Immediately stop business of unregistered interest: HC

The High Court (HC) on Monday ordered the closure of microfinance institutions and unregistered cooperatives across the country.

The HC bench of Judge Abu Taher Md Saifur Rahman and Judge Zakir Hossain adopted the order.

The court also ordered the Bangladesh Bank to form a special committee to investigate the activities of unauthorized financial institutions and micro-lenders.

The central bank has been ordered to shut down with immediate effect the organizations found unauthorized or unlicensed during the investigation and to take legal action against them.

In addition, the microcredit regulatory authority was requested to provide a list of local pawn shops who lend at high interest rates in rural areas of the country.

The report must be submitted within 45 days with respect to the above guidelines.

Lawyer Syed Sayedul Haque Suman defended the petition while Deputy Attorney General Noor Us Sadiq represented the state.

Previously, the High Court had set September 27 for the order after hearing on this issue.

On September 7, a lawyer filed a lawsuit with the High Court seeking directions for shutting down unregistered high-interest private loans.

In the petition, 136 people, including the finance secretary, the interior minister, the legal secretary, the governor of the Bangladesh Bank, the inspector general of police, deputy commissioners and police superintendents in 64 districts, were declared respondents.

Attorney Sumon, who presented the petition in the public interest, said private high-interest lending takes place under the guise of cooperative societies in every village across the country. Again, many are also looking for high interest rates as private loans. They don’t have a record to lend.

“Ordinary people have become hostages to these private lenders. The amount of interest they earn on a weekly and monthly basis is skyrocketing. The interest per week for 10,000 Tk is 500 to 600 Tk and in some cases it reaches 1000 Tk. They earn up to Tk 2,000-2,500 in interest per month, ”he added.

He said many families have become destitute by carrying the burden of high interest on loans taken from unregistered cooperative societies.

In many cases, private lenders act under the very eyes of the administration.

“So I filed a petition with the High Court asking for directions to shut down all unauthorized lending businesses across the country,” he added.

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