Respect for the rule of law is gaining ground in Bangladesh, and that bodes well for the economy as well, as it is an important pre-condition for sustainable economic growth.
This positive trend is exemplified by the recent closure of tannery factories in Hazaribagh and shifting to Savar.
For the last 30 years, the government has been ordering the factories to be closed in Hazaribagh to stop the pollution of water in the Buriganga River.
The Environment Protection Act was passed in 1995 but nothing further has been done about it.
A government agency, BSCIC, was developing the new site for relocating the tannery factories in Savar which required ETPs to stop polluting water in the river nearby.
At last, the order by the Supreme Court to disconnect utilities to tannery factories in Hazaribagh did the work.
There may be some more delays by some of the units to start operations at Savar, but the case is clear that the owners of factories have acted as per the order, and the High Court also waived huge amounts of penalty for not moving out earlier.
We need more such orders from the courts to protect rivers, forests, and hills from grabbing by powerful people who disregard laws and policies
We need more such orders from the courts to protect rivers, forests, and hills from grabbing by powerful people who disregard laws and policies.
There is a need for this kind of judicial activism in the financial sector now, as crony capitalism has wreaked havoc upon it.
A report in that respect was published in the newspaper that the High Court has asked Bangladesh Bank (BB) to submit names of those defaulting borrowers from banks and the amount of bad loans written off in the recent past.
The BB has taken a strong stand against large defaulters threatening to cancel licenses of banks failing to collect defaulting loans.
This needs to be enforced without delay as the trend is upward for bad loans. Last year, the amount of defaulted loans increased by over Tk10,000 crore and the total reached over Tk60,000cr.
It was reported that if the amount of written-off loans were added, the amount may reach Tk100,000cr. On April 18, a national daily published a report on this topic saying that such large borrowers have transferred huge amounts outside the country.
Besides that report, the World Bank also warned of the risk to the economy from the trend of rising loan defaults.
Figures published in a table in the report mentioned the names of four public sector banks. Janata, Rupali, BKB, and RKB topped the list of defaulting loans.
The High Court should take note of the report and order these banks to be merged with other banks.
Or they need to be sold and their management needs to be changed, as they have totally failed to operate with prudence, an essential condition in banking.
M Shamsul Haque is a professor of finance at NUB.