Artha Rin Adalat Ain 2003: How Bank Loan Recovery Suits Work in Bangladesh (2026)

Artha Rin Adalat Bangladesh: how bank loan recovery works in 2026

Artha Rin Adalat Bangladesh practice decides how most bank and finance-company loans in default are recovered. The Artha Rin Adalat Ain 2003 gives specialist money loan courts exclusive jurisdiction over recovery suits by financial institutions, makes mediation a compulsory stage, sets deadlines for nearly every step, and makes a borrower pay heavily, in deposits and enhanced interest, for the right to appeal. For a lender it is a powerful recovery machine. For a borrower, guarantor or third-party mortgagor, a missed deadline can cost the factory.

This guide covers the full cycle of an Artha Rin mamla (অর্থ ঋণ মামলা): jurisdiction, the pre-suit sale of collateral under section 12, filing and service, mediation under section 22, execution, auction under section 33, civil detention, certificate cases, deposits for appeals, revisions and writs, the defences that work, lender strategy and the 2025 to 2026 reform debate.

Summary: A financial institution recovering a loan in Bangladesh must sue in the Artha Rin Adalat, usually after first selling or trying to sell its collateral. After the written statement, the court must send the case to mediation for up to 90 days. A decree is enforced through a separate execution case filed within one year, leading to auction, transfer of title to the bank or civil detention. A borrower who appeals must first deposit 50 per cent of the decree, and 75 per cent to seek revision.

Key point: The deposit rules are the pivot of every Artha Rin case. A borrower cannot set aside an ex parte decree without depositing 10 per cent of the decretal amount, cannot appeal without 50 per cent and cannot seek revision without 75 per cent, and a writ that bypasses those deposits and fails attracts interest at 25 per cent a year.

At a glance

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Table of Contents

The Artha Rin Adalat Ain 2003 and why it matters

The Artha Rin Adalat Ain 2003 (Act No. 8 of 2003), dated 10 March 2003, consolidated the law on recovery of loans by financial institutions.[1] It was substantially rewritten by the Artha Rin Adalat (Amendment) Act 2010 (Act No. 16 of 2010), which recast the mediation chapter, the auction rules and the appeal provisions.[2] [3]

The scale is enormous. Bangladesh Bank data reported in December 2025 put pending money loan court cases at 222,341 as of June 2025, involving Tk 407,435 crore. In April to June 2025, lenders filed 14,652 new cases worth Tk 96,904 crore, while courts disposed of 11,944 and banks recovered Tk 2,910 crore.[7] Filing far outpaces recovery, which is why procedural skill matters on both sides of an Artha Rin Adalat Bangladesh dispute.

Financial institutions and loans covered

Only a financial institution defined in section 2 can use the Act: Bangladesh Bank, state-owned and private bank companies, specialised banks such as Bangladesh Krishi Bank, the House Building Finance Corporation, the Investment Corporation of Bangladesh, finance companies and multilateral lenders such as the IFC and the ADB. "Loan" covers advances, overdrafts, bills discounted or purchased, Shariah-based investment, guarantees and letters of credit, with lawful interest, penal interest, profit or rent.[1] Islamic-mode facilities and guarantee pay-outs are therefore recovered in the same courts as conventional loans.

Artha Rin Adalat Bangladesh jurisdiction and pecuniary limits

Exclusive jurisdiction under section 5

Every suit by a financial institution to recover a loan must be filed in, and decided by, the Artha Rin Adalat, and so must a mortgage suit for sale or foreclosure under section 67 of the Transfer of Property Act 1882 and Order XXXIV of the Code of Civil Procedure.[1] There is no pecuniary ceiling at trial level: a Tk 5 lakh SME overdraft and a Tk 500 crore term loan go to the same court. The amount matters later, for the appeal route and for internal approval of settlements.

A decree in a non-foreclosure suit operates as a preliminary foreclosure decree over the mortgaged property. When the property is sold at auction, the decree and sale become final and the borrower loses the right of redemption, notwithstanding the Transfer of Property Act.[1]

The courts and the bar on other forums

Under section 4, the government establishes Artha Rin Adalats by gazette notification, staffed by joint district judges who may not hear other civil or criminal cases; where none exists, the local joint district judge's court acts as one.[1] Dhaka's seven money loan courts alone held 31,309 pending cases involving nearly Tk 200,000 crore at the end of August 2025.[9] Section 20 bars any other court from questioning an Artha Rin proceeding, order or decree except as the Act allows.[1]

The Commercial Court Ordinance 2026, now replaced by the Commercial Courts Act 2026 (Act No. 23 of 2026), defined commercial disputes to exclude matters within the Artha Rin Adalat's jurisdiction.[5] Loan recovery by banks therefore stays in the money loan courts, while wider banking disputes can go to the new commercial courts.

