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এক নজরে দেওয়ানী কার্যবিধি, ১৯০৮

  • Act No: 5
  • Bill Pass: ২১ শে মার্চ, ১৯০৮
  • Effective: ১লা জানু, ১৯০৯
  • সর্বপ্রথম দেওয়ানী কার্যবিধি আইনে পরিনত হয়, ১৮৫৯ সালে
  • দেওয়ানী কার্যবিধি একটি পদ্ধতিগত আইন। (Procedural / Adjective Law)
  • দেওয়ানী কার্যবিধিকে দুটি ভাগে ভাগ করা যায় – ধারা এবং তফসীল
  • মোট ধারা: ১৫৮টি। কার্যকর আছে ১৩৮ টি
  • মোট তফসীল আছে পাঁচটি
  • ১ম তফসীলে ৫১ টি অর্ডার আছে। অর্ডার গুলোতে একাধিক বিধি রয়েছে
  • ধারা এবং বিধির মধ্যে কোন পার্থক্য দেখা দিলে ধারা প্রাধান্য পাবে
  • ধারা গুলো সংশোধন করতে পারে জাতীয় সংসদ
  • সুপ্রীম কোর্টের বিধি প্রনয়ন, সংশোধন এবং সংযোজনের ক্ষমতা রয়েছে
  • দেওয়ানী কার্যবিধিকে এ্যক্ট অব পার্লামেন্ট বলা হয় কিনা? – হ্যা, এটা এ্যক্ট অব পার্লামেন্ট। কারন এটা parliament এর ৫ নং আইন
  • কোড এর বাংলা হল সংহিতা (Collection of Rules)



The constitutional laws of the United Kingdom include documents of many hundreds years old and they are still being added to in the present day. The development of a constitution arose from conflicts of authority between kings, popes, barons and common people. The first events in this development were in England.’

Before the Norman Conquest

The Kingdom of England was formed in the mid 9th Century and what is now recognized as being England came about in 927 when the last of the Heptarchy kingdoms fell under the rule of the English King. Until 1066 England was ruled by monarchs that were elected by the witan. There were various elements of democracy at a local level too. This ended with the Norman Conquest.

The Norman Conquest

King Harold was the last Anglo-Saxon king. From William I onwards the rulers of England have all descended from a variety of foreign nationalities. The Normans brought in absolutist monarchy. William ruled for 21 years and was succeeded by his son William II. There was friction and conflict between the three sons of William and the youngest, Henry, attempted a coup in 1091. He failed at that time but eventually succeeded to the throne in 1100.

Henry I

Henry I (c. 1068 – December 1, 1135) was king from 1100 to 1135. When he ascended to the throne he granted the Charter of Liberties This document is not a Bill of Rights but a series of decrees and assurances. Probably the most important statement in the charter is at the beginning, where the king admits “that by the mercy of God and

the common counsel of the barons of the whole kingdom of England I have been crowned king of said kingdom”. This represents a step away from absolutism and a step toward constitutionalism. The king had recognized that the right to rule came not only from God but also from the common counsel of the barons.

From this point onward, and more especially between the reigns of King John and Charles II, the power structure in England evolved from an essentially absolutist model to an essentially constitutional one.

The Plantagenates

King John was King of England from 1199 to 1216. He was the youngest brother of Richard I. His reign was fraught with conflicts. There was conflict between England and France, between England and the Pope and between the King and the barons.

Eventually the barons forced John to sign the Magna Carta, often looked upon as the first truly significant document in a long succession of documents over the centuries up to the present day which collectively constitute the legal sovereignty of the land now known as the United Kingdom. The constitution of this sovereignty is thus distributed across many historical precedents rather than written in one piece.

Henry III succeeded his father John. Henry was only nine years of age when he became king and so the country was ruled by regents until Henry reached the age of 20. Under pressure from the barons, led by Simon de Montfort, 6th Earl of Leicester, Henry had to accept the existence of the first English Parliament. In the next century, in the reign of Richard II there was an uprising, the Peasants’ Revolt (1381). The revolt came very, very close getting their demands granted by the king but at the end the protestors were tricked out of it all. The revolt remains as an important moment in history, but failed to contribute to the written body of the constitution.

The Historical Development of Banking Business



A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets.

Origin of the word Bank:

As early as 2000 B.C. Babylonians had developed a system of banks. According to some economists— the Word bank has been derived from the German word “BANC” which means in joint stock firm. Others says that —derived from an Italian word “BANCO” which means heap or mound. Some people also believed that the Word bank has derived from the word “BANQUE” which means Bank in English.

— The bank of Venice established in 1157 supposed to be the most ancient bank.

Definition of Bank By Different Authors:

Crowder says— a bank is a dealer in his own and others.

John Harry says—  Bank is a economic institution whose main aim is to earn profit through exchange of money and credit instrument.

Historical development of Banking business:

The bank of Venice founded in Italy in 1157 was the first public banking institution. Originally it was not a bank in the modern sense.

 The bank of Amsterdam was established in 1609. lt was one of the greatest Bank of the 17th century. Most of European banks now in existence were formed on the model of the bank of Amsterdam.

 The goldsmith mainly functioned in England of 17th century. They used to received gold and silver for safe custody and receipt issued by them.

The bank of England was established in 1694 in England. But the development of modern commercial banking institution was started only when banking act of 1833 was passed.

In 19th century that the modern joint stock commercial banking system developed in most of the leading countries of the world.

After the partition of British India in 1947 the Pakistan established the State Bank of Pakistan in 1st July 1948.

After the emergence of Bangladesh in 1971 the Bangladesh Bank was established in 1972 which is the successor Bank of the State bank of Pakistan.

Evaluation :

Now-a- days the banking institutions become an important and the part of the life of people. There are various views about the origin of the word bank. One view is that it was derived from an Italian word “BANCO”. Another is German word “BANC”. So it has not so far been decided to how the word bank originated.

Conclusion :

In simple words the bank is a financial institution, and its main two works are to deposit and lending money. But according to Section: 7 of the banking Companies Act 1991 it has many works to do without these. But the origin of the word bank does not ensured by the authors.


give Direction & remove a Director

Section 45 power of Bangladesh bank to give direction: The direction given by Bangladesh bank will be bound to Banking Company. In the following cases BD bank may give direction,

  1. in the public interest, or
    b) to provide for the improvement of the monetary policy or banking policy, or
    c) to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or
    d) to secure the proper management of any banking company

Section 46: Power of Bangladesh bank to remove a director:

Where the Bangladesh Bank is satisfied that it is necessary to remove a chairman or director or principal executive officer, by whatever name he be called, of a banking company in order to prevent its affairs being conducted in a manner prejudicial to the interests of the banking company or its depositors or to secure in the public interest the proper management of the banking company, it may, after committing its reasons to writing, issue direction that such chairman, director or principal executive officer be removed from his office.

