New provision to help rehabilitate bank looters: TIB

Criticising the newly-enacted Bank Resolution Act 2026, the Transparency International Bangladesh (TIB) says the initiative will rehabilitate bank looters.
As a result, the banking sector is likely to once again turn into a haven for corruption and plunder, which will be self-defeating, it says.
The local chapter of the Berlin-based anti-graft watchdog made the observation in a press statement issued on Monday.
It said by including the provision of allowing former shareholders of the weak banks that had been merged to regain ownership without any form of accountability, the government had taken an initiative to rehabilitate identified looters.
The organisation further opined instead of addressing the long-standing mismanagement, irregularities, and governance deficits in the banking sector, this move perpetuated the previous authoritarian culture of impunity and lack of accountability.
TIB Executive Director Dr Iftekharuzzaman referred to the amendment to the provision in the Bank Resolution Ordinance 2025 -- issued during the interim government's tenure - that barred individuals or groups responsible for a bank's collapse from returning to ownership even if all funds were repaid.
With the inclusion of Section 18(a) in the Bank Resolution Act 2026, he said, the government guaranteed impunity instead of ensuring justice for those concerned.
He also said, "Whatever justification the government may offer, this decision -- one that facilitates and shields corruption and plunder -- does not ensure legal accountability for those who looted the banking sector. Instead, it effectively rewards them on a massive scale, making it self-defeating."
"While the decision is disappointing, it is hardly surprising. The fall of authoritarianism does not necessarily mark an end to the abuse of power and forcible capture in the banking sector.
"Rather, under a 'winner takes all' approach, it signals a shift in policy capture, leaving room for the re-emergence of kleptocratic practices after only a brief pause. This move by the government exemplifies that trend and is merely a continuation of the highly controversial decision surrounding the appointment of the Bangladesh Bank governor," he said.
He questioned what magic had suddenly purified the former owners of the crisis-ridden banks, who were the pioneers of plundering this sector, that they would deposit only 7.5 per cent of the government-determined amount to re-acquire shares, assets, etc. of the same banks, while the remaining 92.5 per cent would be repaid over two years at only 10 per cent interest.
"They will inject new capital! They will cover the existing capital shortfall! They will repay all previous depositors and creditors! They will pay government taxes and revenues! They will compensate affected parties and rebuild the relevant regulatory compliance framework! Does the government have any answer to this question?"
If the initiative to broadly return ownership to the former shareholders responsible for the collapse of the banking sector continued without ensuring their accountability through the proper legal process, no qualitative improvement would happen in this sector, the TIB official said.
"Under the pretext of keeping banks operational, protecting depositors, and ensuring economic stability, the government has passed a law in parliament by majority vote that introduces a new provision supportive of corruption.
"Will this law actually help fulfil the ruling party's electoral commitment to reform the banking and financial institution sector? Or has such a self-defeating decision been made to protect the interests of a vested syndicate?"
The TIB urged the government to reconsider the matter.

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