7-member body to probe unregistered FIs01 December 2021
Staff Reporter :
The Bangladesh Bank has formed a special committee to probe into the illegal financial transactions of the unauthorised and unregistered financial institutions (FIs) and as well as the microcredit financial institutions across the country.
Kazi Sayedur Rahman, Deputy Governor of the Bangladesh Bank, has been made the Chairman of the seven-member committee.
The other members are central bank's Executive Director Md Serajul Islam, General Manager of the Banking Inspection Department-1 Jiban Krishno Roy, General Manager of off-site Supervision Department Md Anwarul Islam, General Manager of the Department of Financial Institutions and Markets Md Zulkar Nayn, general manager of Banking Regulation and Policy Department Maksuda Begum and Deputy General Manager of Banking Inspection Department-4 Munir Ahmed Chowdhury.
The central bank authorities have formed the committee and informed it to the High Court complying with its earlier directive issued in this regard.
Upon a writ petition a High Court Bench on September 27 this year asked the Bangladesh Bank governor to form a special committee regarding the activities of the unauthorised and unregistered 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.
The High Court Bench of Justice Abu Taher Md Saifur Rahman and Justice Md Zakir Hossain in its order also asked the concerned bodies of the government to take legal action against the institutions which are dealing financial activities including microcredit business across the country without any valid license or approval.
During the investigation, if the existence of any unauthorised 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 at once 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 immovable or immovable property before this court on or before 45 days.
The High Court 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 unauthorised 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 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 money lending activities across the country.
Barrister Syed Sayedul Haque Suman, a Supreme Court lawyer, filed the petition with the High Court 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 the license from the Microcredit Regulatory Authority to run microcredit functions, while thousands of institutions are conducting microcredit functions across the country without any license.
However, the Microcredit Regulatory Authority doesn't monitor the functions of the unauthorised institutions properly, said the lawyer. Even many NGOs who took license for other purposes are also conducting the microcredit activities, added the lawyer.