HC orders BB to file 20-year report on loan default, money laundering

The Bangladesh Bank governor has been ordered to report to the High Court on individuals who defaulted loans worth above Tk 10 million and loan waiver, money laundering and money launderer of the last 20 years.

The bench of justices FM Nazmul Ahasan and Justice KM Kamrul Kader passed the orders after a hearing on a writ petition on Wednesday.

The court issued a three-point directive to the governor and said a precarious situation has been created in public and private banks and money has disappeared from the Bangladesh Bank.

Loans were sanctioned from different banks without any security money deposits. Those who were taking the loans failed to repay. Thus, tens of billions of taka were looted, pushing the banking sector into a bad situation, the court observed.

The court has put emphasis on taking all necessary measures to overcome the situation immediately.

The court asked the central bank to submit a list of those who have taken loans and siphoned off money. Measures taken to bring the laundered money back to the country have to be there in the report.

It also asked why the inaction of the respondents of the petition in taking effective measures to prevent financial corruption, irregularities, mismanagement in banks including Bangladesh Bank should not be declared illegal.

A rule was issued to explain why a commission would not be constituted comprising former Bangladesh Bank governors Mohammed Farashuddin and Saleh Uddin Ahmed, and former adviser to the caretaker government AB Mirza Azizul Islam, former Bangladesh Bank deputy governor Khondkar Ibrahim Khaled, former CEO of Citibank NA Mamun Rashid, representatives of the Bangladesh Bank and the finance ministry.

The secretaries to the Cabinet Division, the Prime Minister’s Office, Finance Division, Financial Institutions Division, the law ministry, Bangladesh Bank governor, chairmen and managing directors of public and private banks will have to reply within four weeks to the rule.

THE THREE INSTRUCTIONS TO GOVERNOR

>> The names, addresses, and list of loan defaulters with more than Tk 10 million will be submitted to the court.

>> In the case of money laundering, reports on what measures taken by the Bangladesh Bank and how much money has been trafficked so far.

>> The report on what measures have been taken to stop the irregularities in the case of sanctioning loans and the interest waivers on loans should be submitted.

Supreme Court Lawyer Manzill Murshid had earlier sent a legal notice on behalf of the Human Rights and Peace for Bangladesh. He filed a writ petition on Tuesday as he did not get any reply from the defendants.