Transparency International Bangladesh (TIB) has criticised the newly enacted Bank Resolution Act, 2026, warning that it could facilitate corruption and undermine efforts to reform the country’s troubled banking sector.
In a statement issued on Monday, the anti-corruption watchdog said a key provision in the law allows former shareholders of weak or merged banks to regain ownership without adequate accountability, effectively “rehabilitating identified looters”.
TIB argued that the move risks turning the banking sector once again into a “haven for corruption and plunder”, describing it as a self-defeating policy that fails to address longstanding governance failures, mismanagement and irregularities.
The organisation pointed to a change from the earlier Bank Resolution Ordinance, 2025, which had barred individuals responsible for bank failures from returning to ownership — even if they repaid funds.
Under the new Act, however, Section 18(a) allows such individuals to re-enter ownership under certain conditions.
TIB Executive Director Dr Iftekharuzzaman said the provision effectively guarantees impunity rather than ensuring justice.
“Whatever justification the government may offer, this decision does not ensure legal accountability for those who looted the banking sector; instead, it rewards them on a massive scale,” he said.
He added that the move reflects a continuation of past practices, warning that the fall of authoritarian governance does not automatically end abuse of power in the financial system. Instead, he said, it risks enabling a new cycle of “policy capture” and the re-emergence of entrenched interests.
Questioning the feasibility of the new framework, Iftekharuzzaman raised concerns over the terms under which former owners could regain control. He noted that they would only need to pay 7.5 per cent upfront, with the remaining amount repayable over two years at relatively low interest.
He also questioned whether such owners could realistically inject fresh capital, cover existing capital shortfalls, repay depositors and creditors, and restore regulatory compliance.
TIB further expressed doubts about the ability of Bangladesh Bank to enforce post-reacquisition conditions, citing concerns over conflicts of interest and weak oversight.
The organisation warned that, without strict legal accountability, the policy could worsen financial instability by encouraging further loan defaults and deepening insolvency risks — ultimately shifting the burden onto the public.
“If ownership is returned to those responsible for the sector’s collapse without due process, no meaningful improvement can be expected,” Iftekharuzzaman said.
He also questioned whether the law aligns with the government’s commitment to reform the banking and financial sector, suggesting it may instead serve vested interests.
TIB has urged the government to reconsider the provision and ensure that accountability remains central to any banking sector reform.