STAR BUSINESS REPORT

The Bank Resolution Ordinance will remain merely a promise on paper unless the authorities can conduct orderly resolutions, manage failing banks effectively, and protect depositors while minimising systemic risks, according to the Policy Research Institute of Bangladesh (PRI).

“Implementing and executing banking resolution regimes -- though conceptually strong -- involves major institutional, political, and technical challenges, especially in emerging markets,” read a PRI paper presented at a roundtable titled “Bank Failures and Resolution Regime: Understanding the Challenges for Bangladesh.”

The discussion, organised by PRI with support from the Foreign, Commonwealth & Development Office (FCDO), took place yesterday at Hotel Amari in Dhaka. Ashikur Rahman, principal economist at PRI, presented the paper, stressing that passing the ordinance is only half the work.

“What must come next is major investment in the processes, systems, and institutional capacity that will enable Bangladesh Bank and the financial sector to actually implement the resolution regime,” Rahman said.

“The real task now is building operational strength — supervisory tools, valuation skills, recovery mechanisms, and clear decision-making protocols that can rebuild confidence and revive Bangladesh’s financial system. Only then will the ordinance achieve its goal of protecting stability and creating the foundation for a stronger, more resilient banking sector,” he added.

CALLS FOR URGENT REFORM

Lutfey Siddiqi, special envoy to the chief adviser for international affairs and chief guest at the event, highlighted the urgency of reform.

“If the banking sector continues with business as usual, nothing will change. Ensuring good governance — no matter which political party is in power — is essential,” Siddiqi said.

He also suggested forming a truth and reconciliation commission for the banking sector.

“We need a truth and reconciliation commission for economic crime and NPLs, and to understand how these NPLs were created.

We have to develop a taxonomy because that is the only way to avoid repeating past mistakes,” Siddiqi said.

“We need to get to the core