The Cabinet on Monday approved in principle the draft of Finance Company Bill, 2021, keeping a provision of imposing a fine of Tk one crore as the maximum administrative punishment for violation of the law.
The approval came from the Cabinet's virtual meeting held with Prime Minister Sheikh Hasina in the chair. She joined it from her official residence Ganobhaban, while other Cabinet members from the Bangladesh Secretariat.
"The new proposed law has brought changes to the Finance Institutions Act, 1993 as it (the existing law) is not that much effective," said Cabinet Secretary Khandker Anwarul Islam at a press briefing at the Secretariat.
As per the proposed law, the existing financial institutions would become companies but they would require neither fresh registration nor change in their existing memorandum of associations.
He said a provision of huge fines were as administrative pecuniary punishments in some clauses of the draft law. The maximum punishment is Tk 1 crore fine, he said adding that the criminal offence will be tried separately under penal codes.
According to the bill, no one can run a finance company without taking a license from the Bangladesh Bank.
The bill precisely defined loan defaulters as well as fixed the ceilings for the amount of deposited money and interest rates.
During approval of the draft law, the Cabinet made an observation for the authorities concerned to review whether the bankruptcy issue of a company can be solved outside the court and if the issue can be incorporated in the proposed law, said the Cabinet Secretary.
He said now the court declares a company bankrupt. It takes time to remove the bankruptcy-related complexities, completing all the legal procedures following the High Court's judgment over a bankruptcy issue.
Besides, the Cabinet cleared the draft of Leader and Deputy Leader of the Opposition (Remuneration and Privileges) Act, 2021 in order to replace the Leader and Deputy Leader of the Opposition (Remuneration and Privileges) Ordinance, 1979, which was promulgated during the military regime.
"No major change has been brought in the proposed law," he said.
It also approved in principle the draft of Bangladesh Homoeopathic Treatment Education Act, 2021, which will replace the Bangladesh Homoeopathic Practitioners Ordinance, 1983.
The meeting cleared the draft Bengali and English versions of the National Financial Inclusion Strategy.
The Cabinet approved the draft of an agreement to be signed between Bangladesh and Botswana on visa exemption for those having diplomatic and official passports.