Certificate cases for small state-bank claims

Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and other state-owned financial institutions may instead file certificate cases under the Public Demands Recovery Act 1913 for claims up to Tk 5 lakh, a limit raised from Tk 50,000 in 2004.[1] The certificate officer files a certificate, serves notice, and enforces it by attachment and sale or civil detention; the debtor has 30 days from service to petition denying liability.[4] Certificate cases run through deputy commissioners' offices, and the 2025 fast-track programme for state-bank defaults used them alongside Artha Rin suits.[10]

Before the suit: section 12 sale of collateral

Section 12 is the step lenders most often get wrong. A financial institution holding the borrower's property under a pledge or lien with a right of sale must sell it and credit the proceeds before suing. Where a loan is secured by a mortgage or hypothecation with a power of sale, it may not sue unless it has sold the collateral or tried and failed.[1]

The sale follows the section 33 tender procedure as far as possible, including a notice of at least 15 days in a national Bengali daily. If the borrower refuses to give up possession, the District Magistrate can recover it for the institution or the buyer. The buyer takes title that cannot be challenged, but the borrower may claim compensation for illegality or procedural irregularity.[1]

A lender that skips section 12 does not lose its suit, but section 12(6) requires the court to deduct the collateral's declared value, or a value fixed on the sub-registrar's report, from the claim, with ownership vesting in the institution.[1] For borrowers, a section 12(6) application is often the most valuable early defence.

When the lender must sue

Under section 46, if recovery falls below 10 per cent of the amount due in the first year of the repayment schedule, 15 per cent in two years or 25 per cent in three, the institution must sue within one year after that period. A late suit is not barred, but the court notifies the chief executive and the responsible officer faces disciplinary action.[1]

Artha Rin Adalat procedure: filing a suit step by step

The Artha Rin Adalat procedure is the Code of Civil Procedure modified by the Act, with affidavit evidence and fixed time limits replacing open-ended trial.[1]

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The plaint, parties and service

The institution files a plaint on affidavit with ad valorem court fee. Section 8 requires schedules of principal, interest, penal interest, charges and every payment credited, and of mortgaged or pledged property and title deeds. Third-party mortgagors and guarantors must be joined; the decree runs jointly and severally, but recovery is directed first against the principal debtor, and a third party who pays may take over the decree.[1] Summons goes by bailiff and registered post; if not served within 15 days, the court orders publication in a national Bengali daily, which counts as service.[1]

Written statement and disposal deadlines

The defendant has 40 days from appearance to file a written statement, extendable by 20 days only on prior deposit of costs between Tk 2,000 and Tk 5,000; after that the suit proceeds ex parte. Set-off and counterclaim are barred. Section 17 then requires disposal within 30 days of service where the defendant does not appear, or 90 days from the written statement, each extendable by 30 days.[1] These limits are routinely exceeded, but they frame every adjournment request.

Ex parte decrees and the 10 per cent deposit

Under section 19, a defendant may apply to set aside an ex parte decree within 30 days of the decree or of learning of it, but must deposit 10 per cent of the decretal amount within 15 days. If the deposit is made, the suit is revived; if not, the application is dismissed.[1] In January 2026 the High Court Division held that once both conditions are met, the court must restore the suit and cannot refuse because service was by newspaper publication.[12]

Mediation under section 22 and settlement

The original section 21 and its settlement-conference model were repealed by the 2010 amendment, and section 22 was substituted with a compulsory mediation stage.[2] [3] Once the written statement is filed, the court shall refer the suit to mediation, notwithstanding the ordinary trial procedure.

