Defaulters need further loans to repay their outstanding debts, said Bangladesh Association of Banks (BAB) lawyer Shah Monjurul Hoque on Tuesday.
"This is a common practice all over the world. Otherwise, how will they pay the installment on defaulted loans?" he observed.
The High Court (HC) heard a Bangladesh Bank (BB) circular that allowed defaulters to reschedule loans upon a down payment of 2.0 per cent of the total loan amount up to 10 years and get further loans.
Formation of an enquiry commission to probe irregularities will contrast BB Order and Banking Companies, Anti-Corruption Commission, Artha Rin Adalat and Money-Laundering Prevention Acts, Mr Hoque said.
Advocate Manzill Murshid took part in the court hearing on behalf of Human Rights and Peace for Bangladesh (HRPB) that filed a writ against the BB circular.
At one stage of the hearing, the court observed, "All are sympathisers of loan defaulters, even the creator too. But the situation is different in Bangladesh."
After the lawyers' submissions, the HC bench of Justice JBM Hassan and Justice Md Khairul Alam adjourned the hearing until today (Wednesday).
Attorney general Mahbubey Alam attended the hearing on behalf of finance ministry and barrister Shameem Khaled and advocate Munirujjaman for BB.
On July 23, HC asked BB and government authorities concerned to explain in 10 days why the May 16 circular in favour of defaulters should not be declared illegal.
Earlier on May 21, it issued a status quo on the BB circular until June 24.
On June 24, the HC bench of Justice FRM Nazmul Ahasan and Justice KM Kamrul Kader extended the order for another two months.
After hearing a ministry appeal, Justice Md Nuruzzaman of the Appellate Division on July 03 stayed the HC order until July 08 and sent it to the SC full bench.
On July 08, the Supreme Court (SC) extended for two months its stay on the HC order that halted the circular.
The SC in its order said anyone opting for the opportunity will not be allowed to borrow funds from another bank in two months.
It also asked the HC bench, led by Justice Hassan, to hear and dispose of the petition filed in this regard in the next two months.
Later on August 29, the HC bench of Justice Hassan and Justice Alam ordered the authorities concerned not to allow defaulters to borrow bank loans until October 20.
