TRW Insight / Bangladesh
Bangladesh has rebuilt the legal rules for failing banks, depositor protection and defaulting borrowers since 2025. Knowing which statute governs a loan, a deposit or a dispute now decides who is paid, how fast and at whose risk.
Banking law in Bangladesh in 2026: statutes, regulators and reform
Banking law in Bangladesh has changed more in the past eighteen months than in the previous two decades. A banking system carrying one of the highest default-loan ratios in the world has been met with a new resolution statute, a rebuilt deposit protection scheme, the first forced merger of failed banks and a fresh round of governance reform aimed at family control of bank boards. For lenders, borrowers, depositors, investors and anyone who signs a loan facility or a guarantee, the rules that decide who gets paid, and when, are no longer the rules of 2023.
This guide maps the whole framework: the Bank Company Act 1991 and its amendments, the Bangladesh Bank Order 1972, the Bank Resolution Act 2026 that replaced the 2025 ordinance, the Finance Company Act 2023, the Artha Rin Adalat Ain 2003, cheque dishonour under the Negotiable Instruments Act 1881, money laundering controls, foreign exchange regulation, Islamic banking and the 2025 to 2026 merger programme. It explains how each instrument works in practice, the legal issues that most often reach the courts, and when a business or borrower should take advice.
Summary: Banking in Bangladesh is governed by a small number of core statutes administered by Bangladesh Bank: the Bank Company Act 1991 for licensed banks, the Finance Company Act 2023 for non-bank lenders, the Bank Resolution Act 2026 for failing banks and the Artha Rin Adalat Ain 2003 for loan recovery. Money laundering, foreign exchange and cheque law sit alongside them. Since 2025 the state has gained wide powers to take over, merge or wind up weak banks, and depositor protection has doubled to Tk 2 lakh.
Key point: The Bank Resolution Act 2026, passed on 10 April 2026, lets Bangladesh Bank appoint administrators, dissolve boards, transfer a failing bank's business, create a bridge bank and hold individuals personally liable. A September 2026 amendment removed the provision that would have let former shareholders of a resolved bank buy it back.
At a glance
Bank Company Act 1991
The licensing, governance and prudential code for every bank company, including the wilful defaulter regime added in 2023.
Bangladesh Bank
Central bank, licensing authority, supervisor and, since 2025, resolution authority for failing banks.
Bank Resolution Act 2026
Administrators, bridge banks, transfers, write-downs and personal liability for those who drove a bank into failure.
Loan recovery
The Artha Rin Adalat Ain 2003 channels lender claims into specialist money loan courts with mediation built in.
2025 to 2026 reform
Five Islamic banks merged into Sammilito Islami Bank, deposit cover doubled and new bank governance rules are in draft.
Table of Contents
What banking law in Bangladesh covers
Banking law in Bangladesh is best understood as three layers. At the top sit statutes passed by Parliament or issued as President's Orders and ordinances. Beneath them sit regulations, rules and the master circulars, guidelines and directions issued by Bangladesh Bank under those statutes. At the bottom sit the contracts themselves: sanction letters, facility agreements, mortgages, hypothecations, guarantees and account terms. A dispute is usually won or lost on how those three layers interact, not on any one of them alone.
The statutory layer is compact. Commercial banks are licensed and supervised under the Bank Company Act 1991; the central bank derives its constitution and monetary powers from the Bangladesh Bank Order 1972; non-bank lenders operate under the Finance Company Act 2023; failing banks are dealt with under the Bank Resolution Act 2026; and lenders recover loans through the Artha Rin Adalat Ain 2003. Around that core sit the Negotiable Instruments Act 1881, the Money Laundering Prevention Act 2012, the Foreign Exchange Regulation Act 1947, deposit protection legislation and the general law of contract, transfer of property and companies.
Banking law and institutional finance
The same framework governs institutional finance more broadly: syndicated and club loans, project finance, trade finance, working-capital lines, leasing and the funding that finance companies raise from the public. Whether a lender is a scheduled bank, a finance company or a foreign lender advancing money offshore decides which statute applies, which regulator approves the transaction and which court hears a default. Our separate analysis of foreign loans to Bangladeshi borrowers covers the cross-border layer.
