Is it permissible to hand over a plot of land to a bank for construction and to pay the amount in installments with interest?

If the bank undertakes the construction of the land through an istisna' (manufacturing) contract for a known price to be paid to it in specified installments, then there is no objection to this, even if the total value of the installments is higher than the cost of construction. However, if the bank is to lend you the cost of construction with interest, then this is usury (riba) and is not permissible. The istisna' transaction itself is permissible.