Arrest Warrant Issued Against M Morshed Khan In MTB Loan Recovery Case: Banking Sector Enforcement

Dhaka, September 25, 2026 — A Dhaka money loan court has issued an arrest warrant against former foreign minister M Morshed Khan, who is also the founder and chairman of Citycell, in a loan recovery case brought by Mutual Trust Bank (MTB) PLC. The case highlights Bangladesh's intensifying enforcement against wilful loan defaulters — a key priority for the country's banking sector reform agenda.

⚖ Warrants have also been issued against four more officials of Pacific Bangladesh Telecom Limited (PBTL), the defunct mobile operator known as Citycell:

• 👥 Asghar Karim — Director
• 👥 Nasreen Khan — Director
• 👥 Md Farikul Hasan — Acting Chief Financial Officer (listed as grantor)
• 👥 Mehboob Chowdhury — CEO

🏛 Court Order Details

Artha Rin Adalat No. 7 issued the warrants on September 23 in a Money Execution Case under Section 34(1) of the Artha Rin Adalat Ain, 2003. The provision allows civil detention of up to six months for a judgment debtor who fails to satisfy a decree.

The court directed the officer-in-charge of Gulshan Police Station, through the Dhaka Metropolitan Police commissioner, to arrest them and produce them in court by November 18. The warrants give their address as Pacific Centre, Mohakhali C/A.

The documents do not state the outstanding amount. Because this is an execution case, a decree has already been passed and the bank is now enforcing it.

⚖ What Section 34 Means

Detention under Section 34 is a coercive measure meant to compel repayment, not a punishment. The purpose is to pressure the judgment debtor to satisfy the decree by paying the outstanding amount or making acceptable payment arrangements. Once the debtor pays or makes acceptable arrangements, the detention order can be lifted.

This mechanism is one of the stronger enforcement tools available to Bangladeshi banks in their fight against wilful default — and its use against a high-profile figure like Morshed Khan signals the banking sector's growing willingness to pursue aggressive legal action against defaulters.

📱 Citycell: Bangladesh's First Mobile Operator

PBTL (Pacific Bangladesh Telecom Limited), operating under the brand name Citycell, was Bangladesh's first mobile operator. Key facts:

• 📱 Launched: 1996 — as Bangladesh's first mobile phone service.
• 📱 Technology: CDMA-based (unlike competitors using GSM).
• 📱 Ceased operations: 2016 — after failing to pay dues ordered by the telecom regulator (BTRC).
• 📱 Parliament listing: Named among the country's top 20 loan defaulters as of December 2025.

Citycell's decline was one of the most significant corporate failures in Bangladesh's telecom sector — with the company unable to compete against Grameenphone, Robi, and Banglalink, eventually losing its operating license due to unpaid regulatory dues.

💰 The Loan Recovery Case Timeline

• 📅 Loan default: PBTL/Citycell defaulted on loans from MTB.
• 📅 July 5, 2018: MTB filed a case with the Money Loan Court seeking Tk 68.76 crore in outstanding dues.
• 📅 Decree passed: The court eventually passed a decree in MTB's favour.
• 📅 September 23, 2026: Artha Rin Adalat No. 7 issued arrest warrants in the execution case.
• 📅 November 18, 2026: Deadline for police to produce the defendants in court.

💬 MTB CEO's Statement

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said that the bank wants to recover the money in any way.

💬 “Nobody is above the law, so we will take legal action against loan defaulters, especially wilful defaulters,” he said.

💬 “This is depositors' money, which is why we will have to recover it,” said Rahman, adding that the bank is now taking several legal actions, such as:

• ⚖ Seeking arrest warrants against wilful defaulters.
• ⚖ Seeking travel bans against wilful defaulters.
• ⚖ Using all legal avenues to recover classified loans.

