Fingerprint verification mandatory for loan guarantors: BB

Staff Reporter :
The central bank has directed the banks to ensure the verification of fingerprints from loan guarantors as a measure to curb irregularities and fraudulent activities in the banking sector.

A number of writ petitions have been filed to the courts in recent times, wherein borrowers and loan guarantors claim to not have endorsed the loan and guarantee agreements, according to a Bangladesh Bank circular issued on Wednesday (2 August).

Consequently, this directive has been issued to mitigate potential legal entanglements in the process of debt recovery, it said.

The circular also mentioned that bank officials should verbally communicate the loan’s purpose and the contents of the documents to the borrower, guarantor, and any relevant third party or group involved.

Furthermore, it emphasizes the necessity to validate and confirm the thumbprints accompanying the signatures on the documents and cross-reference them with the data stored in the national identity card database.

Disposing an appeal, the court ruled in January this year that guarantors cannot stop the bidding process by filing writ petitions. The full verdict released by the Supreme Court recently made it clear that, under the Money Loan Court Act, there is no bar on banks selling out guarantors’ properties to adjust their unpaid loans.

Bankers have highlighted instances where customers, in collaboration with bank officials, fraudulently secure loans by forging the signature of the guarantor. The directives issued by the central bank are poised to play a crucial role in curbing such fraudulent activities, they said.