Six non-bank financial institutions (NBFIs) out of 35 are set to be liquidated finally due to poor financial health, after the Bangladesh Bank (BB) board approved the move yesterday.

The six NBFIs are FAS Finance, Premier Leasing, Fareast Finance, Aviva Finance, People’s Leasing, and International Leasing.

Initially, the regulator had planned to liquidate nine NBFIs. However, after two days of hearings, three companies -- Prime Finance, GSP Finance, and Bangladesh Industrial Finance Company (BIFC) -- were given three to six months to improve their finances.

Arief Hossain Khan, executive director and spokesperson of Bangladesh Bank, confirmed the development to The Daily Star.

Last November, the BB board approved the liquidation of troubled NBFIs under the Bank Resolution Ordinance 2025
The decision was made at a BB board meeting chaired by Governor Ahsan H Mansur.

A senior central bank official, speaking on condition of anonymity, told The Daily Star that the central bank has already declared six NBFIs non-viable, while the remaining three have been given three to six months to improve their financial condition.

“If the three institutions fail to recover or show meaningful progress, they will be added to the liquidation list,” the official added.

Last week, BB held hearings with the nine NBFIs -- FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing, and International Leasing -- to determine if they had grounds to oppose liquidation.

Last November, the BB board approved the liquidation of troubled NBFIs under the Bank Resolution Ordinance 2025, the country’s first comprehensive framework for resolving failing banks and NBFIs.

The ordinance outlines procedures for merging, restructuring, or closing distressed institutions and sets the hierarchy for repaying creditors once assets are sold.

Together, the nine NBFIs account for 52 percent -- Tk 25,089 crore -- of the sector’s total defaulted loans as of the end of 2024, reflecting years of unchecked lending irregularities and capital erosion.

BB Governor Ahsan H Mansur recently said that individual depositors of the nine troubled NBFIs may recover their principal amounts before Ramadan in February.

A senior BB official added that the central bank will write to the Ministry of Finance to request a Tk 3,000 crore bailout package, as the number of NBFIs facing liquidation has now decreased.

Earlier, the BB governor had said the Ministry of Finance had verbally approved Tk 5,000 crore for the liquidation of the nine NBFIs.

According to central bank data, the nine institutions hold Tk 15,370 crore in deposits, of which Tk 3,525 crore belongs to individual depositors and Tk 11,845 crore to banks and corporate clients.

As of September 2025, the country’s 35 NBFIs had Tk 29,408.66 crore in non-performing loans, equal to 37.11 percent of their total outstanding loans of Tk 79,251.11 crore, according to BB data.

A year earlier, in September 2024, the sector’s non-performing loan ratio was 35.52 percent.

The Bangladesh Bank has decided to keep its policy repo rate unchanged at 10% for the second half of the current fiscal year 2026-27 in a bid to contain inflation, defying calls from the business community to lower lending rates.

The central bank's board approved the Monetary Policy Statement (MPS) for January-June yesterday, with a formal announcement scheduled for tomorrow, officials said.

The policy repo rate – the rate at which the Bangladesh Bank lends to commercial banks – will remain at 10% as inflation has yet to fall to the targeted 6.5% set for FY26 in the previous policy. Although inflation declined slightly above 8% in December, it remains well above the central bank's comfort level.

In its earlier MPS, the Bangladesh Bank pledged to maintain a tight monetary stance until inflation fell below 7%.

The private sector credit growth target will be kept unchanged at 8% against actual growth of 6.2%. On the other hand, public sector credit growth is likely to increase to 19% from the previous ceiling of 18%.

Although a tight monetary policy has been in place since last year, both lending and deposit rates have edged up slightly amid sluggish private sector demand following the political transition in August 2024.

Over the past six months, the average lending rate has hovered around 12%, while deposit rates have remained above 6%, according to central bank data.

Bangladesh Bank Governor Ahsan H Mansur acknowledges the concerns of businesses seeking lower interest rates but stresses that the timing is not yet right for a policy shift.

"I fully understand the sentiments of the business community – I also want to reduce interest rates. But at this stage, we cannot do so from a policy perspective," he told The Business Standard.

He said, "Inflation has fallen from 12.5% to 8.5% – that is progress, but not enough. Our target is to bring inflation down to 3-4% within two years. Once we reach that point, the policy rate will naturally come down."

The governor added that managing inflation expectations would require time. "People now assume that prices will rise by 10%. Breaking this mindset takes time. We have managed to neutralise exchange rate pressures to a large extent, but domestic pressures are not yet fully under control."

Forex market gains

In May 2025, the central bank moved towards a more flexible exchange rate regime aimed at enhancing stability. Since August 2024, it has not sold a single dollar in the market; instead, it has purchased $3.7 billion, marking a sharp turnaround from previous years.

Governor Mansur said the current account was now broadly balanced, while the financial account – which had long been in deficit – had recorded a substantial surplus.

"Our overall balance was positive last year and remains strongly positive this year," he said. "As a result, our reserves are gradually increasing."

The governor noted that during his tenure, the International Monetary Fund had disbursed around $700 million, while the Bangladesh Bank had purchased more than double that amount from the market.

"When the IMF said it would not release funds before the formation of a new government, we told them there was no problem – we were not in crisis and did not urgently need the funds," he said.

The Bangladesh Bank aims to raise reserves to $35-36 billion by June this year, based on its own calculation method, with further increases expected alongside growth in imports and exports.

The country's gross foreign exchange reserves stood at over $28 billion on 22 January, according to IMF methodology, up from $26.7 billion in June. The exchange rate has remained stable at Tk122-123 per US dollar over the past year.

The governor also described the reversal of capital outflows as a key achievement, noting that foreign investors who had previously withdrawn funds were now returning with fresh investments.

The Bangladesh Bank has taken a final decision to liquidate six non-bank financial institutions (NBFIs) that have been struggling with irregularities, corruption and mismanagement, while granting an additional three months to three other institutions to improve their financial position.

The decision was taken at a board meeting of the central bank today (27 January).

The three institutions given time are Bangladesh Industrial Finance Company, GSP Finance Company and Prime Finance and Investment Limited.

An official present at the meeting said these three firms would not be placed under the liquidation process for now.

They have informed Bangladesh Bank that they will try to mobilise funds over the next three months. If they are able to recover a significant amount of defaulted loans during this period, they will be kept out of liquidation.

