The amount of money blocked in court is more than the total amount of delinquent loans suffered by financial institutions so far
At the end of June of this year, 17,432 cases filed by non-bank financial institutions to collect a loan of Tk 10,632 crore were pending with Artha Rin Adalat.
The amount of money frozen in court is more than the total amount of delinquent loans suffered by financial institutions so far, a recent report from the Bank of Bangladesh revealed.
Currently, there are 34 non-bank financial institutions in the country. According to the Bangladesh Bank’s latest report on non-performing loans, non-bank financial institutions have disbursed loans of Tk 67,114 crore until June of this year. Of this amount, Tk 10,328 crore was in default, representing 15.38% of the loan disbursed.
Those concerned have said that many cases in Artha Rin Adalat have been stayed by the order of the High Court. In addition, the number of cash lending courts and judges in the country is insufficient in relation to the demand. Both loan givers and takers are suffering because of the pending cases.
In this regard, Mominul Islam, President of the Association of Leasing and Finance Companies of Bangladesh (BLFCA) and Managing Director of IPDC Finance, said: court not to allow the case to be decided. As a result, these cases remain hanging not only for years, but from generation to generation.
According to the Bangladesh Bank report, 28,207 cases involving more than 12,890 Tk crore have been filed in court through June of this year. Of these, 10,775 cases involving approximately 2,257 Tk crore have been resolved.
The Bangladesh Bank has provided a number of special facilities, including loan rescheduling and one-off exit facilities for defaulting clients of the financial institution.
Despite the facilities, defaulters do not repay loans and bad debts continue to increase. On the other hand, with the exception of a small number of incidents, defaulters have rarely been subject to punitive action.
In such a situation, officials of non-bank financial institutions and experts said the government should take strict action against defaulters and launch a special tribunal to reduce the number of pending cases.
Lawyer Tanjib-ul-Alam, an expert in corporate law, told The Business Standard: âThe cases at Artha Rin Adalat remain for years due to the orders of the High Court. In addition, the trial of the current case is unreasonably adjourned. without adequate training of judges, rapid resolution of these cases is not possible. ”
“The stay orders of the High Court which stayed the cases should be set aside. The Bangladesh Bank should take the initiative in this regard. A list of pending cases should be prepared and submitted to the Chief Justice through the ministry. of Justice, “he continued.
“In addition, the authority should take measures to increase the number of money lending courts and judges to ensure that these cases are conducted by efficient judges,” he added.