Reschedule of loans: HC questions legality of BB circular

The High Court today questioned the legality of a Bangladesh Bank circular allowing defaulters to reschedule their loan with a repayment period of up to ten years.

The court issued a rule asking the authorities concerned of the Bangladesh Bank and the government to explain in 10 days why the circular issued on May 21 should not be declared illegal.

The HC bench of Justice JBM Hassan and and Justice Md. Khairul Alam came up with the rule following a petition filed by Human Rights and Peace for Bangladesh (HRPB).

Petitioner’s lawyer Advocate Manzil Murshid told The Daily Star that the Appellate Division order of July 8 on this issue will remain in force.

On July 8, the Supreme Court (SC) extended for two months its stay on a HC order that halted the BB circular.

The apex court however issued a condition saying that the loan defaulters would not be allowed to get further loans by depositing two per cent down payment of the total loan amount.

On July 3, Chamber judge of the Appellate Division of the SC, Justice Md Nuruzzaman stayed the HC order till today (July 8) and sent it to the SC full bench.

Following a writ petition filed by Human Rights and Peace for Bangladesh (HRPB), the HC on May 21 issued a status quo till June 24 on the central bank’s May 16 circular that allowed defaulters to reschedule their defaulted loans upon a down payment of just two percent of the total loan amount up to 10 years, and to get further loans.

The finance ministry recently filed a petition with the SC seeking stay on the HC’s May 21 and June 24 orders.