Defaulters must not be rewarded

It is completely unacceptable that the Bank Resolution Act, 2026, based on the ordinance drafted by the interim government to merge five troubled Shariah-based banks, has been passed in parliament enabling the country’s most notorious defaulters to regain control of the very banks they caused to fail. Under relatively easy terms, Section 18A of the act allows former directors or owners of the merging banks to reclaim ownership by paying upfront 7.5 percent of the amount injected into these banks by the government or the Bangladesh Bank. They then have two years to pay the remaining amount at a 10 percent simple interest.

In addition, they will have to make several pledges in their ownership reclamation application, including paying all pre-merger liabilities to depositors, foreign and domestic creditors, and third-party claims, as well as clearing all taxes and other financial liabilities to the government. Given that the infamous S Alam Group is among the former directors/owners of the five ailing Shariah-based banks, insertion of this clause appears to be a gross error of judgement. Not long ago, the finance minister identified this group as the country’s top loan defaulter. It has defaulted on crores of taka in loans with nearly a dozen banks and has been implicated in serious financial crimes. According to the former central bank governor, the group’s founder and chairman, Mohammed Saiful Alam, and his associates “syphoned off” more than Tk 1 lakh crore (~$10 billion) after taking control of several banks with the help of an intelligence agency during Sheikh Hasina’s regime.

Now imagine that the S Alam Group applies to reclaim ownership or directorship of one of the ailing banks under Section 18A of the act, making the required pledges and paying 7.5 percent of the Tk 35,000 crore bailout fund. For a group that has syphoned off vast sums, paying Tk 2,625 crore upfront would be easy. But how can they be trusted to fulfil the pledges or pay the remainder of the money when 11 of its subsidiaries alone have at least Tk 22,881 crore in defaulted loans—about 65 percent of the total owed by the top 20 defaulters?

If such a situation arises, what will happen to the cases filed by the Anti-Corruption Commission, now awaiting international arbitration, as the S Alam Group has reportedly approached the World Bank’s International Centre for Settlement of Investment Disputes? With ownership restored, would they not influence the investigation? How would this affect efforts to repatriate laundered money? Most importantly, what message does this send to wilful defaulters and financial criminals?

In a country where bad loans reached Tk 5.45 lakh crore in 2025, allowing such entities to own banks sets a dangerous precedent. Many of them are largely responsible for the illicit financial outflows totalling $68 billion between 2013 and 2022. Thus, this provision may end up rewarding those who caused such great losses in the first place. It is indeed concerning that the government passed this law despite opposition objections. Parliamentary majority should not be abused to pass contentious legislations. The government should promptly amend the act to remove this provision.