Cabinet backs scrapping Section 18A, shuts former shareholders out of banks

The cabinet has endorsed the scrapping of the ‘controversial’ Section 18A of the Bank Resolution Act, a move Finance Minister Amir Khosru Mahmud Chowdhury announced in his budget closing speech.

The provision’s removal closes a route for former shareholders of banks to regain stakes in merged institutions.

At Monday’s cabinet meeting, the government gave policy and final approval to amendments to the Bank Resolution (Amendment) Act 2026, removing Section 18A.

Once enacted, former shareholders or partners of a bank brought under resolution will no longer have the option, subject to conditions, to reclaim shares, assets or liabilities of the institution.

A Cabinet Division media statement on Monday said the draft will be finalised after legal vetting by the Legislative and Parliamentary Affairs Division.

The government proposed scrapping Section 18A because no individual or institution had applied under its provisions, according to the release.