In a significant step toward ensuring institutional reform and economic stabilization, the interim government of Bangladesh has published a detailed progress report summarizing the initiatives it has undertaken across 14 critical sectors. Released on June 25 by the Chief Advisor’s Press Wing, the report provides a comprehensive picture of the government’s reformist efforts since it assumed office and emphasizes its resolve to implement long-term structural change.
Of particular importance are three major economic ordinances aimed at overhauling Bangladesh’s revenue system, banking infrastructure, and default loan management framework. Experts and international institutions alike have hailed these ordinances as foundational reforms that could lay the groundwork for a more transparent and resilient financial system.
A Reform-Driven Interim Administration: The interim government’s report-covering reforms completed by June 15-details progress in sectors ranging from energy to education, judiciary to ICT, and social protection to labor rights. But it is the economic segment, bolstered by the issuance of three ordinances, that stands out as a transformative agenda, launched in cooperation with the International Monetary Fund (IMF) and the World Bank. These three ordinances are: Revenue Policy and Revenue Management Ordinance. Bank Restructuring Ordinance. Difficult Asset Management Ordinance (DAMO). The government believes these reforms will restore discipline in financial governance, increase revenue collection efficiency, address the festering crisis of non-performing loans (NPLs), and rebuild trust in the country’s banking sector.
Overhauling Revenue Management: A New Dual Department System: On May 12, 2025, the government issued the Revenue Policy and Revenue Management Ordinance, a groundbreaking legal reform that seeks to split the National Board of Revenue (NBR) into two distinct bodies: Revenue Policy Department. Revenue Administration Department. The aim is to introduce functional and structural separation between policymaking and tax administration-two areas long plagued by overlaps, inefficiencies, and politicization. According to the ordinance: The Revenue Policy Department will be responsible for formulating tax laws, analyzing policy impacts, and coordinating with global financial institutions. The Revenue Administration Department will focus on tax collection, enforcement, audits, and expanding the tax net.
The Ministry of Finance, in a press note on May 22, clarified that the final implementation of this new structure will take place by July 31, after incorporating amendments based on feedback from stakeholders.
Why this matters: Bangladesh’s tax-to-GDP ratio has consistently been among the lowest in South Asia-hovering just above 8%. This dual department model is expected to streamline operations, reduce corruption, and improve taxpayer compliance.
Bank Restructuring Ordinance: Central Bank Gains New Powers: Earlier, on April 17, the government issued the Bank Restructuring Ordinance, published in the official gazette on May 9. This ordinance grants Bangladesh Bank sweeping powers to intervene in troubled banks and financial institutions.
Key features include: Temporary control of banks in crisis. Powers to merge, dissolve, or recapitalize institutions. Applicability to public, private, and foreign banks. This legal provision is aimed at addressing the crisis of mounting non-performing loans, inadequate capital buffers, and years of governance failure in the financial sector.
According to banking expert and former BB deputy governor Khondkar Ibrahim Khaled, “This is the most decisive move in a decade. If implemented sincerely, it could save several banks from collapse and restore discipline to an industry at the brink.” As of March 2025, the total volume of NPLs in Bangladesh stood at Tk 4.2 trillion, accounting for more than 24% of all loans disbursed-a systemic threat that could drag down the entire economy if left unchecked.
Troubled Asset Management Ordinance: Targeting Large Defaulters: The third ordinance-the Difficult Asset Management Ordinance (DAMO)-completes the government’s triad of economic reform. Developed with technical assistance from the IMF, World Bank, and the Ministry of Finance, the DAMO lays the foundation for a more aggressive approach to default loan recovery.
Highlights include: Formation of a four-member high-level task force to oversee implementation. Creation of a 10-member legal expert team to identify legislative barriers to recovery. Collaboration with bank executives to insert robust default-protection clauses in loan agreements.
This multi-tiered strategy aims to fast-track the recovery of defaulted loans, particularly those involving politically connected or large corporate defaulters.
The legal team is also reviewing laws like the Money Loan Court Act, and preparing reform recommendations to address long-standing delays and inefficiencies in financial litigation. A Bangladesh Bank source involved in the implementation process said, “This ordinance is essential. Our current legal framework allows defaulters too many loopholes. We’re closing those gaps now.”
International Backing Strengthens Reform Credibility: The involvement of the IMF and World Bank adds credibility and urgency to these reforms. Both institutions have made structural overhauls in banking, revenue, and loan recovery a prerequisite for the continuation of Bangladesh’s Extended Credit Facility (ECF) and other financing programs. In its latest mission statement, the IMF noted that the “interim administration has shown commendable resolve in initiating difficult but necessary reforms, particularly in the areas of financial discipline, revenue mobilization, and debt recovery.”
A Broader Reform Agenda: 14 Sectors in Focus: Beyond finance and banking, the interim government’s progress report details reforms in: Power & Energy: Streamlining subsidy structures, promoting renewable investments. Railways: Infrastructure upgrades and private sector partnerships. Electoral Systems: Digitizing voter registration and updating constituency data. Judiciary: Introduction of e-court protocols and fast-track benches for financial cases. ICT: Nationwide broadband expansion and cybersecurity task force establishment. Education: Curriculum updates and increased funding for rural schools. Gender-Based Violence: Setting up special response units and shelters. Social Protection: Expanding digital inclusion and cash transfer programs. Labor Rights & Migration: New labor inspection protocols and migration safety framework. Human Rights: Independent commissions to monitor custodial torture and extrajudicial actions. Youth Development: Launching skills training programs for NEET (Not in Education, Employment, or Training) youth.
Experts: Reform Execution Is Now the Key: While the design of these reforms has drawn praise, analysts caution that implementation will be the real test. Dr. Selim Raihan, executive director of SANEM, said, “Ordinances alone won’t solve deep-rooted problems. We need political commitment, institutional coordination, and a non-interventionist approach from vested interests.” Others fear that reforms may stall if the interim government lacks adequate administrative continuity or faces legal challenges.
Public Sentiment and Stakeholder Views: Reactions among industry insiders and civil society have been cautiously optimistic. Abdur Razzak, a senior official at a private bank, said, “Giving the central bank power to restructure failing banks was long overdue. But the success will depend on whether it can act independently.” Afroza Nasrin, a garment exporter, added, “The revenue reforms are promising. If the government can widen the tax base and reduce harassment, that will encourage more people to come into the tax net.”
Looking Ahead: Blueprint for a New Economy: The three ordinances-the Revenue Management Ordinance, Bank Restructuring Ordinance, and DAMO-form the bedrock of the interim government’s economic reform package. Together, they offer a blueprint for overhauling Bangladesh’s economic governance, balancing growth with fiscal discipline, and laying the groundwork for a more inclusive financial system.
What remains now is the political will to follow through and institutional capacity to implement without compromise. As the progress report suggests, “Reforms are not just documents or declarations-they are instruments of national revival. We have started the journey. The future depends on how well we stay the course.”