How this guide relates to our regulatory overview
This article is the legal-framework hub: it explains the statutes, how they are enforced and where disputes arise. For licensing conditions, capital and provisioning rules, digital banks, payment systems and the detailed supervisory regime, read our companion guide to banking regulations in Bangladesh in 2026, which we keep under review alongside this one.
The Bank Company Act 1991: the core code for commercial banks
The Bank Company Act 1991 (Act No. 14 of 1991) is the principal statute for every bank company operating in Bangladesh.[1] It decides who may carry on banking business, how a bank is owned and governed, what it may lend and to whom, and what Bangladesh Bank may do when things go wrong. Any analysis of banking law in Bangladesh starts with it, because almost every Bangladesh Bank circular traces its authority back to one of its sections.
Licensing and market entry
Section 31 requires a licence from Bangladesh Bank before a company may carry on banking business, and section 32 restricts opening or relocating places of business without approval.[1] In practice a licence is a discretionary regulatory decision: sponsors, source of funds, capital, business plan and the fitness of proposed directors are all scrutinised. Foreign banks operate branches under the same licensing regime.
Governance, directors and related-party lending
Section 15 governs the election of directors and the appointment of the managing director or chief executive, section 15KaKa sets directors' tenure, section 18 regulates transactions with directors, officers and employees, and section 27 imposes the general restrictions on loans and advances.[1] Related-party lending is where many of the sector's losses originated, so these provisions are enforced more aggressively after a bank enters difficulty than before.
Supervisory powers of Bangladesh Bank
The Act gives the central bank sharp tools. Section 29 lets it control advances, section 28Ka deals with bad or doubtful loans, section 46 empowers it to remove directors and senior officers, and section 47 allows it to dissolve a bank company's board.[1] Those powers were used repeatedly during 2024 and 2025 to reconstitute the boards of banks that had been captured by their sponsors.
The 2023 amendment: tenure, family seats and wilful defaulters
The Bank Company (Amendment) Act 2023, passed in June 2023, extended a director's maximum consecutive tenure from nine to twelve years followed by a three-year gap, and cut the number of members of one family who may sit on a bank board from four to three.[2] It also introduced a statutory concept of the wilful defaulter: a borrower who has the means to repay but does not, or who transfers mortgaged assets without the bank's approval.[2]
The consequences are significant for business. Banks must publish lists of wilful defaulters, which now sit under section 27Kha of the Act, and Bangladesh Bank can bar a listed wilful defaulter from travelling abroad, obtaining trade licences and registering companies.[1] [2] Being placed on the list is therefore a commercial event in its own right, and the classification process deserves the same attention as the underlying debt.
The 2026 draft amendment
A further Bank Company (Amendment) Act is in draft. The interim government's Bangladesh Bank had proposed cutting family seats on a board to two and capping consecutive service at six years. The revised draft reviewed on 20 September 2026 restores the limit of three family directors, and the Financial Institutions Division initially favoured a nine-year tenure.[3] The draft would also bar directors of a borrowing company from resigning, being removed or transferring shares without the lending bank's approval. As of October 2026 it still had to return to Bangladesh Bank and then go to Cabinet.[3]
Bangladesh Bank and the Bangladesh Bank Order 1972
Bangladesh Bank is constituted by the Bangladesh Bank Order 1972, a President's Order that sets out its capital, board, governor, monetary functions and its role as banker to the government. The Order sits behind every other statute in this guide, because Bangladesh Bank is the licensing authority, the prudential supervisor, the resolution authority and the operator of key payment systems at the same time.
The interim government prepared a wider rewrite of the Order to strengthen central bank independence in 2025, but the measure enacted by the new Parliament was narrower. The Bangladesh Bank (Amendment) Bill 2026, passed on 10 April 2026, struck clause 5 of Article 10 and removed the retirement age of 67 for the governor, while keeping the four-year term and the option of reappointment.[4] The amendment also gave statutory footing to the 2024 interim ordinance under which Ahsan H Mansur had been appointed.[4]
Why circulars matter as much as statutes
Most of the rules that bind a bank day to day are not in any Act. Loan classification and provisioning, rescheduling and write-off policies, single-borrower exposure limits, credit card rules and foreign exchange transaction rules are issued as Bangladesh Bank circulars and master circulars, and they change often. A borrower negotiating a reschedule, or a bank defending a classification, must work from the circular in force on the relevant date, not from memory.