Section 47: Power of BD Bank to dismiss the board of Director:

if BD Bank is satisfied Bangladesh bank remove or dismiss board of director.

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Functions of a Bank Company



Section 7-Business of Banking Companies

(1) In addition to the business of banking, a banking company may engage in all or any of the following forms of business, namely:-

a) The borrowing, raising or taking up of money;

b) The lending or advancing of money either upon or without security;

c) The granting and issuing of letters of credit, traveller’s checks, and circular notes; the receiving of all kinds of bonds or other valuables on deposit or for safe custody or otherwise;

d) Providing vaults for the safety of the deposits;

e) Collecting and transmitting of money against securities

Section 9-Prohibition of certain forms of trading

 No banking company shall directly or indirectly deal in the buying, selling or bartering of goods, except in connection with the realisation of security given to or held by it, or engage in any trade or buy, sell or barter goods for others otherwise than in connection with bills of exchange received for collection or negotiation or with such of its business as is approved under section 7.

Section 13-Minimum paid up capital and reserves

(1) Unless it has paid-up capital and reserves of such aggregate value as is required by this section

a) no banking company in existence on the commencement of this Act shall, after the expiry of two years from such commencement, if it is incorporated in Bangladesh and of six months, if it is incorporated outside Bangladesh, carry on business in Bangladesh; and
b) no other banking company, except the banking companies mentioned in clause a), shall commence its business after the commencement of this Act:
Provided that the Bangladesh Bank may, if it thinks fit in any particular case, extend the period referred to in this sub-section by a further period not exceeding one year in the case of banking companies incorporated in Bangladesh and six months in the case of banking companies incorporated outside Bangladesh.

Section 14(A)-The shares of a bank shall not be concentrated on any person,company or membres of a join familly, no company or members alone jointly or both more than 10% of the shares of a bank.

Section 14(AA) Significant Shareholder -Holding of more than 5% share

Section 15-Election of new directors

  • The Bangladesh Bank may, by order, require any banking company except new and special banks to call a general meeting of the company within two months from the date of the order or within such further time as the order may allow in this behalf, to elect in accordance with the provisions of this ordinance new directors.
    (2) Every director elected under subsection (1) shall hold office until the date up to which his predecessor would have held office, if the election had not been held.
    (3) Any election duly held under this section shall not be called in question in any court.
    (4) The Bangladesh Bank may, by general order, make provisions to the effect that no banking company except new and special banks shall appoint its managing directors or chief executive officers, whatever be the name of the office, without the previous approval of the Bangladesh Bank and no managing director or chief executive officer appointed in this way shall be removed from his office, acquitted or dismissed without the previous approval of the Bangladesh Bank.

Section 15AA- The Highest tenure of the director of a bank company shall be consecutive term of 9years.


Section 17 and 18 deals with vacation of the director office and certain benefit of the director

Section -17: Vacation of the office of Director.
a) If any director of a banking company fails to repay/adjust bank’s loans in time then the concerned banking company may serve notice to the defaulting director through the Bangladesh Bank for full adjustment of the defaulted bank’s loans within a specific period. If such failure of repayment continues for a period of two months even after Bangladesh Bank’s Notice, the post of director shall be fallen vacant with the expiry of the period cited in the Notice.
b) Any person receiving a Notice from concerned bank through Bangladesh Bank may explain his position to the Bangladesh Bank within thirty one days from the date of receipt of such notice with a copy of the explanation to the concerned banking company. The Bangladesh Bank shall give reply of the explanation within 15 days from the date of receipt of the explanation and the decision of the Bangladesh Bank in this regard shall be final.
Section -18: Certain benefits of the directors
any director of any banking company shall not accept pecuniary benefit other than honorarium for attending the meeting of the Bank’s Board of Directors. The amount of honorarium may be determined by the Board of Directors unanimously.

Section 19, 22, 27, 28 and 32 deals with certain restriction:

Section -19: Restriction on commission, brokerage, discount etc.
No banking company shall pay out directly or indirectly as commission, brokerage, discount or remuneration by any means in respect of any share issued by it, any amount not exceeding two and one-half percent of the paid-up capital of the said shares.
Section -22: Restrictions regarding payment of dividend
a) No banking company shall pay any dividend on its shares if all its capitalized expenses and other expenses have not been completely written off; or
b) If it fails maintain paid-up capital and reserve fund as per requirements of section – 13.
c) If there is provision shortfall.
Section -27: Restrictions on loans and advances, no Banking company shall
a) make any loans or advances against the security of its own shares
b) grant unsecured loans & advances

Section – 28: Restriction concerning to remission of debts

    According to this section without the permission of Bangladesh bank no banking company can remit any debts of its director. Here director means (family and any dependents of him)

Section -32: Open a branch in a new place of business
No banking company shall open a new branch in a new place or change the location of an existing branch without obtaining prior permission of Bangladesh Bank.

Section –27 Ka Ka: List of Defaulting Borrowers
The Banking companies is allowed to send the list of defaulting borrowers to the Bangladesh Bank from time to time.

Section – 29: Power of Bangladesh Bank to control the giving of advance

Bangladesh Bank may give directions to the banking  company regarding the advances

a) the upper limit of the loan to be given;
b) the ratio to be maintained between the total amount of an advance and loans of little amount or of other kind;
c) the purposes for which advances may or may not be given;
d) the upper limit of advances to be given to any banking company or any group of banking companies or person or assembly of persons;
e) the limit of interests on secured advances and advances; and
f) the rate of interest to be charged on advances.
Section -31: License of Banking Companies
No banking company shall carry out banking business in Bangladesh without obtaining a license from Bangladesh Bank.

Public demand recovery and money loan court act


Topic: ( Public demand recovery Act 1913 )


This is an Act to consolidate and amend the law relating to the recovery of public demands in Bengal, whereas it is expedient to consolidate and amend the law relating to the Recovery of public demands in Bengal. According to the Public Demand Recovery Act 1913, Section 3(6) “Public Demand” means any arrear or money mentioned or referred to in Schedule I, and includes any interest which may, by law, be chargeable thereon up to the date on which a certificate is signed.

This Act, 1913 is a self-contained law. It is an amended and consolidated Act. It can also be regarded as an exhaustive and complete code in itself.

 Consolidation, however, has been effected for the purpose of recovery of public demands as defined in Schedule- of this Act. The Public Demands Recovery Act (No-3 of) 1913, provides the speedier and easier procedure in the matter of realization of various kinds of dues, which are basically undisputed in nature such as; fines, fees, rents, rates, land revenue and charges payable to the government, local authorities and court of wards.