Administrators will be appointed by the Bangladesh Bank to three financial institutions. A senior official said that there has been strong demand from these three institutions for funds to be injected into them.

Individual depositors of 9 NBFIs to get full principal, no interest, after liquidation

According to the central bank's review, BIFC has 97.30% defaulted loans, with losses of Tk1,480 crore, while GSP Finance has 59% defaulted loans, with losses of Tk339 crore. Prime Finance has 78% of its loans in default, with losses amounting to Tk351 crore.

The institutions were found to be in an "unviable" condition based on three indicators: failure to return depositors' money, extremely high defaulted loans, and capital shortfalls.

As per the central bank's review, the six NBFIs that are being liquidated are in a dire financial state, with most of their loan portfolios turning bad and massive losses piling up.

FAS Finance is the worst affected, with 99.93% of its total loans defaulted and accumulated losses of Tk1,719 crore. Fareast Finance has 98% of its loans in default and has incurred losses of Tk1,017 crore.

At International Leasing, defaulted loans stand at Tk3,975 crore, accounting for 96% of its portfolio, most of which is considered unrecoverable, while its losses have reached Tk4,219 crore.

People's Leasing has seen 95% of its loans turn bad, with losses amounting to Tk4,628 crore.

Aviva Finance's defaulted loans account for 83% of its portfolio, and the company has recorded losses of Tk3,803 crore. Premier Leasing, though comparatively better off, still has 75% of its loans in default and has suffered losses of Tk941 crore.

Bangladesh currently has 35 non-bank financial institutions. Of these, the central bank has identified 20 as distressed. The total loan portfolio of these 20 institutions stands at Tk25,808 crore, of which Tk21,462 crore, or 83.16%, is classified as defaulted. In contrast, the value of their collateral is only Tk6,899 crore.

By comparison, the remaining 15 relatively sound institutions have a non-performing loan ratio of just 7.31%. Last year, they made a combined profit of Tk1,465 crore and currently hold a capital surplus of Tk6,189 crore.

The 20 troubled institutions hold deposits worth Tk22,127 crore, including around Tk4,971 crore in net individual customer deposits. Bangladesh Bank believes this amount may be needed initially to support the liquidation and restructuring process.

The central bank has also assured that employees working at institutions that go into liquidation will receive all benefits as per service rules.

Bangladesh is not fully prepared to face the economic and institutional challenges that will follow its graduation from the least developed country (LDC) category later this year, business leaders and bankers said yesterday, warning that it could expose the economy to serious risks.

Speaking at a roundtable on the implications of LDC graduation for the banking sector, they cautioned that Bangladesh will gradually lose preferential market access, concessional financing and policy flexibilities, while facing intensified global competition, pressure on exports and rising living costs.

These changes will place new pressures on the economy, particularly on the financial system, ICCB President Mahbubur Rahman said at the event organised by International Chamber of Commerce-Bangladesh (ICCB).

Noting that the graduation should be seen as a structural shift rather than a symbolic milestone, he added, “In the post-LDC era, a strong, credible, and autonomous central bank will be the anchor of financial stability and confidence.”

AK Azad, vice-president of ICCB, said there were real post-graduation impacts on exports and other sectors. “We clearly presented these to the interim government, but they did not agree.”

He urged the next government to take up the issue with urgency, as understanding and addressing the realities of LDC graduation would take time.

Simeen Rahman, chief executive officer of Transcom Group, said graduation would reshape Bangladesh’s policy space and competitiveness, particularly in sectors directly affecting people’s lives.

Emphasising the pharmaceutical industry, she said coordinated policy, regulatory efficiency, financial support and adequate transition time were crucial to preserving domestic strength and export potential. Local production of active pharmaceutical ingredients (APIs), she added, was a key preparatory step.

“If we place people’s health, industrial strength and financial stability at the centre of this transition, Bangladesh will graduate not only with pride but with confidence,” she said.

Former BKMEA president Fazlul Hoque said while graduation was welcome, the private sector remained deeply uneasy about preparedness. “The reality is that we are not well prepared. That is why we have been advocating for an extension,” he said.

However, he warned that even a two- or three-year extension would be meaningless without concrete action.

“We already had eight years to prepare… There were many meetings and seminars, but little real progress. If we waste the next few months, even with an extension, we will simply repeat the same discussions,” he said.

Muhammad A (Rumee) Ali, chairman of the ICCB Banking Commission, said despite extensive discussion of graduation’s sectoral impacts, the banking industry had lacked urgency and proactive policy dialogue.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said LDC graduation marked a new phase of development that demands maturity, discipline and vision.

“The banking sector must not remain a passive observer; it must act as an active architect of a more resilient, inclusive and globally competitive Bangladesh,” he said.

Meanwhile, offering a contrasting view, Bangladesh Bank Governor Ahsan H Mansur urged stakeholders not to frame graduation narrowly as a matter of tariff or trade privileges.

“It is part of a larger economic transformation,” he said, adding that Bangladesh must decide whether it wants to remain among fragile economies or aspire to stand alongside emerging and developed nations.

“Graduation is inevitable. The policies we need for graduation are the same policies we need for development – growth, human development, a strong currency and a resilient financial system,” he said.

Diversification, better logistics, improved ports, roads, communications, ICT, education and healthcare were all integral to both development and graduation, he added.

“Unfortunately, we have downsized the debate to protecting market access. That is not the core issue. Graduation and development go hand in hand,” he said.

Mansur also defended recent reforms, including contracts with global port operators, acknowledging that resistance was inevitable but necessary to ensure continuity. “The government decided to sign the contracts to preserve continuity for the future.”

He also criticised sections of the business community for supporting policies such as interest-rate caps that weakened the financial system.

“They never protested when bureaucrats siphoned money abroad. Where was the business community then? They were happy,” he said.

“We need vibrant associations, not puppet ones -- associations that speak the truth without hesitation. Otherwise, democracy becomes little more than voting every few years while business continues as usual,” he added.

Bangladesh is not yet fully prepared to absorb the aftershocks from least-developed country (LDC) graduation with key sectors like banking and finance and manufacturing staring at significant challenges looming large.Finance software

Economists, business leaders and experts came up with such forewarning at a roundtable discussion Tuesday, as the cutoff time for UN certification for the country's status change keeps nearing now.

They said following the graduation set for November 2026, such sectors would face difficulties adjusting the loss of preferential treatment and increased competitive pressure on the global market.

