Bangladesh Association of Banks president Abdul Hai Sarker on Monday expressed deep concern over a provision in the Bank Resolution Act, 2026 that allows former sponsors and owners to return to the banking sector.
Speaking to reporters after a meeting with Bangladesh Bank governor Mostaqur Rahman on Monday, Sarker said that the association feared that those who previously looted money from banks and were involved in irregularities might exploit the provision to stage a comeback, potentially triggering fresh instability in the sector.
He said that the banking industry was worried because the people responsible for massive loan scams and governance failures were already widely known to the public.
Allowing such individuals to return could further erode depositor confidence and deepen the ongoing crisis in the financial sector, he added.
Sarker, who is also chairman of Dhaka Bank, said that the governor assured bank owners that former sponsors would not be able to return by fully complying with the strict conditions outlined in Section 18(a) of the amended law.
He also said that the central bank confirmed that the ongoing merger process involving five weak banks would continue.
The concerns were outlined in a detailed letter submitted by the BAB to the central bank governor ahead of the meeting.
In the letter, the association described the banking sector as passing through one of the most difficult periods in its history, burdened by soaring non-performing loans, provisioning shortages, capital adequacy pressure, weak private sector credit growth, declining investor confidence and legal barriers to loan recovery.
The association warned that the crisis was no longer limited to financial stress, but had become a broader confidence crisis involving depositors, investors and international stakeholders concerned about governance, transparency and accountability in the sector.
The BAB also called for structured consultations with banks before finalising major reforms, including amendments to the Bank Company Act and implementation rules under the resolution framework.
The organisation proposed allowing banks with non-performing loan ratios below 20 per cent to continue accessing refinance schemes and requested regulatory relief on provisioning, capital treatment and rescheduled loans to ease pressure on banks’ balance sheets.
The BAB further proposed setting up a national Asset Management Company to acquire and recover bad loans, saying that countries like Malaysia, Indonesia and South Korea had successfully used such mechanisms during banking crises.
The bankers’ body also urged reforms to the legal recovery framework, including fast-track financial courts, restrictions on repeated stay orders and measures to pursue ultimate beneficiaries of defaulted loans.
Shahjalal Islami Bank director AK Azad, UCB Bank chairman Sharif Zahir, Pubali Bank chairman Monzurur Rahman and Bank Asia chairman Romo Rouf Chowdhury were also present at the meeting.
