Bangladesh Government Moves to Repeal Bank Resolution Act, End Black Money Legalization Scheme

The Bangladesh government on Monday proposed repealing the controversial Bank Resolution Act and eliminating the budget provision that allowed the legalization of undisclosed wealth, marking a significant shift in its financial and tax policy agenda.

Prime Minister Tarique Rahman announced the proposals while presenting amendments in parliament, saying the changes are part of a broader effort to strengthen financial governance, restore confidence in the banking sector, and improve tax compliance.

The government plans to repeal the Bank Resolution Act, legislation enacted under the previous administration that drew widespread criticism from economists, bankers, business leaders, and civil society organizations.

Opponents argued the law granted regulators broad authority to intervene in financially distressed banks without providing sufficient safeguards for depositors. Critics also contended that existing banking laws already offered adequate tools to manage troubled financial institutions.

The proposed repeal comes as Bangladesh continues efforts to rebuild confidence in its banking system, which has been challenged by rising non-performing loans, governance concerns, and allegations of large-scale financial misconduct.

The government also proposed withdrawing the provision that allowed taxpayers to legalize undisclosed income and assets by paying a prescribed tax.

The measure had been included in the proposed national budget but faced criticism from economists and anti-corruption advocates, who argued that it rewarded tax evasion and created an uneven tax system for compliant taxpayers.

"The provision for legalising undisclosed money has been proposed to be withdrawn," Prime Minister Rahman told parliament.

If approved, taxpayers will no longer have access to the special tax facility that has periodically allowed the declaration and legalization of previously undisclosed wealth.

The withdrawal of both measures signals a broader policy shift toward stronger financial oversight, improved banking governance, and greater tax fairness.

The proposed repeal of the Bank Resolution Act follows months of calls from banking experts, business chambers, and other stakeholders after the change in government. Supporters of the repeal have argued that abolishing the law will help strengthen public confidence in the financial system.

The government has also said ending the undisclosed wealth legalization scheme will reinforce the integrity of the tax system by removing preferential treatment for holders of undeclared assets.

The proposed changes will take effect only after receiving parliamentary approval.