B Mirror Desk : The “Bank Resolution Ordinance, 2025,” which gives Bangladesh Bank additional authority to guarantee sound banking practices and effectively manage weaker banks, was passed by the Advisory Council on Thursday, April 17. According to sources in the Ministry of Finance’s Financial Institutions Division, it will soon be enacted as an ordinance following the President’s approval.
According to the new regulation, Bangladesh Bank may take corrective action against a bank if its beneficial owner fraudulently exploits its assets or finances for personal gain. In other words, Bangladesh Bank has the authority to make decisions about administering the bank, transferring ownership, or closing the bank as needed.
In order to manage weak banks, the legislation gives Bangladesh Bank the authority to transfer shares, assets, and liabilities to other parties, hire temporary administrators, and raise capital through new or existing owners. Additionally, there is a provision for the creation of one or more “bridge banks,” which may be sold at a later date.
Bangladesh Bank has the authority to suspend a bank’s operations entirely for a maximum of two working days and partially for three months in order to continue the bank’s essential operations.
Selim RF Hossain, chairman of the Association of Bankers Bangladesh (ABB), praised the effort to enact the Bank Resolution Ordinance. “If it passes, there would be more trust in Bangladesh Bank,” he remarked. We would like it to be put into effect first.
In order to address the banking sector crisis, the legislation calls for the creation of a six-member organization known as the “Banking Sector Crisis Management Council.” It will be led by the governor of Bangladesh Bank. The members will include two deputy governors of Bangladesh Bank, the chairman of the Bangladesh Securities and Exchange Commission, the finance secretary, and the secretary of the Financial Institutions Division.
Bangladesh Bank will petition to the court and set up the appointment of a liquidator in the event that a bank files for bankruptcy. The voluntary liquidation process now requires the consent of Bangladesh Bank. Deposits must be paid within seven business days of the license being revoked, and other obligations must be paid within two months.
Personal liability of those responsible for the failure of the bank has been ensured. A fine of Tk 50 lakh has been provided for violation of regulations. However, the proposal of three years The original draft’s imprisonment clause has been removed. Rather, for every day of delay, a further Tk 5,000 punishment has been applied.
The draft of the Bank Resolution Ordinance was considered by the International Monetary Fund (IMF), according to Ministry of Finance sources. The usefulness of the Bank Crisis Management Council in Bangladeshi reality was questioned during the conversation. The Advisory Council ultimately chose to establish the council under Bangladesh Bank, nonetheless.
According to experts, the Bank Resolution Ordinance will improve accountability and good governance in the banking industry and make it feasible to better safeguard depositor interests.
