Cabinet okays bank resolution amendment, repeals former owners' comeback clause
The approval came at a cabinet meeting chaired by Prime Minister Tarique Rahman at the Bangladesh Secretariat.
Highlights
- Cabinet approves amendment repealing controversial Section 18(a)
- No applicant met conditions to reclaim control of banks
- Section 18(a) allowed former owners to regain bank control
- Government announced repeal decision following stakeholder feedback
- Experts warned former owners' return could undermine banking reforms
- Bank Resolution Act, 2026 passed Parliament on 10 April
The cabinet today (10 August) gave final approval to the draft Bank Resolution (Amendment) Act, 2026, repealing a provision that allowed former directors or owners of banks undergoing or slated for mergers to regain control under relatively favourable terms.
The approval came at a cabinet meeting chaired by Prime Minister Tarique Rahman at the Bangladesh Secretariat, according to a press release.
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Under the Article 18 (A) of the existing bank resolution act, former directors or owners of banks, merging or listed for mergers, could pay 7.5% upfront of the amount injected by the government or the Bangladesh Bank to reclaim the banks while the remaining 92.5% was to be repaid within two years at 10% simple interest.
The provision was introduced as a market-based alternative to conventional bank resolution tools, allowing troubled banks to remain operational while being restructured, addressing capital and liquidity shortfalls, protecting depositors and investors, and reducing the government's financial exposure.
However, no individual or institution applied under the provision after meeting its conditions, prompting the government to move to repeal it altogether.
The cabinet also cleared the draft of the National Human Rights Commission Act, 2026 and the draft Visa Policy 2026 at the meeting.
The national human rights commission act is essential to protect, promote and ensure human rights.
According to the proposed law, the Commission will comprise a chairman and four commissioners, including at least one woman, following the recommendation of a search committee.
The cabinet also approved the draft Visa Policy 2026, aimed at making the entry and exit of foreigners into Bangladesh easier and more orderly, attracting foreign direct investment (FDI), businesses and skilled human resources, and modernising the existing visa system.
The new visa policy also aims to promote tourism and the hospitality sector, ensure technology and knowledge transfer, maintain national security and international diplomatic balance, and develop a modern, service-oriented immigration framework based on the principle of reciprocity.
