A writ petition challenging the legality of the directive issued by the Bangladesh Bank (BB) about fixing the maximum lending rate at 9.0 per cent by banks barring the advances made against credit cards was filed with the High Court (HC) Sunday.
The writ petitioner said the BB in its directive has given no rationale behind fixing the interest at a maximum rate of 9.0-per cent by banks.
Md. Mahfuzur Rahman, an apprentice lawyer, filed the petition, said his counsel Barrister Syed Sayedul Haque Suman.
The HC bench comprising Justice Tariq ul Hakim and Justice Md Iqbal Kabir is likely to hear the petition today (Monday).
The finance secretary, the BB governor and the BB general manager (banking regulation and policy department) have been made respondents in the petition.
The banking sector regulator's order might hit the already troubled banking sector hard, the petitioner expressed the fear.
"Such a restriction on interest rate are unlawful and against the established financial policies and international practices of free market economy", the petition said.
This will further stifle the availability of loans necessary for setting up and expansion of small, medium and large business and commercial entities and industries, reads the petition.
The directive violates the fundamental right of 'equality before law' guaranteed under article 27 of the Constitution, it added.
As a consequence of a significant reduction in interest charged by banks on loans, the returns accrued by depositors from fixed deposit schemes would also fall sharply.
This will result in serious prejudice to middle-income group of the country, said the petition.
The BB restriction applies to scheduled banks only and does not extend to the loans and/or investments of non-banking financial institutions, which is discriminatory, it noted.
The petitioner prayed to the court to issue a rule upon the respondents to explain as to why the BB directive should not be declared illegal.
He also sought a stay order upon all operations of the directive until the hearing of the rule is over.
The central bank on February 24 issued the notification as part of the government initiative to bring down the lending rate to a single digit.
The new order will come into effect from April 01.
Borrowers must pay an additional 2.0 per cent as panel interest along with the new rate if they become defaulters despite getting the facility, it said.
The central bank, however, kept unchanged the interest rate at 7.0 per cent for exporters.
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