Bank resolution: from the 2025 ordinance to the Bank Resolution Act 2026
Before 2025 Bangladesh had no modern framework for dealing with a failing bank short of liquidation. The interim government issued the Bank Resolution Ordinance 2025 on 9 May 2025.[6] When the new Parliament reviewed 133 interim ordinances in April 2026, its special committee placed the resolution ordinance among fifteen to be re-enacted in amended form, and the Bank Resolution Bill 2026 was passed by voice vote on 10 April 2026.[6] It became the Bank Resolution Act 2026 (Act No. 88 of 2026).[5]
What the Bank Resolution Act allows Bangladesh Bank to do
The Bank Resolution Act makes Bangladesh Bank the resolution authority. It may suspend a weak bank's business, limit shareholder rights, appoint administrators, dissolve the board or install new management, and transfer or merge a failing bank with a stronger institution.[6] The resolution tools in Chapter 4 include capital increases, transfers of shares, assets and liabilities to third parties, a bridge bank under section 28, write-down or conversion of capital and eligible liabilities under section 30, and temporary government ownership under section 33.[5]
Liability, compensation and depositor priority
The Bank Resolution Act reaches the people behind a failure. Sections 53 to 58 deal with the fraudulent use and misuse of bank funds, asset statements of responsible persons and measures to recover from them.[5] Individuals can be held personally liable, with penalties of up to Tk 50 lakh plus daily fines for violations. Shareholders who lose more in resolution than they would have in liquidation are compensated, and depositors have priority if a bank is closed.[6]
The September 2026 amendment
One provision drew sustained criticism. Section 18A, added when the ordinance was re-enacted, allowed shareholders who held shares before a bank entered resolution to apply to buy back its shares, assets and liabilities. Parliament repealed it through the Bank Resolution (Amendment) Bill 2026 on 9 September 2026, after concern that former owners of the merged Islamic banks could regain control.[7] The Act also creates a Bank Reconstruction and Resolution Fund under section 16, a Banking Sector Crisis Management Council and a liquidation regime, and it extends to finance companies under section 71.[5]
The 2025 to 2026 bank mergers and Sammilito Islami Bank
The resolution framework was used almost immediately. Five Shariah-based banks, Exim Bank, Social Islami Bank, First Security Islami Bank, Union Bank and Global Islami Bank, were placed into a merger process under the resolution regime.[6] They were combined into Sammilito Islami Bank PLC, the largest test so far of how banking law in Bangladesh handles failure on this scale.[7]
What a merger means for depositors, borrowers and counterparties
For depositors, the questions are access and timing: which balances are protected immediately and which are released in stages. For borrowers, the loan does not disappear; the claim passes to the successor bank, which will usually review security, guarantees and any pending Artha Rin cases with fresh eyes. For trade counterparties, letters of credit, guarantees and correspondent arrangements must be checked against the transfer instruments. Anyone with an exposure to a bank in resolution should obtain the relevant Bangladesh Bank orders and map exactly which rights moved and which stayed behind.
Will there be more mergers?
The legal answer is that the Bank Resolution Act gives Bangladesh Bank continuing power to transfer or merge any bank that meets the resolution conditions, and to create a bridge bank where a buyer is not immediately available.[5] Directors and controlling shareholders of weak banks should assume that recovery plans, valuations and their own asset statements may be demanded at short notice.
Deposit protection after the Deposit Protection Act 2026
Parliament passed the deposit protection bill on 10 April 2026. It repeals the Bank Deposit Insurance Act 2000 and guarantees each depositor up to Tk 200,000 from the fund if a member institution is liquidated, double the previous Tk 100,000, with the limit reviewed every three years.[8] Depositors with larger balances claim the excess from the liquidator.
The timetable is tight. The liquidator must give Bangladesh Bank the depositor list within ten working days of the liquidation order, and Bangladesh Bank must then settle protected deposits within seven working days. Finance companies are covered for the first time and must join by 1 July 2028, with separate funds kept for bank companies and finance companies.[8] Corporate treasurers should treat the cap as a per-depositor limit, not a per-account guarantee, and spread significant balances accordingly.
Finance companies under the Finance Company Act 2023
Non-bank lenders, formerly known as financial institutions, are governed by the Finance Company Act 2023 (Act No. 59 of 2023), which repealed and re-enacted the Financial Institutions Act 1993.[9] The statute regulates leasing companies and other finance companies that lend and, within limits, take term deposits.