They have cautioned that without swift reforms along with adequate preparation, the transition could strain the financial system and undermine economic stability.

The speakers, mostly bankers, representatives of financial institutions and corporate executives, were speaking at the roundtable titled 'Implications of LDC Graduation for the Banking Industry: Bangladesh Perspective', organised by the International Chamber of Commerce Bangladesh (ICCB) at a city hotel.

.President the ICCB Mahbubur Rahman moderated discussions and shared the concerns raised at the meet.

Bangladesh Bank Governor Dr Ahsan H. Mansur attended it as chief guest while Dr Shah Md Ahsan Habib of Bangladesh Institute of Bank Management presented the keynote.

The speakers said the policymakers must now focus on enhancing competitiveness, strengthening institutional capacity and diversifying its export basket to navigate the post-LDC environment successfully.

While speaking as chief guest, the central bank governor said Bangladesh's development trajectory and its graduation from LDC status were closely linked and should be viewed as complementary processes.

"Bangladesh's development and LDC graduation go hand in hand," said Dr Mansur, urging the relevant stakeholders to look ahead and focus on long-term structural reforms and ensure sustainability.

He stressed the need for raising efficiency across the economy, improving logistics, strengthening road and port infrastructures, and investing more in education and healthcare.

Development partners, he mentions, have already been treating Bangladesh as a developing country since 2015.

The governor also underscores the importance of restoring macroeconomic stability, particularly by curbing inflation and lowering the rate of interest.

Bangladesh has historically experienced inflation in the range of 6.0-7.0 per cent, the central bank's chief executive said, but stressed that it must be brought down to 2.0-3.0 per cent to support sustainable growth.

"Inflation expectations have now become a key barrier…Local policy focus should centre on reducing inflation and borrowing costs," he told the audience.

Dr Mansur said Bangladesh could improve efficiency by as much as 30 per cent through better policy coordination and reforms.

The interim government, he mentions, has already passed several reforms, including promulgating the Bank Resolution Ordinance 2025, though some measures remain pending and are necessary to further stabilise and strengthen the financial sector.

Managing Director and CEO of Mutual Trust Bank PLC Syed Mahbubur Rahman, Managing Director and CEO of Prime Bank PLC Hassan O. Rashid, Managing Director of Plummy Fashions Limited Md. Fazlul Hoque, Deputy Managing Director of Picard Bangladesh Amrita Makin Islam, and Managing Director of Eskayef Pharmaceuticals Ltd. Simeen Rahman were panel discussants.

Besides, Chairman of Bangladesh Association of Banks (BAB) Abdul Hai Sarker, World Bank country Director Jean Pesme, ICCB Vice-President A K Azad, Chairman of Bengal Commercial Bank PLC Md. Jashim Uddin, Vice President of ICCB and Chief Executive Officer of Standard Chartered Bank Naser Ezaz Bijoy, ICC Bangladesh Secretary-General Ataur Rahman, and representatives from the World Bank, the UN, UNDP and IFC were also among others present.

The ICCB President, Mr. Mahbubur Rahman, said with graduation, scheduled to take place in November this year, Bangladesh would gradually lose LDC-specific benefits such as preferential market access, concessional financing, and certain policy flexibilities.

"These changes will place new pressures on the economy-and in particular, on our financial system," he told the meet.Finance software

"Bangladesh's graduation, therefore, is not merely a celebratory moment--it represents a structural shift. In this transition, the role of the central bank becomes even more consequential," he added.

From a banking perspective, LDC graduation will reshape the operating environment in three fundamental ways.

From ICC Bangladesh's perspective, the post-LDC era calls for a qualitative transformation of the banking sector, guided by sound regulation and credible supervision.

The ICCB Vice President and Managing Director of Ha-Meem Group of Industries, AK Azad, vented concern about monetary policy.

"Only tightening monetary policy will not reduce inflation in the country, because it is related to many other issues, including revenue," he said.

As a result of tightening monetary policy, 1.2 million people have already lost their jobs and another 1.2 million may lose their jobs in the next six months, he added.

He also mentions that the private sector has taken only 6.0 per cent of loans from banks, while the government has taken 27 per cent which may reach 32 percent in the future.

He thinks it is not possible to manage the economy through monetary policy alone without increasing investment and employment.

He laments that although attempts were made to explain the impact of LDC graduation to the current government, they did not agree, and said, 'These problems must be brought before them immediately after the formation of the new government.'

Group Chief Executive Officer of the country's leading conglomerate - Transcom Group - Ms. Simeen Rahman said LDC graduation is not merely a change in economic classification, it represents a structural shift that will reshape policy, space, and competitiveness, particularly in sectors that directly affect people's lives.

Ms. Rahman, also managing director of Eskayef Pharmaceuticals Ltd, said pharmaceutical is one of such sectors that play a unique and critical role bridging public-health priorities and industrial capability of a country.

She underscores the need for local production of API as one of the preparatory measures.

Muhammad A. (Rumee) Ali said there had been a lot of discussions on the impact of graduation on different sectors of the economy but he did not see much discussion or pre-emptive policy suggestions on this imminent risk with any level of urgency or concerns by the banking industry.

Managing director and CEO of private commercials bank Mutual Trust Bank PLC Syed Mahbubur Rahman said the graduation process reflects decades of progress in poverty reduction, human development, and economic resilience.

"But, let us be clear, we are graduating into a world that is far more complex, competitive, and unforgiving than the one we entered as an LDC."

And it is being done at a time when the country's banking sector is under immense strain as well as the economy.

He further said Bangladesh's LDC graduation is not the end of its development journey rather it is the beginning of a new chapter-one that demands maturity, discipline, and vision.

"The banking sector must not be a passive observer in this transition. It must be an active architect of a more resilient, inclusive, and globally competitive Bangladesh," he said.

Managing director and CEO of Prime Bank PLC Hassan O. Rashid said the impact on bank will also leave impact on the capital market as there are a number of listed banks.

Underscoring the need for independence of the central bank he said: "I think this is extremely important because to tackle the headwind, we need a stable economic policy, monetary policy, stable exchange rate, inflation and interest rate."

Former president of Bangladesh Knitwear Manufacturing and Exporters Association Fazlul Hoque thinks the country is not well prepared to embrace the graduation right now.

As a private-sector representative, he says, they are not feeling very comfortable at this juncture to have the graduation in November to 2026.