Some of the Public Demands falling under Schedule-1:

 1. Money due to government under the Indian Forest Act 2. Recovery of fees under the Elephant Preservation Act 3. Loan for land improvement, interest and costs 4. Income tax 5. Entertainment tax and betting taxes 6. Fees under the Court fees Act 7. Recovery of postal money order paid to a wrong person 8. Fines imposed by the board on persons failing to attend in person when required 9. Fines imposed on properties, farmers etc refusing to attend with accounts before collector.

Nature and Object of this PDR Act, 1913,

There are so many causes for considering PDR Act, 1913 as a self-contained Act; some of those are discussed below:

a) Easy Intelligibility: This Act is easily Intelligible without reference to the provisions of other law or code. Hence, it is considered to be self-contained.

 b) Special, speedier and easier procedure: This Act is a self-contained one, as it provides the special speedier and easier procedure in the matter of realization of various kinds of public demands, which are basically undisputed in nature, payable either to the Collector or any other public authorities.

c) Inapplicability of the CPC: In the case of Sadhu Saran vs. Panch Deo Lal, it was held that provisions of CPC could only be applicable, with regard to the recovery procedures of public demands, only up to the stage of auction sale to an execution proceeding issued to enforce a certificate, not to any later stage.

d) Prescription of procedure of Sale: The Act is a self-contained one, because it provides the procedure to be followed in respect of the matter of conducting sale under this Act.

e) Prescription of procedure of execution: This act is self-contained, as it provides the complete law and complete procedure for execution.

 f) Incorporation of new provisions: This Act is self-contained, as certain new provision, concerning the realization of public demands have been incorporated therein. But, however, Section-36, in the Act (No-3 of) 1913, was inserted providing that no sale shall be void on the ground of mere irregularity in the absence of substantial injury suffered by the certificate-debtor.


1. Determine various types of dues: One of the important objectives of the Public Demand Recovery Act 1913 is to determine various types of dues; the dues are basically undisputed in nature

2. Speedier and easier procedure: One of the important objectives of the Public Demand Recovery Act 1913 is to create a speedier and easier procedure

3. Public demands payable to the government: One of the important objectives of the Public Demand Recovery Act 1913 is to recover public demands payable to the government

 4. Public demands payable to any other person other than the government: One of the important objectives of the Public Demand Recovery Act 1913 is to recover public demands payable to any other person other than the government

 5. Add certain necessary provisions: One of the important objectives of the Public Demand Recovery Act 1913 is to remedy certain anomalies which have come to notice in the administration of the Act and to add certain necessary provisions

6. Self contained and complete: One of the important objectives of the Public Demand Recovery Act 1913 is to consolidate the law and render the Act self contained and complete

7. Prescribe the procedure for sale: One of the important objectives of the Public Demand Recovery Act 1913 is to prescribe the procedure for sale

 8. Prescribe the procedure for execution: One of the important objectives of the Public Demand Recovery Act 1913 is to prescribe the procedure for execution

Fulfillment of the Objectives 1. Determine various types of dues:

The Public Demand Recovery Act 1913 provides the speedier and easier procedure in the matter of determination of various types of dues; the dues are basically undisputed in nature such as:

 a. Fine and fees b. Land revenue c. Rate and charges of payable to the government, local authority or court of wards

2. Speedier and easier procedure: The Public Demand Recovery Act 1913 provides the speedier and easier procedure and it is not bound by the civil procedural code. The provisions of the CPC could only i the recovery procedures of public demands, only up to the stage of auction sale not to any later stage. applicable with regard to

3. Public demands payable to the government: Section 4 of the Public Demand Recovery Act 1913 describes the essential conditions to fulfill by the collector before issuing a certificate when he satisfies that any amount is due to the government, like:

*The certificate must be filed in the prescribed form *Form number 1 is essential to fulfill *Mere subjective satisfaction of the certificate officer is not sufficient, he must be confirmed *The due amount must be expressly and clearly stated in the certificate

Example “I hereby certify that the above mentioned sum of TK.. . is due to the above named.. ….. from the above named..

4. Public demands payable to any other person other than the government: Section 5 & 6 of the Public Demand Recovery Act 1913 describes the procedure to recover and public demand due to a person other than the government

5. The Public Demand Recovery Act, 1895: If there is any dispute between Public Demand Recovery Act 1913 and Public Demand Recovery Act 1985then the Public Demand Recovery Act 1913 will prevail.

 6. Self contained and complete: Public Demand Recovery Act 1913 is a self contained law and complete in nature.

It doesn’t need help of any other provisions in the following cases:  Akubali Hawlader vs Najamali Hawlader, 50 CWN 382 Justice Mukharjee said that: it has not been disputed and can’t be disputed that Public Demand Recovery Act 1913 is a self-contained Act, which is complete by itself. #Kalipada Ray vs Mukunda Lal Ray, 34 CN 131 In this case, it was decided that civil procedure code is self contained law because in it there is a provision that the Decree of a civil court is not binding on minors whose interest could be affected by the decree.

Procedure for Sale

Where any property of the certificate debtor is sold in execution of the debt it is only the right title and interest of the certificate debtor will pass to the purchasers by the sale from the date when the property is sold and not from the time when the sale become absolute (According to the section: 20 of the Public Demand Recovery Act 1913)

 Rule: 46 Before making proclamation, a notice must be served upon the certificate debtor. Notice is mandatory in respect of immoveable property and property moveable exceeding 40 taka in value A notice must contain about the following things:

*Time and place of sale *The property to be sold *The revenue assessed upon the estate or part of the estateThe amount for recovery of which the sale is ordered *Any other things which the certificate debtor considers material for the purchase

Rule: 47 Mode of Proclamation: Proclamation for the sale of immovable property shall be made at some place near such property by beat of drum or other customary mode. Copy fixing: A copy of proclamation for the sale shall be affixed in a conspicuous part of the property and the office of the certificate officer, Publication: Proclamation shall be published in the official gazette or in the newspaper or both and the cost of such publication shall be deemed to be costs of sale. In case of divided property: When the property is divided into lots for the purpose of being sold separately, it shall not necessary to make separate proclamation otherwise it’s not possible to make appropriately

Rule: 47 Time limit in case of moveable property: After the written consent of the Certificate debtor before the expiration of 30 days calculated from the date on which a copy of the sale proclamation has been affixed in a conspicuous part of the property or the office of the certificate officer, whichever is later. Time limit in case of immoveable property: After the written consent of the Certificate debtor before the expiration of 15 days calculated from the date on which a copy of the sale proclamation has been affixed in a conspicuous part of the office of the certificate officer.