Section 4 requires a licence, section 7 allows its cancellation, sections 14 and 15 govern the board and the appointment of directors, section 19 lets Bangladesh Bank remove the chairman, directors and chief executive, section 24 restricts deposit-taking, section 30 deals with defaulting and wilful defaulting borrowers, and section 41 empowers Bangladesh Bank to issue binding directions.[9] Several finance companies collapsed in the decade before 2023, and the new Act was designed to give the regulator the powers it lacked during those failures. Lenders and investors should note that the resolution regime in the Bank Resolution Act also extends to finance companies.[5]
Bangladesh Bank
Central bank, licensing authority, prudential supervisor and resolution authority for banks and finance companies.
Bangladesh Financial Intelligence Unit
Receives suspicious transaction reports and leads anti-money laundering supervision under the 2012 Act.
Financial Institutions Division
Ministry of Finance division that steers banking legislation, including the Artha Rin and Bank Company reforms.
Artha Rin Adalat
Money loan courts with exclusive jurisdiction over recovery suits by banks and finance companies.
High Court Division
Hears appeals, revisions and writ petitions against regulatory action, and liquidation applications.
Banks and finance companies
Scheduled banks under the 1991 Act and non-bank lenders under the Finance Company Act 2023.
Loan recovery and the Artha Rin Adalat Ain 2003
When a borrower defaults, banking law in Bangladesh sends the lender to a specialist forum. The Artha Rin Adalat Ain 2003 (Act No. 8 of 2003) establishes money loan courts with exclusive jurisdiction over recovery suits by financial institutions under section 5, and sets its own procedure, time limits and execution rules.[10]
Pre-suit sale, mediation and settlement
Section 12 regulates sales of collateral by financial institutions, so a lender's power to sell mortgaged or pledged property outside court must be checked against it before any suit is filed.[10] The Act also builds settlement into each stage: section 22 provides for mediation, section 23 for a further attempt at alternative dispute resolution, section 38 for mediation at the execution stage, section 44A for mediation on appeal or revision and section 45 for compromise settlements.[10] Our guide to alternative dispute resolution in Bangladesh explains how these settlement routes fit together.
Execution: auction and civil detention
A decree is enforced in an execution case under Chapter 6. Section 33 provides for auction sale of the security, section 34 for civil detention of the judgment debtor and section 36 for recovering decree money from third parties.[10] Guarantors are exposed in the same proceedings, which is why a personal guarantee given to secure a company's facility is rarely a formality.
Reform of the money loan courts
Delay is the system's weakness. Bangladesh Bank drafted a new Artha Rin Adalat Ain with an appellate court of High Court rank judges, a recovery officer to execute decrees, power to suspend defaulters' national ID cards and passports, and bars on defaulters contesting elections or acting as company directors. In January 2026 the law ministry rejected a new statute and asked for targeted amendments to the 2003 Act instead, and a committee under the Financial Institutions Division is preparing those recommendations.[11] Lenders should expect procedural change during 2026 and 2027, but not a new court system.
Cheque dishonour cases under the Negotiable Instruments Act 1881
Alongside civil recovery, lenders and trade creditors routinely use criminal cheque cases. Under section 138 of the Negotiable Instruments Act 1881, a cheque must be presented within six months of its date or within its validity period, whichever is earlier. If it is returned unpaid for insufficient funds, the payee must send written notice within thirty days of being informed by the bank, and the drawer then has thirty days to pay.[12]
If the drawer does not pay, the offence is complete and is punishable with imprisonment of up to one year, a fine of up to three times the cheque amount, or both.[12] Banks often take post-dated or security cheques at disbursement for exactly this reason. The strategy has limits: the courts look closely at whether a cheque was given for a legally enforceable debt, and running a cheque case and an Artha Rin suit in parallel requires careful coordination. Our detailed guide to cheque dishonour in Bangladesh covers the complaint stage, forum and appeals.
Money laundering, sanctions and customer due diligence
The Money Laundering Prevention Act 2012 (Act No. 5 of 2012) defines the offence of money laundering and its punishment in section 4, provides for freezing and attachment of property in section 14, establishes the Bangladesh Financial Intelligence Unit in section 24 and imposes responsibilities on reporting organisations in section 25.[13] Banks and finance companies are reporting organisations, so customer due diligence, record-keeping and suspicious transaction reporting are statutory duties, not policy choices.