For the good health of banking sector, he underscores the need for an independent and free central bank to regulate the country's banking sector.

Deputy Managing Director of Picard Bangladesh Ms. Amrita Makin Islam underscored the need for export diversification from RMG that constitutes almost 80 per cent of total export receipt.

She also points out Bangladeshi exporters, compared to the peer countries, face additional burden like extended lead time in export and poor backward linkage that need serious attention.

Former President of Dhaka Chamber of Commerce and Industry (DCCI) Rizwan Rahman, CEO and Managing Director of Renata PLC Syed S. Kaiser Kabir, and BGMEA Director Faisal Samad also spoke, among others, in the open-floor discussion session.

The United States may announce a reduction in the reciprocal tariffs imposed on Bangladesh by the end of this week or early next week, Lutfey Siddiqi, special envoy on international affairs to the chief adviser, said yesterday.

Speaking at a press conference at the Foreign Service Academy, where he briefed the media on Bangladesh’s engagements and outcomes at the World Economic Forum (WEF) in Davos, Siddiqi said Washington is sincere about lowering tariffs on Bangladesh, and an announcement is expected soon.

He, however, said it is still unclear to what extent the current 20 percent tariff will be reduced.

The special envoy said he discussed the issue with US Treasury Secretary and member of President Donald Trump’s cabinet, Scott Bessent, on the sidelines of the Davos conference.

“Many elements of the US non-tariff policies align with the reform agenda of Bangladesh’s interim government. Besides, the trade deficit of around $6 billion with the US has come down significantly. Considering these factors, the United States is showing sincerity in reducing trade barriers on Bangladesh. A better decision will come soon,” he said.

On Bangladesh-EU trade relations, Siddiqi said discussions were held with EU Commissioners Roxana Mînzatu and Jozef Síkela on a possible free trade agreement (FTA). “We have clearly conveyed that Bangladesh wants an FTA with the EU, and they have shown interest. But their process is slow.”

He said the EU is currently pursuing FTAs with India and may move towards Vietnam next, which could pose challenges for Bangladesh. “Still, there is no reason to panic. We must continue discussions. I will leave detailed notes on this for the next government.”

Siddiqi also pointed out that securing GSP Plus facilities in the EU market after Bangladesh’s graduation from LDC status will be challenging, and warned that excessive export concentration on a single product could risk losing GSP Plus benefits, noting that Bangladesh’s garment exports heavily dominate the EU market, which could create future vulnerabilities.

Referring to talks with World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala, Siddiqi said future trade policy issues were discussed, where the WTO chief advised Bangladesh to gradually move beyond multilateral trade reliance and focus more on bilateral trade agreements.

In this context, the special envoy to the chief adviser said productive discussions were held with Japan on an economic partnership agreement (EPA).

Japanese Minister of Economy, Trade and Industry Akazawa Ryosei informed him that a formal agreement with Bangladesh could be signed within the next one or two weeks.

Bangladesh will also enjoy duty-free transit facilities in Japan for three years after LDC graduation, he said.

“Talks on FTAs are ongoing with South Korea, while negotiations with Singapore are almost at the final stage. In the future global trade environment, surviving without FTAs or EPAs will be difficult,” Siddiqi said.

He said discussions with Thai Foreign Minister Sihasak Phuangketkeow covered potential Thai investment in Bangladesh’s food processing sector and the use of Thai ports to boost bilateral trade.

On the Rohingya repatriation issue, Siddiqi said the matter was discussed with UN Special Envoy on Myanmar Julie Bishop in Davos. “As days pass, global geopolitics surrounding Myanmar are becoming more complicated. Bangladesh must remain focused on its rightful demands.”

Highlighting talks with International Organization for Migration Director General Amy Pope, the special envoy said discussions focused on legal migration from Bangladesh.

“There is a perception internationally that Bangladesh is not serious about illegal migration and is content as long as people go abroad. We are trying to change that perception.”

He mentioned that 600 holders of fake passports were sent back from Singapore last month. “Previously, no action was taken against them. This time, with support from the CID, each individual will be brought under the law.”

Stressing the need for changing Bangladesh’s diplomatic approach, Siddiqi said symbolic gestures such as signing MoUs, handshakes, and photo opportunities are no longer sufficient; Bangladesh must make itself more relevant globally.

Corridor diplomacy and issue-based negotiations must be prioritised to clearly present Bangladesh’s positions to the world, he said.

Chinese company Huazhu Accessories Co Ltd signed an agreement with the Bangladesh Export Processing Zones Authority (Bepza) to set up an accessories manufacturing factory at the Bepza Economic Zone in Mirsharai, Chattogram.

According to the agreement, signed on Monday at the Bepza Complex in Dhaka, the company will invest $16.34 million, creating employment opportunities for 1,395 Bangladeshi nationals.

The factory will produce a wide range of items, including bra cups, bra wire, hook and eye, webbing tape, elastic, drawstrings, sliders, snap buttons, logos, hardware for bags and luggage, and ribbons, with a projected annual output of 40 lakh kilogrammes.

The agreement was signed by Md Tanvir Hossain, executive director (investment promotion) of Bepza, and Yang Yanmei, managing director of Huazhu Accessories Co Ltd.

Mohammad Moazzem Hossain, executive chairman of Bepza, welcomed the investor and reaffirmed the authority’s commitment to facilitating industrial setup, providing prompt services, and ensuring a business-friendly environment.

Other Bepza officials present at the event included Abdullah Al Mamun, member (engineering); ANM Faizul Haque, member (finance); Md Khurshid Alam, executive director (enterprise services); Samir Biswas, executive director (administration); and ASM Anwar Parvez, executive director (public relations), along with representatives from Huazhu Accessories Co Ltd.

Imagine a factory owner forced to start repaying bank loans before the factory produces a single product. Inevitably, financial stress and eventual default would almost be assured.

That, in effect, is what is happening to the Bangladesh government. The key difference is that, unlike private borrowers, governments do not default; instead, the repayment burden is passed on to taxpayers.

A recent review by the Economic Relations Division (ERD) shows that grace periods of four to six years have already expired for 29 World Bank–financed projects, even though Bangladesh has failed to utilise $1.93 billion of the borrowed funds. As a result, loan repayments are beginning before many projects are completed, pushing up debt-servicing costs and adding to fiscal pressure.

