At the end of June this year, 17,432 cases filed by the non-banking financial institutions for recovering Tk10,632 crore loan were pending with the Artha Rin Adalat.
The amount of money stuck at the court is more than the total amount of default loans suffered by the financial institutions so far, revealed a recent report of the Bangladesh Bank.
Currently, there are 34 non-bank financial institutions in the country. According to the latest Bangladesh Bank report on non-performing loans, non-bank financial institutions have disbursed loans of Tk67,114 crore till June this year. Of this, Tk10,328 crore has been defaulted, which is 15.38% of the disbursed loan.
People concerned said many cases in the Artha Rin Adalat have been stayed by the High Court's order. Besides, the number of money loan courts and the judges in the country is inadequate compared to the demand. Both the loan givers and takers are suffering because of the pending cases.
In this regard, Mominul Islam, chairman of Bangladesh Leasing and Finance Companies Association (BLFCA) and managing director of IPDC Finance, said, "The people who willingly default loans appear as obstacles in the settlement of these cases. They secure stay orders from the court to not allow the case to be disposed of. As a result, these cases remain pending not only for years, but for generation after generation."
According to the Bangladesh Bank report, 28,207 cases involving over Tk12,890 crore were filed in the courts till June this year. Of these, 10,775 cases involving around Tk2,257 crore have been settled.
The Bangladesh Bank has provided a number of special facilities including rescheduling the loans and one-time exit facilities for the loan defaulting customers of the financial institution.
Despite the facilities, the defaulters are not repaying the loans and bad debts continue to rise. On the other hand, except for a small number of incidents, the defaulters rarely faced any punitive action.
In such a situation, officials of the non-banking financial institutions and experts said the government should take strict action against the defaulters and launch a special court to reduce the number of pending cases.
Barrister Tanjib-ul-Alam, a company law expert, told The Business Standard, "Cases at the Artha Rin Adalat remain pending for years because of the High Court orders. Besides, the trial of the ongoing case is being adjourned unreasonably. Due to lack of proper training of judges, speedy disposal of these cases is not possible."
"The High Court stay orders that stayed the cases have to be cancelled. The Bangladesh Bank has to take initiative in this regard. A list of pending cases should be prepared and submitted to the chief justice through the Ministry of Law," he continued.
"Besides, the authority should take steps to increase the numbers of money loan courts and the judges to ensure that these cases are conducted by the efficient judges," he added.