Allowing ex-owners of 5 Shariah-based banks to return threatens banking reform: Selim Raihan
He noted that the original ordinance passed in May 2025 barred these former owners from any involvement.
Allowing former owners of five crisis-hit Shariah-based banks to return is deeply concerning for Bangladesh's banking sector reform process, economist Professor Selim Raihan has warned.
In a Facebook post yesterday (16 April), Selim said the issue is not merely technical or limited to a law or merger framework but raises fundamental questions about financial sector governance.
He noted that the original ordinance passed in May 2025 barred these former owners from any involvement.
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However, the newly enacted Bank Resolution Act, 2026 effectively allows those responsible for the crisis to return in exchange for payment, he added.
Citing reports, Selim said the government and Bangladesh Bank provided Tk35,000 crore to support the merger of five weak banks into Sammilito Islami Bank. Yet former owners may regain control by paying only 7.5% upfront, with the remainder payable over two years, he stated.
Selim warned that these risks turning a public bailout into private rehabilitation.
The economist said this creates a serious moral hazard, as those accused of irregular lending, regulatory bypass and misuse of depositors' funds may regain control.
He added that this could signal that misconduct can ultimately be legitimised.
He urged the government to reconsider the law and ensure strict accountability measures, including forensic audits, full recovery of misused funds, and stronger regulatory independence to rebuild public trust.