What a grace period is and why it matters

In international lending, a grace period refers to the initial, specified timeframe after a loan agreement is signed during which the borrower is not required to repay the principal amount. While principal repayment is deferred, interest may still accrue or be payable, giving borrowers time to start projects, generate returns and put financing structures in place.

Such grace periods are designed as a cushion, particularly for developing countries, allowing projects to become operational and deliver benefits before the burden of repayment begins. When that cushion erodes, repayments start early, often before projects are capable of generating economic or fiscal returns.

Structural mismatch at the core

ERD officials say the problem stems from a structural mismatch between the World Bank's financing framework and Bangladesh's project approval process.

Under World Bank rules, grace periods begin immediately after board approval. In Bangladesh, however, it often takes up to two years after board approval to complete feasibility studies, prepare development project proposals, secure inter-ministerial clearances and obtain final approval from the Executive Committee of the National Economic Council (Ecnec). Loan agreements are signed only after Ecnec approval.

As a result, a substantial portion of the grace period is consumed before projects even become operational.

ERD officials admit that negotiations with the World Bank frequently begin without adequate preparatory work. Once negotiations conclude, board approval follows relatively quickly, while domestic procedures move slowly.

"Our projects are like premature babies — they often need treatment, from extending completion timelines to escalating costs," a senior ERD official told The Business Standard. "We have decided we will not take loans without full readiness."

$1.9bn stuck after grace periods expire

According to the ERD report, several large projects still have substantial undisbursed loan amounts even though their grace periods have already expired.

These include the Western Economic Corridor and Regional Enhancement Programme (Phase I) with $444.64 million undisbursed; the Dhaka Sanitation Improvement Project ($144.18 million); Operation for Supporting Rural Bridges ($152.39 million); Livestock and Dairy Development ($141 million); the Regional Waterway Transport Project ($91 million); Enhancing Digital Government and Economy ($63 million); and Enhancement and Strengthening of Power Transmission ($54.66 million).

While disbursement deadlines can be extended, ERD officials noted that grace periods are never extended, permanently shortening the concessional window and eroding the benefits of low-cost financing.

Strategy shift — but only recently

A senior ERD official, speaking on condition of anonymity, said Bangladesh had previously entered loan negotiations without sufficient preparation, partly due to pressure from the World Bank.

That approach is now changing, the official said. Even when the World Bank signals that delays could result in financing being redirected to other countries, ERD is no longer accommodating such pressure. Instead, preparatory work is now being completed before negotiations begin, leading to delays in several planned loans in the current fiscal year.

While this may reduce World Bank lending in the short term, it lowers the risk of losing grace-period benefits, the official added.

Bay Container Terminal: five years on paper, four in practice

The $650 million Bay Container Terminal project highlights how grace periods shrink in practice.

The loan agreement was signed in April 2025 with a five-year grace period. However, under the World Bank's repayment schedule, the first principal instalment is due on 15 February 2029, effectively reducing the usable grace period to about four years.

ERD officials said implementation has begun but remains slow, with disbursements falling short of expectations, further increasing the risk of grace-period erosion.

In a statement sent to The Business Standard on 21 December, World Bank Operations Manager Gayle Martin said, "The World Bank Group's IDA provides financing on highly concessional terms. This means that IDA credits have a near-zero interest charge. Repayments start after a 5- to 10-year grace period, and are paid over 30 to 40 years. The grace period starts from the date of approval of the financing."

Approved but unsigned projects add to the risk

ERD officials also flagged risks from projects approved by the World Bank board but still awaiting loan agreements. These include the Strengthening Institutions for Transparency and Accountability (SITA) Project, approved on 12 June 2025 for $250 million, and the Bangladesh Clean Air Project, approved on 18 June last year for $290 million.

The Bangladesh Private Investment and Digital Entrepreneurship Project shows how the pattern repeats. The World Bank approved $500 million for the project on 19 June 2020, while the loan agreement was signed on 13 April 2021, leaving the project with a four-year grace period.

According to ERD data, Bangladesh lost $440.15 million in grace-period benefits. Nearly a year elapsed before the agreement was signed, followed by further delays during implementation.

Project officials cited slow tender processes, delays in appointing procurement consultants and compliance with World Bank regulations — challenges they said could have been avoided with better preparation.

Why grace periods matter

ERD officials said grace periods are designed to allow projects to be completed and benefits realised before principal repayments begin. When grace periods shrink, repayments start early, raising debt-servicing costs, increasing budgetary pressure and straining foreign exchange reserves.

Many infrastructure and social sector projects do not generate immediate revenue. Shortened grace periods weaken key financial indicators such as Internal Rate of Return (IRR) and Net Present Value (NPV), while repayments must still be made in foreign currency amid global economic uncertainty.

Expert warning

M Masrur Reaz, chairman of Policy Exchange Bangladesh, said multilateral loans are considered concessional mainly because of low interest rates, long tenures and grace periods.

"When grace periods are missed, a major part of that advantage disappears even if interest rates remain low," he said. "Early repayments increase pressure on reserves, squeeze development spending and weaken long-term debt sustainability."

He added that structural reforms are needed, including stronger project preparation, better inter-agency coordination and closer alignment between board approval, loan signing and grace-period timelines.

The interim government’s proposed new pay scale for public servants could intensify inflationary pressures and strain the banking system, Bangladesh Bank (BB) Governor Ahsan H Mansur said yesterday.

“The salary hike will require borrowing more from the banking system. Is that going to help reduce inflation? No,” the governor said at an event on the implications of the LDC graduation for the banking system, organised by the International Chamber of Commerce-Bangladesh (ICCB) in Dhaka.

The government is planning a general salary increase, which will double the wage bill.

Speaking about the central bank’s efforts to tame inflation, Mansur said bringing down inflation is achievable, but will take time.

Bangladesh, he noted, has already reduced inflation from around 12.5 percent to about 8.3 percent. “Inflation has to come down. But we must give it time. We must be patient.”

However, he cautioned that the real challenge lies in breaking inflation expectations, which have been long-established.

“Historically, Bangladesh has never had low inflation,” he said, noting that inflation has typically hovered around 6 percent to 8 percent.

Claims of sustained high growth alongside low inflation, he added, were often more artificial than real.

“This is why interest rates cannot be low,” he said, adding that rates can only fall sustainably if non-performing loans are reduced sharply through accountability, good governance, and effective supervision.

“If we can reduce bad loans and lower expectations, why can’t we bring inflation down?” he asked.

