MoL turns down draft Money Loan Court Act

The law ministry has turned down the central bank's proposal to prepare a new Artha Rin Adalat Ain (Money Loan Court Act) and suggested updating of the existing law through necessary amendments, officials say.

The draft law, prepared by the central bank, incorporated extensive punitive actions against delinquent bank borrowers.

The ministry also sent back the draft of the proposed Artha Rin Adalat Ordinance 2025, prepared by the central bank, to the Financial Institution Division (FID), asking it to submit a report on which sections of the Artha Rin Adalat Ain, 2003 need amendment and what kinds of changes are required.

The report, to be prepared by a nine-member committee, should also explain the rationale behind the proposed amendments.

The law ministry's directives followed an inter-ministerial meeting on the draft Artha Rin Adalat Ordinance 2025, during which the majority of participants opposed the enactment of a new law.

The ministry recommended forming a committee comprising representatives from the FID, Law and Justice Division, Legislative and Parliamentary Affairs Division, Law Commission, Bangladesh Bank, a state-run commercial bank, and a private commercial bank.

The committee has been asked to consult a report previously prepared by the Law Commission on the Artha Rin Adalat Ain, 2003, which had recommended amendments to make the law more time-befitting.

In its draft of the new act, the central bank had proposed provisions to form an Artha Rin Appellate Court, manned by judges of High Court rank, and to create a post of "recovery officer" to implement the process of issuing decrees.

The central bank had also proposed provisions empowering the court to suspend the national identity cards and passports of loan defaulters, declare them ineligible for national and local government elections, and prevent them from serving as directors of any public or private company.

At the inter-ministerial meeting, a joint director of the central bank said the draft of the new act was prepared with the assistance of several local and foreign experts.

"Once the new law comes into force, the number of defaulters in banks and financial institutions will decline significantly," he said.

Contacted, a senior FID official told the FE that a committee has been formed, headed by an additional secretary of the division, in line with the law ministry's advice. The official said the committee will meet this week to make recommendations on amending the Artha Rin Adalat Ain, 2003.

"We are not preparing any new act, as it is deemed unnecessary," the official added.

syful-islam@outlook.com