Staff Reporter :
The High Court on Tuesday questioned the legality of the Bangladesh Bank (BB) notification that instructed all the scheduled banks to charge interest or profit at a maximum rate of 9.0 percent for all loans or investments except credit cards.
The court issued a rule upon the Bangladesh Bank and other respondents to explain in four weeks as to why the Bangladesh Bank notification instructing to fix a maximum interest rate of 9.0 percent for all loans should not be declared illegal.
The High Court Bench of Justice Abu Taher Md Saifur Rahman and Justice Md Zakir Hossain passed the order after hearing on a writ petition filed with the High Court. Finance Secretary, Bangladesh Bank Governor and General Manager (Banking Regulation and Policy Department) Rezaul Islam have been asked to comply with the rule.
Barrister Syed Sayedul Haque Suman appeared in the court on behalf of the writ petitioner while Barrister Munirujjaman appeared for the Bangladesh Bank.
In the hearing, Barrister Syed Sayedul Haque said, “Only 2 lakh borrowers will get the benefit of the circular that instructed the scheduled banks to fix a maximum 9.0 per cent interest rate on all loans, whereas at least 5 million depositors will be loser if the decision comes into effect. If the borrowers get loans at 9.0 percent interest than the interest rate of the depositors will be reduced automatically.”
Md Mahfuzur Rahman, an apprentice lawyer, filed the petition on March 1, 2020, saying Bangladesh Bank direction may severely affect the already suffering banking sector and such restriction on interest rate is unlawful and against financial policies and international practices of free market economy.
This kind of restriction shall further stifle the availability of loans necessary for setting up and expansion of small, medium and large business and commercial entities and industries, read the petition.
The central bank on February 24, 2020, issued a notification instructing all scheduled banks to fix a maximum 9.0 per cent interest rate on all loans except credit cards as part of the government initiative to bring down the lending rate to a single digit.
The new instruction will come into effect from April 01, 2020, according to the notification, issued by the Bangladesh Bank.
