Transparency International Bangladesh (TIB) has strongly criticised the Bank Resolution Act, 2026, claiming that it facilitates corruption and provides a mechanism for “identified looters” to reclaim ownership of banks without accountability.
In a statement issued Monday, the anti-graft watchdog warned that the legislation would transform the banking sector back into a sanctuary for plunderers, describing the government’s move as self-defeating.
The organisation argued that the act prioritises an authoritarian culture of impunity over addressing long-standing governance deficits and mismanagement.
‘Impunity via Section 18(a)’
TIB Executive Director Dr Iftekharuzzaman highlighted that the inclusion of Section 18(a) in the Bank Resolution Act ensures impunity for those responsible for the collapse of financial institutions.
This provision marks a significant departure from the Bank Resolution Ordinance, 2025, which was issued under the interim government and strictly prohibited individuals or groups involved in a bank’s failure from returning to ownership, regardless of fund repayment.
“Whatever justification the government may offer, this decision – one that facilitates and shields corruption and plunder – does not ensure legal accountability,” Iftekharuzzaman stated.
He noted that while the fall of authoritarianism was expected to bring change, the current trend suggests a shift in “policy capture” under a “winner takes all” approach, allowing kleptocratic practices to re-emerge.
‘Questionable financial terms’
The TIB chief questioned the logic behind the financial requirements for re-acquiring shares.
Under the new law, former owners of crisis-hit banks are required to deposit only 7.5 per cent of a government-determined amount to regain control of assets and shares. The remaining 92.5 per cent is to be repaid over two years at a mere 10 per cent interest rate.
Iftekharuzzaman expressed scepticism regarding how these individuals, who originally presided over the sector’s decline, would suddenly find the means to inject new capital, cover shortfalls, and compensate creditors and depositors.
He further questioned the basis on which re-ownership prices were determined and warned that Bangladesh Bank, currently hindered by conflicts of interest, may fail to enforce post-reacquisition conditions.
‘Risk to the public’
TIB warned that the move could allow former owners to take new loans on self-determined terms, taking advantage of the “normalisation of loan defaults” to cause deeper insolvency, the burden of which would ultimately fall on the public.
Iftekharuzzaman concluded that passing such a law by majority vote in parliament undermines the ruling party’s own electoral manifesto regarding financial sector reforms.
He suggested the decision might have been taken to protect a “vested syndicate system” rather than to ensure economic stability or protect depositors.
TIB has officially urged the government to reconsider the provision to ensure qualitative improvements in the banking sector through proper legal accountability.