He said inflation expectations are visible across the labour market, where workers routinely expect annual wage increases. In many factories, wages rise by 10 percent, 15 percent, or even 20 percent each year - not necessarily because productivity has increased, but because higher inflation is assumed.

“These expectations are deeply ingrained. We have to break that cycle,” he said. “Unless expectations change, inflation will not come down to 3 or 4 percent. And that will take time.”

Anwar Galvanizing Limited continues to bleed in its core business amid weak construction demand and supply chain disruptions. Yet, strong gains from capital market investments have helped the listed company swing back to profit in the first half of the current fiscal year.

According to its half-yearly financial report, the company posted a profit of Tk9.11 crore with earnings per share (EPS) of Tk3.02. In the same period of the previous fiscal year, it recorded a loss of Tk5.45 crore and per-share loss of Tk1.81.

In a disclosure to the stock exchanges, the company said its profit turnaround was mainly driven by a sharp rise in non-operating income, which increased by Tk21.19 crore in the first half. Non-operating income in the second quarter alone rose by Tk8.89 crore, largely from stock market investments.

However, the company acknowledged that its operational performance remained under pressure. A downturn in demand in the construction sector, prolonged political unrest and disrupted supply chains adversely affected its gross profit margin during the reporting period.

Revenue in the half-year rose slightly to Tk30.38 crore from Tk28.89 crore a year earlier. After deducting operating expenses, the company incurred an operational loss of Tk8.34 crore.

On Tuesday, shares of Anwar Galvanizing closed at Tk92.30 each on the stock exchanges.

The national committee tasked with restructuring Bangladesh's tax system has submitted a reform agenda to Chief Adviser Muhammad Yunus, proposing major structural changes to boost revenue mobilisation and reduce the economy's heavy reliance on indirect taxation.

The report, prepared by an 11-member taskforce led by Policy Research Institute (PRI) Chairman Dr Zaidi Sattar, sets ambitious targets to raise the tax-to-GDP ratio to 12% by 2030 and 15-20% by 2035, from the current level of around 10%.

It also recommends rebalancing the tax mix by increasing the share of direct taxes to 50% from the existing 30%, signalling a shift towards a more equitable and growth-friendly tax regime.

Titled "Tax Policy for Development: A Reform Agenda for Restructuring the Tax System", the report submitted today (27 January) describes Bangladesh's tax system as unnecessarily complex, inefficient and overly dependent on indirect taxes.

It argues that incremental or piecemeal changes will not be enough to support long-term economic transformation, calling instead for fundamental and structural reforms.

The taskforce identified 55 policy issues, with seven flagged as immediate priorities.

Key recommendations include simplifying the tax system through greater digitalisation and automation, introducing artificial intelligence-based risk analysis, expanding risk-based audits and rationalising tax incentives.

The report also proposes a strategic shift away from trade-based taxation towards stronger domestic tax mobilisation.

On customs reforms, the report suggests modernising the tariff structure and applying equal effective protection for export-oriented and import-substituting industries. It also proposes moving away from port-based enforcement towards post-clearance audits and argues that a separate valuation database for cargo clearance is unnecessary.

In the area of value-added tax, the taskforce recommends a gradual transition from the current multi-rate VAT regime to a single-rate system, saying this would reduce complexity and lower compliance costs for businesses.

Receiving the report, Chief Adviser Yunus said the interim government had limited time but intended to initiate the implementation process.

Finance Adviser Dr Salehuddin Ahmed said the report would serve as a guideline for improving both revenue collection and governance.

Officials from the Internal Resources Division noted that the document clearly diagnoses existing weaknesses in the tax system and offers a roadmap for reform.

Revenue up Tk23,000cr

Meanwhile, the National Board of Revenue, in a detailed briefing sent to Chief Adviser Yunus last Sunday, said its reform initiatives have produced positive results in revenue collection, with government revenue increasing by Tk23,020 crore in the first six months of the current fiscal year compared to the same period a year earlier.

The revenue authority stated that total collections between July and December 2025 reached Tk1,85,229 crore, attributing the increase to structural reforms in revenue management, digitalisation, measures to curb tax evasion and taxpayer-friendly initiatives.

However, economists and former officials have questioned the claim, arguing that the higher growth rate largely reflects a low base in the previous fiscal year rather than the immediate impact of reforms.

According to experts, it was too early for reforms to have such an effect.

Dr Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), told The Business Standard, "Even if some reforms have been undertaken, their results would not come this quickly. It would take more time."

"The growth we are seeing is mainly due to low revenue collection last year. That low base is why the current growth rate appears higher," he said.

As per NBR data, revenue collection during the first half of FY2024-25 (July-December) did not increase; instead, it declined by about 1%.

A former senior NBR official, speaking on condition of anonymity, echoed that view, saying, "The revenue growth being observed is not due to new reforms."

He rather questioned whether any effective reform had been implemented over the past year.

Structural reforms, legal changes

In its briefing, the NBR highlighted the separation of revenue policy from revenue administration as a major milestone. It noted that the issuance of the Revenue Policy and Revenue Management (Amendment) Ordinance, 2025 had formally divided policy formulation from implementation.

The decision was approved at a meeting of the National Implementation Committee for Administrative Reforms (Nicar), chaired by the chief adviser, paving the way for long-awaited structural reforms within the NBR.

The revenue authority also said the government had moved to curb tax exemptions by introducing the Tax Expenditure Policy and Management Framework, which has been published in the official gazette.

Amendments to the Income Tax Act, the Customs Act and the VAT Act have withdrawn the NBR's authority to grant tax exemptions, it said, adding that any future exemptions will require parliamentary approval.

Digitalisation drive

The NBR said it has undertaken a major digitalisation programme under the World Bank-funded Strengthening Domestic Revenue Mobilisation Project, with an estimated cost of nearly Tk1,000 crore.

The project aims to modernise income tax, VAT and customs operations. Measures such as e-returns, online payments, e-refunds, VAT smart invoices and risk-based audits have reduced hassle for taxpayers, the authority said.

In customs, the launch of the Bangladesh Single Window has enabled certificates, licences and permits from 19 agencies to be issued online. Around 900,000 certificates have been issued so far, with most applications processed within one hour to one day, according to the NBR.

In the VAT sector, a special registration drive led to the issuance of 131,000 new VAT registrations in December 2025 alone, raising the total number of registered entities to 775,000.

The NBR said mandatory online submission of income tax returns has resulted in more than 34 lakh e-returns being filed so far.

