Banks are increasingly pursuing defaulting borrowers through a dual-track legal strategy that critics argue amounts to double punishment: seizing assets via loan recovery courts while simultaneously seeking imprisonment or heavy fines under cheque dishonour proceedings.
Under this parallel approach, banks initiate civil cases in Money Loan Courts to recover outstanding loans, while also lodging criminal cases under the Negotiable Instruments Act, citing post-dated or blank cheques taken as additional security. The result: borrowers frequently lose mortgaged property yet continue to face criminal prosecution for the same debt.
Legal experts warn that, without regulatory intervention or clear judicial guidelines, thousands of borrowers remain exposed to overlapping proceedings, as cheque dishonour cases accumulate nationwide.
“This is unquestionably an abuse of the law,” said Advocate Emran Ahmed Bhuiyan, a specialist in bank and company law. “Banks recover dues through loan court verdicts, yet the same borrowers are jailed or fined again under cheque dishonour cases.”
Mounting Cases and Growing Pressure
Supreme Court data indicate that, as of 30 November 2025, 324,804 cheque dishonour cases—involving nearly Tk450,000 crore—were pending nationwide. Of these, around 176,000 cases related to Tk244,000 crore were filed by banks and non-banking financial institutions (NBFIs) to recover defaulted loans.
| Year | Cheque Dishonour Cases Filed by Banks/NBFIs | Loan Amount (Tk crore) |
|---|---|---|
| 2024 | 26,000 | 20,000 (approx.) |
| Jan–Nov 2025 | 29,000 | 24,000 (approx.) |
| Total Pending | 176,000 | 244,000 |
The human cost of this dual legal approach is evident in cases such as Sadiqul Islam Jibon, a businessman from Narayanganj. In March 2012, Jibon borrowed Tk7 crore from Sonali Bank. Following default, the bank filed a loan recovery case in 2015 while simultaneously lodging a cheque dishonour case based on 30 post-dated blank cheques.
Although the loan court ruled in the bank’s favour in 2021, Jibon’s property—his four-storey house and 30 kathas of land—was seized. Yet in February 2022, the cheque dishonour case led to three years’ imprisonment and a Tk11 crore repayment order, requiring him to deposit Tk5.5 crore for bail—an impossible task after losing his assets.
“Even after the loan court verdict, the cheque case continued,” Jibon said. “The bank had already taken my property. I had no way to pay Tk5.5 crore.”
High Court intervention eventually suspended the verdict and quashed the cheque case. Jibon also alleges undervaluation of assets: the property was taken at its 2012 valuation of Tk8 crore, though by 2022 its market value should have been at least Tk5 crore higher.
Small and Medium Borrowers at Greater Risk
Advocate Bhuiyan highlighted that small and medium borrowers are disproportionately affected. “Banks often require both mortgaged property and blank cheques from smaller borrowers, while large loan defaults rarely involve cheque securities. This reflects a clear double standard.”
Between January 2024 and November 2025, 1,728 verdicts were delivered in cheque dishonour cases, 983 filed by banks for defaulted loans totalling nearly Tk2,000 crore. In all these instances, borrowers also had pending loan recovery cases, with banks often already taking possession of mortgaged assets.
Former Bangladesh Bank deputy governor Muhammad A. (Rumee) Ali warned that cheque-based litigation is placing mounting pressure on borrowers, banks, and courts alike. “A coordinated and consistent legal framework for loan recovery is urgently needed,” he said.
High Court Interventions
Recent interventions illustrate the judiciary’s efforts to curb abuse. Businessman Lipu Rahman’s Tk6.5 crore loan default led to a cheque dishonour case for Tk9.74 crore. The High Court stayed proceedings and later quashed the case. Between January and November 2025, the High Court stayed 19,406 cheque dishonour cases involving nearly Tk15,000 crore. In 2024, it stayed 26,000 cases worth roughly Tk19,000 crore.
Regulatory and Legal Uncertainty
In November 2022, the High Court ruled that banks could not file cheque dishonour cases solely to recover loans, mandated loan insurance, and urged Bangladesh Bank to issue guidelines. However, the Appellate Division stayed this ruling, leaving legal ambiguities unresolved.
Bangladesh Bank emphasises that while taking cheques as loan security is discouraged, there is currently no legal bar on filing cases upon dishonour. “Any further action depends on the outcome of the appeal,” said spokesperson Arif Hossain Khan.
As cases continue to pile up, borrowers remain caught in a precarious legal limbo, facing the twin pressures of asset loss and potential criminal liability.