HC halts privilege for loan defaulters

The High Court (HC) on Monday issued an order halting the effectiveness of a Bangladesh Bank circular for one month, which offered special concession for loan defaulters to secure further loans by giving a 2 per cent down payment.
The central bank on May 16 posted the circular on its website, allowing loan defaulters to reschedule their bank loans by paying 2 percent down payment and securing further loan in this way.

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, according to the circular. Under the existing policy, the defaulters can reschedule their classified loans by making a down payment of 10-50 percent.
An HC bench comprising Justice FRM Nazmul Ahasan and Justice KM Kamrul Kader issued a status-quo on the central bank circular till June 24 in repose to a petition filed by Human Rights and Peace for Bangladesh (HRPB) lawyer Manzill Murshid.    The court observed that Bangladesh Bank gave an opportunity to big loan defaulters through the notice, which creates scope of Tk 1 lakh crore laundering. "On the other hand, the central bank is making the genuine businessmen pay 14 to 15 per cent interest, which is a discrimination," the court said in its observation.
While passing the order, the court also said the central bank is yet to execute the prime minister's instruction to lower down the interest rate to single digit for bank loans.
"After today's order, the central bank circular will not be in effect till June 24," Advocate Morshed told journalists.
"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," the lawyer said.