An email-based one-time password system has also been introduced for expatriate Bangladeshis, making overseas filing easier. More than 5,000 expatriate taxpayers have already used the facility, it said.

The introduction of a risk-based audit system has made the audit selection process more transparent, the authority added.

Duty, tax relief measures

The government has also provided duty and tax relief in several areas, the NBR said.

These include excise duty exemptions on air tickets and related services for Hajj pilgrims, reduced customs duty and advance income tax on date imports ahead of Ramadan, and duty-tax relief on essential commodities.

Customs duty on mobile phone imports has been cut from 25% to 10%, resulting in an overall import duty reduction of up to 60%, according to the NBR.

The authority said the benefits of these measures were already visible in higher revenue collection, increased taxpayer confidence and a more business-friendly environment, and would help raise the revenue-to-GDP ratio over the medium and long term.

The National Board of Revenue (NBR) has said its reform initiatives have produced positive results in revenue collection, with government revenue increasing by Tk23,020 crore in the first six months of the current fiscal year compared to the same period last year.

In a detailed briefing sent to Chief Adviser Muhammad Yunus on Sunday (25 January), the revenue authority attributed this to structural reforms in revenue management, digitalisation, measures to curb tax evasion and taxpayer-friendly initiatives.

According to the NBR, total revenue collection from July to December 2025 stood at Tk1,85,229 crore, marking a notable rise from the corresponding period of the previous fiscal year.

One of the major milestones of the reform process, the NBR said, is the decision to separate revenue policy from revenue administration.

The briefing noted that the issuance of the Revenue Policy and Revenue Management (Amendment) Ordinance, 2025 formally separated policy formulation from implementation.

The decision's approval came at a meeting of the National Implementation Committee for Administrative Reforms (NICAR), chaired by the chief adviser, paving the way for long-awaited structural reforms within the NBR.

Major investment in digital revenue system

The NBR said that to fully digitise revenue management, a World Bank-funded project titled Strengthening Domestic Revenue Mobilisation Project (SDRMP) has been undertaken at a cost of nearly Tk1,000 crore. The project aims to modernise income tax, VAT and customs operations.

The introduction of e-returns, online payments, e-refunds, VAT smart invoices and risk-based audits has reduced taxpayer hassle, the NBR added.

Parliamentary approval mandatory for tax exemptions

To move away from tax exemptions, the government has formulated the Tax Expenditure Policy and Management Framework and published it in the official gazette, the NBR said.

Amendments to the Income Tax Act, Customs Act and VAT Act have withdrawn the NBR's authority to grant tax exemptions, it added, mentioning that from now on, no tax exemption can be granted without parliamentary approval.

Customs and VAT

With the launch of the Bangladesh Single Window (BSW), certificates, licences and permits from 19 agencies are now being issued online.

So far around 900,000 certificates have been issued digitally, with most applications processed within one hour to one day, the NBR said.

In the VAT sector, a special registration campaign led to the issuance of 1,31,000 new VAT registrations in December 2025 alone, raising the total number of VAT-registered entities to 775,000.

Response to e-returns in income tax

Mandatory online income tax return submission has resulted in more than 34 lakh e-returns being filed so far, the NBR said.

An email-based OTP system for expatriate Bangladeshis has made overseas filing easier, with over 5,000 expatriate taxpayers already using the facility, it added.

The NBR stated that the introduction of a risk-based audit system has also made the audit selection process more transparent.

Duty and tax relief for business and public interest

The government has granted excise duty exemptions on air tickets and related services for Hajj pilgrims, reduced customs duty and advance income tax on date imports ahead of Ramadan, and provided duty-tax relief on essential commodities.

Additionally, customs duty on mobile phone imports has been reduced from 25% to 10%, resulting in an overall import duty reduction of up to 60%.

According to the NBR, the benefits of these reforms are already being reflected in higher revenue collection, increased taxpayer confidence and a more business-friendly environment.

The briefing noted that in the medium and long term, these reforms will play a crucial role in increasing the revenue-to-GDP ratio.

A move by the National Board of Revenue to mandate full automation for exporters' raw material usage and activities from 1 January has apparently backfired, with businesses reporting severe software glitches, systemic delays, and a persistence of the very harassment the system was designed to eliminate.

While the NBR claims these issues are minor teething problems that will be resolved over time, exporters argue that the Customs Bond Management System was launched without adequate preparation. In some instances, approval processes that were supposed to be streamlined are now taking over a fortnight, causing many to miss LC deadlines.

Saleudh Zaman Khan, managing director of NZ Apparel, told TBS, "It is taking up to two weeks to secure a UP (utility permission). Consequently, LC deadlines are expiring, and we cannot supply local garment manufacturers on time, which ultimately hampers the country's final exports."

Exporters are allowed to import raw materials duty-free under the bonded warehouse facility. Even when raw materials are sourced locally, suppliers must obtain a UP from the Customs Bond Commissionerate to confirm that goods produced from imported inputs have been fully exported. The bond office verifies data from Bangladesh Bank and NBR units before issuing approval.

Previously, the process was manual, which businesses said left room for irregularities and harassment.

Industry insiders cite several problems with the bond automation, including the absence of Bangladesh Bank's dashboard integration, lack of coordination with the NBR's duty drawback office, unusually slow performance, missing bills of entry, and incomplete display of raw material data.

While Mohammad Hasmat Ali, commissioner of Customs Bond Commissionerate (Dhaka South), maintained that only "minor issues" are being addressed, a senior official from the Dhaka North office admitted that the problems are significant enough that staff are occasionally forced to revert to manual solutions.

Responding to questions at a press conference on Sunday, NBR Chairman Abdur Rahman Khan admitted there were initial complexities but said these would be corrected over time.

Some business leaders also suggested that resistance from a section of customs officials – particularly at junior levels – and certain commercial officers within exporting firms may be contributing to the difficulties. They alleged that automation has reduced opportunities for "undue advantages" for some under the manual system, creating reluctance to fully embrace the digital process.

Private sector bank credit growth declined again in December 2025, remaining below 7% for the seventh consecutive month.

At the end of December 2025, private sector credit growth stood at 6.20%. In November, growth was 6.58%, while in December 2024 it was 7.28%.

Economists and bankers say the primary reason for the slowdown in bank lending is stagnation in new investment. With fewer new investments, imports of capital machinery have fallen.

