Amendments to the Bank Resolution Act, 2026 have raised concerns about renewed instability in Bangladesh’s banking sector.
Economists, bankers and policy analysts at a roundtable in the capital on Saturday, organised by Voice for Reform, warned the crisis remains structural and politically influenced.
Voice for Reform organiser Fahim Mashroor said the crisis stems from 15 years of governance failures and oligarchic capture, alleging large-scale capital flight.
He said recent reforms, including mergers and recapitalisation of weak Islamic banks, have been overshadowed by controversy over changes to the Bank Resolution Ordinance 2025.
“The question is whether these changes will resolve the crisis or deepen it,” he said.
Former Bangladesh Institute of Bank Management Director General Toufic Ahmad Choudhury said repeated regulatory relaxation has weakened discipline, highlighting the absence of a structured exit policy for failed banks and diluted loan rescheduling standards.
He called for a full resolution toolkit, including bridge banks, asset management companies and distressed asset sales, alongside a clearer distinction between wilful and non-wilful defaulters.
Shushashoner Jonno Nagorik (SHUJAN) Secretary Badiul Alam Majumdar said institutional and procedural reforms are needed, stressing a cashless economy to curb illegal flows and calling for an independent Bangladesh Bank to prevent political interference in oversight.
NCP Joint Convener Sarwar Tushar said the crisis reflects systemic state capture and warned that vague provisions such as “fit and proper” criteria could allow controversial actors to re-enter the sector.
He added that external influence, including from lenders, and fiscal expansion without revenue strength are worsening macroeconomic risks.
Prothom Alo Head of Online Shawkat Hossain said excessive bank licensing and political interference have weakened the sector, arguing mergers may be the only viable option for weak banks.
He questioned taxpayer-funded bailouts and noted that restructuring tools remain underused.
SOAS University of London Professor Mushtaq Khan said the crisis threatens national development, warning that even strong banks can collapse under panic.
He called for targeted action against major defaulters, including asset seizure, while avoiding blanket bailouts that create moral hazard.
CFA Society Bangladesh President Asif Khan said global experience shows a trade-off between depositor protection and fiscal risk.
He proposed full protection for small depositors, partial losses for large ones and structured mechanisms to manage bad loans.
Bangladesh-Thai Chamber of Commerce and Industry President Shams Mahmud said weak governance, opaque ownership structures and politicised regulation are driving repeated instability.
He warned that without rule of law and transparency, reforms will remain ineffective and the risk of systemic collapse will persist.