For customers, the practical effect is friction. Accounts can be frozen, transactions held and beneficial-ownership information demanded, especially where funds move across borders or through connected companies. Since 2024 money laundering powers have also been used to trace assets linked to the banking scandals now being unwound through resolution. A business whose account is frozen should act quickly: identify the authority behind the order, the statutory basis and the route to challenge or release.
Foreign exchange regulation and cross-border banking
Foreign exchange is the part of banking law in Bangladesh that most affects foreign investors. Every foreign exchange transaction passes through the Foreign Exchange Regulation Act 1947 and the Bangladesh Bank rules made under it. Only authorised dealers, in practice licensed banks, may deal in foreign currency, and payments to non-residents, export proceeds, foreign borrowing and the transfer of securities are all regulated. Bangladesh Bank's foreign exchange guidelines set out which transactions are permitted automatically and which require prior approval.
For businesses, foreign exchange rules shape the structure of a deal as much as its commercial terms: whether an overseas parent should lend or subscribe equity, how a standby letter of credit is used, how export proceeds must be repatriated and how dividends are remitted. Our guides on receiving foreign currency in Bangladesh, overseas bank guarantees and SBLCs and LC versus TT payments address the most common questions.
Islamic banking in the Bangladesh legal framework
Islamic banks hold a large share of deposits, yet banking law in Bangladesh gives them no separate banking statute. They are licensed and supervised as bank companies under the Bank Company Act 1991 and operate under Bangladesh Bank's Islamic banking guidelines, with Shariah supervisory boards at bank level. Their contracts, such as murabaha, ijara and musharaka financing, are drafted as sale, lease and partnership arrangements, but disputes are heard in the same money loan courts as conventional loans.
The resolution regime recognises the difference. Section 31 of the Bank Resolution Act addresses how resolution tools apply to Islamic banks.[5] That provision matters in practice, because the five banks merged into Sammilito Islami Bank were all Shariah-based, and depositors' profit-sharing accounts raise questions that a conventional deposit does not.[6]
Common legal issues in the banking sector
The legal problems that banking law in Bangladesh generates fall into recurring patterns. Most begin long before litigation, in a sanction letter, a board resolution or a guarantee signed under time pressure.
Non-performing loans
Default is the sector's defining problem. According to Bangladesh Bank data, the non-performing loan ratio fell from 35.73 per cent in September 2025 to 32.78 per cent in June 2026, but classified loans still rose in absolute terms to Tk 606,555 crore.[14] Part of the jump in recent years reflects stricter classification and disclosure rather than new lending failures, but the legal consequence is the same: more classification disputes, rescheduling negotiations, wilful defaulter listings and Artha Rin suits.
Governance failures and related-party lending
Board capture, insider lending and benami borrowing lie behind most of the bank failures now being resolved. The Bank Company Act limits on family directors and related-party transactions, the removal and supersession powers in sections 46 and 47, and the personal-liability provisions of the Bank Resolution Act are the legal response.[1] [5] Independent directors and senior managers should keep their own record of objections, because they may later have to show they did not approve a transaction.
Fraud, forgery and account disputes
Forged cheques, unauthorised transfers, card and mobile-banking fraud, and disputes over joint or deceased persons' accounts are frequent. The bank-customer relationship is contractual, so liability usually turns on the account terms, the bank's verification procedures and how quickly the customer reported the problem. Where fraud involves insiders, criminal, anti-corruption and money laundering proceedings may run alongside the civil claim.
Guarantees and security
Disputes over bank guarantees, performance bonds and mortgages are a separate category. A demand guarantee is generally paid on a compliant demand regardless of the underlying dispute, and injunctions are granted only on narrow grounds. Our analysis of bank guarantees in Bangladesh explains the rules, and the companion piece on whether a performance guarantee can be stopped covers injunctions.