How Artha Rin mediation works

The parties' lawyers appoint by consent a lawyer not engaged in the case, a retired judge, a retired banker or another suitable person, but not a holder of a profitable post of the Republic. They must name the mediator within 10 days, or the court appoints one. Mediation must finish within 60 days, extendable by 30. Everything said is confidential and inadmissible. A settlement is recorded in writing and the court's order on it is final, with no appeal or revision; if mediation fails, the suit resumes. On settlement, the plaintiff receives a certificate for refund of the entire court fee.[3]

Internal authority under sections 24 and 25

Mediation fails when the officer at the table cannot say yes. Section 24 requires each institution's board to delegate settlement authority by resolution and circular, with copies to the local court, and the court checks that a settlement is within those limits. Under section 25, a settlement where the claim exceeds Tk 5 crore needs approval from the managing director or chief executive.[1]

Settlement remains possible later: before judgment with the court's permission under section 23, during execution under section 38, on appeal or revision under section 44A, and by compromise at any stage under section 45.[1] A reform task force noted that the Act permits mediation only after litigation begins, which limits its reach.[10] See our guide to court-annexed mediation in Bangladesh.

Interest, instalments and the 200 per cent cap

Section 47 caps the total of all claims raised in court at 200 per cent over the principal: on a principal of Tk 100, the claim cannot exceed Tk 300, whatever the contract says. Subject to that cap, section 50(1) stops the court reducing interest lawfully charged up to the suit.[1]

From suit to recovery, section 50(2) fixes simple interest at 12 per cent a year if the borrower does not challenge the decree, 16 per cent if it appeals or seeks revision, and 18 per cent if it goes to the Appellate Division, unless a higher court materially changes the decree. Section 49 lets the court allow four equal instalments within one year, or twelve within three years with the decree-holder's consent; one missed instalment accelerates the whole balance.[1]

Artha Rin Adalat Bangladesh execution case

A decree is not money. The bank must file a separate execution case, an Artha Jari mamla (অর্থজারি মামলা), and this is where recoveries stall. In April 2026, Supreme Court data showed 33,406 execution cases pending, involving about Tk 57,000 crore; 1,108 had been pending for more than a decade.[8]

Execution deadlines under section 28

Notwithstanding the Limitation Act, the execution case must be filed within one year of the decree, a period extended from 180 days in 2010. A later case is time-barred. A second execution case must follow within one year of the previous one's disposal, and none may be filed more than six years after the first.[1] Diarise every decree the day it is passed.

Disposal, stays and third-party claims

Section 37 requires disposal within 90 days, extendable by 60. An appeal or revision does not stay execution automatically under section 31; only an express stay order does.[1] Stays are common: by February 2026 the High Court Division had stayed 4,809 execution cases involving over Tk 13,000 crore.[8] A third party claiming attached property must deposit 10 per cent of the decretal amount as security under section 32; the claim is decided within 30 days, extendable by 30, and the security is forfeited if the claim was brought to delay.[1]

Attaching money owed to the borrower

Section 36 lets the court order anyone owing money to the judgment-debtor, including a bank, post office or insurer, to pay it into court, without production of the passbook or policy. Disobedience attracts a fine equal to the amount.[1]

Auction under section 33 and title to the bank

Section 33, rebuilt in 2010, is where Artha Rin Adalat Bangladesh recoveries against mortgaged property are won or lost. The court invites sealed tenders on at least 15 days' notice in a national Bengali daily, on the court notice board and by local drum beating. Earnest money is 20 per cent for bids up to Tk 10 lakh, 15 per cent up to Tk 50 lakh and 10 per cent above that, and the full price is due within 30, 60 or 90 days for the same bands, extendable by 60 days on the bank's application. A defaulting bidder forfeits the earnest money to the decree-holder.[1]

The decree-holder may object that a bid is abnormally low. If the highest bidder defaults, the second-highest may be invited to buy, and if the property still does not sell, it is re-advertised in two national dailies.[1]

Vesting, possession and shortfall

If no sale results, the property vests in the decree-holder with possession until the decree is satisfied. The decree-holder may instead apply under section 33(7) for ownership: the court issues a certificate that serves as the title document, sent to the sub-registrar for registration with no tax or registration fee. Absent an application, ownership vests automatically after six years.[1]

Before delivering possession, section 33(7B) requires the court to reconfirm that the property was mortgaged by its true owner or attached as the debtor's own. A surplus goes to the debtor; a shortfall can be pursued in a further execution case within the section 28 limits.[1]

Civil detention under section 34

The court may commit the judgment-debtor to civil prison for up to six months, generally after at least one auction has failed to satisfy the decree, unless no auction can be held. For a company or firm, the natural persons constituting it are liable; heirs and persons under 18 cannot be detained. Paying 25 per cent of the unpaid amount in cash and signing a bond for the rest within 90 days secures release. Detention does not discharge the debt, but a debtor who has served a full term cannot be detained again.[1]

Appeals, revisions and writs: deposit requirements

The appeal provisions make a borrower pay before being heard, which shapes Artha Rin Adalat Bangladesh strategy after judgment.