Case References: Kalipada Ray vs Mukundalal Ray (34 CWN) Khyarennesa vs Satya Bhanu (AIR 1930

Execution of certificate

Who may execute:

A certificate may be executed by the

 *The original certificate officer

The transferee certificate officer Under section 11 of the Public Demand Recovery Act 1913 Transmission of certificate to another certificate officer for execution:

 The original certificate officer in whose office a certificate is filed may send a copy for execution to any other certificate officer and it will get the same force as the original Under section 12 of the Public Demand Recovery Act 1913

When a certificate can be executed:

A certificate can only be executed after: 1. The expiry of 30 days from the date of service of notice II. The expiry of 30 days from the date of demand notice III. Until a objection petition is heard & determined Exception: If the certificate officer satisfied that the certificate creditor is going to dispose, remove or conceal the property that is liable to attachment. Under section 13 of the Public Demand Recovery Act 1913 Other Important Provisions for Fulfilling the Objectives

Attachment of property: Under section 17 of the Public Demand Recovery Act 1913 we can see that a person who has no other source of income to maintain himself and his family than his house of occupation is exempted from attachment.

Case reference: MI. Bhula vs BisesharAIR 1925 Under section 18 of the Public Demand Recovery Act 1913 payment of any kind contrary to attachment shall be void

Setting aside sale:

 Under section 22 of the Public Demand Recovery Act 1913 the certificate debtor or any other party whose interests are affected by the sale may apply to the certificate officer to set aside the sale within 30m days from the date of sale Under section 23 of the Public Demand Recovery Act 1913 where a party sustains any kind of injury by the sale through non service or irregularity of notice than within 60 days from the date of sale a application can be made for setting aside the sale Under section 23 of the Public Demand Recovery Act 1913 the purchaser has a right to file an application to set aside the sale within 60 days from the date of sale on the ground that the Certificate debtor has no saleable interest in the property Section 23 of the Public Demand Recovery Act 1913 says when the sale becomes absolute. Jurisdiction of the civil court: Section 34 to 37 of the Public Demand Recovery Act 1913 gives the right to a certificate debtor to bring a suit in the civil court to have the certificate cancelled or modified and for any other consequential relief.

Case references: Halimunnessa vs Hamebdra Kumar [PLD 1960 (Dhaka)768] • Tarangini vs Govinda (9 DLR 65) • Tikendrajit vs Mritunjit (AIR 1940 Cal.554) Appeal To the Collector: When the order has been made by: The Assistant collector • The Deputy collector • The certificate officer Time limit 15 days To the Commissioner: When the order has been made by the Collector Time limit 30 days.TIGS maue by The Assistant collector The Deputy collector The certificate officer Time limit 15 days To the Commissioner: When the order has been made by the Collector Time limit 30 days.


So from the above discussion it is very much clear that the main objective of the Public Demand Recovery Act 1913 is to settle and determine various types of dispute relating to debt which are payable to the government or any other person rather than the government. For fulfilling the objectives Public Demand Recovery Act 1913 adapts various types of procedure from issuing a certificate to sale execution of the property and in the end it shall be said that “it has not been disputed and can’t be disputed that Public Demand Recovery Act 1913 is a self-contained Act, which is complete by itself.”




  • Introduction;
  • Definition of Insurance;
  • Nature of insurance;
  • Historical development of insurance in Bangladesh;
  • Insurance Act, 2010;
  • Important features of this Act;
  • New accompaniments by this Act;
  •  Changes brought by this Act;
  • Problems of insurance in Bangladesh;
  • Prospects of insurance in Bangladesh;
  • Present situation of insurance in Bangladesh;
  • Conclusion.


Bangladesh economy holds huge risk in every sector because the country often faces natural disasters like flood, cyclone, draught, and hurricane. There are also other factors like political   strikes,   and economic issues like  inflation,   high   interest rate, tax policy, deregulation, etc. that deepen the  risks for the economy. There are no certainties or guarantees in life. There is no guarantee that the business will not suffer an unexpected loss or damages. So while we cannot protect our interests against all risks, we can option for some insurance.   

However, Bangladesh’s, insurance market is not very large compared to the degree of risk. For a better functioning of the insurance industry and to attain good growth of this sector, it’s   worthwhile   to   know   the   factors   which are responsible   for   low growth   of   the insurance industry   in Bangladesh.

As we have seen the possibility of loss creates uncertainty, which has undesirable economic and psychological effect. When we speak of methods of handling risks we are talking about efforts to reduce uncertainty. While no approach to risk problems is used to exclusions of all others the single most important a widely used alternatively for most families & business is insurance.


Insurance is defined as a contract, which is called a policy, in which an individual or organization receives financial protection and reimbursement of damages from the insurer or the insurance company. At a very basic level, it is some form of protection from any possible financial losses. The basic principle of insurance is that an entity will choose to spend small periodic amounts of money against a possibility of a huge unexpected loss. Basically, all the policyholder poor their risks together. Any loss that they suffer will be paid out of their premiums which they pay.  

Different authors / authorities have defined the term ‘Insurance’ differently. Some of the popular definitions are as follows:

  • Insurance is a co-operative form of distributing a certain risk over a group of persons who are exposed to it. [Ghosh and Agarwal]
  • Insurance is a social device for eliminating or reducing the cost to society of certain types of risk. [Mowbray and Blan Chard]
  • Insurance is a form of contract or agreement under which one party agrees in return for a consideration to pay an agreed amount of money to another party to make good for a loss, damage, or injury to something of value in which the insured has a pecuniary interest as a result of some uncertain events. [Dictionary of Business and Finance]
  • Insurance is a device for the transfer to an insurer certain risks of economic loss that would otherwise come to the insured. [Allen Z][1]


There are three schools of thought, which have defined the nature of Insurance as follows:

  1. Insurance in terms of the relationship between the insured & the insurer – transfer device:

According to this school, Insurance may be defined as the transfer of pure risk from the insured to the insurer. The insured is the person or firm or company confronted by risk and the insurer is a person or firm or company, which specializes in the assumption of risk. The primary business of the insurer is risk assumption for a fee.

  • Technical:

This school of thought defines Insurance in terms of techniques or mechanics it involves. According to Prof Mehr & Cammack, Insurance is a device for reducing risk by combining a sufficient number of exposure units to make their individual losses collectively predictable. The predictable loss is then shared proportionately by all units in the combination. Therefore, it implies both that uncertainty is reduced & losses are shared. Further, it is said that a device will be deemed Insurance if (i) it implies the law of large numbers so that the requirement of future funds to cover losses are predictable with reasonable accuracy. (ii) It provides some definite method for raising these funds by levies against the units covered by the scheme. In short, the essential features of Insurance are the manner in which losses are predicted & shared.

  • Combination:

According to the third school of thought, Prof. Willet defines Insurance as a social device for making accumulations to meet uncertain losses of capital, which is carried out through the transfer of risks of many individuals to one person or to a group of persons. Wherever there is accumulation for uncertain losses, or wherever there is transfer of risk, there is one element of Insurance, only when these are joined with the combination of risk in a group is the Insurance complete. Another way to state this is to say that “Insurance is a transfer of risk with the added features of (i) combination of risks (ii) an estimate of future losses”. Although each of the authors have defined Insurance differently but they are all thinking about virtually the same thing when they use the term Insurance. If we sum up all schools of thought then the Insurance can be well defined as follows:-

“Insurance is a social device which combines the risks of individuals into a group, using funds contributed by members of the group to pay for losses.”

