The government is going to introduce a new Act to empower Bangladesh Bank (BB) to deal with banks' share ownership transfer and legal challenges.

In consultation with the government, the central bank has drafted the new special Act to empower the central bank to change ownership of bank shares, mergers, liquidations and acquisitions.

This law is being made in the context of concerns over the fugitive ownership of several banks by individuals and business groups close to the ousted Awami League government.

The concerned official of the Financial Institution Department (FID), a wing of the Finance Ministry, said that the central bank has already prepared a draft of this special law called the "Bank Regulation Act".

“If the law is passed, the owner's approval will not be required for the transfer of bank share ownership, mergers and acquisitions of weak banks, It will be possible to do so only if the central bank desired,” the official said.

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Besides, even if the old owner challenges it in court in the future, it will not survive. That is, the Bangladesh Bank authorities and potential buyers will get legal protection.

A senior BB official told UNB on condition of anonymity, "The Act has been drafted. Now the opinions of the FID and the Banking Regulations and Policies Division of the central bank are being taken. The opinions of the Legal Department of BB will also be taken.”

Then it will be sent to the FID and the FID will hold a stakeholder meeting with the representatives of the country's banks, representatives of the Law Ministry and experts.

The proposed law also includes the issue of transferring shares of shareholders/owners of the bank—whose shares the government will attach—are those who have failed to repay loans or taxes for any reason, or who have been proven to have lost their ability to own the bank.

The money received from the sale of these shares will first be used to repay liabilities or loans, and then, if there is a surplus, it will be deposited in their account, sources said.