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Emphasising the urgent need for comprehensive legal reforms to strengthen Bangladesh’s banking sector, Additional Managing Director of NCC Bank PLC M. Khurshed Alam has outlined a series of proposals aimed at enhancing loan recovery and improving the effectiveness of the Artha Rin Adalat Act.
Speaking at a roundtable discussion titled “Banking Sector Reforms”, organised by The Financial Express at a city hotel on Thursday, he said weaknesses in the existing legal framework have significantly undermined banks’ ability to recover defaulted loans, thereby affecting overall financial discipline.
He noted that stay orders issued in writ petitions often delay loan recovery proceedings and suggested that no stay order should be granted without first hearing the bank concerned. Moreover, he proposed that any writ petition challenging an order under the Artha Rin Adalat law should require the petitioner to deposit at least 20 per cent of the suit value, payable either in favour of the bank or through a challan to Bangladesh Bank.
Highlighting the need for judicial capacity building, Khurshed Alam recommended specialised training programmes jointly organised by Bangladesh Bank and the Judicial Service Commission for judges handling Artha Rin Adalat cases. He also proposed the formation of five specialised banking benches in the High Court Division to expedite the disposal of banking-related cases.
To strengthen deterrence against wilful defaulters, the NCC Bank executive suggested empowering Artha Rin Adalat to impose travel restrictions on defaulting borrowers. He further proposed that banks be allowed to publish the names and addresses of defaulting borrowers and guarantors in national newspapers.
Khurshed Alam also called for restricting loan defaulters and guarantors from holding membership in elite social, cultural, and sports clubs as well as from enjoying commercially important person (CIP) status.
On asset recovery, he proposed granting magisterial powers to Artha Rin Adalat to take physical possession of mortgaged property even before filing a loan suit. He also recommended allowing banks to sell mortgaged assets through auction, after publishing notice, at any stage of legal proceedings, including after the filing of execution cases, without prior court approval.
The NCC Bank executive further suggested that execution cases should remain pending until full realisation of the decretal amount, including up-to-date interest, regardless of provisions in other laws.
Addressing post-judgment complications, he proposed an automatic mutation mechanism whereby, after registration of an ownership certificate under Section 33(7) of the Artha Rin Adalat Act, the sub-registrar would notify the relevant land and development authorities to complete mutation in favour of the decree holder within 15 days.
He also underscored the importance of retaining provisions for civil imprisonment of judgment debtors, borrowers, and guarantors in appropriate cases.
Khurshed Alam proposed specific time limits for the disposal of execution cases -- one year for amounts up to Tk 10 million, two years for amounts up to Tk 100 million, and five years for amounts above Tk 100 million -- without requiring a 50 per cent deposit of the execution value.
He expressed hope that these proposals would help policymakers and regulators, including Bangladesh Bank, in framing effective reforms to restore discipline, accountability, and confidence in the banking sector.