The essence of the Insurance scheme is that it is a-

  1. Social science,
  2. Accumulation of funds,
  3. It involves a group of risks,
  4. Transfer of risk to the whole group.


The British rule ended in the Indian sub-continents in the year 1947 from when Bangladesh (the then East Pakistan) was a part of Pakistan (the then West Pakistan). During that period, there were 49 insurers operating in the East Pakistan with offices in Dhaka and Chittagong; but their reporting was to the principal offices located in the West Pakistan.

Subsequently Bangladesh achieved independence in 1971 from Pakistan. Just after 02 years of independence, abolishing all insurance companies of the country under the provisions of Insurance Corporation Act 1973, the government of Bangladesh has set up two corporations i.e. Sadharan Bima Corporation (SBC) and Jiban Bima Corporation (JBC) to deal with non-life and life Insurances respectively.

Thereafter; Insurance Corporations Act 1973 was amended to allow private insurance companies to operate side by side with these two state-owned corporations, providing direct insurance to the policyholders, and reinsurance to private insurers being functional under the auspices of Insurance (Amendment) Ordinance, 1984.

Besides; 1984 ordinance has compelled private companies to seek 100% reinsurance from corporations, and also reserved the public sector business (approximately accounting for 80% of the then market premium) to be underwritten exclusively by corporations. This limitation creates operational difficulties for private insurers.

Thereafter; for facilitating private companies, the Government modified the insurance business procedures with the introduction of the Insurance Corporations (Amendment) Act 1990, which allows private insurers to underwrite 50% of the public sector business through a national coinsurance scheme, and to reinsure 50% of the re-insurable amount with state-owned reinsurers.

In the March 2008, the supervision of insurance industry has been shifted from Ministry of Commerce to the Ministry of Finance, to which IDRA itself report.

In 2010, Bangladesh Parliament passed two acts for strengthening the regulatory framework for the insurance industry. The new laws, came into effect on 18 March 2010, are Insurance Act 2010, and Insurance Development and Regulatory Authority (IDRA) Act 2010 (Insurance News, 2018). In the year 2018, 78 insurance companies have earned the gross premium amount of BDT 103.84billion equivalent to USD 1.22billion.


Bangladesh‘s insurance industry is set to start a new journey with the passage of two new laws in the parliament recently. The House passed two insurance laws in a bid to further strengthen the regulatory framework and make the industry operationally vibrant. The new laws are Insurance Act 2010 and Insurance Development and Regulatory Authority Act 2010. The government has taken the pragmatic step to boost the insurance sector.

Insurance Development and Regulatory Authority of Bangladesh (IDRA) is the only government body for regulating and developing the insurance sector of Bangladesh since 2010. The Parliament of Bangladesh on 3 March 2010 has passed two insurance laws in a bid to further strengthen the regulatory framework for the insurance industry. The new laws came into effect on 18 March 2010, are the Insurance Act 2010 and IDRA Act 2010. A total of 78 insurance companies have been operating in the country. The companies are to be regulated under comprehensive laws and guidelines and to be supervised by IDRA. The IDRA Act 2010 has paved the way for better regulation of the sector by reducing business risks, and by harmonizing local and international insurance laws for the Economy of Bangladesh. IDRA attempts to protect the interest of insurance policyholders, beneficiaries and ensuring stability of the insurance sector.[2] Two state-owned insurers -Sadharan Bima Corporation (SBC) and Jiban Bima Corporation (JBC) are also regulated by IDRA.


This law is related to the matters of Insurance. The much talked about the Insurance Act 2010 has some notable provisions as follows:

  • Setting up of a Policyholders’ Protection Fund:

In order to make the overall claim settlement procedure smooth and timely, the insurance companies have to set up a special fund named ―Policyholders’ Protection Fund as per the new requirements of the newly passed and being implemented Insurance Act 2010.

  • Greater Capital Requirements for Insurers:

The new Insurance Act 2010 raised the paid-up capital of life and non-life insurance companies to make them financially sound. The minimum paid-up capital of a life insurance company will now rise to Tk. 300 million from Tk. 75 million and for nonlife the capital size will be Tk. 400 million from Tk150 million under Basel-II. For Financial Institutions (FIs,) full implementation of Basel-II has been started in January 01, 2012 (Prudential Guidelines on Capital Adequacy and Market Discipline (CAMD) for Financial Institutions). Now, FIs in Bangladesh are required to maintain Tk. 1 billion or 10% of Total Risk Weighted Assets as capital, whichever is higher.

  • Creation of brokerage houses for insurance policies:

The new Insurance Act 2010[1] said that brokerage houses (Banks, financial institutions or any middleman company/organization) should be created for insurance policies. Under the section 58 (1), none can give money of commission to anybody except the certain agents or brokerage houses in order to launch or expand any insurance business in Bangladesh.  The distribution of the commission must be as follows:

  1. 35% of the premium in the first year.
  2. 10% of the renewed premium in the second year.
  3. 5% of the renewed premium in the 3rd year and on after.
  • Mandatory Solvency Margins for Insurers:

All authorized life assurance companies are closely regulated by the IRA. Regular internal and external audit activity and strict reporting requirements ensure that the companies comply with the regulator‘s safeguards; one of those safeguards is a solvency margin. The solvency margin is the comparison between what a company owns (its assets) and what it owes (it liabilities) and indicates the ratio of assets to debt. Therefore the solvency margin provides a good indicator of the financial stability of that company. The IRA/IDRA, as the regulator, monitors any falls in solvency below a certain percentage.

Each and every insurance company has to keep a mandatory solvency margin following a certain percentage (which has not yet been fixed) and by using a certain formula (which has not yet been established) according to section 43 (1) of the Insurance Act 2010.

  • Allowing foreign investment in the insurance sector:

The Insurance Act 2010 said the sector needs to be managed properly and be strengthened by reducing business risks, and local and international insurance laws need to be harmonized considering the socio-economic aspects of the country and protect the interest of policy-holders and other beneficiaries.

  • Reduction of the number of directors from 20 to 15:

The insurance act bars a director of an insurance company to become director of any other financial institution including banks. Under the Insurance Act 2010, the number of the directors cannot exceed 15, while it was 20 under the Insurance Act 1938.

  • Categorization of Insurance Business:

The section 5 (1) of the Insurance Act 2010 proposed that insurance company to be categorized as life and non-life instead of life and general and it have replaced the Insurance Act 1938. So, from now on the insurance companies in the entire insurance sector in Bangladesh will be categorized as life and non-life insurance companies under the new insurance Act.


