Published:  03:34 AM, 15 October 2019

New law to slash defaulted loans

The government is planning to enact a new law with a view to realizing money from bank loan defaulters. Provisions might be made in the said law that loan defaulters will have to deposit 50% of default amount if they want to lodge writ petition in the apex court. In this regard, Finance Minister A H M Mustafa Kamal has asked the Bangladesh Bank and financial institutions to take necessary measures.

When a bank client becomes a loan defaulter and the authority moves to the court, the borrower usually goes to the apex court with a writ petition. As a result, the case remains pending for a long time and the banks and financial institutions face a new challenge to sustain the challenge.

In response to a query for reducing default loan, the Finance Minister told journalists that the existing legal instruments like Money Loan Court Act, Negotiable Instrument Act, Bank Companies Act, Finance Company Act, Insolvency Act and Amalgamation Act are to be addressed with time befitting laws in the banking sector.

The Finance Minister also said the specific time-frame regarding loan default cases will be fixed, with a view to decreasing the number of cases, together with the introduction of appointed lawyers of banks and non-banking finical institutions in order to prevent their own interest. Besides, the deposits of bank clients will be protected at any cost by paying attention to the rules and regulation in giving services.

Recently Finance Minister Mustafa Kamal at important meeting, together with four CEOs of state owned banks, non-bank financial institutions owners, came up with these decisions to bring discipline to the sector, finance ministry sources said.At present Tk 2.75 lakh crore default loans remain pending due to lodging of writ petitions in the apex court by loan defaulters.

The hearing does not take place of those petitions for years and a large number of borrowers keep away from paying back their loans. There are two lakh fifty five thousand cases in the court, which are yet be solved and 75% of those cases are on default loans from state-owned banks, Bangladesh Bank sources said.

According to the Bangladesh Bank, most of the cases are lodged with financial loan court - out of four categories of courts like the Financial Loan Court, Insolvency Court, Certificate Adalat and Civil Court - and cases of a large number of loan defaulters are pending in this court.

In the financial court, the number of cases under trial is 62,204, in the certificate court the number of cases total one lakh fifty seven thousand, in Dewani Adalot 165 and in Civil Court 35,514, the sources said.

Leave Your Comments

Latest News

More From Frontpage

Go to Home Page »

Site Index The Asian Age