Appeal under section 41

Where the decree exceeds Tk 50 lakh, the appeal lies to the High Court Division within 60 days; otherwise to the District Judge within 30 days. The borrower must deposit 50 per cent of the decretal amount, with the institution or as security with the court, and file proof with the appeal, or it will not be entertained. A 10 per cent section 19 deposit counts towards it. A financial institution appealing deposits nothing. The appeal should be decided within 90 days, plus 30.[1]

Revision and the Appellate Division

Revision against an appellate decree requires a deposit of 75 per cent of the decretal amount, including the 50 per cent already paid, and should be decided within 60 days, plus 30. On granting a borrower leave to appeal, the Appellate Division may order a further deposit under section 43. Interim orders cannot be appealed under section 44; the point is raised in the section 41 appeal.[1]

Writ petitions and the 25 per cent penalty

No deposit is prescribed for a writ, and the writ jurisdiction is heavily used: in 2024, 458 writs were filed to halt auctions and the High Court stayed 179.[9] Section 50(4) answers this: where a defendant who could have appealed by depositing instead files a writ against the decree, and the writ is dismissed, interest runs at 25 per cent a year.[1]

The Appellate Division held in Gazi M Towfic v Agrani Bank (2002) that the statutory appeal excludes Article 102 against money loan court decrees, and in Banesa Bibi v Senior Vice President (2011) that an irregular auction cannot be challenged by writ; the High Court Division held in Mamun-ur-Rashid v Secretary, Ministry of Law (2013) that a writ does not lie against a private bank's section 12 auction.[11] Interlocutory orders are different: in January 2026 the High Court Division entertained a writ against a refusal to restore a suit under section 19, treating it as an interim order.[12] See our guide to writ petitions in Bangladesh.

Defences for borrowers, guarantors and mortgagors

An Artha Rin suit is hard to defeat outright, but claims can often be reduced and assets protected. The defences that work are procedural and arithmetical.

• Interrogate the account against the sanction letter and apply the section 47 cap.
• Use section 12(6) where the bank sued without selling collateral it held with a power of sale.
• Check embezzlement: section 18(1) bars recovery of a loan embezzled by the institution's own staff.
• Attack defective service under section 19, within 30 days and with the 10 per cent deposit.
• Insist on the order of recovery against the principal debtor first if you are a guarantor or mortgagor.
• Watch section 28 limitation in every execution case.
• Protect third-party property through section 33(7B) and section 32.[1]

A borrower cannot counterclaim, and a separate suit cannot be heard alongside or stay the Artha Rin suit.[1] But in June 2026 the High Court Division confirmed that section 20 does not bar an independent damages suit alleging breach of Bangladesh Bank circulars in loan classification and credit reporting, if it does not challenge the Artha Rin proceedings.[14]

The strongest negotiating window is section 22 mediation, before a decree triggers enhanced interest and an appeal requires a 50 per cent deposit. Settlements should cover rescheduling, release of security and guarantors. Where security cheques or guarantees are involved, see our guides to cheque dishonour and bank guarantees in Bangladesh.

Bank loan recovery strategy for lenders

For lenders, Artha Rin Adalat Bangladesh recovery rewards discipline more than aggression.

• Build the file at sanction: registered mortgages with a power of sale, perfected hypothecations and clear guarantees. Our guide to banking regulations in Bangladesh covers the classification rules that frame the decision to sue.
• Run section 12 properly, then sue within the section 46 window, join every guarantor and file the draft advertisement with the plaint.
• Make mediation real: keep the section 24 delegation current and obtain section 25 approval early for claims above Tk 5 crore.
• Execute immediately: file well within one year, object to low bids, take title under section 33(7) where the market is thin, and use section 36 garnishee orders and section 34 detention.[1]

Debt recovery tools extend beyond the suit: cheque dishonour prosecutions, wilful defaulter proceedings under the Bank Company Act and winding up. The courts have drawn a line on travel bans: in January 2026 the High Court Division held that section 57 of the Act, preserving the court's inherent powers, does not allow it to restrict a borrower's travel, a power that lies with the authority acting on Bangladesh Bank's referral under section 27Kha of the Bank Company Act.[13] See our guides to legal notices and winding up a company in Bangladesh.

