The High Court has questioned the legality of financial activities run by unauthorised private microfinance institutions (MFIs) and cooperative societies, as well as informal local money-lenders.
It has issued a rule upon the government bodies concerned to explain why their inaction and failure to monitor and supervise the financial activities of these bodies shall not be declared illegal.
The finance secretary, the home secretary, the Bangladesh Bank governor, the Microcredit Regulatory Authority (MRA) chairman, the inspector general of police (IGP), and others have been asked to comply with the rule.
The High Court bench of Justice Md Ashraful Kamal and Justice Kazi Waliul Islam passed the order on Tuesday after hearing a writ petition filed in this regard.
The court also asked the MRA chairman to dispose of within two months the representation submitted by the petitioner seeking action against informal money lenders.
Lawyer Farhad Uddin Ahmed Bhuiyan appeared in the court hearing on behalf of the petitioner, while Deputy Attorney General Md Monjur Alam represented the state.
Sachindra Nath Shil, a resident of Khulna's Sonadanga area, filed the petition.
According to the petition, Sachindra's wife received a loan of Tk 0.2 million in phases from local money lenders in 2013-2014. She later received more loans to repay the previous debts. Thus she became saddled with debts and their high interest rates. At one stage, the moneylenders sued her.
Sachindra submitted a petition to the MRA chairman on May 2 in 2023 seeking a remedy. As the chairman did not heed that, he filed the writ petition.
Earlier on September 27 in 2021, in response to a writ petition, the High Court ordered the government bodies concerned to take legal action against the institutions, including microcredit businesses across the country, running financial activities without a valid licence or approval. The court also asked the Bangladesh Bank governor to form a special committee to probe the activities of the unauthorised financial institutions, including the ones running microcredit operations, across the country and submit a report within 45 days after receiving the order.
Later, in November that year, the central bank informed the High Court that it had formed a special committee to probe the illegal financial activities of the unauthorised and unregistered financial institutions, including microcredit ones, across the country.
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