Govt to amend Financial Debt Court Act to recover defaulted loans

Published : Tuesday, 25 November, 2025 at 12:00 AM Count : 686

The government has initiated amendments to the Financial Debt Court Act to resolve defaulted loan cases quickly. The draft Financial Debt Court Ordinance 2025 provides for the recovery of defaulted loans by selling the borrower's mortgaged property, as well as their domestic and foreign assets.

It says if someone wants to appeal against the verdict of Financial Debt Court, 50 per cent of the unpaid loan must be deposited in the court. And if a review of a verdict is requested, 75 per cent must be deposited.

The draft of the Financial Debt Court Ordinance 2025 was sent to Finance Ministry a few days ago from Bangladesh Bank. A meeting was called by the Law Ministry on Monday (November 24) to receive the opinions of various parties. If the ordinance is issued after vetting by the Law Ministry, the existing Financial Debt Court Act-2003 will be abolished.

The draft of the proposed ordinance states that the debt court can order a ban on borrowers leaving the country or order to maintain the status for an interim period before the case is settled. The court can temporarily block or cancel the national identity card and passport of the defaulter.

It can order the appointment of a receiver in the mortgaged property, a writ of attachment, freezing of accounts or assets. It can issue various restrictions including detention orders in civil prisons.

However, Judge Mujahidur Rahman of Dhaka's debt court-5 has been issuing such bans for quite some time. While he was in Chattogrom, the managing director of debt default AFC Health, Jewel Khan, filed a writ in the High Court challenging the jurisdiction of an order he gave.

A larger bench of three judges of the High Court Division upheld the order banning the debt defaulters from leaving the country with 12-point instructions and gave its verdict in January.

Incidentally, there are over 80,000 pending cases in debt courts with defaulted loans worth Tk 200,000 crore. This is mainly due to the delay in settling the case.