Rin khelapi mamla and other Bangla terms

A rin khelapi mamla (ঋণখেলাপি মামলা), literally a loan defaulter case, is the colloquial name for an Artha Rin suit against a defaulting borrower. A bank rin mamla or Artha Rin mamla is the suit itself, which section 5 requires to be registered under that name in the Artha Rin Adalat (অর্থ ঋণ আদালত), also called the money loan court.[1] The auction is a nilam (নিলাম). Searches for an "Artha Rin lawyer in Dhaka" or a "bank mamla ainjibi" (ব্যাংক মামলা আইনজীবী) point to the same practice.

Choosing an Artha Rin lawyer in Dhaka

Look for experience in the Dhaka Artha Rin courts and the High Court Division, a system that diarises every statutory deadline, the financial literacy to rebuild a loan account and apply the section 47 cap, settlement skill within sections 24 and 25, and coordination across cheque cases, writs and insolvency. TRW acts for lenders, borrowers, guarantors and third-party owners through our banking and finance litigation practice and restructuring and insolvency practice.

Artha Rin Adalat Bangladesh reform in 2025 and 2026

As at 20 October 2026, the 2003 Act, as amended in 2004 and 2010, remains the governing law. Bangladesh Bank drafted a replacement Artha Rin Adalat Ordinance in 2025 with an appellate court of High Court rank judges, a recovery officer to execute decrees, power to suspend defaulters' national identity cards and passports, and bars on defaulters contesting elections or serving as company directors. In January 2026 the law ministry turned down a new statute and asked the Financial Institutions Division for targeted amendments instead; a nine-member committee drawn from the ministries, the Law Commission, Bangladesh Bank and banks is preparing them.[6]

In September 2025 the interim government identified 100 large lawsuits involving Tk 38,000 crore for fast-tracking.[10] In April 2026 bankers and lawyers renewed calls to remove the separate execution case.[8] Expect amendments aimed at execution and appeals during the new Parliament, and review long-running files once a bill is published.

Next steps in an Artha Rin Adalat Bangladesh matter

The first decisions carry the most weight: whether collateral must be sold first, which deadline runs next, whether a deposit is affordable and whether settlement is realistic. Never let a statutory date pass while negotiations continue. For a clear view of your position, contact TRW.

Frequently asked questions

What is the Artha Rin Adalat in Bangladesh?

It is the money loan court established under the Artha Rin Adalat Ain 2003, with exclusive jurisdiction over suits by banks and other financial institutions to recover loans, including mortgage suits.[1]

Is there a pecuniary limit for an Artha Rin suit?

Not at trial level. Decrees above Tk 50 lakh are appealed to the High Court Division, settlements of claims above Tk 5 crore need chief executive approval, and state-owned lenders may use certificate cases up to Tk 5 lakh.[1]

Must a bank sell the mortgaged property before filing suit?

Where it holds a pledge, lien, or mortgage or hypothecation with a power of sale, yes. If it does not sell or try to sell first, the court deducts the property's value from the claim.[1]

Is mediation compulsory in an Artha Rin case?

Yes. After the written statement, section 22 requires referral to mediation for 60 days, extendable by 30. A mediated settlement is final and the court fee is refunded.[3]

How long does a borrower have to file a written statement?

Forty days from appearance, extendable by 20 days only on prior deposit of costs between Tk 2,000 and Tk 5,000.[1]

How can an ex parte Artha Rin decree be set aside?

Apply under section 19 within 30 days of the decree or of learning of it, and deposit 10 per cent of the decretal amount within 15 days.[1] [12]

How much must a borrower deposit to appeal?

Fifty per cent of the decretal amount to appeal, and 75 per cent in total for revision. Financial institutions are exempt.[1]

What is the time limit for an Artha Rin execution case?

One year from the decree; a further case within one year of the previous one's disposal; and none more than six years after the first.[1]

Can a borrower be detained for an unpaid bank decree?

Yes, for up to six months under section 34, generally after an auction has failed. Paying 25 per cent and signing a bond secures release, and detention does not discharge the debt.[1]

Was the Artha Rin Adalat Ain amended in 2025 or 2026?

Not as at 20 October 2026. A replacement ordinance was turned down in January 2026, and a committee is preparing targeted amendments.[6]