Bangladesh News

Bangladesh Bank is actively considering tougher legal steps against bank loan defaulters, seeking cooperation of the finance ministry to amend the Representation of the People Order (RPO) 1972.

The RPO that bars bank loan defaulters from contesting any election is needed to be amended as its arm does not reach the loan defaulters of financial institutions.

The Election Commission had cancelled about 200 nomination papers on grounds of loan default while scrutinising the candidatures for the general election that was cancelled on Sunday, EC sources said. Some of them, however, were exempted on appeal.

The central bank recommended the finance ministry to prepare the nomenclature of defaulters of financial institutions to prevent them from contesting the election.

“The finance adviser has already discussed the issue with the law adviser,” a highly placed official told the news agency yesterday.

The decision came in line with the maiden speech of the chief adviser to the caretaker government to make election free from corrupt people and black money holders.

The central bank also recommended the finance ministry to take up with the Ministry of Law to simultaneously dispose of the pending writ petitions regarding default loan cases of similar nature.

Around 200 writ petitions are pending with the High Court seeking removal of the names from the defaulter list of the Credit Information Bureau (CIB) of the central bank, sources concerned said.

Meanwhile, a large number of writ petitions remain pending with the High Court challenging the verdict of money loan court against the defaulters.

“Realising default loans by banks has become difficult as the defaulters take shelter to the High Court seeking stay orders,” said a senior Bangladesh Bank official.

He said the extent of default loans has come down, but not up to the mark and it’s because of the writ petitions.

According to the central bank figures, 17.6 per cent of the total outstanding loans was classified in 2004, which declined to 13.6 per cent on December 2005 and again rose to 16.6 per cent in June 2006. It, however, came down to 14.3 per cent in September 2006.