Bill placed in parliament to abolish provision allowing former owners to reclaim troubled banks

Finance Minister Amir Khosru Mahmud Chowdhury on Thursday placed the Bank Resolution (Amendment) Bill 2026, seeking to abolish a controversial provision that allowed former owners of weakened banks to regain ownership.

It proposes dropping Section 18(A) of the Bank Resolution Act 2026, which was passed in April.

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The provision allowed former directors or owners of merged banks to reclaim control by paying 7.5 percent upfront of the funds injected by the government or Bangladesh Bank. The remaining 92.5 percent could be repaid within two years at 10 percent simple interest.

Bank Resolution Ordinance 2025, enacted by the interim government, was aimed at addressing capital shortfalls, liquidity crises, insolvency and other risks threatening scheduled banks.

Under the ordinance, five troubled Islamic lenders were merged into the country’s largest state-owned Shariah bank.

The retention of Section 18(A) when the 2026 Act was passed drew sharp criticism from various quarters, with critics viewing it as a loophole that could allow former owners to regain control on lenient terms.

The amendment bill has been sent to the standing committee on the finance ministry for scrutiny within two working days.

In its statement of objectives and reasons, the finance minister said no individual or institution had applied under the full conditions of the provision since the law came into effect. It was therefore appropriate to abolish the clause, he said.