Banking Resolution Act to be finalised by July: BB governor

The Banking Resolution Act is expected to be finalised by July this year, said Bangladesh Bank Governor Ahsan H Mansur today (4 March).

"At the pace we are moving now, we should be able to enact the Banking Resolution Act by July," he said while speaking at a roundtable titled "Path to Recovery for the Banking Sector", organised by The Business Standard at its office in the capital.

Asked by journalists how much of the banking sector reforms could be achieved by December this year, the governor said, "The central bank's structural reforms will be completed by July-August.

"We will initiate the reform process in the banking sector, but the rest will depend on the efforts of the next elected political government."  

"Our agenda is big and ambitious. We are doing as fast as we can," he added.

The Banking Resolution Act is a new legal framework designed to address financial crises in Bangladesh's banking sector. 

It would allow making quick policy decisions for mergers, acquisitions, liquidation, or re-capitalisation of any bank under the law. 

By introducing a structured approach to resolving financial distress, the act aims to prevent disruptions in the banking system and ensure economic stability.  

One of the key provisions of the act is granting the central bank the authority to restructure failing banks. 

Additionally, the act seeks to minimise risks for depositors and creditors. A resolution framework will ensure that depositors, especially small account holders, do not suffer significant financial losses if a bank collapses. 

By strengthening regulatory oversight and providing Bangladesh Bank with legal tools to intervene in failing institutions, this law will help restore confidence in the financial system. It will also encourage better governance, accountability, and transparency in banking operations, ensuring a more stable financial sector in the long run.