Friday, April 19, 2019 | ePaper

Banks in dire straits

Tk 2 lakh cr stuck in pending lawsuits

  • Print
Kazi Zahidul Hasan :
Banks and financial institutions are fighting cases across the country to recover over Tk two lakh crore from the borrowers.
About 1,00,705 cases are pending  with different courts as of June this year, according to an official figure.
Out of the total pending litigations, a total of 95,271 cases were filed with Artha Rin Adalat (Money Loan Court), Bankruptcy Court and others involving Tk 1.42 lakh crore, while a total of 5,434 writ petitions were filed by the defaulters against their classified loans involving over Tk 57,674 crore.
State-owned banks and financial institutions had 35,029 pending cases with courts involving over Tk 1.11 lakh crore, while private banks and financial institutions had 65,676 cases involving Tk 88,559 owed by loan defaulters.
Sonali had the highest number of pending cases among the public banks. 
"A huge amount of money got stuck with the cases putting banks in an extremely difficult situation," Md Obayed Ullah Al Masud, Managing Director of Sonali Bank, told The New Nation yesterday.
He said that like other banks Sonali was also pursuing the most pending cases for recovery of the outstanding amount.
"We were compelled to file lawsuits against the defaulters as repayment dates of their loans expired long ago," he added.
He said banks filed lawsuits for recovering loans. But it takes a long time to settle due to different legal complexities, including writ in the High Court.
"It's a matter of concern that banks are struggling to settle huge number cases remaining pending over the years involving huge chunk of invested funds. We need a 'special tribunal' for disposing the pending cases. Otherwise, the situation will go worse, making banks vulnerable," said Mohammad Shams-Ul Islam, Managing Director of Agrani Bank
"Banks and financial institutions are caught in a vicious cycle of pending lawsuits. Many of them are rapidly becoming insolvent due to pending cases for years," an unanimous private banker told The New Nation.
He said, the rules must be changed to get rid from the pending cases in loan court.
"Banks have filed cases to recover money from defaulters.  Large amount of money  became stuck in these cases eroding their capital base," Dr Khondkar Ibrahim Khaled, a former Deputy Governor of Bangladesh Bank, told The New Nation on Saturday.
"Though the banks are pursuing the cases through the courts to recover the money, little progress is in sight due to lengthy court procedures," he observed.  
Dr Ibrahim Khaled further said that the country's banking sector is beset with toxic loans due to improper loan sanctioning, poor supervision and risk management practices.
"Banks and financial institutions may not get benefit from the court cases if due diligence is not followed while processing and sanctioning loans," said Ibrahim Khaled.
When asked, he said the government should look for a fresh strategy to quickly dispose of the huge number of cases. Otherwise, the issue would be more complex in the days to come.

More News For this Category

Mueller report: Trump 'tried to get special counsel fired'

President Trump tried to get the man appointed to investigate his links to Russia fired, a long-awaited report has revealed.Details are starting to emerge about the 448-page redacted document, collated

Corruption is everywhere but punishment is selective

The Anti-Corruption Commission has identified 22 sources of corruption plaguing the state-run Titas Gas for years. Illegal connections, re-connection of illegal lines, meter tampering and bribery in providing legal

The OC must be arrested immediately and HR Commission abolished

We welcome the circular issued by the Chief Justice Syed Mahmud Hossain requiring female magistrates to be assigned for interrogation of women and children in rape and other sexual

 Judicial probe into police role a must

Judicial probe into police role a must

Staff Reporter :Transparency International Bangladesh (TIB) on Thursday demanded judicial inquiry into the role of police in the Feni madrasa student Nusrat Jahan Rafi murder.The TIB in a press statement

Kader makes confession

Kader makes confession

Court Correspondent :Hafez Abdul Kader, an accused in madrasa student Nusrat murder case, was brought to a Feni court yesterday at 1.30 pm to record his confessional statement.  Senior Judicial

Another accused Shamim put on remand

UNB, Feni :A court here on Thursday placed Md Shamim, an accused in madrasa student Nusrat Jahan Rafi murder case, on a 5-day remand.Senior judicial magistrate Soraf Uddin Ahmed passed

Russel gets new life with prosthetic leg

Russel gets new life with prosthetic leg

Staff Reporter :Russel Sarkar, who lost a leg after a bus of Green Line Paribahan injured him fatally in April last year, has got a prosthetic leg.A Swiss-made artificial leg

50 pc of eye patients suffer from sight disability in BD

Staff Reporter :About 50 percent of eye patients in Bangladesh  suffer from sight disability. Of them, the females share 53 percent and the males do 47 percent.Sightsavers, an international charity,

Ranks 150th with global score BD slips 4 notches down in WPF

Staff Reporter :Bangladesh has slipped four notches down in the World Press Freedom Index-2019 published by Paris-based Reporters Without Borders (RSF).Bangladesh ranks 150th with a global score of 50.74 this

BD Myanmar JWG meets on May 3

Bangladesh and Myanmar will hold their next Joint Working Group (JWG) meeting in Naypyidaw on May 3 to discuss the development made so far for safe repatriation of Rohingya people."The