From now on, struggling borrowers will have to withdraw all legal cases against the government, the Bangladesh Bank (BB), or the commercial bank concerned before being eligible for any form of incentives or policy support announced by the banking regulator.
Issuing a circular on Wednesday, the central bank stated that the new directive was aimed at facilitating employment generation, boosting credit flow to productive sectors, and fostering a private investment-led economy.
The BB said it had already introduced a series of measures to revive economic activities, including policy support for reopening export-oriented closed factories and extending financial assistance to borrowers in the agriculture as well as Cottage, Micro, Small and Medium Enterprise (CMSME) sectors.
The circular said the central bank had observed that some borrowers had been receiving incentives and policy support while simultaneously pursuing writ petitions and other legal proceedings against the government, the Bangladesh Bank, and the respective lending institutions.
To address the issue and help reduce litigation in the banking sector, the central bank instructed all scheduled banks to ensure that any applicant seeking incentives or policy support first withdraws all pending writ petitions and other legal cases filed against the government, the Bangladesh Bank, or the bank concerned.
As part of the application process, borrowers will be required to submit a list of all withdrawn cases.
Banks must also obtain an affidavit from the applicant declaring that no legal proceedings previously initiated against the government, the Bangladesh Bank, or the relevant banks remain pending.
jubairfe1980@gmail.com