Bank Resolution Act: Provision allowing controversial directors to return to be scrapped

A bill has been placed in parliament to repeal the controversial Section 18(A) of the Bank Resolution Act. The current government had added the provision to allow former and controversial directors of the merged Sammilito Islami Bank to return. Following widespread criticism, the provision is now set to be removed.

Finance Minister Amir Khasru Mahmud Chowdhury placed the bill in parliament on Thursday. The House later sent it to the Parliamentary Standing Committee on the Ministry of Finance, chaired by Deputy Speaker Kaiser Kamal, for scrutiny and submission of a report within two working days.

The bill proposes repealing Section 18(A) of the Bank Resolution Act. The provision states that individuals who were shareholders of a bank before it came under resolution could subsequently apply to Bangladesh Bank to reacquire shares, assets and liabilities of the bank. Bangladesh Bank could also extend the opportunity to another suitable person if it deemed appropriate.

The former interim government had issued the Bank Resolution Ordinance, which did not contain Section 18(A). After the BNP came to power, it amended and approved the ordinance, adding the provision.
The provision drew widespread criticism because it created an opportunity for former and controversial directors to return. The government later decided to scrap it and has now introduced the bill to amend the law accordingly.

In the statement outlining the bill’s objectives and reasons, Finance Minister Amir Khasru said it would be appropriate to repeal the provision since no individual or institution had applied under it after fulfilling all the requirements stipulated in the section.

Sammilito Islami Bank was formed through the merger of five troubled Islamic banks: EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank and union Bank.

Jamaat-e-Islami MP Nazibur Rahman had introduced a private member’s bill seeking to amend the Government Money and Budget Management Act.

When he sought permission to introduce the bill in parliament, the finance minister spoke on the matter and requested that the bill be withdrawn. Nazibur, however, refused to withdraw it.

The matter was then put to a vote. The “No” votes prevailed, and Nazibur was therefore denied permission to introduce the bill.