The High Court (HC) yesterday issued a rule asking the government to explain in four weeks why the circular issued by Bangladesh Bank fixing 9 per cent interest rate on loans should not be declared illegal. In response to a writ petition, the HC bench comprising Justice Abu Taher Md Saifur Rahman and Justice Md Zakir Hossain issued the rule. Three people, including the finance secretary and Bangladesh Bank governor have been asked to reply to the rule within four weeks.

Supreme Court lawyer Barrister Sayedul Haque Suman filed the writ petition on March 1 with the related branch of the HC on behalf of a Law student Mahfuzur Rahman. The petitioner challenged the legality of a circular issued by Bangladesh Bank fixing 9 per cent loan interest scheduled to be effective from April 1.

Barrister Suman said Bangladesh Bank issued a circular on February 24 announcing that no loan would cost more than 9 per cent interest. But the circular does not have any word about depositors. On January 1, Finance Minister AHM Mustafa Kamal said country’s banks will follow the single-digit interest rate – highest 6 per cent for deposit and maximum 9 per cent for all lending except for credit cards starting from April 1.