When an ordinary farmer or a small entrepreneur knocks on the door of a bank carrying a fragment of a colorful dream, they have to overcome hundreds of regulatory hurdles. To get a loan of a few thousand takas, they must mortgage their homestead. If the loan installment is delayed by a day or two, they have to endure notices, threats of lawsuits, and social humiliation.
Yet, in the same country, some people are withdrawing thousands of crores of takas from banks simply on the strength of a flashy signboard, fake documents, and political influence. And without returning that money, they are strutting around with impunity. Is this extreme discrimination and injustice what we call development?
One of the biggest cancers of Bangladesh's economy is 'defaulted loans'. It is no longer an accident or a mere business loss; rather, it has become a 'right' for a class of influential people. Due to the tyranny of willful defaulters, the country's banking sector is now on the edge of a precipice. The hard-earned savings of ordinary depositors are being looted and laundered abroad, while the country's banks are facing a severe liquidity crisis.
Just think for a moment about that middle-class or lower-middle-class person whose life savings are kept in the bank. When they go to the market, the fire of inflation burns their hands. While ordinary people are struggling to survive, those who embezzle thousands of crores of takas receive special legal privileges like loan rescheduling or interest waivers. This injustice not only weakens the economic structure but also creates extreme frustration, anger, and a crisis of confidence in the state system among the people. When thousands of youth in the country are wandering around carrying the burden of unemployment after completing higher education, if this huge amount of stuck or laundered loan money had been invested in productive sectors, it could have generated employment for millions of youth.
It is natural to ask, why can't this tyranny be stopped? When seeking the answer to this question, the naked reality of the existing legal provisions and punishments versus their practical application comes to the forefront. It is not that there is an absolute lack of legal frameworks to suppress loan defaulters and money launderers in Bangladesh. Rather, according to the law, the punishment for these crimes is quite severe:
Penal Code, 1860: Embezzling bank money in the name of non-existent institutions or by showing fake documents is basically a clear offense of cheating (Section 420) and criminal breach of trust (Sections 406 and 409). These sections carry provisions for rigorous imprisonment of 7 to 10 years and fines for the offenders.
Money Laundering Prevention Act, 2012: If money is looted from a bank and laundered abroad through hundi or over-invoicing, there is a provision of imprisonment for 4 to 12 years under this act. In addition, the state is empowered to impose a fine of double the laundered amount or at least 10 lakh takas (whichever is higher) and confiscate all movable and immovable properties of the launderer.
Bank Company (Amendment) Act, 2023: In this act, 'Willful Defaulters' have been separately defined and strict punishments have been mandated. Willful defaulters will not be able to become directors of any other bank or financial institution. Disobeying the directives of Bangladesh Bank carries a provision of a fine of up to 50 lakh takas and an additional fine of 1 lakh takas for each day of failure. There is also scope to impose a ban on their foreign travel, vehicle and property registration, and even on receiving state honors.
Artha Rin Adalat Ain (Money Loan Court Act), 2003: According to Section 34 of this Act, after the execution of a decree, if a defaulter fails to repay the loan despite having the capacity or conceals assets, the court can send them to civil imprisonment or jail for a maximum of 6 months.
But where are these strict punishments on the pages of the law actually being applied in reality?
The reality is that the application of law in our country is somewhat like a spider's web; where small, weak insects get caught, but the big fish easily tear through it and escape. If an ordinary farmer fails to repay an agricultural loan, a rope is tied around his waist. Yet, influential people who embezzle thousands of crores of takas slip through the loopholes of the law, bring writ petitions or stay orders from the High Court, and halt the pace of justice for years.
Today, the Artha Rin Adalats (Money Loan Courts) are overwhelmed by the burden of millions of cases. It takes decades to dispose of a single case. Defaulters take full advantage of this prolonged delay to transfer their assets anonymously. On the other hand, the precedents of bringing to justice those bank directors and corrupt officials who abuse their power to approve fake loans under the Penal Code are also very rare. When the law is held captive in the pockets of the influential, that law is nothing but a mockery in the eyes of ordinary people.
A country's economy can never be sustainable if looters are rewarded with legal advantages. To stop this tyranny of loan defaulters, having penal provisions just on paper will not suffice. Special tribunals must be formed to ensure the speedy trial of money laundering and fraud cases. Confiscating the properties of the offenders to compensate the banks is now a demand of the time.
There is an absolute need for radical structural reforms in the banking sector, the establishment of good governance, and the impartial application of the law. If this wound is not healed while there is still time, we will have no opportunity left for accountability to the next generation.
The writer is student of law at Gopalganj Science and Technology University
