From Outdated to Effective: Revamping Bangladesh's Bankruptcy Law to Support Economic Stability and Growth

Abstract

Bangladesh, known globally as a low-cost garment manufacturing hub, is transitioning from a Least Developed Country to a "Developing Country" status. To sustain and accelerate this growth, the country is aggressively seeking Foreign Direct Investment (FDI) and pursuing various ambitious mega-projects. However, a critical area that requires attention is its bankruptcy law, which plays a crucial role in corporate governance and enterprise development. The existing Bankruptcy Act 1997 is outdated and ineffective, necessitating urgent reform. This study identifies the deficiencies in the current law and proposes updates to align it with international standards, particularly the UNCITRAL Model Law* which includes provisions for cross-border insolvency. A unified legal framework for addressing non-performing loans is also recommended.