| Statute | Governs | Regulator or forum | 2025 to 2026 change |
|---|---|---|---|
| Bank Company Act 1991 | Bank licensing, governance, lending, defaulters | Bangladesh Bank | Further amendment in draft on family directors and tenure |
| Bangladesh Bank Order 1972 | Central bank constitution and powers | Bangladesh Bank | 2026 amendment removed governor's age limit |
| Bank Resolution Act 2026 | Failing banks, bridge banks, liquidation | Bangladesh Bank; High Court Division | Replaced 2025 ordinance; buy-back clause repealed September 2026 |
| Finance Company Act 2023 | Non-bank lenders and leasing companies | Bangladesh Bank | Covered by resolution and deposit protection regimes |
| Artha Rin Adalat Ain 2003 | Loan recovery suits and execution | Money loan courts | Amendments under preparation |
| Negotiable Instruments Act 1881 | Cheque dishonour offences | Magistrate and sessions courts | 2026 amendment to forum rules |
| Money Laundering Prevention Act 2012 | AML duties and freezing | BFIU; courts | Used to trace assets linked to failed banks |
Impact of banking law on businesses and borrowers
For a business, banking law in Bangladesh is not an abstract regulatory field. It decides how much a company can borrow from one bank, what security it must give, what happens to its directors if it defaults and how quickly a lender can sell its factory. The changes since 2023 have shifted risk towards borrowers and their controllers.
Borrowers and their directors
The wilful defaulter regime under the Bank Company Act and the Finance Company Act exposes directors and group companies to travel bans and restrictions on trade licences and new company registrations.[2] [9] The 2026 draft would go further by locking directors of borrowing companies into their positions and shareholdings without the bank's approval.[3] Directors should treat any personal guarantee and any default notice as a personal legal matter.
Depositors and treasurers
The Tk 2 lakh protection limit, the staged release of larger balances in banks under resolution and the possibility of forced mergers make bank selection a governance decision. Treasurers should document why each bank was chosen, monitor exposure limits and check whether facility agreements allow cash collateral to be moved if a bank weakens.[8]
Investors and acquirers
Investors in banks and finance companies face fit-and-proper review, shareholding limits and the possibility that a resolution order will write down capital or transfer the business without their consent.[5] Due diligence on a bank or finance company must now include resolution risk, related-party exposures and any Bangladesh Bank inspection findings.
How to manage a banking law matter step by step
Whether the issue is a default notice, a frozen account, a resolution order or a planned facility, the same disciplined sequence protects the client's position.
Identify the institution
Confirm whether the counterparty is a bank company, a finance company or a foreign lender, and whether it is under resolution.
Collect the documents
Gather the sanction letter, facility agreement, security, guarantees, statements and every notice exchanged.
Check the circular in force
Identify the Bangladesh Bank classification, rescheduling or foreign exchange rule that applied on the relevant date.
Diary every deadline
Record cheque notice periods, Artha Rin limitation and filing dates, appeal windows and any regulatory response dates.
Assess personal exposure
Review guarantees, wilful defaulter risk and director liability before anyone signs or speaks to the bank.
Open settlement early
Use rescheduling, mediation under the Artha Rin Adalat Ain or a negotiated exit before positions harden.
Choose the forum
File or defend in the money loan court, magistrate's court or High Court Division as the dispute requires.
Record the outcome
Document any settlement, reschedule or compromise decree with precise terms and default consequences.
When to seek banking law advice
The right time to take advice on banking law in Bangladesh is before a document is signed or a deadline passes, not after the bank has filed suit. Typical trigger points include negotiating a sanction letter or facility agreement; giving a personal or corporate guarantee; receiving a default, classification or wilful defaulter notice; facing an Artha Rin suit or execution case; receiving or issuing a cheque dishonour notice; having an account frozen; being affected by a bank resolution or merger; and buying into, or investing in, a bank or finance company.
A good banking lawyer adds most value at three moments: in structuring, by making sure security and guarantees are valid and enforceable; at the first sign of distress, by negotiating rescheduling or settlement before positions harden; and in litigation, by using the procedural rules of the Artha Rin Adalat Ain, the Negotiable Instruments Act and the writ jurisdiction of the High Court Division with precision.
Banking and finance lawyers in Bangladesh: how TRW helps
TRW's banking and finance team advises banks, finance companies, foreign lenders, corporate borrowers, directors and depositors across the full range of banking law in Bangladesh. We draft and negotiate facility agreements, security and guarantees; advise on Bangladesh Bank approvals and foreign exchange structuring; act in Artha Rin suits, execution cases, cheque dishonour prosecutions and defences, and writ petitions against regulatory action; and advise boards and investors on resolution and merger risk.
