The government will amend the money loan court law, making Alternative Dispute Resolution (ADR) mandatory to reduce the huge backlog of cases through out-of-court settlement, said finance ministry officials.

The move will ensure quick recovery of thousands of crores of taka now stuck in lengthy court procedures.

According to Bangladesh Bank (BB) statistics, the number of cases pending with the Artha Rin Adalat (money loan court) was 36,772 until December 31, 2009,

while the amount claimed by different banks was Tk22,024 crore.

The law ministry, after consulting the finance ministry and the central bank, has prepared a draft of the amendment to the act. The draft says parties concerned will have to go for the ADR before filing case with the Artha Rin Adalat. Otherwise, the court will not accept any case.

ABB high official said there are several cases pending with the court, which could not be disposed of in the last 15 years - - both the bank and borrower wasted money and time. So, the provision for ADR before filing any case is going to be made mandatory, said the official.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), has submitted to the law ministry suggestions about amendments to the money loan court act.

The country's apex trade body also recommended going for the ADR before filing case with the Artha Rin Adalat. The FBCCI recommendation said if the ADR is arranged after filing the case, the bank will influence the dispute resolution process where the borrower’s interest will not be protected.

BB officials said a good number of loan cases involving small borrowers were disposed of through the Artha Rin Adalat and the amount claimed was recovered. Even after filing case, the money claimed was realised through out-of-court settlement.

But, in case of big defaulters, money claimed by the banks could not be recovered even after filing cases many years back.

According to BB statistics, the highest number of cases pending with the money loan court is of state-owned banks. Of the total 36,772 pending cases, the number of state banks' cases is 21,606. The amount claimed by the banks is Tk 11,490 crore.

The number of cases of private commercial banks is 7,935 and the amount claimed is Tk8,479 crore.

Foreign commercial banks have 87 cases of Tk 148 crore, while the number of cases of specialised banks is 7,144 and the amount claimed isTk 1,906 crore.

After the establishment of the Artha Rin Adalat, a total of 108,840 cases have been filed with the court, with the amount claimed being Tk 31,814 crore. Of the total cases filed, 72,068 have been settled andTk 5,081 crore was recovered, whereas the amount claimed by the banks wasTk9,818 crore.