Bangladesh Bank (BB) Governor Dr Ahsan H Mansur today said the 'Bank Resolution Act' is expected to be finalised by July this year for legally apply corrective measures like mergers and acquisitions, liquidation, re-capitalisation and consolidation of the crisis-ridden banks.
"At the pace we are moving now, we should be able to enact the 'Bank Resolution Act' by July. We will initiate the reform process in the banking sector, but the rest will depend on the efforts of the next elected political government," he said.
The BB governor said this while speaking at a roundtable titled "Path to Recovery for the Banking Sector", organised by The Business Standard at its office in the city.
Mansur said a banking regulatory simplification task force will also be formed to clarify central bank policies and streamline operational processes for banks.
"The task force will include managing directors from various banks and experts," he said.
Regarding the banking sector, the governor said, "We want to move fast and reshape the financial horizon."
Efforts to strengthen the central bank are in full swing and the World Bank is helping find the best practices globally, he added.
"We want to ensure independence of the central bank within July-August this year. We will try to consolidate the foundation but all reforms cannot be done by the interim government. Reforms will continue when the next government comes to power," he said.
Regarding weak banks, the BB governor said, "We are closely monitoring the management of weak banks on a daily basis and overseeing their activities. While we have already provided substantial liquidity support, these banks will require 5-10 years to fully recover with adequate capital."
He said even banks that have previously overcome financial difficulties in the country have taken a similar amount of time to stabilise.