The newly passed Insurance Act, 2010 has some notable new additions, which were absent in the previous Insurance Act of 1938. Therefore, the entire insurance industry is facing some new practices while implementing the new act in the insurance business. The new additions by the new Act are as follows:

  • Creation of New Regulatory Authority:

Insurance Regulatory Authority (IRA) will be established for the Insurance sector. There are 62 insurance companies operating in the country and they need to be regulated under comprehensive laws and guidelines and need to be supervised by a strong regulatory authority. The Insurance Act 2010 said the sector needs to be managed properly and be strengthened by reducing business risks, and local and international insurance laws need to be harmonized considering the socio-economic aspect of the country, and to protect the interest of policy holders and stakeholders of the insurance industry in Bangladesh. The New Insurance Act provides for the composition of such Authority, its terms & conditions. The IRA will have the power to: Making regulation for Insurance Industry and delegation of powers, Establishment of the Insurance Regulatory Fund, Establishment of Insurance Advisory Committee, Power to make any future rules or amendments, etc.

The Insurance Development and Regulatory Authority Act 2010 said the authority will comprise a chairman and four members and they will look after the whole sector. The enactment of the law will abolish the department of insurance under the Finance Ministry of Bangladesh.

Premium charged by the companies will be determined by a committee formed by the authorities and it will also investigate any irregularities of the companies, the Act said. To create a vibrant insurance sector, the industry got its recognition from the government and a new Insurance Act 2010 has been passed to replace the old Insurance Act of 1938.

  • Legal Framework for Islamic Insurance:

Islamic Insurance was already in Bangladesh but it was now bought under legal framework by this new Act 2010. Under the section 7 (1) of the Insurance Act 2010, no insurance company is allowed to do both Islamic Insurance business and non-life insurance business together. If any company have both of this business, then according to section 7 (2) of the new Act it has to give up one and can continue any of these two. And the decision has to be informed to the insurance authority within six month of forming the business authority. However, the claim of the previous policy holders shall be settled according to the previous Insurance Act of 1938.

During 1999 & onward many insurance companies have been given license to underwrite Islamic insurance business without having proper laws, rules and regulations to guide them. It is not proper to allow Islamic insurance business without having legal backing and, therefore, this business has been brought under the ambit of new law.


The Insurance Act has not only brought the new additions, but also has brought some eye-catching changes in some significant areas that existed in the previous insurance Act. The changes brought by the Insurance act 2010 are described shortly below–

  • Capital Requirements:

An insurer transacting life insurance business would be required to have a minimum paid-up capital of Tk. 300 million while the minimum paid-up capital for non-life insurer would be Tk. 400 million.

  • Spread of Business in Rural Areas:

Provision has been made to induce insures to undertake such parentage of his business in the rural areas or in social sectors as may be specified by the Authority, This provision would encourage savings among the people in the rural areas and social sectors on the one hand, and provide financial security to the insurer, on the other.

  • Reinsurance Abroad:

The present mandatory provision for reinsurance of general insurance with the state-owned Sadharan Bima Corporation (SBC) has been relaxed. An insurer may reinsure with any other insurer inside or outside Bangladesh.

  • Penalty Under the new Insurance Law:

Maximum penalty for any violation will be Tk. 10 lakh in fine while the minimum fine will be Tk. 50,000. If the violation continues, an additional fine of Tk. 5,000per day will be imposed.

  • Provision for Foreign Investment:

With a view to attracting foreign investment in the insurance sector in Bangladesh, foreign investors would be allowed to hold or subscribe to the share of an insurance company up to a prescribed maximum (the maximum limit has not yet been set).


The following problems of the insurance industry in Bangladesh are identified in the present study:

  1. Lack of Public Faith:  Insurance agents are responsible for creating negative image of insurance to the public. It shrinks the scope of insurance business. Poor public   image is mainly responsible for not expanding   the sector. This opinion is held by 94.80 percent respondents in the study.
  • Lack of Public Awareness:  Mas illiteracy hinders the growth of the insurance sector. A vast majority of people especially in rural areas are left outside the insurance coverage. This mainly results from the look of awareness among the people. This problem is supported by 93.60% in the study. Even a large portion of people in the country have no minimum idea about insurance. People are not aware of the benefits from the insurance policy and a good number of people believe that insurance business is nothing but cheating and they assume that insurance policy is quite unnecessary.
  • Poor Economic Conditions:  Bangladesh is one of the poorest countries in the world and most of the people in this country live under extreme poverty. All of these people fight hard to earn their livelihood. It is quite impossible for them to save some money for future need. Therefore, they are quite unable to give the amount to the insurer which is called premium and regarded as safety or precautionary measure   against   any accident.  This problem is mentioned by74.80% people in the study.
  • Lack   of   Supervision   from the   Government:  Lack   of surveillance   from controlling agency of government encourages many insurance companies to follow some unethical practices like delay in claim settlement, harassment to policy   holders and   showing   fake   financial   statement.   This   is   not   only destroying the reputation of the insurance companies but also creates negative impact in   the   mind of the people   about insurance.  This problem has been mentioned by 80.80% respondents of the study.
  • Lack of Training for the Employees:  Spread of insurance business in Bangladesh failed for lack of proper training of the employees, especially the field employees   of   insurance companies. Still there are not enough training centers to provide proper   training regarding insurance activities for the officials of insurance company. This problem is cited by 81% respondents of the study.


There  are  many  good  signs  for  the  insurance  business  in  Bangladesh.  The factors that can facilitate the insurance business in our country are discussed below:

  1. Large Population:  There is a big opportunity for the insurance companies as the   population of our country is increasing day by day. The growth of population opens greater scope for every kind of insurance business.
  • Higher GDP:  The GDP of our country is increasing which results in the increase of per capita income. With the growth in the income more, people are now willing to take an insurance policy for safeguarding themselves against any danger.
  • Investment Scope:  Bangladesh has large scope of investment in trade, commerce and industry. The insurance fund is now invested in government bonds, ICB   projects, marketable securities, and FDR which are not much profitable. The private insurance companies are realizing this fact. There are opportunities to enhance profit   through effective and efficient money management by employing capable and experienced personnel. There is scope of investment expansion in the areas leasing,   housing, health and moneymaker.
  • Government Aid: Government is the key player of all development. In order to boost the growth of the insurance sector, the government should frame a liberal tax policy, reform the legal structure and set up a strong regulatory body. Since the government   is liable to ensure the safety and security of people, it can obligate the people to take policy in some cases and also attract investors in this sector.
  • Developing New Insurance Products:  In course of   time, there is a great change in climate and atmosphere over the world that adds new pattern of risk in trade and commerce. The insurance should add new products to cover the additional risk and   to meet the new tastes of entrepreneur. There is considerable scope of developing new product and service in insurance sector to cover all sectors of our economy. In our study, some insurance companies are being advancing in product modification and attempt to introduce new products. This action of generating new product and service will considerably expand the demand for insurance products.


