a leading economist, called the move pragmatic and timely.
"Cutting spending (on vehicles) will increase incomes and profits of the banks and help them reduce interest rates on lending as well as various charges and fees to be competitive," he told Reuters.
The central bank order will apply to 36 private, four state-run and two specialised commercial banks in the country. ($1=58.41 taka)