The structural integrity of the national financial sector has come under renewed scrutiny following the ratification of the Revised Bank Resolution Act 2026. Financial analysts, academics, and industry experts have voiced substantial apprehension, suggesting that specific amendments within this legislative framework may inadvertently jeopardise the progress made in fiscal discipline. Of particular concern is the potential for the new law to facilitate the re-entry of individuals—previously associated with systematic financial irregularities and the misappropriation of capital—into influential positions of bank ownership and governance.
These critical observations formed the core of a high-level roundtable discussion titled “Revised Bank Resolution Act 2026: Banking Sector Discipline at Risk Again,” convened on Saturday, 25 April 2026. Organised by the advocacy group Voice for Reform, the symposium was held in the Karwan Bazar district of Dhaka. It brought together a distinguished panel of former regulators, legal experts, and scholars to evaluate the socio-economic ramifications of the new legal mandates.
Regulatory Vulnerabilities and the “Bail-out” Mechanism
The focal point of the expert critique is Section 18(A) of the newly amended Act. Critics argue that this clause provides a legal gateway for former directors and owners—those who presided over periods of institutional mismanagement and the “looting” of assets—to re-establish their presence within the banking hierarchy.
Toufic Ahmad Choudhury, the former Director General of the Bangladesh Institute of Bank Management (BIBM), served as a primary voice during the proceedings. He posited that the nation does not suffer from a lack of legislation, but rather from a profound deficit in implementation. Mr Choudhury warned that the 2026 Act, in its current form, appears to function as a “bail-out” mechanism for financial offenders instead of a tool for rigorous accountability.
Furthermore, Mr Choudhury articulated several critical deficiencies in the current regulatory approach:
The Mandate of Depositor Protection: He asserted that Bangladesh Bank maintains an absolute legal and moral obligation to ensure the full restitution of depositors’ funds. He dismissed the notion that the central bank could absolve itself of responsibility by merely providing the 200,000 BDT insurance limit, stating that such a cap is insufficient given the scale of public investment and the trust placed in the banking system.
Structural Deficiencies in Exit Policies: The absence of a viable “exit policy” for the banking sector remains an unresolved issue. Historically, the state has preferred to sustain insolvent institutions through public subsidies rather than permitting orderly liquidation or genuine restructuring. This trend, he argued, places an unfair financial burden upon the taxpayer.
The Non-Performing Loan (NPL) Crisis: He advocated for a rigorous distinction between “wilful” and “unintentional” defaulters. The culture of frequent loan rescheduling has eroded market discipline, and Mr Choudhury maintained that no law can be effective without the credible threat of punishment for financial malpractice.
Systemic Contagion and the Threat of Institutional Collapse
The broader implications for economic stability were explored by Dr Mushtaq Khan, a professor at the School of Oriental and African Studies (SOAS), University of London. Dr Khan warned that the sudden closure of banking institutions, if handled without extreme caution, could trigger a “contagion effect.” In such a scenario, the failure of a single entity could lead to a widespread erosion of public confidence, affecting the entire financial ecosystem.
He further cautioned that the failure to impose exemplary penalties on those who have plundered bank resources could lead to a “bank run.” This phenomenon, characterised by panicked depositors simultaneously attempting to withdraw their savings, could lead to a total collapse of liquidity within the sector.
Contributing to the analysis of restructuring efforts, Saokat Hossain, Head of Online at Prothom Alo, reflected on international precedents. While many nations utilise mergers and liquidations to manage weak banks, he noted that these strategies are often ineffective in environments where credit siphoning and money laundering are prevalent. Merging a distressed bank with a stable one often results in a “weakened whole” rather than a strengthened institution, potentially dragging down healthy assets.
Governance, Accountability, and the Path Forward
The discussion reached a consensus that the existing legal framework would have been sufficient to prevent recent irregularities had it been applied with total impartiality. Badiul Alam Majumdar, Secretary of Citizens for Good Governance (SHUJAN), remarked that the primary impediment to banking discipline is the lack of accountability for historical malpractice. He suggested that without holding individuals responsible for past actions, new laws would likely be manipulated in a similar fashion.
The roundtable was moderated by Fahim Mashroor, the entrepreneur behind Voice for Reform, and featured additional insights from Professor A.K.M. Waresul Karim of North South University, Asif Khan, President of the CFA Society, and the prominent businessman Shams Mahmud, alongside politician Sarwar Tushar.
The collective findings of the panel suggest that while the Bank Resolution Act 2026 was ostensibly designed to manage distressed assets and provide a framework for resolution, the inclusion of Section 18(A) and the lack of robust enforcement protocols may ultimately compromise public trust and long-term discipline in the national banking industry. The experts concluded that the priority must remain the protection of the depositor and the absolute accountability of those at the helm of financial institutions.