The High Court on Tuesday issued a rule asking authorities to explain in four weeks why and how big loan defaulters could reschedule their loans under special facilities given through a Bangladesh Bank circular issued on July 18.
It also raised a question about curtailing monitoring powers of the central bank.
The HC asked the authorities to explain as to why the clauses 4(2) (3), 5, 6 and 9 of the circular should not be declared illegal.
Secretaries of the Cabinet, Prime Minister's Office (PMO), Finance and Law Ministries, Bangladesh Bank Governor and three other respondents have been asked to comply with the rule.
The HC bench of Justice JBM Hassan and Justice Razik-Al-Jalil passed the order after hearing a writ petition filed in this regard.
Human Rights and Peace for Bangladesh (HRPB), a rights organization, filed the writ petition on August 22 last challenging the clauses of the circular.
Advocate Manzill Murshid appeared in the court hearing on behalf of the petitioners, while Attorney General AM Amin Uddin represented the state.
Manzill Murshid said the new governor of the Bangladesh Bank issued a new circular on July 18 over loan rescheduling, cancelling the earlier circular.
In the new circular, the loan repayment period has been made five years, which was earlier two years. Instead of a 10-30% deposit for rescheduling a loan, a defaulter can deposit only 2.5-4% now. Besides, this circular overrules Bangladesh Bank's authority in rescheduling the loans, he said.
He added: "In case of receiving a new loan, now 2.5% has to be deposited instead of the previous minimum amount of 15%. Depositors may face disaster if these rules continue."