BB frames rules on government agencies seeking debtor information

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A file photo shows the headquarters of Bangladesh Bank in the capital Dhaka. Bangladesh Bank has drafted amendments to the Banking Ordinance of Bangladesh, allowing government agencies, constitutional bodies and regulatory authorities to collect credit information of any debtor from the central bank.— New Age photo

The Bangladesh Bank has drafted amendments to the Banking Ordinance of Bangladesh, allowing government agencies, constitutional bodies and regulatory authorities to collect credit information of any debtor from the central bank.

Now, government agencies and regulators collect credit information from any person or business at the request of the central bank which has no regulatory framework.

The central bank drafted the “Bangladesh Bank (Amendment) Act, 2022” with respect to “Bangladesh Bank Ordinance, 1972”.

The central bank sought public input on the amendments by September 5.

The bill added new clauses (1A) and (1B) to section 45.

According to the new clause (1B), a constitutional body, governmental agency or regulatory authority may, in respect of its official purpose, make a request to the Bank to request from it the required credit information in such manner as the Bank can prescribe.

In accordance with the law in force, the word “Bank” with an initial in capital letter indicates the “Bangladesh Bank”.

“Any person may, in respect of his credit information, as the case may be, make a request to the banking company in such manner as the Bank may prescribe,” the new clause (1A) reads.

The bill also amended the definition of credit information by stating that any information relating to the amounts and nature of loans or advances or borrowings through bonds, debentures, commercial paper and other credit facilities extended by a banking company to any borrower and such other information as Bangladesh Bank may deem necessary.

After receiving a request from the bodies or persons, Bangladesh Bank will, as soon as possible, provide the applicant with the credit information relating to the matters specified in the request, which may be in its possession, according to the draft law.

However, when submitting credit information to the central bank, the banking company should not disclose its name, except in cases where it serves the purposes of constitutional bodies or government agencies, the bill says. .

Any credit information contained in a statement submitted by a banking company under section 44 or provided by Bangladesh Bank to a banking company, constitutional body, government agency or regulatory authority under section 45 shall be treated as confidential and shall not, except for the purposes of Chapter IV (Collection and Provision of Credit Information), be published or otherwise disclosed.

If a banking company fails to comply with the terms of the law, any director or other officer or person who is knowingly a party to the breach shall be liable to a fine of Tk 25 lakh.

Currently, the penalty is Tk 5 lakh.

The bill indicated that the current order needed to be updated in view of the expansion of financial sector activities, the multiplication of total assets, loans and investments and, therefore, the need to put order in the vast area and manage systematically.

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