The managing director of Padma Bank has been directed by the Money Loan Court to provide justification for submitting an 'unlawful' application on behalf of a 'deliberate defaulter'.

Chattogram Money Loan Court Magistrate Mujahidur Rahman issued the order yesterday.

The court has served a show-cause notice to the managing director of Padma Bank for applying for bail and release of property of a wilful defaulter without fulfilling the conditions of the law, according to court documents.

The court also directed Padma Bank Managing Director Tarek Reaz Khan to submit a written reply by May 9.

Court documents revealed that Padma Bank officials submitted a joint application on behalf of Jasim Uddin Ahmed, the chairman of Jessica Group, who took a loan of Tk 88 crore from the Khatunganj branch of the bank in 2016.

The bank requested the recall of the warrant issued against the defendant and the withdrawal of the order for seized property.

However, the court expressed displeasure at the application made on behalf of the defendant without a written approval letter from the bank's board of directors.

Rezaul Karim, the bench assistant of the court, informed The Daily Star that in accordance with section 34 (6) of the Money Loan Court Act, the court rejected Padma Bank's joint application. This is because, in line with the rules for regularising defaulted loans, applicants must pay 25 percent of the defaulted amount up front.

However, the defaulter did not pay off the amount before filing the application.

Karim further stated that the court highlighted Padma Bank's eagerness to assist wilful defaulters.

Raihanul Wazed Chowdhury, panel lawyer of Padma Bank, told The Daily Star: "An explanation has been sought from the managing director of Padma Bank as this application was made without fulfilling all the conditions. We have not yet received a reply in writing. After receiving it, we will determine our next step."