The finance minister, Amir Khosru Mahmud Chowdhury, on Tuesday informed the Jatiya Sangsad that the government has undertaken a series of comprehensive measures aimed at restoring stability and confidence in the country’s banking sector through a structured and multi-dimensional resolution framework.
Responding to a question from Cox’s Bazar-3 lawmaker Lutfur Rahman during the third sitting of the second session and first budget session of the 13th JS, the minister said the legal foundation for the framework was established through the Bank Resolution Ordinance 2025, under which the Bank Resolution Scheme 2025 was implemented. The ordinance was subsequently enacted as the Bank Resolution Act 2026.
As part of the resolution strategy, five troubled Islamic banks have been merged to form Sommilito Islami Bank PLC—a move the minister described as a significant step towards strengthening the financial sector.
Khosru highlighted reforms introduced under the Deposit Protection Act 2026, which doubled the maximum amount of protected deposits from Tk 100,000 to Tk 200,000.
In addition, depositors of finance companies, who were previously excluded from deposit protection coverage, have now been brought under the protection of the law.
‘Overall, a clear legal framework, a transparent resolution process, and stronger protection for depositors are expected to play an effective role in restoring the confidence of depositors and stakeholders in the banking sector,’ he told the house.
The finance minister said the government and Bangladesh Bank have adopted a number of measures to improve loan recovery and reduce non-performing loans (NPLs).
These include policy support for recovering overdue loans from borrowers unable to repay on time, the formulation of guidelines on classified loan resolution strategies for banks with high levels of defaulted loans, and stricter action against wilful defaulters.
Khosru said banks have been instructed to strengthen their legal divisions, while each bank has been directed to recover at least 1 per cent of its outstanding defaulted loans in cash through alternative dispute resolution (ADR) mechanisms by 30 June.
Other measures include updating the credit risk management guidelines, reviewing the progress of recovery from the top 20 defaulters at every bankers’ meeting, and requiring banks with classified loans exceeding 10 per cent to establish dedicated monitoring teams for loan recovery.
The minister added that loan classification and provisioning policies based on Expected Credit Loss (ECL) under IFRS 9 are being implemented to enhance governance in credit management and mitigate lending risks. In addition, listed collateral valuation firms have been authorised to assess securities pledged against loans alongside the banks’ own evaluations.
The finance minister further noted that the government has adopted several action plans. These include updating agricultural loan rescheduling policies, publishing lists of defaulting and wilful defaulters, revising incentive schemes for good borrowers, setting borrowing limits across the banking sector for individual borrowers, and pursuing legal reforms to impose stricter measures on habitual defaulters.
He said the government is also considering the inclusion of experienced bankers on the jury board of the Artha Rin Adalat (money loan court), measures to prevent defaulters from delaying recovery proceedings through writ petitions, and encouraging companies seeking financing above Tk 10 billion to raise funds through bond issuances rather than bank borrowing.
Furthermore, legislation is being prepared to facilitate the establishment of private-sector asset management companies (AMCs) to help address distressed assets and improve financial sector stability, the minister said.
