Govt tightens bank resolution rules
The government has moved to prevent former owners of financially weakened banks from regaining control, approving an amendment to the Bank Resolution Act amid criticism over a provision that had opened the door for their return.
The Cabinet on Monday gave final approval to the draft Bank Resolution (Amendment) Act, 2026, which removes the provision allowing former owners of resolved banks to reclaim ownership.
The amendment will now be sent to the Legislative and Parliamentary Affairs Division for vetting.
The decision was taken at the 16th cabinet meeting at the Secretariat, chaired by Prime Minister Tarique Rahman, the Cabinet Division said.
A source at the meeting said the change was made “in the face of criticism at national and international levels”.
According to Cabinet Division officials, the interim government had brought five weak banks under the Bank Resolution Act, while preventing individuals responsible for weakening the institutions from returning as owners.
However, when the ordinance was subsequently enacted as law by parliament, the BNP-led government introduced Section 18A, which allowed former owners to regain ownership under certain conditions.
The provision came under widespread criticism, prompting the government to move to repeal it through the latest amendment.
A Cabinet Division press release said Section 18A was abolished as no individual or institution had submitted an application while fulfilling all the conditions specified in the provision.
The move comes as Bangladesh seeks to strengthen its bank resolution framework and prevent previous owners whose institutions have been weakened from regaining control following restructuring or resolution.
The government had earlier used the Bank Resolution Act to address problems at five weak banks during the interim administration.
The legislation is intended to provide a framework for dealing with troubled financial institutions while protecting depositors and maintaining financial stability.
Other cabinet decisions
The cabinet also gave final approval to the draft National Human Rights Commission Act, 2026 at Monday’s meeting.
It separately approved the Visa Policy-2026, according to the Cabinet Division.
The latest banking amendment will take effect after completing the required legislative vetting and approval process.
