Bangladesh Bank (BB) has made it mandatory for applicants to withdraw all pending lawsuits filed against the government, the central bank, or the respective bank to qualify for any government-announced incentive packages or special policy support.
In a circular issued to the chief executives of all scheduled banks, the central bank stated that the new directive comes into force with immediate effect.
Under the new instructions, applicants will not only have to withdraw all existing cases but must also submit a complete list of the withdrawn lawsuits alongside their applications.
Furthermore, applicants must furnish a formal declaration through an affidavit executed on a non-judicial stamp, confirming that no lawsuits filed by them against the government, Bangladesh Bank, or the bank concerned remain pending or under trial.
The BB noted that it has long been providing various policy supports and incentive packages aimed at generating employment, boosting credit flow to productive sectors, and building a private investment-led economy.
These measures include assistance for reopening closed export-oriented factories, providing credit facilities to entrepreneurs in the agricultural, cottage, micro, small, and medium enterprise (CMSME) sectors, and supporting other productive industries.
However, central bank observations revealed that certain clients were enjoying government incentives and policy benefits while simultaneously pursuing writ petitions and other legal suits against the government, Bangladesh Bank, or the lending banks. Central bank authorities noted that this dual position has created unnecessary legal complications within the banking sector and posed significant hurdles to implementing policy support smoothly.
Central bank officials expect the new directive to reduce unnecessary case backlogs and minimize legal uncertainties surrounding the implementation of government incentive packages. They added that the process will become more transparent and accountable for genuine entrepreneurs seeking to revive their businesses, expand production, and create jobs.
Bankers pointed out that, in the past, several institutions continued legal battles in court while simultaneously availing themselves of incentive schemes. This resulted in delays in policy execution and forced banks into prolonged litigation. The new policy is designed to discourage such dual stances.
Meanwhile, a section of legal experts emphasized that, while executing the directive, it will be crucial to maintain a balance between an applicant's right to seek constitutional remedies and the conditions attached to government policy support. They advised banks to strictly adhere to the provisions of the circular during implementation.
The BB expressed hope that the policy will ensure incentives reach actual entrepreneurs more effectively, lower legal friction, and invigorate national economic activities through increased investment, production, and employment generation.