In Bangladesh, during the 1970s, government-owned JBC and SBC was the only   provider of life and general insurance   coverage   for individual   and business properties.   During that time insurance products were very few in number and the industry did not take innovative efforts for product development. In the country the first private insurance company was set up in1985. Since then non-government insurers have shown rapid growth in terms of institutional set-up,   policy design and business expansion. When   non-government insurers gradually have gained the foothold   in the country, real competition in the sector has begun.  However,   the insurance industry in Bangladesh is very small compared to its economy and the number   of insurance policyholders is still not increasing satisfactorily (Islam & Mamun, 2005). At present, there are 43  general   (non-life) insurance and 17 life insurance companies are operating  in Bangladesh which  are  inadequate to provide  insurance  services to about 150 million people (BIA,  2000; Ahmed,1977; Siddiqui, Islam and Chowdhury, 1995).

The insurance companies of our country perform a wide range of activities such   as   service designing, preparing contract and policy,   marketing and selling, underwriting,   rating, reinsurance and other services and claim settlement. The two governments   owned insurance companies   i.e. The Shadharan Bima Corporation   and   Jiban   Bima   Corporation get all the government insurance business by virtue of the Insurance Act of Bangladesh. According to the rule, all insurance in the government sector is done through these two nationalized insurance companies, so they enjoy a monopoly. None of the private insurance companies is allowed to offer insurance services to government   organizations. Furthermore, these two corporations are also allowed to underwrite private businesses, and people feel confident about their reliability. So they have not yet felt any strong need to practice marketing properly.

Insurance is a form of risk management, used to hedge against the risk of a contingent loss. It involves the transfer of the risk of potential loss from one entity to another,   in   exchange for a risk premium.  Given this role, the insurance sector fosters financial   stability by enabling economic agents to undertake various transactions with the facility of transfer and dispersion   of risks. As a crucial component of the financial system, life insurance plans are an important source of savings and long-term institutional   investments essential   for the development and   growth of bond markets.  The role   of insurance as a financial intermediary is particularly important in countries like Bangladesh with low levels of financial penetration. Overall   insurance penetration itself is also just 0.9 percent in the country; much lower than the regional average of 2 percent.[9]


The role of insurance in developing our economy is increasing so it is necessary to give importance in this sector for giving protection of the people in general and the society in particular. Insurance Industry is playing a significant role in the economic progress of Bangladesh through its risk sharing operations which motivate investment in many important businesses. The Government has now embarked on a reform program in the insurance sector to promote a vibrant insurance sector in our country. As a first step towards achieving he objective, the Insurance Act, 2010 in replacement of the previous Insurance Act, 1938, and the Insurance Development and Regulatory Authority Act, 2010 also has been passed for establishing a stronger insurance sector in Bangladesh In the era of globalization, domestic market should be well organized while the legal framework should be effective to address the changed circumstances in the business and socio-economic entities.


  1. https://accountlearning.com/history-of-insurance-example-definition-nature-or-characteristics/#History_to_Insurance  
  2. https://indiafreenotes.com/insurance-meaning-and-basic-nature-of-insurance/
  3. https://accountlearning.com/history-of-insurance-example-definition-nature-or-characteristics/#History_to_Insurance
  4. https://bdjls.org/a-comparative-study-on-insurance-act-1938-and-insurance-act-2010/
  5. https://bdjls.org/a-comparative-study-on-insurance-act-1938-and-insurance-act-2010/
  6. https://insurancenews.com.bd/report/314/insurance-sector-in-bangladesh/#:~:text=Present%20position%20of%20insurance%20business,Premiums%20%2F%20Gross%20Domestic%20Product).&text=The%20role%20so%20played%20by%20the%20service%20sector%20is%20burgeoning%20as%20well

[1] https://accountlearning.com/history-of-insurance-example-definition-nature-or-characteristics/#History_to_Insurance

[2] https://indiafreenotes.com/insurance-meaning-and-basic-nature-of-insurance/

[3] https://accountlearning.com/history-of-insurance-example-definition-nature-or-characteristics/#History_to_Insurance

[4] https://bdjls.org/a-comparative-study-on-insurance-act-1938-and-insurance-act-2010/

[5] Ibid:

[6] Ibid:

[7] https://bdjls.org/a-comparative-study-on-insurance-act-1938-and-insurance-act-2010/

[8] Ibid:

[9] https://insurancenews.com.bd/report/314/insurance-sector-in-bangladesh/#:~:text=Present%20position%20of%20insurance%20business,Premiums%20%2F%20Gross%20Domestic%20Product).&text=The%20role%20so%20played%20by%20the%20service%20sector%20is%20burgeoning%20as%20well


Money Loan Court Act 2003


Banks are the customers of the public money. People generally deposit their money to the banks for proper investment and transaction. Therefore, banks lend and invest this money to the borrowers. Thus, the banking transaction goes on. But sometimes the problem arises when some borrowers become defaulters of repayment of the borrowed money and the banks fall in a critical situation. For that reason, a proper legal process is highly required for the recovery of the money. And thinking the matter, the government has enacted a special law in 2003 for the proper and speedy realization of the money from the defaulter borrowers. This special law is called the Money Loan Court Act,2003 (properly known as Artha Rin Adalat Ain).The Money Loan Court Act,2003 enacted specially for the financial institutions to recover the defaulted money from it’s defaulter borrower. 

Objective of this Study:

  • To acquire the theoretical as well as practical knowledge on the law.
  • To be acquainted with the fundamental, essential and relevant provisions, rules, regulations, case laws etc. On the subject.
  • To know the power and functions of this court and also the court process on this Act.
  • To know safeguards for the banks and bankers under this law.

Historical Background:

The overall development of Bangladesh depends on economic development. Since no one in this country has enough capital, financial institutions have to take help. Financial institutions again maintain their existence by bringing money from one or other institution and investing money at some interest to the customers. Although financial institutions can raise funds, they just fail to do so on time and it is not possible to recapitalize. The jurisdiction of the public Demands Act of 1913 is limited and the finance Debt Ordinance of 1989 has been able to deal with this situation. In order to deal with such a situation, the finance Credit Court Act was enacted in 1990 to maintain the existence of the country’s financial institutions and to conti8nue the development work of the country. This law was amended in1990,1992, 1997. Despite such amendments, it was not possible to make the law suitable for the time and need. Therefore, Finance Court Act of 1990 was amended and this Finance Court Act was enacted in 2003.This law plays a vital role in speedy disposal of cases and issuance of decrees.

