HC seeks explanation over 9 pc interest on loans

The High Court on Tuesday issued a rule asking the government to explain as to why the circular issued by Bangladesh Bank fixing 9 percent interest on all loans except credit card should not be declared illegal.

The HC bench of Justice Abu Taher Md Saifur Rahman and Justice Md Zakir Hossain issued the rule following a writ petition filed by a law student, reports UNB.

Finance secretary, Bangladesh Bank Governor and another person were made respondents to the rule which is returnable in four weeks.

Supreme Court lawyer Barrister Sayedul Haque Suman stood for the petitioner.

On March 1, Law student Mahfuzur Rahman filed a writ petition with the High Court challenging a Bangladesh Bank circular that fixed 9 percent interest on all loans except credit card.

The HC bench of Justice Tariq ul Hakim and Justice Md Iqbal Kabir on Monday refused to hear the petition saying the HC bench has no jurisdiction to hear the petition.

Barrister Suman said Bangladesh Bank issued a circular on Feb 24 announcing that no loan would cost more than 9 percent interest. The circular does not have any word about depositors.

He said they challenged the legality of the circular and sought an interim order on its effectiveness.

Bangladesh Bank has recently issued a circular fixing single-digit interest rate from April 1.

On January 1, Finance Minister AHM Mustafa Kamal said country’s banks will follow the single-digit interest rate-- highest 6 percent for deposit and maximum 9 percent for lending - from April 1.