New Bill Seeks to Repeal Controversial Bank Ownership Clause in Bangladesh

Finance Minister Amir Khosru Mahmud Chowdhury tabled the Bank Resolution (Amendment) Bill, 2026 in the Jatiya Sangsad on 3 September, seeking to repeal Section 18(a) of the Bank Resolution Act—a statutory clause that critics argued could have allowed pre-resolution shareholders to reacquire ownership of failed banks. According to Bangladesh Sangbad Sangstha, the bill has been referred to the Parliamentary Standing Committee on the Ministry of Finance, which is expected to submit its report within two working days.

The provision at the centre of the amendment

Section 18(a), inserted after the BNP-led government took office and amended the original Bank Resolution Ordinance issued by the interim administration, enabled shareholders who held equity in a bank before it entered resolution to apply to Bangladesh Bank for the re-acquisition of shares, assets, and liabilities. The same clause also empowered the central bank to extend the opportunity to any suitable person. In its statement of objects and reasons, the finance ministry noted that no person or institution had applied under the full conditions stipulated by the section since the law came into force—a circumstance the minister cited as grounds for repeal rather than retention.

Link to the Islamic bank consolidation

The clause drew particular scrutiny in connection with the merger of five troubled Islamic banks into Sammilito Islami Bank, where concerns surfaced about the possible return of former directors and shareholders associated with the failed entities. The repeal thus closes a structural loophole that, if left intact, could have complicated the government's consolidation strategy and weakened the resolution authority's capacity to enforce clean break transfers. The legislative revision also carries signalling weight for Bangladesh Bank's broader resolution toolkit: removing the reacquisition pathway reduces the bilateral leverage that legacy shareholders might otherwise exert during recovery proceedings.

Forward trajectory

The standing committee's two-day review window will determine the bill's pace toward enactment. Once repealed, Section 18(a) cannot be invoked in future resolution cases, tightening the statutory framework around asset transfers and narrowing the room for negotiated reversals. In a separate development, a Jamaat-e-Islami private member's bill seeking amendments to the Government Money and Budget Management Act failed to secure parliamentary permission after the finance minister requested its withdrawal—an outcome that leaves the government's fiscal management legislation untouched in this session.