Explore our banking and finance practice for transactional and regulatory work, or our banking and finance litigation practice for recovery, defence and regulatory disputes. You can also contact TRW directly to discuss a specific matter.
What to watch in banking law in Bangladesh for the rest of 2026
Three developments will shape the next twelve months. First, the Bank Company (Amendment) draft, with its compromises on family directors and tenure, still has to reach Cabinet and Parliament.[3] Second, targeted amendments to the Artha Rin Adalat Ain are being prepared, and their content will decide whether loan recovery becomes faster.[11] Third, the integration of Sammilito Islami Bank and any further use of the Bank Resolution Act will test how far the new framework protects depositors without rewarding those responsible for failure.[7] Anyone with material exposure to the banking sector should review their position against each of these.
Frequently asked questions
What are the main banking laws in Bangladesh?
The core statutes are the Bank Company Act 1991, the Bangladesh Bank Order 1972, the Bank Resolution Act 2026, the Finance Company Act 2023 and the Artha Rin Adalat Ain 2003, supported by the Negotiable Instruments Act 1881, the Money Laundering Prevention Act 2012 and the Foreign Exchange Regulation Act 1947.[1] [5] [9]
Who regulates banks in Bangladesh?
What is the Bank Resolution Act 2026?
How much of my bank deposit is protected?
Under the 2026 deposit protection law, each depositor is guaranteed up to Tk 200,000 if a member bank or finance company is liquidated. Larger balances are claimed from the liquidator.[8]
Which banks merged into Sammilito Islami Bank?
What is a wilful defaulter under Bangladeshi law?
Broadly, a borrower who can repay but does not, or who transfers mortgaged assets without the lender's approval. Listed wilful defaulters can face travel bans and restrictions on trade licences and company registration.[2]
Which court hears bank loan recovery cases?
Money loan courts established under the Artha Rin Adalat Ain 2003 have exclusive jurisdiction over recovery suits by financial institutions, with mediation available at trial, execution and appeal stages.[10]
What are the deadlines in a cheque dishonour case?
Present the cheque within six months or its validity, whichever is earlier; send notice within thirty days of the bank's return advice; and allow the drawer thirty days to pay before the offence is complete.[12]
Is there a separate law for Islamic banks in Bangladesh?
When should a business consult a banking lawyer?
Before signing a facility, security document or guarantee, and immediately on receiving a default, classification or wilful defaulter notice, a cheque dishonour notice, an account freeze or notice of a bank's resolution. Early advice preserves settlement options and statutory deadlines.
Source register
Primary legal and regulatory sources
Materials checked on 20 October 2026. Confirm the current official text before relying on any provision.
- Bank Company Act 1991 (Act No. 14 of 1991) — Laws of Bangladesh
- Dhaka Tribune, 22 June 2023 — Bank director tenure raised to 12 years
- Prothom Alo, October 2026 — New draft law retains scope for family control of banks
- The Business Standard, 10 April 2026 — Age limit removed for Bangladesh Bank governor's post
- Bank Resolution Act 2026 (Act No. 88 of 2026) — Laws of Bangladesh
- The Business Standard, 10 April 2026 — Bank Resolution Bill passed in parliament
- The Financial Express, 9 September 2026 — Parliament scraps controversial bank ownership provision
- The Financial Express, 10 April 2026 — Parliament passes bill to safeguard depositors' interests
- Finance Company Act 2023 (Act No. 59 of 2023) — Laws of Bangladesh
- Artha Rin Adalat Ain 2003 (Act No. 8 of 2003) — Laws of Bangladesh
- The Financial Express, 19 January 2026 — Law ministry turns down draft Money Loan Court Act
- Negotiable Instruments Act 1881, section 138 — Laws of Bangladesh
- Money Laundering Prevention Act 2012 (Act No. 5 of 2012) — Laws of Bangladesh
- Dhaka Tribune, 16 September 2026 — NPLs decline by 3 percentage points
Related TRW assistance
Move from information to a defined next step
TRW advises lenders, borrowers, directors, depositors and investors on facilities, security, Bangladesh Bank approvals, Artha Rin recovery, cheque cases and bank resolution. Explore our banking and finance practice, our banking and finance litigation practice, or contact TRW to discuss your matter.