In Bangladesh, banks are increasingly pursuing a dual-track legal strategy against defaulters, a practice critics have termed “double punishment.” While borrowers lose assets through loan recovery courts, they simultaneously face arrest or fines under the country’s cheque dishonour laws. As a result, many individuals are being penalised twice for the same debt, even after their collateral has been seized.
Under this parallel system, banks first file civil suits to recover outstanding loans, where the exact repayment amount is determined. At the same time, they pursue punitive cases based on post-dated or dishonoured cheques. Legal experts warn that without clear judicial guidelines or regulatory intervention, thousands of borrowers risk becoming entangled in this dual legal process.
Lawyer Emran Ahmed Bhuiyan remarked, “It is, in essence, legally audacious. Banks recover the debt through loan courts, yet the same borrower is punished again under cheque dishonour proceedings.”
Cheque Dishonour Cases and Outstanding Loans
| Year | Cases Filed by Banks/NBFIs | Approx. Loan Amount (BDT crore) |
|---|---|---|
| 2024 | 26,000 | 20,000 |
| Jan–Nov 2025 | 29,000 | 24,000 |
| Total Pending | 1,76,000 | 2,44,000 |
Ordinary citizens are not spared. In Narayanganj, businessman Sadikul Islam Jibon took a loan of BDT 7 crore in 2012. In 2015, the bank filed a loan recovery case while simultaneously pursuing 30 post-dated cheque dishonour cases. The loan court ruled in the bank’s favour in 2021, seizing his assets. Yet, in 2022, he received a three-year sentence and a BDT 11 crore repayment order under cheque law.
“Although the loan court ruled, the cheque cases continue. The bank already took my property, and I could not furnish BDT 5.5 crore bail,” Jibon stated. The High Court later stayed the ruling and annulled the cheque cases.
Legal analysts emphasise that small and medium borrowers are most vulnerable, as large borrowers typically issue cheques for convenience rather than security. Between 2024 and 2025, out of 1,728 cheque dishonour cases, 983 were filed by banks, representing nearly BDT 2,000 crore in loans.
High Court interventions have been significant. In the case of Lipu Rahman, a BDT 6.5 crore loan was subject to a BDT 9.74 crore cheque claim; the court suspended and later cancelled the case. Between January and November 2025, 19,406 cases, amounting to approximately BDT 15,000 crore, were stayed.
Regulatory and legal ambiguities remain. While a 2022 High Court ruling specified that cheques cannot be filed solely to recover debt, the appellate division has suspended this directive. Bangladesh Bank has discouraged cheque-taking as security but acknowledges no legal barrier exists to prosecuting dishonoured cheques.
Borrowers in Bangladesh now face the legal equivalent of a squeeze: loss of assets on one hand and potential criminal penalties on the other, trapped in a system where clarity and protection remain elusive.