A roundtable discussion was held at the Bangladesh International Arbitration Centre (BIAC), bringing together key stakeholders, including senior officials from various banks, legal experts, and financial analysts. The discussion centered on the implications of Bangladesh Bank’s BRPD Circular No. 11, which advises all banks to utilize Alternative Dispute Resolution (ADR) methods, specifically with the assistance of BIAC, to recover bad debts.
Mr. Muhammad A. (Rumee) Ali, Vice Chairman of BIAC, delivered the opening remarks, highlighting the importance of the BRPD Circular No. 11, issued on May 12, 2024. The circular encourages banks to seek BIAC’s assistance in recovering non-performing loans (NPLs). He explained that BIAC has its own Mediation Rules 2019 and Arbitration Rules 2019, which establish a time frame of 3 months to 388 days for case resolution. He further emphasized that BIAC has a distinguished panel of arbitrators, including eminent former chief justices, renowned advocates, and jurists from both local and international backgrounds.
Additionally, he introduced BIAC’s pilot initiative, in which BIAC has invited banks to submit an initial 10 cases for resolution through mediation, aiming to demonstrate the effectiveness of ADR in handling bad debts.
Special Guest, Mr. Mohammed Forrukh Rahman, Barrister-at-Law, Advocate, Supreme Court of Bangladesh shared his experiences of resolving cases using ADR within just six months, with many already in the execution stage. He pointed out that under the Arbitration Act 2001; it typically takes 6 months to 1 year to appoint an arbitrator, while BIAC can select an arbitrator within approximately 3 days due to its established panel. Additionally, he noted that mediators appointed by the Money Loan Court in Bangladesh are not certified, whereas BIAC offers a panel of certified mediators. As a result, Mr. Rahman stressed that for efficient and expedited case resolution, BIAC offers unparalleled advantages.
Bank representatives raised concerns about the backlog of cases in the Artha Rin Courts, with some cases pending for over 10 years. They also mentioned that the time frame under Section 22 of the Money Loan Court Act 2003 is often exploited by defaulters to delay proceedings, preventing banks from seeing timely resolution. They noted that, to date, no bank has been able to fully benefit from Section 22’s provisions.
Mr. Shafayat Ullah, Barrister-at-Law, Divisional Head of MTB Group Legal Affairs Division, Mutual Trust Bank PLC moderated the event while Ms. Ummay Habiba Sharmin, Head of Legal, City Bank PLC and Mr. Rafat Ahmed Pavel, Head of Legal Operations, IFIC Bank PLC shared their insights as speakers.