HC: Shutdown unauthorised microfinance institutions immediately
HC also directed Bangladesh Bank to form a special committee to probe the activities of unauthorised financial institutions and submit a report in 45 days
The High Court (HC) has ordered the authorities concerned in the government to shut down the unregistered microfinance institutions and private lending businesses across the country.
The bench of Justice Abu Taher Md Saifur Rahman and Justice Zakir Hossain passed the order on Monday.
The court also directed the Bangladesh Bank to form a special committee to investigate the activities of unauthorised financial institutions and submit a report on it within 45 days.
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The central bank was further ordered to shut down unauthorised or unlicensed organisations with immediate effect during the investigation, and to take legal action against those.
Moreover, the court also directed the microcredit regulatory authority to make a list of private lenders, who lend at high-interest rates in rural areas across the country and submit it within 45 days.
Barrister Syed Sayedul Haque Suman stood for the petition while Deputy Attorney General Noor Us Sadiq represented the state.
Earlier on 7 September, Barrister Suman filed a public interest writ petition with the High Court seeking its directives for the closure of unregistered private lenders who lend at high-interest rates.
In the petition, 136 persons -- including secretaries to the finance, home and law ministries, Bangladesh Bank governor, Inspector General of Police, deputy commissioners and superintendents of police in 64 districts -- were made respondents.
Barrister Suman said in the guise of cooperative societies, many unauthorised private lenders are lending money at high interest rates in every village of the country.
"Ordinary people have become hostages to these private lenders. The amount of interest they collect on a weekly and monthly basis is skyrocketing. The per week interest is Tk500-600 for Tk10,000, and in some cases, it rises to Tk1,000," he added.
He said many families have become destitute bearing the burden of high interest on loans taken from unregistered microcredit organisations.
In many cases, unauthorised private lenders are carrying on their businesses before the very eyes of the administration, he added.
