Cabinet Approves Draft Bank Resolution Amendment Law 2026

The Cabinet has given final approval to the draft Bank Resolution (Amendment) Act, 2026, aimed at strengthening the framework for dealing with troubled banks and maintaining financial stability.

The decision was taken at the Cabinet’s 16th meeting on Monday (August 10), chaired by Prime Minister Tarique Rahman at the Cabinet Division meeting room in Bangladesh Secretariat.

The government had earlier introduced the Bank Resolution Ordinance, 2025, to address problems such as capital shortages, liquidity crises, insolvency and risks to the survival of scheduled banks.

The ordinance was later presented to Parliament as a bill for conversion into law and was sent to a special parliamentary committee for review.

Following the committee’s recommendations, Section 18A was added to the Bank Resolution Act, 2026. The provision was intended to reduce the government’s financial burden, protect customers and provide an alternative market-based mechanism for restructuring troubled banks.

However, no individual or organization applied under the conditions set out in Section 18A after the law was enacted. As a result, the government decided that the provision was no longer necessary.

The Financial Institutions Division subsequently prepared the draft amendment law to remove Section 18A.

The Cabinet gave the draft its final approval, subject to vetting by the Legislative and Parliamentary Affairs Division.

The amendment mainly seeks to remove a provision that has not been used, while keeping the broader bank-resolution framework in place to deal with financial problems at scheduled banks.