TIB calls Bank Resolution Act amendment 'suicidal' for banking sector

Transparency International Bangladesh (TIB) has described the initiative to allow former shareholders of weak banks to regain ownership under the Bank Resolution Act as 'suicidal'. According to the organisation, this amendment has created a path for rehabilitating identified bank looters without accountability, which will once again expose the country's banking sector to the risks of corruption and plunder.

In a statement sent to the media on Monday, April 13, TIB said that instead of addressing long-standing irregularities and governance deficits in the banking sector, the new law has further strengthened the culture of impunity. It has changed a provision of the previous interim government's 'Bank Resolution Ordinance, 2025', which had barred those responsible for a bank's failure from returning to ownership even after repaying all the money.

TIB alleged that this restriction has been relaxed by adding Section 18(ka) to the new 'Bank Resolution Act, 2026'. The organisation claims that this ensures impunity for the perpetrators instead of ensuring their trial and accountability.

TIB Executive Director Iftekharuzzaman said this decision essentially amounts to rewarding bank looters. According to him, allowing individuals or groups who previously plunged the banking sector into crisis to regain ownership of the same institutions is unacceptable by any standard.

He questioned how former shareholders are being granted such significant benefits, being allowed to regain ownership under conditions of limited payment, long-term instalments and interest. He also questioned how they would manage the enormous responsibilities of bringing in new capital, repaying depositors' liabilities, paying taxes and restructuring the banks.

TIB also warned that if the trend of bringing back old owners without accountability continues, the desired reform in the banking sector will not materialise. Instead, the risk of recurrence of corruption and irregularities will increase.

The organisation called upon the government to reconsider this amendment and focus on ensuring good governance and accountability in the banking sector.