The High Court (HC) on Monday ordered the closure of unregistered microfinance institutions and cooperatives across the country.
The HC bench of Justice Abu Taher Md Saifur Rahman and Justice Zakir Hossain passed the order.
The court also directed Bangladesh Bank to form a special committee to investigate the activities of unauthorised financial institutions and micro-lenders.
The central bank was ordered to close down organisations found unauthorised or unlicensed during the investigation with immediate effect and to take legal action against them.
Besides, the microcredit regulatory authority has been asked to provide a list of local moneylenders who lend at high-interest rates in rural areas across the country.
The report has to be submitted within 45 days in regards to the aforementioned directives.
Barrister Syed Sayedul Haque Suman stood for the petition while Deputy Attorney General Noor Us Sadiq represented the state.
Earlier, the High Court fixed 27 September for the order after hearing on this matter.
On 7 September, a lawyer filed a writ petition with the High Court seeking its directives for the closure of unregistered high-interest private lending.
In the writ petition, 136 persons including the finance secretary, home secretary, law secretary, Bangladesh Bank governor, Inspector General of Police, deputy commissioners and superintendents of police in 64 districts, have been made respondents.
Barrister Sumon, who moved the petition in the public interest, said high-interest private lending is going on under the guise of cooperative societies in every village of the country. Cooperative societies are authorised to lend, but not the private lender, that is illegal, he said.
“Ordinary people have become hostages to these private lenders. The amount of interest they collect on a weekly and monthly basis is skyrocketing. The interest per week for Tk10,000 is Tk500-600 and in some cases, it rises to Tk1,000. They collect up to Tk2,000-2,500 in interest per month,” he added.
He said many families have become destitute bearing the burden of high interest on loans taken from unregistered cooperative societies.
In many cases, private lenders are carrying on before the very eyes of the administration.
“So I have filed a writ petition with the High Court seeking directives to close all unauthorised lending businesses across the country,” he added.
