Curb writ filing practices among loan defaulters

The leaders of the Bangladesh Association of Banks (BAB) have urged the central bank to take steps to stop defaulters from filing writ petitions with courts against the classification of loans and the collection of non-performing loans (NPLs).

The BAB leaders, led by its chairman Abdul Hai Sarker, also chairman of Dhaka Bank, made the call in a meeting with Bangladesh Bank Governor Ahsan H Mansur yesterday, according to Husne Ara Shikha, the spokesperson of the central bank.

Under existing rules, if a borrower defaults and the loan is classified as non-performing, banks can initiate legal proceedings for recovery.

However, if either the borrower or the lender is dissatisfied with the judgement or procedure of the 'Artha Rin Adalat', which are special courts that deal with financial disputes, they may file a writ petition to challenge the decision in the High Court.

Seizing this opportunity, borrowers often file writ petitions to obtain stay orders, which delay recovery proceedings initiated by banks.

In response to the BAB's demand, Mansur said the Bangladesh Bank would do whatever needed to be done.

There are various restrictions on the sale of disputed properties in the financial sector, which should be removed, he said, according to Shikha,

He also hinted at discussing the matter with the attorney general's office to find a solution to speed up the legal procedure for recovering bad loans, Shikha, also an executive director of the Bangladesh Bank, said.

The BAB leaders also urged the governor to include representatives from lenders in formulation of any policy related to banks, Shikha said.

In response, Mansur said he would consider including stakeholders from banks and their opinions.

The BAB leaders also called upon the central bank governor to take measures to name and shame money launderers, according to Sharif Zahir, chairman of United Commercial Bank.

As an example, Zahir said the banking regulator could take steps to impose travel restrictions on money launderers and defaulters.