Khosru: Economic Decisions Must Follow Law, Not Emotion

By Radwan Chowdhury, Chief of News

Dhaka | September 6, 2026

Finance Minister Amir Khosru Mahmud Chowdhury has said that decisions to shut down companies cannot be taken solely on the basis of public anger or allegations against their owners, stressing that the broader impact on the national economy and the legal status of a company must be considered.

“An economy cannot run on emotion; it must run on law,” Khosru said in parliament while responding to a supplementary question from Noakhali-6 MP Abdul Hannan Masud.

The exchange came amid questions over the government’s handling of companies associated with major loan defaulters and the extent to which financial institutions should continue supporting businesses whose owners are facing allegations of corruption or financial misconduct.

Questions over S Alam Group loans

During the parliamentary discussion, Hannan raised concerns about the country’s growing loan default problem and cited SS Power, a company associated with the S Alam Group, as an example.

He questioned how the company was able to receive permission from Bangladesh Bank to open a letter of credit worth approximately $3.2 million despite its association with a business group carrying substantial outstanding liabilities.

Hannan also pointed to the scale of loans reportedly owed by various companies linked to the S Alam Group, putting the figure at more than Tk 225,000 crore.

He questioned whether providing additional financial facilities to companies linked to major defaulters could create a perception that loan defaults carry limited consequences.

He also raised concerns about the possible impact on foreign lenders and investors, particularly whether continued support for heavily indebted companies could undermine confidence in Bangladesh’s financial sector.

Minister stresses the distinction between individuals and companies

Responding to the concerns, Khosru emphasized the legal distinction between a company and the individuals who own or manage it.

According to the finance minister, a corporation is a separate legal entity. Allegations or criminal charges against an owner do not automatically mean that the company itself should be prevented from operating.

He explained that an individual accused of corruption can be investigated, prosecuted and punished under the law if found guilty. The legal position of the company, however, has to be considered separately.

“If an individual commits corruption, you can prosecute him, jail him, even sentence him to death. But the company is a legal body. You must allow its operations to continue, whatever the company may be,” Khosru said.

He added that legal proceedings against individuals accused of corruption are already underway and that those cases should proceed through the judicial process.

“If the owners are corrupt, they face trial. Those trials are ongoing and will continue. Justice will be delivered for their personal corruption,” he said.

A broader question for Bangladesh’s financial sector

The parliamentary exchange highlights a difficult issue facing Bangladesh’s financial system: how to hold business owners accountable for financial crimes or corruption without unnecessarily damaging companies, employees, suppliers, lenders and other parties who may have no involvement in the alleged wrongdoing.

A company can employ thousands of people, maintain contracts with suppliers, hold assets and have obligations to banks and other financial institutions. Shutting down a company without following due process could therefore have consequences beyond its owners.

At the same time, the continued operation or financing of businesses associated with major loan defaults raises questions about financial discipline, corporate governance and the protection of depositors and public funds.

The central challenge for policymakers is therefore finding a balance between enforcing accountability and preventing disruption to legitimate economic activity.

Law versus economic consequences

Khosru's comments suggest that the government intends to distinguish between individual accountability and corporate continuity.

Under this approach, allegations against shareholders, directors or executives would be addressed through investigation, prosecution and the courts, while the company's legal and economic status would be evaluated separately.

Such a distinction is particularly important for banks and financial regulators because corporate decisions can have consequences for employment, investment, supply chains, credit markets and overall economic stability.

However, the approach also places greater importance on effective regulation and oversight. Allowing a company to continue operating does not necessarily mean that its owners or management should be shielded from investigation, nor does it eliminate the responsibility of regulators and financial institutions to ensure that lending decisions comply with applicable rules.

The loan default challenge

Bangladesh's banking sector has faced persistent concerns over non-performing loans, weak recovery mechanisms, corporate governance and the influence of powerful borrowers.

The issue has become increasingly important as policymakers attempt to strengthen financial discipline while maintaining credit flows to productive sectors of the economy.

For businesses, access to credit is essential for investment, employment and expansion. But for banks, large concentrations of loans among connected borrowers can create significant risks when those loans are not repaid.

The debate in parliament therefore extends beyond any single business group. It raises broader questions about how Bangladesh should deal with financially distressed companies, politically or commercially connected borrowers, corporate misconduct and the recovery of public and private funds.

Accountability remains central

While Khosru defended the principle that companies should not automatically be shut down because of allegations against their owners, his comments also underscored that individuals accused of corruption must face the legal process.

That distinction could become increasingly important as authorities pursue cases involving alleged financial irregularities and seek to recover money from businesses and individuals accused of wrongdoing.

For the financial sector, the effectiveness of this approach will ultimately depend on whether investigations are conducted independently, whether courts are allowed to complete cases without interference, whether banks enforce proper lending standards and whether institutions are able to recover funds from genuine defaulters.

The government now faces the larger task of demonstrating that protecting legitimate economic activity and enforcing financial accountability can operate together.

Khosru's message in parliament was clear: economic policy should be governed by law and economic realities rather than emotion. The more difficult question is how effectively that principle can be applied while restoring confidence in Bangladesh's banking and financial system.