Concept and Features:

  • Money Loan Court Act, 2003 is primarily legal instrument dealing with bank and non-bank financial institution loan defaulters, which prescribes mechanisms for the banks and financial institutions to get reimbursed.
  • The Act provides for the establishment of a separate court for dealing with money loan cases, which can only be filled by a bank or a non-bank financial institutions.
  • The Money Loan Courts which in 2003 to help expedition resolution of disputes between banks and their clients over loan repayment, are overburdened.
  • There are sixty sections in this Act.
  • This Act plays a vital role in speedy disposal of cases and issuance of decrees.
  • Opportunities have been set aside for settlement of disputes in various cases.
  • This law has provision for Appeal and Revision.
  • The first Financial Court Act was enacted in 1990 and the present act was enacted thirteen years later. There have been many cases in these long thirteen years. All those cases settled according to the law of 1990. Therefore,  although the law of 1990 is invalid, there still a need for pre-2003 cases to be disposed of in accordance with the law of 1990
  • The bank can file a suit against the defaulter borrowers but the borrowers can not file any suit against the banks under this law.

Power and Functions of Money Loan Court, 2003:

Money Loan Court Act, was enacted by the legislature of Bangladesh to address loan recovery process by financial institutions or banks. This court has some power and functions, which mentioned below :

  • Any suit those are relating to recovery of lending by the financial institution shall be filed in Money Loan Court under this Act and disposed of in the said court.
  • The suit for filing under this Act shall be registered as Money Lending Suit.
  • Financial institution, mortgage of immovable property taken against given loan for selling and foreclosure of that property and issue any mortgage suit under the Transfer Property Act and the Code of Civil Procedure, 1908.
  • To have a mortgage suit for foreclosure of a suit.
  • The loan realizable by money loan court be payable to the Government under the PDR, 1913
  • Local jurisdiction shall be determined by the District Judge.
  • Money Loan court having local jurisdiction.
  • The Money Loan Court shall be deemed as a civil court.
  • The inherent powers of the court to pass any complementary order shall not be limited by anything in order to carry out of the purposes of justice.

Problems and Prospects:

Banks are custodians of the public money. People generally deposit their money to the banks for proper investment and transaction. Therefore, banks lend and invest this money to the borrowers. Thus, the banking transaction goes on. But sometimes the problem arises when some borrowers become defaulters of repayment of the borrowed money and the banks fall in a critical situation. According to the Bangladesh Bank statistics a total number of cases were awaiting disposal in the money loan courts across the country until June, 2019. According to the Supreme Court statistics, until June, 2019, at least 21849 cases were awaiting disposal in the money loan courts across the country. There are some problems are given below:

  • Above sources said, a large number of cases have remained pending for many years, mainly due to the weakness of the existing  laws, lack of required number of judges, courtrooms, and complexities in case management.
  • The section -17 of this Act mandates disposal of the cases within a maximum of 120 days, in reality, courts cannot dispose cases within this timeframe.
  • Courts take a much longer time in hearing and disposing petitions of the defendants.
  • The defendants file a writ petition in the High Court Division against any interim order of the lower court. The High Court Division in many cases, by issuing a stay order put off the proceedings of the lower court until disposal of the writ petition.
  • Disposal of a writ petition is a lengthy process. If the order of the writ petition goes against the defendant, then appeals against the order of the writ petition. The case thus keeps travelling from one bench to another, one court to another.
  • The main intention of the defendants is to keep the case pending at the stage of hearing in the lower court and they rake undue advantage of the legal bureaucracy.
  • If they file an appeal against the decree of the lower court, they shall have to deposit 50 percent of the decreed valued to the lower court. That’s why defendants are usually willing to file an appeal against the decree of a lower court.
  • Many cases under the money loan court Act, 2003 take even 8-10 years to settle.
  • Besides, many bank loan defaulters using their political influence manage to delay the legal procedure of the cases filled against them for an indefinite period of time.
  • The number of money loan court is insufficient in comparison with the number of cases.
  • A legal Adviser’s negligence and dishonesty can also contribute to slow disposal 

Prospect :

If we truly get benefits from the laws pertaining to recovery-

  • legal bureaucracy must be handled.
  • To get rid of procedural delay and backblocks of the banks cases, it appears to crucial to form a separate bench in High Court Division of the Supreme Court for speedy disposal of writ petitions filed by the defendants.
  • This bench will only hear and disposal of writ petition and appeals. In this way, writ petition and appeals will be disposed of an accelerated  way and the disposed cases will be increased.
  • On the other hand, section -4 of the money loan court Act,2003 should be made functional  by establishing one or more Money Loan Courts with sufficient number of dedicated judges in each  district for the trial of cases constituted by the banks and financial institutions .
  • Necessary amendments to law may be done so that bank’s CR cases for bounce cheques or any kind of money recovery cases can be lodged and tried with this dedicated court.
  • The loan recovery process must be made functional and the banker, the legal system and the administrative bodies should play their due roles to make it happen. The related law and the legal system has significant role in this process.
  • Making of law doesn’t make any changes, if it’s not applied. In fact, any law in force is toothless if it’s not effectively implemented.
  • The application of law against the defaulters would create examples and thereafter wilful defaulters would think twice. At the same time, corrupt bankers should not be spared by termination or dismissal from the job only, they should be penalised and punished as per the law.
  • But for all the above strategies to work, the government must show stern political commitment and goodwill against wilful defaulters.

Case Laws:

[IFIC Bank Ltd. Others Vs. M/S Beximco Holding Ltd. & others 13 BLT(HCD)23]

Impugned Judgment and decree passed under section -13(1)

Judgment : If there is no specific admission made in the written statement as contemplated in section -9(5) of the Act, the court can’t  come to conclusion as regards the said fact of the case.

[ IFIC Bank Limited Vs. M/S Marinar Fashions Wear Pvt.Ltd. & others 15

BLT(HCD) 425]

Whether on issuance of the certificate of title in favour of the decree holder, the execution case has already been disposed of and the court has got nothing further to do in this respect.

Judgment : Sub section-7 envisages vesting of ownership of the property of the judgment debtor upon the decree holder. The said vesting of ownership includes delivery of possession of property.  Without the delivery of possession, execution cannot be disposed of.


Money loan Court Act, 2003 is primarily legal instrument dealing with bank and non- bank financial institution loan defaulters, which prescribes mechanisms for the banks and financial institutions to get reimbursed. The Act provides for the establishment   of a separate court for dealing with many loan cases, which can only be filed by a bank or an nonbank financial institutions.

The money loan courts which in  2003 to help expeditions resolution of disputes between banks and their clients over loan repayment are overburdened. For that reason, a proper legal process is highly required for the recovery of the money. And thinking the matter, the Government has enacted a special law in 2003 for the proper and speedy realization of the money from the defaulter borrowers.


  1. Bare ACT, Money Loan court  ACT-2003
  2. www. elearning.bdjobs.com
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