BRD Circular No. 01: Bank Resolution Act, 2026

Bangladesh Bank Circular No. 01 Bank Resolution Act, 2026 Date: 10 June, 2026 Bangladesh Bank Dhaka, 27 Asharh, 1432/10 June, 2026 Circular No. 01 dated 27 Asharh, 1432 corresponding to 10 June, 2026

Regarding the implementation of the Bank Resolution Act, 2026 and to facilitate the effective exercise of powers under the said Act:

Act No. 88 of 2026

1. Definitions. – Unless there is anything repugnant in the subject or context, the following words and expressions used herein shall have the meanings respectively assigned to them in this Act, namely:

(a) "Act" means the Bank Resolution Act, 2026 (Act No. 88 of 2026);

(b) "Authority" means the Bangladesh Bank;

(c) "Bank" means a bank as defined in section 2(j) of the Bangladesh Bank Order, 1972 (President's Order No. 127 of 1972);

(d) "Banking Company" means a banking company as defined in section 5(b) of the Banking Company Act, 1972 (Act No. 8 of 1972);

(e) "Banking Operation" means any banking operation as defined in section 5(c) of the Banking Company Act, 1972 (Act No. 8 of 1972);

(f) "Bridge Bank" means a bank established by the Authority under section 33 of the Act;

(g) "Critical Functions" means the functions of a bank which, if they were not provided, would be likely to lead to the disruption of the services of the bank that are essential to the real economy, or to the stability of the financial system of Bangladesh, or to the provision of credit to the real economy, or to the provision of payment, clearing and settlement services, or to the provision of other financial services, and which are designated as critical functions by the Authority;

(h) "Eligible Liability" means any liability of a bank which is eligible for bail-in in accordance with the provisions of this Act;

(i) "Financial Institution" means a financial institution as defined in section 2(j) of the Bangladesh Bank Order, 1972 (President's Order No. 127 of 1972);

(j) "Key Management Personnel" means the Managing Director, Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Chief Operating Officer, Chief Information Officer, Chief Compliance Officer, Chief Internal Auditor, Chief Human Resource Officer, and such other officers as may be designated by the Authority as key management personnel of a bank;

(k) "Non-viable" means a bank which is determined by the Authority to be non-viable;

(l) "Prompt Corrective Action Framework" means the framework for prompt corrective action as defined in section 2(k) of the Act;

(m) "Resolution" means the resolution of a bank as defined in section 2(l) of the Act;

(n) "Resolution Plan" means a resolution plan as defined in section 2(m) of the Act;

(o) "Resolution Power" means the resolution power as defined in section 2(n) of the Act;

(p) "Systemically Important Bank" means a bank which is designated as a systemically important bank by the Authority;

(q) "Write-down" means the write-down of a liability as defined in section 2(o) of the Act.

2. Application. – The provisions of this Circular shall apply to all banks and financial institutions in Bangladesh.

3. Powers of the Authority. – The Authority shall have the following powers, namely:

(a) To require any bank or financial institution to submit information and documents as may be necessary for the purpose of this Act;

(b) To conduct inspections and investigations of any bank or financial institution;

(c) To issue directions to any bank or financial institution to comply with the provisions of this Act;

(d) To impose penalties on any bank or financial institution for violation of the provisions of this Act;

(e) To take such other measures as may be necessary for the purpose of this Act.

4. Resolution Authority. – The Authority shall be the Resolution Authority for the purposes of this Act.

5. Resolution Powers. – The Resolution Authority shall have the following powers, namely:

(a) To transfer the assets, liabilities, or business of a bank to another bank or financial institution;

(b) To establish a bridge bank;

(c) To impose a bail-in on the eligible liabilities of a bank;

(d) To write down the eligible liabilities of a bank;

(e) To cancel the shares of a bank;

(f) To replace the key management personnel of a bank;

(g) To take such other measures as may be necessary for the purpose of this Act.

6. Resolution Plan. – The Authority may require any systemically important bank to submit a resolution plan to the Authority.

7. Prompt Corrective Action. – The Authority may take prompt corrective action against any bank which is determined to be non-viable.

8. Bail-in. – The Authority may impose a bail-in on the eligible liabilities of a bank which is determined to be non-viable.

9. Write-down. – The Authority may write down the eligible liabilities of a bank which is determined to be non-viable.

10. Hierarchy of Claims. – The hierarchy of claims in the resolution of a bank shall be as follows:

(a) Secured creditors;

(b) Preferential creditors; (c) Unsecured creditors; (d) Subordinated creditors; (e) Shareholders.

11. Treatment of Deposits. – The Authority shall ensure that the deposits of depositors are protected in the resolution of a bank.

12. Continuity of Critical Functions. – The Authority shall ensure that the critical functions of a bank are continued in the resolution of a bank.

13. Information Sharing. – The Authority may share information with other regulatory authorities for the purpose of this Act.

14. Confidentiality. – The Authority shall maintain the confidentiality of information obtained under this Act.

15. Penalties. – The Authority may impose penalties on any bank or financial institution for violation of the provisions of this Act.

16. Appeal. – Any person aggrieved by any order made by the Authority under this Act may prefer an appeal to the Appellate Tribunal.

17. Power to Make Rules. – The Authority may make rules for the purpose of carrying out the provisions of this Act.

18. Repeal. – The Bank Resolution Ordinance, 1984 is hereby repealed.

19. Transitional Provisions. – The provisions of this Act shall apply to all banks and financial institutions in Bangladesh.

20. Commencement. – This Circular shall come into force on the date of its publication in the Bangladesh Gazette.

Dhaka 10 June, 2026

(Enamul Haque) Deputy Governor Bangladesh Bank