The High Court issued a rule on Thursday asking relevant authorities to explain why specific provisions of the "Bank Resolution Ordinance 2025" empowering the central bank to merge several banks and non-bank financial institutions (NBFIs) should not be declared unconstitutional.
The provisions of the ordinance empower the Bangladesh Bank to merge multiple financially weak banks and NBFIs into stronger entities.
The court issued the rule on the respondents to explain why Sections 28(6) and 28(7) read with Section 16(M) and Sections 30, 31, 33, 34, 36, 48, 49, 50, and 51 of the "Bank Resolution Ordinance-2025" should not be declared unconstitutional.
The Law Secretary, Cabinet Secretary, Bangladesh Bank Governor, and others have been asked to comply with the rule within four weeks.
The High Court bench of Justice Md Habibul Gani and Justice Sk Tahsin Ali passed the order after hearing a writ petition filed by some secondary shareholders of Social Islami Bank, Islami Bank Bangladesh Limited, Global Islami Bank, First Security Islami Bank, and Union Bank.
Lawyers Ahsanul Karim and Mustafizur Rahman Khan appeared in the court hearing on behalf of the writ petitioners, while Additional Attorney General Arshadur Rouf represented the Bangladesh Bank.
Lawyer Ahsanul Karim told The Financial Express that the ordinance was passed without consulting the banks' shareholders and that the move would destroy the country's economy.
Md Shah Alam Babu, Md Afsar Uddin Sarkar, Siddiqur Rahman (Liton), Mustayen Billah, Mark Lloyd Gomes, Md Abdul Kader Sarker, and M A Saidur Rahman filed the writ petition.
The Bangladesh Bank is preparing to roll out a large-scale merger initiative involving financially weak banks and non-bank financial institutions (NBFIs) under the Bank Resolution Ordinance.
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