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Cases involving default loans of thousands of crores of taka have remained stuck at the money loan courts due to settlement delays.
A large number of cases haveremained unsettled for years due to loopholes in the existing laws, lack of required number of judges, courtrooms and various other complexities, experts said.
The banking sector is facing difficulties in recovering the huge amount of the defaulted loan as the debtors resort to legal shelter to shield them.
At least 68,271 cases against loan default of Tk1, 43,694 crore are stuck with the country’s money loan courts (Artha Rin Adalat) till 31 December 2021, according to Bangladesh Bank report.
Of the cases, the state-owned six commercial banks have 16,571 pending cases with the money loan courts against Tk62, 078.71crore defaulted loan.
The state-run specialized banks have 5,700 pending cases against a loan default of Tk2, 442.46crore, according to the BB data.
The private commercial banks filed 37,371 cases against Tk76, 019.70 crore defaulted loan while the foreign banks 8,629 cases against Tk3, 153.22crore.
Finance Minister AHM Mustafa Kamal on June 22 told parliament that the amount of loan default was Tk1, 26,389crore as of March.
Apart from this, another Tk21,046 crore has remained stuck due to the stay orders of the High Court as banks and financial institutions have been unable to realize the amount, he said
Kamal said the Bank Company Act would be amended where intentional loan defaulters would face various types of restrictions.
He also said the banks had been advised to use alternative dispute resolution methods to recover the loans.
Founded in 2003 the money loan courts aimed at dispute resolution readily concerning loan repayment by the clients to their respective banks but the court is overwhelmed with the financial litigations.
The Money Loan Court Act-2003 is a good law, but the number of the courts is relatively few and so is the number of judges which are the reasons for the delay in case settlements.
Experts say it is an age-old issue that the financial cases are not disposed of expeditiously.
Usually, the banks file lawsuit with lower courts to recover defaulted loans but the borrowers file writs with the High Court against the trial court verdicts.
The writ takes time to be settled and the financial litigation continues to linger. In addition, the writ petitioners obtain stay order in their favour – a tactic they use to shy away from making immediate payment to the lenders.
If the High Court hands down its verdict soon considering the merits of the writs, the pending cases will be disposed of quickly,the experts said
According to the Bangladesh Bank data, since 2003, a total of 1, 90,060 cases involving Tk1, 70,823.85crore were filed with the money loan courts across the country till 31 December, 2021.
Of the cases, 82,030 were filed by state-run banks against Tk105, 078.29crore, 36,558 cases by state owned specialized banks against Tk5, 172.23crore, 79,418 cases by private banks against Tk100, 079.53crore and foreign banks filed 9,890 cases against Tk3, 405.32crore defaulted loans.
Among the cases, a total of 139,625 cases were disposed of while the banks could manage to recover Tk19, 703.01crore in between 2003-2021.
The numbers of pending cases were 68,271 against Tk1,43,694crore defaulted loans in 2021, 65,437 cases against Tk135851.48 crore in 2020, 64,116 cases against Tk124524.65 crore in 2019 and 57,416 cases against Tk1,10,726 in 2018.
When asked, Md Zakaria Haider, a panel lawyer of BASIC Bank Ltd, told The Business Post that the cases with the Artha Rin Adalat had remained pending for years because of slow pace of trial proceedings due to inadequate number of courts.
He also said the trials of the ongoing cases are being adjourned unreasonably while frequent writ filed by defaulters slows down the loan recovery process and a huge backlog of cases remains unresolved for years due to such petitions.
The Supreme Court lawyer suggested taking steps to increase numbers of money loan courts and the judges. Willingness of judges is also needed to quick disposal of the cases, he added.