🏦 Bangladesh's Banking Sector And Wilful Default

The Morshed Khan arrest warrant is significant in the context of Bangladesh's broader banking sector challenges. The country's banking sector has been grappling with elevated non-performing loans (NPLs) for years:

• 📊 Total NPLs in the banking sector: approximately Tk 1.5-2.0 lakh crore (as of mid-2026).
• 📊 NPL ratio: approximately 9-10 per cent of total outstanding loans.
• 📊 Wilful defaulters: a significant subset of total NPLs — where borrowers have the capacity to repay but choose not to.

The Bangladesh Bank has been pushing banks to take stronger legal action against wilful defaulters — including through:

• ⚖ Arrest warrants under Section 34 of the Artha Rin Adalat Ain
• ⚖ Travel bans preventing defaulters from leaving the country
• ⚖ Asset attachment and auction
• ⚖ Credit information bureau (CIB) blacklisting
• ⚖ Cross-default acceleration across multiple lenders

💼 Why This Case Matters For Bangladesh's Banking Sector

The Morshed Khan arrest warrant is significant for several reasons:

• 🏦 High-profile enforcement — demonstrating that even politically connected defaulters are not above the law.
• 🏦 Depositor protection — as MTB CEO Rahman noted, the money being recovered belongs to depositors.
• 🏦 Deterrent effect — the arrest warrant against a former foreign minister sends a strong signal to other wilful defaulters.
• 🏦 IMF programme alignment — banking sector reform, including NPL resolution, is a key IMF programme condition.
• 🏦 Governance improvement — stronger enforcement against defaulters supports broader governance reform.

📜 The Artha Rin Adalat System

Bangladesh's Artha Rin Adalat (Money Loan Court) system was established under the Artha Rin Adalat Ain, 2003 to expedite the resolution of loan recovery cases. Key features include:

• ⚖ Specialised courts — dedicated to loan recovery cases, separate from regular civil courts.
• ⚖ Expedited procedures — designed to resolve cases faster than regular civil litigation.
• ⚖ Section 34 detention — allowing civil detention of up to 6 months for non-compliant judgment debtors.
• ⚖ Asset attachment — allowing courts to attach and sell defaulters' assets.
• ⚖ Travel restrictions — courts can impose travel bans on defaulters.

Despite these powers, the Artha Rin Adalat system has historically been slow — with cases often taking years to resolve. The MTB case against Morshed Khan, filed in 2018 and reaching the arrest warrant stage in 2026, is illustrative of the typical timeline.

💼 Wider Implications For Corporate Bangladesh

The arrest warrant against Morshed Khan carries wider implications for corporate Bangladesh:

• 🏢 Corporate governance — the case highlights the importance of maintaining corporate governance standards, particularly for companies with significant bank borrowing.
• 🏢 Director liability — the inclusion of multiple PBTL directors in the arrest warrant underscores that directors can face personal legal consequences for corporate loan defaults.
• 🏢 Political connections — the case demonstrates that political connections do not provide immunity from loan recovery actions.
• 🏢 Telecom sector legacy — the case is a reminder of the financial legacy issues from Bangladesh's telecom sector, where multiple operators have faced financial distress.

📜 Looking Ahead

The November 18 deadline for the police to produce Morshed Khan and the other defendants in court will be the next milestone in this case. The defendants may:

• 📝 Seek anticipatory bail from a higher court.
• 📝 negotiate a settlement with MTB to satisfy the decree.
• 📝 Challenge the arrest warrant on procedural grounds.
• 📝 Surrender to the court and seek bail.

For Bangladesh's banking sector, the case represents a meaningful step towards stronger enforcement against wilful default — and a signal that the era of impunity for politically connected defaulters may be coming to an end. For MTB specifically, the arrest warrant is a step towards recovering Tk 68.76 crore in depositors' money that has been outstanding for years.

The case will be closely watched by other banks pursuing similar recovery actions — and by the broader business community as a barometer of Bangladesh's commitment to banking sector governance reform.