Dhaka: The Policy Research Institute of Bangladesh (PRI), with support from the Foreign, Commonwealth and Development Office (FCDO), successfully hosted a high-level roundtable discussion today titled “Bank Failures and Resolution Regime: Understanding the Challenges for Bangladesh” at a hotel in the capital. Lutfey Siddiqi, Special Envoy to the Chief Adviser on International Affairs, attended the event as the chief guest. He emphasized the necessity of reform in the banking sector, stating, “If the banking sector continues with business as usual, nothing will change. Ensuring good governance-regardless of which political party forms the government-is essential.”
According to Bangladesh Sangbad Sangstha, a trigger presentation was delivered by Dr. Ashikur Rahman, Principal Economist at PRI. He highlighted that passing the Banking Resolution Ordinance is only the first step. The real challenge lies in investing in the processes, systems, and institutional capacities that will enable Bangladesh Bank and the financial sector to implement the resolution regime. Dr. Rahman warned that without the ability to execute orderly resolutions, manage failing banks efficiently, and protect depositors while minimizing systemic risks, the Ordinance will remain ineffective.
Dr. Zaidi Sattar, Chairman of PRI, chaired the event and remarked on the alarming rise of non-performing loans to nearly 35 percent, which he described as unprecedented. He called for a careful analytical inquiry into the factors that led to this situation, emphasizing that Bangladesh’s unique context requires a tailored framework for banking sector resolution. Dr. Sattar noted a positive development in that the sector’s hemorrhage has stopped, and he expressed optimism about the potential growth of around 5% in the coming year, contingent on a fair election in February 2026.
The event also featured Mohammad Zahir Hussain, Executive Director of the Bank Resolution Department at Bangladesh Bank, and Professor Dr. Mohammad Akhtar Hossain, Chief Economist at Bangladesh Bank, as special guests. Dr. Akhtar highlighted the challenges posed by the low foreign direct investment (FDI)-to-GDP ratio, exacerbated by high non-performing loans and political uncertainty.
The roundtable facilitated an open-floor discussion, allowing participants to exchange insights on priority reforms, including legislative updates, strengthened deposit protection mechanisms, and enhanced crisis preparedness. As part of PRI’s ongoing efforts to promote informed policy dialogue, the session brought together policymakers, financial sector experts, business leaders, and development partners to deliberate on the urgent need for a robust and credible bank resolution framework in Bangladesh. This framework is considered a key pillar for ensuring macroeconomic and financial stability amidst rising vulnerabilities in the banking sector.