Heaped up 0.45m cases trap Tk 465b in loan defaults
Sunday, 19 August 2007
About 0.45 million (4.5 lakh) cases involving Tk 464.90 billion (46,490 crore) in defaulted loans have remained unresolved in courts for years, bankers said Saturday, reports bdnews24.com.
The settlement of the cases becomes overly protracted mainly due to writ petitions in the High Court (HC), where defaulters filed the appeals in an attempt to stop legal procedures.
Official figures show that about 0.45 million cases were filed until June 2007, but officials familiar with the situation did not give details on when the legal gridlock actually started.
The cases were mostly filed with four money loan courts, one bankruptcy court and some other courts.
The number of courts assigned to deal with default-loan cases, which involve both state-run and private banks, is inadequate considering the huge number of cases, the bankers said.
Of the amount, about Tk 240 billion (24,000 crore) of state-run banks remained stuck in 190,578 unresolved cases while private banks found about Tk 160 billion (16,000 crore) stuck in 23,494 cases.
The remaining unresolved cases were filed by some specialised banks.
"We are facing difficulty due to writ petitions in the High Court. Big defaulters are filing appeals and the court issues stay orders without listening to our arguments," M Aminuzzaman, chairman of Bankers Association of Bangladesh, told the news agency.
The ABB chairman demanded that a separate bench be formed in the High Court for speedy trail of default-loan cases.
"The recovery of the defaulted amount would improve banks' financial health and help them cut interest rates on loans," said Syed Abu Naser Bukhtear Ahmed, chief executive of state-run Agrani Bank.
A central bank official, who preferred not to be named, said suits relating to default-loans are needed to be disposed of within 90 days of submitting a written statement.
The law, however, permits another 30 days, if necessary. He said: "There should be more courts for a speedy solution to the cases."
Aminur Rahman, managing director of state-run Sonali Bank, said they could function better if the defaulted loans were retrieved.
The settlement of the cases becomes overly protracted mainly due to writ petitions in the High Court (HC), where defaulters filed the appeals in an attempt to stop legal procedures.
Official figures show that about 0.45 million cases were filed until June 2007, but officials familiar with the situation did not give details on when the legal gridlock actually started.
The cases were mostly filed with four money loan courts, one bankruptcy court and some other courts.
The number of courts assigned to deal with default-loan cases, which involve both state-run and private banks, is inadequate considering the huge number of cases, the bankers said.
Of the amount, about Tk 240 billion (24,000 crore) of state-run banks remained stuck in 190,578 unresolved cases while private banks found about Tk 160 billion (16,000 crore) stuck in 23,494 cases.
The remaining unresolved cases were filed by some specialised banks.
"We are facing difficulty due to writ petitions in the High Court. Big defaulters are filing appeals and the court issues stay orders without listening to our arguments," M Aminuzzaman, chairman of Bankers Association of Bangladesh, told the news agency.
The ABB chairman demanded that a separate bench be formed in the High Court for speedy trail of default-loan cases.
"The recovery of the defaulted amount would improve banks' financial health and help them cut interest rates on loans," said Syed Abu Naser Bukhtear Ahmed, chief executive of state-run Agrani Bank.
A central bank official, who preferred not to be named, said suits relating to default-loans are needed to be disposed of within 90 days of submitting a written statement.
The law, however, permits another 30 days, if necessary. He said: "There should be more courts for a speedy solution to the cases."
Aminur Rahman, managing director of state-run Sonali Bank, said they could function better if the defaulted loans were retrieved.