Written by The Banking Post
Dhaka, July 6 — Bangladesh has rolled out a comprehensive three-year reform roadmap to overhaul its banking sector, backed by the IMF, World Bank, and ADB, with future disbursements under the IMF’s $5.5 billion programme tied to its execution.
The plan includes sweeping legal, supervisory, and institutional reforms aimed at restoring financial stability, resolving distressed assets, and shielding taxpayers from future bank failures.
🏛️ Institutional Framework
- A Banking Sector Crisis Management Council (BCMC) will be formed to coordinate responses and end regulatory forbearance.
- A government-wide strategy will define the roles of Bangladesh Bank and the finance ministry in managing crises and recapitalisation.
📜 Legal Overhaul by FY2026
| Legislation | Objective |
|---|---|
| Bankruptcy Act | Enable early restructuring of viable distressed firms |
| Money Loan Court Act | Expedite loan recovery and reduce case backlog |
| Distressed Asset Management Act | License private AMCs to trade NPLs; no state-funded “bad bank” |
| Bank Resolution Ordinance | Grant BB powers to wind up failing banks; limit legal challenges |
| Deposit Protection Ordinance | Double deposit insurance to Tk 200,000; enable “Pay Box Plus” |
🛡️ Governance & Supervision
- BB has replaced boards at 15 weak banks and appointed administrators.
- New rules require banks to disclose beneficial ownership.
- Amendments to the Bank Company Act will ensure board and owner suitability.
- State-owned bank governance will be strengthened.
🔍 Asset Quality & Recovery
- AQRs completed for 6 banks; 12 more due by Dec 2025.
- BB to advise state-owned banks to conduct independent AQRs by Mar 2026.
- Risk-based supervision piloted for 20 banks.
- IFRS 9 implementation by 2027, with interim buffers.
💰 Liquidity & Asset Recovery
- Emergency liquidity assistance framework due by Dec 2025, including Shariah-compliant options.
- Asset recovery task force reactivated to trace and recover stolen funds from fraud and corruption.
The government says the reforms will restore credit discipline, reduce reliance on political intervention, and build a more resilient financial system.
