Bangladesh’s economic stability will remain vulnerable without a credible and operational bank resolution framework, experts warned at a policy roundtable in Dhaka on Thursday. The discussion, hosted by the Policy Research Institute of Bangladesh (PRI) with support from the UK’s Foreign, Commonwealth and Development Office, examined the challenges of managing bank failures and necessary financial reforms.
Special Envoy to the Chief Adviser for International Affairs, Lutfey Siddiqi, attending as chief guest, stated that meaningful reform will not occur if the banking sector continues with business “as usual.” He emphasised that good governance is essential irrespective of the political party forming the next government.
In a trigger presentation, PRI principal economist Ashikur Rahman argued that passing the Banking Resolution Ordinance “is only half the job.” He said the Bangladesh Bank and the wider financial sector must now invest in systems, processes, and institutional capacity to make the resolution regime functional. Orderly resolutions, efficient handling of failing banks, and depositor protection, he noted, depend on supervisory tools, valuation ability, recovery mechanisms, and clear decision protocols.
PRI chairman Zaidi Sattar, who chaired the session, highlighted that non-performing loans approaching 35 per cent are “unprecedented” and demand careful inquiry. He asserted that Bangladesh requires its own resolution framework, noting that while advanced economies handled institutions “too big to fail,” Bangladesh faces banks “too toxic to fail,” whose collapse could trigger severe contagion.
Sattar added that the sector’s “haemorrhage” appears to have stopped and projected economic growth of about 5 per cent next year. He stated that a free and fair election in February 2026 would boost confidence and policy management.
Bangladesh Bank chief economist Mohammad Akhtar Hossain, a special guest at the event alongside the central bank’s bank resolution department executive director Mohammad Zahir Hussain, said foreign direct investment is becoming harder to attract because of high non-performing loans and political uncertainty.
Participants discussed priority reforms, including legislative updates, stronger deposit protection mechanisms, and improved crisis preparedness. The event is part of PRI’s ongoing effort to promote informed policy dialogue on developing a credible bank resolution framework to safeguard Bangladesh’s macroeconomic and financial stability.
