Govt decides to scrap Section 18(a) of Bank Resolution Act, blocking former owners' return
The clause would have allowed former owners to regain control of weak banks after their merger.
Finance Minister Amir Khasru Mahmud Chowdhury today (29 June) announced that the government has decided to scrap Section 18(a) of the Bank Resolution Act, 2026, which was introduced with a clause that would have allowed former owners to regain control of weak banks after their merger.
Speaking at the parliament during the debate on the proposed FY2026-27 budget, he said the decision had been taken following feedback from various stakeholders.
"The government has decided to repeal Section 18(a) based on the opinions of different stakeholders," he said.
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He added, "Our message is clear. Those who have looted people's assets will not be given any concessions. At the same time, the deposits of customers will be fully protected."
The Bank Resolution Bill, 2026, was passed in parliament on 10 April by a voice vote, amid strong objections from opposition members over its amendments and implications for the banking sector.
The law introduced Section 18A, under which former owners of weak banks could seek to regain control by submitting a formal undertaking. Applicants were required to pledge to repay all funds as determined by the government or the central bank, provide fresh capital, and restore financial solvency.
They were also required to settle all liabilities to depositors and creditors, pay outstanding taxes, and reconstruct risk management and compliance frameworks.
The financial terms required an initial pay-order of at least 7.5% of the total determined amount within three months of approval, while the remaining 92.5% had to be paid over two years with a 10% simple interest rate.
Following approval, Bangladesh Bank would supervise the institution for two years before a special committee conducted a final investigation into compliance, with the option to revoke the approval in case of failure.
Experts had criticised the amendment, warning that it undermines the credibility of banking sector reforms and effectively allows those responsible for financial distress to regain control.
