Bank commission: Leave to appeal filed against HC order

An appeal was filed on Tuesday at the Supreme Court (SC) seeking a directive to the government to form a commission to investigate the corruption and irregularities in the country's banking sector.

Human Rights and Peace for Bangladesh (HRPB) – a human rights defender – filed the leave to appeal at the Appellate Division of the SC, for the apex court to stay a part of the High Court directive which ordered the central bank to form a committee to find irregularities in loan distribution and recovery.

A regular appeal will be filed if the leave to appeal is granted, said HRPB lawyer Manzill Murshid.

He said the organisation filed a writ as a public interest litigation in 2019 followed by media reports on banking sector corruption, irregularities and default loans. The writ sought a directive to form a banking commission.

The lawyer said, "While the hearing of the writ was ongoing last year, the central bank issued a circular allowing loan defaulters to reschedule with 2 percent down payment. The court later stayed the Bangladesh Bank circular as it faced a legal challenge."

He added that the High Court on November 3 last year passed the order after completing a lengthy hearing.

The HC said the government is empowered by the Commission of Enquiry Act-1956 to form a commission and it is totally up to the discretion of the government.

"We filed the leave to appeal being aggravated by the HC directive as it did not direct the government to form a commission," said Advocate Manzill Murshid.

He said, "Immediate formation of the commission is a must to stop plundering bank loans and to strengthen the economy."

The High Court on  February 13 last year ordered the Bangladesh Bank governor to submit the list of loan defaulters. A rule was also issued to explain why a commission would not be constituted to prevent financial corruption, irregularities and mismanagement in banks.

The court also issued a rule to explain why it would not order taking action in line with the recommendations made by the banking commission. 

Amid this, the central bank issued a circular on May 16 last year allowing the defaulters to reschedule their loans by making a down payment of only 2 percent. The court on May 21, 2019 stayed the Bangladesh Bank circular.

Subsequently, the Bangladesh Bank moved to the Appellate Division challenging the stay order. On July 2, 2019, the Appellate Division put an injunction on the HC order.

However, those who will pursue the 2 percent down payment facility for loan rescheduling will not qualify for fresh loans.