HC extends stay, BB ‘discriminating’ real businessmen | 2019-06-25 | daily-sun.com

HC extends stay, BB ‘discriminating’ real businessmen

Staff Correspondent

24th June, 2019 11:00:43 printer

The High Court on Monday extended till August 24 its stay on central Bangladesh Bank’s (BB) circular that allowed loan defaulters to receive new loans after clearing their debts with only 2 percent down payment and 9 percent interest rate, calling it a “discrimination” against genuine businessmen.

A division bench comprising Justice FRM Nazmul Ahsan and Justice KM Kamrul Kader passed the order on Monday.

The HC said, “The central bank is making the genuine businessmen pay 14 to 15 percent interest which is a discrimination.”

It observed that the central bank is yet to execute the prime minister’s instruction to lower the interest rate to a single digit for bank loans.

Advocate Manzill Murshid, counsel and president of HRPB, said the defaulters will not be able to have their loans rescheduled by paying a 2 percent down payment following the High Court order.

“The central bank’s new policy will encourage the bank defaulters, and subsequently, the commercial banks will suffer a financial crisis. That’s why we filed a petition with the court, seeking to stop the implementation of the circular,” said Manzill.

The BB issued loan rescheduling policy in 2015, regularising Tk150 billion in credit taken by 11 industrial groups, but only two of these groups have been repaying.

On May 15 this year, the central bank issued a directive, saying a maximum 9 percent interest will be charged on the rescheduled loans and the tenure for the repayment is 10 years with a grace period of one year.

Under the existing policy, the defaulters can reschedule their classified loans by making a down payment of 10 to 50 percent.

Earlier, on May 16, the High Court directed the BB to submit a list of loan defaulters whose debt exceeded Tk1 crore by June 24.

Meanwhile, the BB submitted a report to the High Court saying defaulted loan in last 20 years amounts to Tk 2,20,000 crore. The bank hopes to realize Tk 1,10,000.

Earlier, on May 21, the High Court stayed execution of the BB circular facilitating loan defaulters to receive new loans with low interest rate.

The BB’s circular that allowed the loan defaulters to get their credit rescheduled at low interest has come to a standstill following the High Court order.

Defaulted loan is impeding the country’s economy in various ways. Burden of defaulted loan is a great burden for the banks also.

Recently, Finance Minister AHM Mustafa Kamal disclosed names of 300 top loan defaulters in the country. The apex court’s stay order is a blow to the loan defaulters.

The HC observed that giving such privilege to loan defaulters is tantamount to feeding snakes with milk and banana.

The court ruling came following a writ petition filed by Human Rights and Peace for Bangladesh (HRPB).

The BB gave an opportunity to big loan defaulters through the notice, which creates scope of Tk 1 lakh crore laundering, the court observed.

 


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