Bank Resolution Act criticised for allegedly favouring looters

Speaker at the roundtable on Banking Sector in Danger Again at organized by Voice for Reform at the BDBL Building in Karwan Bazar on Saturday 25 April 2026.

Dhaka, Apr 25 - Financial sector experts and civil society leaders on Saturday warned that the recently passed “Bank Resolution Act 2026” could trigger a fresh wave of looting in the banking sector by allowing former "oligarchs" to reclaim ownership of distressed banks.

Speakers at a roundtable titled “Amended Bank Resolution Act 2026: Banking Sector at Risk Again,” organized by Voice for Reform at the BDBL Building in Karwan Bazar, expressed grave concerns over the newly inserted Section 18(A) of the law.

They argued that this specific provision paves the way for individuals and entities who systematically drained the country’s banks during the previous regime to regain control of financial institutions with minimal investment.

The speakers noted that while the interim government initially took steps to stabilize the sector through the Bank Resolution Ordinance 2025—including injecting Tk 35,000 crore into ailing banks—the subsequent legislative amendment has compromised those efforts.

Dr. Mushtaq Khan, a professor at SOAS University of London, criticized the interim government for failing to confiscate the assets of those involved in previous bank heists.

"The looters structured their theft in such a way that seizing their mortgaged assets alone will not recover the losses," he said, adding that the new law is a "major mistake."

Dr. Waresul Karim, Dean of the Business Department at North South University, alleged that the primary target of Section 18(A) is not the recovery of sick banks, but the re-occupation of successful institutions like ‘Islami Bank’.

He suggested that the controversial S. Alam Group and its affiliates could use this loophole to regain control of the bank without significant financial layout.

Badiul Alam Majumdar, Secretary of SHUJAN (Citizens for Good Governance), raised concerns about the lack of accountability at the highest levels.

He alleged that the serving president of the republic was himself involved in the past takeover of Islami Bank by S. Alam Group.

"It is unfortunate that while collaborators of bank looters should be in jail, they hold high state offices," Majumdar remarked, emphasizing that the banking sector will remain vulnerable until the independence of Bangladesh Bank is fully established.

Sarwar Tushar of the National Citizen Party (NCP) further criticized the government for "partisan appointments," alleging that the current Governor of Bangladesh Bank has past ties with the S. Alam Group.

He warned of an "imminent catastrophe" in the banking sector, comparable to the crisis in the energy sector.

The discussion, moderated by Fahim Mashroor, Coordinator of Voice for Reform, also featured insights from Dr. Toufic Ahmad Choudhury, former Director General of BIBM; Asif Khan, President of the CFA Association; Shawkat Hossain Masum, Head of Online at Prothom Alo; and Shams Mahmud, President of the Bangladesh-Thai Chamber of Commerce and Industry.

The experts called for an immediate review of the legislation to ensure that those responsible for past financial crimes are permanently barred from the banking industry and that depositors' interests are prioritized over political expediency. - UNB