B Mirror Report:  An amendment to the Bank Resolution Ordinance, passed as a bill in parliament, has created a provision that allows former owners of merged banks to potentially regain control by repaying 7.5 percent of the financial assistance provided by the government and Bangladesh Bank.

Under the newly inserted Section 18(A), previous shareholders or eligible parties may apply to the Bangladesh Bank, acting as the resolution authority, to reclaim ownership of shares, assets, and liabilities of banks placed under resolution. Applicants must submit an undertaking committing to repay all government and central bank support, restore capital adequacy, settle liabilities, and comply with regulatory conditions.

The provision also requires repayment of the remaining 92.5 percent of public funds within two years along with 10 percent simple interest. A pay order equal to 7.5 percent of total financial support must be submitted before taking control of the bank.

Bangladesh Bank officials said the clause would allow former owners to regain control with a relatively small upfront payment, raising concerns about enforcement of accountability once ownership is restored.

Sources said the central bank had opposed the inclusion of the provision during drafting, and it was not part of the original committee proposal. It was reportedly added shortly before the bill was passed in parliament.

Economists have also questioned the rationale behind the amendment, warning that it could have unintended consequences for financial sector stability.

The Bank Resolution Ordinance had earlier been used to merge five weak Islamic banks into a single entity, forming Combined Islami Bank. The merged institution carries heavy financial stress, including a large volume of non-performing loans and significant capital shortfalls, according to Bangladesh Bank data.