Government incentives not available unless lawsuits withdrawn: Bangladesh Bank

Bangladesh Bank has directed that borrowers must withdraw any lawsuits or writ petitions filed against the government, the central bank or the relevant bank in order to be eligible for government incentives or policy support.

The directive was issued recently in a letter sent to the chief executives of all scheduled banks in the country.

The letter, signed by Bangladesh Bank Director Gazi Md Mahfuzul Islam, stated that no application from a borrower will be considered unless the lawsuits are withdrawn first.

The letter noted that various government incentives and policy support are being provided to borrowers in sectors including the revival of closed export-oriented factories, agriculture and CMSMEs through banks. However, it has been observed that some borrowers are availing these benefits while simultaneously pursuing writ petitions and other legal cases against the government, Bangladesh Bank and the concerned banks.

In this context, to reduce the backlog of banking sector cases, the directive requires that before disbursing any incentive package or other policy support, it must be ensured that the applicant has withdrawn all cases filed against the government, Bangladesh Bank and the concerned bank.

Additionally, the applicant must submit an affidavit along with a list of withdrawn cases, stating that no cases or writ petitions against the government, Bangladesh Bank or the concerned bank remain pending.

Bangladesh Bank has said the directive will take effect immediately.