HC asks why Grameen Bank's microcredit interest rates should not be reduced
A bench led by Justice Khizir Ahmed Chowdhury passed the order today (18 May) after a preliminary hearing of a public interest litigation.
The High Court (HC) today (18 May) issued a rule asking the authorities concerned to explain why directives should not be given to reduce the interest rates charged by Grameen Bank on microcredit loans to borrowers.
The bench of Justice Khizir Ahmed Choudhury and Justice Md Ziaul Haque also ordered the authorities to reply to the rule within four weeks, after hearing a public interest litigation.
While hearing the litigation, the court described the interest rates charged by the bank as excessively high compared with those charged by commercial banks.
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Bangladesh Bank governor, secretary to the finance ministry, managing director of Grameen Bank, and former managing director and current adviser of the bank, Muhammad Yunus have been respondents to the rule.
Senior lawyer Masood R Sobhan filed the litigation and argued the case himself before the court.
The lawyer in his argument alleged that the bank was charging around 20% interest, an increase by 11% compared to commercial banks.
Many borrowers remained trapped in debt for years despite taking small loans ranging between Tk15,000 and Tk25,000, he said, adding that the heavy interest burden was causing psychological distress among borrowers.
Earlier, a writ petition had been filed seeking alignment of Grameen Bank's microcredit interest rate with that of commercial banks.
