Transparency International Bangladesh (TIB) has said the Bank Resolution Act, 2026 includes a provision that would allow former shareholders of collapsed or merged weak banks to regain ownership without accountability—warning that it could pave the way for renewed corruption and plunder in the banking sector.
The anti-corruption watchdog said the move effectively seeks to rehabilitate “identified looters” and risks turning the banking sector once again into a hub of mismanagement and irregularities. It added that instead of addressing long-standing governance failures, the law reinforces a culture of impunity and weak accountability.
TIB also referred to the earlier “Bank Resolution Ordinance, 2025,” issued during the interim government’s tenure, which barred individuals or groups responsible for a bank’s collapse from returning to ownership even if dues were repaid.
TIB Executive Director Iftekharuzzaman criticized the inclusion of Section 18(a) in the new law, saying it effectively institutionalizes impunity.
He said: “With Section 18(a), the state guarantees impunity instead of justice.”
He added, “However it is justified, the decision shields corruption and rewards those who looted the banking sector.”
He also said: “It does not ensure accountability for bank looters; instead, it rewards them on a massive scale.”
He added that the move reflected continuity of a broader pattern, noting, “The fall of authoritarianism does not necessarily end abuse of power or bank capture.”
The TIB ED warned that a “winner takes all” approach could enable a return of “kleptocratic practices” after only a brief pause.
Questioning the rehabilitation terms, he said: “Former owners who led the plunder are now being treated as clean.”
He questioned the terms of re-ownership, saying they would pay only 7.5 percent upfront while the rest would be repaid over two years at 10 percent interest.
Iftekharuzzaman asked whether they would genuinely inject capital, cover shortfalls, repay depositors, and meet regulatory obligations as claimed.
He also questioned the basis of valuation and whether Bangladesh Bank could ensure compliance amid conflicts of interest.
He warned that loopholes could allow fresh borrowing under relaxed default rules, potentially deepening insolvency and shifting the burden onto the public.
“If this continues without accountability, no qualitative improvement will come in the banking sector,” said the TIB ED.
He added, “This law may undermine reforms promised in the electoral manifesto.”
He further said it raises concerns over whether it serves vested interests instead of public welfare, urging the government to reconsider the decision.