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Why BB circular on 9% lending rate not illegal: HC

Special Correspondent |
Update: 2020-03-03 5:25:50 PM
Why BB circular on 9% lending rate not illegal: HC
High Court

DHAKA: The High Court has issued a rule asking the authorities concerned to explain why the circular of Bangladesh Bank (BB) on 9 percent interest rate should not be declared illegal.

The bench of Justice Abu Taher Md Saifur Rahman and Justice Md Zakir Hossain issued the rule on Tuesday following a writ petition.

The court has asked the respondents including the Bangladesh Bank to reply to the rule within the next four weeks.

Supreme Court lawyer Barrister Syed Sayedul Haque Sumon filed the writ on Sunday on behalf of an apprentice lawyer Mahfuzur Rahman, challenging the effectiveness of the central bank circular setting the bank loans interest rate at 9 percent from April 1.

On Monday, the bench of Justice Tariq ul Hakim and Justice Md Iqbal Kabir refused to hold a hearing on the petition as it had no jurisdiction to hear bank related issues.

On February 23, the central bank issued the circular setting lending rates maximum 9 percent for all sectors except credit cards with effect from April 1.

The BB, however, kept unchanged the interest rate at 7.0 per cent for exporters.

From the current year, banks will not be allowed to disburse loans to the industrial sectors less than their average outstanding credit in the last three years.

The circular said the present high bank interest rates are impeding the growth of the country’s small, medium and large business, and services sector.

On December 30 last year, finance minister AHM Mustafa Kamal told reporters that the single digit interest rate on all loans, excepting credit cards, will take effect from April 01.

BDST: 1725 HRS, MAR 03, 2020

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