To resolve the ongoing crisis in the banking sector, the government has made the ‘Bank Resolution Ordinance 2025’, which has been published as a gazette notification.

The ordinance is empowering Bangladesh Bank, so stricter and more organised steps can be taken to maintain the stability of the banking sector, as stated in the introduction of the ordinance.

Bangladesh Bank can take over any bank, including and financial institutions to bring stability to these institutions.

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To this end, the 67-page Bank Resolution Ordinance, 2025 was published in the form of a gazette on Friday (9 May), a holiday. Earlier, on 17 April, the advisery council approved the draft of the ordinance.

The new provision states that the central bank can temporarily take over any scheduled bank or financial institution, including any Islamic banks, under government ownership. For this, Bangladesh Bank can issue an order to transfer one or more shares.

However, the recipient of the shares must be a government-owned institution.

According to the ordinance, if the owner of a bank misuses the bank's assets for personal gain or resorts to fraud, then Bangladesh Bank can take any action against that bank through a resolution.

If necessary, there will be an opportunity to appoint a temporary administrator in the bank, reinvest capital, transfer assets and shares to a third party, and suspend operations partially or completely.

Bridge Bank Concept and Liquidation Process:

As part of the restructuring of a weak bank, an opportunity has been provided for establishing a "bridge bank", which can also be sold at a later date. If it is necessary to completely close the bank's operations, Bangladesh Bank can take the initiative for liquidation through the court.

In this case, a time limit has also been set for the appointment of a liquidator and settlement of liabilities.

Personal liability and fines:

The liability of the persons involved in the failure of the bank has been determined, and it has been said that if the bank suffers losses as a result of the actions or decisions of any person, he will be personally liable.

In addition, a provision has been made for imposing a fine of up to Tk50 lakh and an additional penalty of Tk5,000 for each day of violation of the ordinance.

Inter-institutional Council for Crisis Management:

A seven-member ‘Banking Sector Crisis Management Council’ will be formed to deal with the crisis in the banking sector, headed by the Governor of the Bangladesh Bank. The other members are the Finance Secretary, the Secretary of the Financial Institutions Division, the BSEC Chairman, the Legislative Secretary, and two Deputy Governors of the Bangladesh Bank.

The council will meet every three months and prepare emergency crisis plans.