B Mirror Report : Transparency International Bangladesh (TIB) has strongly criticised the newly enacted Bank Resolution Act 2026, warning that it could pave the way for previously identified bank loan defaulters and alleged looters to regain control of failed or merged banks without proper accountability.

In a press statement issued on Sunday (April 13), the anti-corruption watchdog said a provision allowing former shareholders of collapsed financial institutions to reclaim ownership poses a serious risk of reviving corruption and weak governance in the banking sector.

TIB said the move undermines ongoing efforts to address long-standing irregularities, mismanagement, and governance failures in the financial sector, and could further strengthen a culture of impunity.

Referring to changes from the earlier “Bank Resolution Ordinance 2025,” the organisation noted that the previous framework had barred individuals responsible for a bank’s collapse from returning to ownership, even if they repaid their liabilities. However, Section 18(a) of the new law reverses that restriction.

TIB Executive Director Iftekharuzzaman said the provision effectively legitimises impunity instead of ensuring accountability.

“Whatever justification the government may provide, this decision does not ensure legal accountability for those who looted the banking sector; rather, it rewards them on a massive scale,” he said.

He also warned that the end of authoritarian rule does not automatically eliminate misuse of power, adding that the financial sector could again fall victim to policy capture and vested interests.

Raising concerns over the financial restructuring terms, TIB questioned how former owners of distressed banks could regain control by paying only 7.5% upfront, with the remaining 92.5% payable over two years at 10% interest.

The organisation also questioned whether such individuals would be able to restore depositor confidence, inject fresh capital, and comply with regulatory requirements under such conditions.

TIB expressed doubts over the Bangladesh Bank’s capacity to enforce post-acquisition conditions effectively, citing risks of weak oversight and potential conflicts of interest.

The watchdog further warned that the law, under the pretext of stabilising banks and protecting depositors, could increase default risks and shift financial burdens onto the public.

It urged the government to reconsider the controversial provision and ensure stronger accountability mechanisms in banking sector reforms.