Govt strengthens deposit protection, banking reforms to rebuild public trust: Minister
The minister also highlighted reforms under the Deposit Protection Act 2026, which raised the maximum protected deposit amount from Tk1 lakh to Tk2 lakh and extended coverage to depositors of finance companies.
Finance Minister Amir Khosru Mahmud Chowdhury today (9 June) told parliament that the government has undertaken a series of measures to restore stability and confidence in the banking sector through a structured and multi-dimensional resolution framework.
Responding to a question from Cox's Bazar-3 lawmaker Lutfur Rahman during the third sitting of the second session and first budget session of the 13th parliament, he said the framework was established through the Bank Resolution Ordinance 2025 and implemented under the Bank Resolution Scheme 2025.
The ordinance was later enacted as the Bank Resolution Act 2026.
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As part of the resolution strategy, five troubled Islamic banks were merged to form Sammilito Islami Bank PLC.
The minister also highlighted reforms under the Deposit Protection Act 2026, which raised the maximum protected deposit amount from Tk1 lakh to Tk2 lakh and extended coverage to depositors of finance companies.
In addition, depositors of finance companies, who were previously excluded from deposit protection coverage, have now been brought under the law.
"Overall, a clear legal framework, a transparent resolution process and stronger protection for depositors are expected to play an effective role in restoring the confidence of depositors and stakeholders in the banking sector," he said.
He further said the government and Bangladesh Bank had introduced measures to improve loan recovery and reduce non-performing loans, including stricter action against willful defaulters, updated credit risk management guidelines and dedicated recovery monitoring teams.
He added that loan classification and provisioning policies based on Expected Credit Loss under IFRS 9 were being implemented, while legislation was being prepared to establish private-sector Asset Management Companies to help address distressed assets and strengthen financial sector stability.
Legislation is being prepared to facilitate the establishment of private-sector Asset Management Companies to help address distressed assets and improve financial sector stability, the minister said.
