The Parliamentary Standing Committee on the Ministry of Finance has recommended repealing the much-debated Section 18A of the Bank Resolution Act, which allowed former shareholders or owners of banks placed under resolution or merged with other banks to regain ownership or control subject to certain conditions.
The move comes after no individual or institution applied to regain ownership or control of a bank by fulfilling all the requirements set out under the provision since the law came into force.
The recommendation was made in the committee's report on the Bank Resolution (Amendment) Bill, 2026, which was placed before the third session of the 13th National Parliament.
What section 18A allowed
Section 18A of the Bank Resolution Act, 2026, provided a mechanism for former owners or shareholders of troubled banks placed under resolution to apply for the restoration of ownership or control.
Applicants were required to meet specific conditions, including commitments to restructure the bank's capital and financial liabilities and make prescribed financial payments.
Under the provision, applicants were required to pay at least 7.5% of the proposed recovery value in advance.
The provision was intended to facilitate the restructuring and continued operation of troubled banks, address capital and liquidity shortfalls, protect depositors and investors, and reduce the government's potential financial burden.
Why the provision is being repealed
According to the parliamentary committee's report, no individual or institution applied after fully complying with the conditions stipulated under Section 18A following the enactment of the Bank Resolution Act.
The committee therefore considered it appropriate to enact the Bank Resolution (Amendment) Act, 2026, to repeal the provision.
The amendment bill states that Section 18A will be repealed and that the amendment will take effect immediately.
A controversial provision
Section 18A drew criticism from the banking sector and civil society groups after the Bank Resolution Act was passed.
Critics feared that former owners responsible for a bank's collapse or financial distress could regain control of the institution by meeting the prescribed financial conditions.
Concerns were also raised by several quarters, including the Bangladesh Association of Banks.
The proposed amendment would remove from the law the provision allowing former owners to regain ownership or control of banks placed under resolution.
The repeal of Section 18A has also been linked in various reports to conditions attached to World Bank loan assistance.
Committee recommends passage
The bill was introduced in the 13th National Parliament on September 3 and referred to the Parliamentary Standing Committee on the Ministry of Finance under Rule 246 of the Rules of Procedure for examination and a report.
The committee examined the bill on September 5 and unanimously recommended that Parliament pass it in its current form.
Finance Minister Amir Khasru Mahmud Chowdhury introduced the bill.
If passed, the amendment will repeal Section 18A of the Bank Resolution Act, effectively removing the legal provision that allowed former owners or shareholders to regain ownership or control of banks placed under resolution.