HC orders closure of unauthorized microcredit institutions28 September 2021
Staff Reporter :
The High Court on Monday ordered the concerned bodies of the government to take legal action against the institutions those are involved in financial activities including microcredit business across the country without any valid license or approval.
The HC bench of Justice Abu Taher Md Saifur Rahman and Justice Md Zakir Hossain passed the order after holding hearing on a writ petition filed in this regard.
The court asked the Bangladesh Bank governor to form a special committee regarding the activities of the unauthorized financial institutions and as well as the microcredit financial institutions across the country and to submit a report to the court within 45 days after receiving the order.
During the investigation, if the existence of any unauthorized or unlicensed financial institution or microcredit financial institution is found, it is directed to the respondents to immediately shut down the offices of those entities and take legal action against the responsible persons with the help of the local administration, the court also said in its order.
The court also asked the Microcredit Regulatory Authority (MRA) to submit a list of the local money lenders who lend money by mortgaging movable or immovable property before this court on or before 45 days.
The HC also issued a ruling upon the concerned bodies of the government to explain in four weeks as to why their failure to monitor and supervision of the activities of the unauthorized financial institutions as well as the microcredit financial institutions should not be declared illegal.
Finance secretary, Bangladesh Bank governor, Microcredit Regulatory Authority's executive vice-chairman and director general of the social welfare department have been asked to comply with the ruling.
The court fixed November 30 for further hearing on the matter.
The writ petition was filed with the High Court seeking its direction upon the concerned bodies of the government to take necessary steps for imposing a ban on the informal high-interest-based money lending activities across the country.
Barrister Syed Sayedul Haque Suman, a SC lawyer, filed the petition with the HC on September 7 this year as a public interest litigation.
Barrister Suman himself took part in the hearing in support of his petition, while deputy attorney general Nur Us Sadiq represented the state.
During the hearing Barrister Suman said only 746 institutions have got licenses from the Microcredit Regulatory Authority to run microcredit functions, while thousands of institutions are conducting microcredit functions across the country without any valid approval.
The Microcredit Regulatory Authority doesn't monitor the functions of the unauthorized institutions properly, said the lawyer. Even many NGOs who took license for other purposes are also conducting the microcredit activities, added the lawyer.
The lawyer said, "Most of the people who have been victimized through the informal high interest money lending business are the member of the grassroots level. In many cases they had to pay 200, 250 or 300 percent interest."