Persistently high inflation has also weighed on investment decisions, discouraging businesses from undertaking new projects. Political instability is cited as the main factor behind this reluctance to invest.

Tight monetary policy strains banking sector, slows deposit and credit growth: Planning Commission report

Professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), said: "Businesses are not making new investments. If new investment does not increase, bank credit will not expand either. Given the current situation, businesses will refrain from investing. This condition is likely to persist until the next election. Lower investment will worsen unemployment, which in turn will slow GDP growth."

He added: "As long as inflation remains high, it will continue to exert pressure on private sector growth."

Mohammad Ali, Managing Director of Pubali Bank Limited, said: "There are no new work orders at the moment because of the prevailing political environment. In such circumstances, it is natural that businesses will not invest. Hopefully, an investment-friendly environment will emerge after the election."

Given the current situation, businesses will refrain from investing. This condition is likely to persist until the next election. Lower investment will worsen unemployment, which in turn will slow GDP growth.
Prof Mustafizur Rahman, distinguished fellow, CPD

A deputy managing director of a private bank told The Business Standard that many businesses have shut down following the fall of the Awami League government, while those still operating are unable to function at full capacity. Several factories belonging to large groups such as Nassa, Beximco and Gazi have closed. As a result, these firms are no longer borrowing from banks. When factories were operational, they imported capital machinery, but even the firms still running have reduced production by 60–70%.

According to Bangladesh Bank data, settlement of liabilities for capital machinery imports declined by more than 16% during July–November.

The last time private sector credit growth reached double digits was in July 2024, at 10.13%. From August that year, growth began to decline steadily, falling to 6.23% in October 2025—described by experts as the lowest level on record.

Bangladesh Bank had projected private sector credit growth of 7.2% by December 2025. The actual figure therefore fell short of the central bank's monetary policy target, indicating that businesses are borrowing significantly less than anticipated.

Controlling inflation remains the biggest challenge

Bangladesh Bank has indicated that it will reduce the policy rate once inflation comes under control. In December, headline inflation rose to 8.49%. The central bank governor has said the policy rate would be lowered if inflation falls into the 7% range. The policy rate currently stands at 10%, keeping average bank lending rates between 11% and 12%. Business groups have repeatedly urged Bangladesh Bank to rein in inflation.

A senior official at a private bank told The Business Standard that unless inflation is controlled, private sector credit growth will not increase. "Businesses are unwilling to operate with high interest rates, as this raises their cost of doing business. Controlling inflation is therefore Bangladesh Bank's biggest challenge," he said.

Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said: "Doing business with high interest rates has become extremely difficult. Many factories have shut down due to a lack of orders, and others are not expanding operations. As a result, many business groups have reduced their reliance on bank borrowing."

A senior executive of the TK Group said borrowing from banks has significantly increased the cost of doing business due to high interest rates.

Banks turn to government securities for income

With private sector credit demand weakening, banks have increased investment in treasury bills and bonds. A senior official at a private bank said that banks are gravitating towards these safer instruments amid weak loan demand. At the same time, the government is borrowing heavily from banks through treasury bills and bonds, including an additional Tk10,000 crore outside the regular borrowing calendar during the October–December quarter.

Limited opportunities for private investment have allowed banks to earn nearly 11% interest on government securities, which are effectively risk-free. For many conventional banks, a substantial share of income now comes from this segment.

Although there were concerns at the beginning of 2025 over rising deposit rates, high inflation, weak loan demand and political uncertainty, the reality has unfolded differently.

Profits at private banks – particularly stronger institutions – have increased not through loan expansion but through large earnings from government securities. This has become a new lifeline for the banking sector and is significantly reshaping banks' balance sheets.

Despite falling prices in the global market, prices of major essential commodities in Bangladesh have risen ahead of Ramadan. Prices of some items, however – including chickpeas and dates – have fallen. This information has emerged from a review report prepared by the commerce ministry.

The report compared price changes over the past month and over one year in both local and international markets for rice, flour, edible oil, sugar, lentils, onions, garlic, chickpeas and dates. Demand for these products rises comparatively in the Bangladeshi market during Ramadan.

This was presented at a meeting of the Task Force Committee on the review of commodity prices and market conditions, held at the commerce ministry yesterday.

According to the report, over the past month the prices of coarse rice varieties such as Swarna and China have remained unchanged in the domestic market. However, over the past year, prices of this high-demand rice have increased by 8.57%, currently selling at Tk54 to Tk60 per kg. In contrast, prices of the same rice in the international market have fallen by 18.65% over the past year to $423 per tonne, although they rose by 4.19% over the past month.

The price of bottled soybean oil per litre in Bangladesh has increased by 1.57% over the past month and by 12.83% year-on-year. Meanwhile, the price of crude soybean oil in the international market has declined by 3.03% over the past month, though it has risen by 9.27% over the year. Over the same one-year period, palm oil prices have increased slightly in Bangladesh, while falling by 11.82% in the international market.

Prices of medium- and small-grain lentils have increased in Bangladesh over the past year, while prices of coarse lentils have declined. In the international market, however, lentil prices have dropped sharply – by 30.92% in Australia and 9.09% in India. Bangladeshi traders mainly import lentils from these two markets.

Over the past month, refined sugar prices in the international market have risen by 5%, while they increased by 1.20% in the domestic market. Over the past year, prices of sugar have declined by around 15% in both Bangladesh and the international market.

There is some good news regarding onion prices. Over the past month, onion prices in the domestic market have fallen by 18.18%, although they are still 24.14% higher than a year ago. The new onion harvest season has begun in the country, contributing to the recent price decline.

Meanwhile, the report notes that prices of ginger, garlic and chickpeas have fallen more in Bangladesh than in the international market. Demand for all three products rises during Ramadan.

Demand for dates increases significantly in Bangladesh during Ramadan, as fasting people consume dates at iftar. Over the past month, prices of this import-dependent fruit have fallen by 2.67% in the domestic market, selling at Tk180 to Tk550 per kg depending on quality. The report did not include any information on international prices for dates.

Market analysts say that weak market monitoring, trader syndicates, and depreciation of the taka against foreign currencies are the main reasons why prices of many commodities in Bangladesh are not falling despite declines in the international market.

Commenting on the issue, Consumer Association of Bangladesh (CAB) President AHM Safiquzzaman told TBS that due to malpractice by traders, Bangladeshi consumers do not benefit from falling global prices.

"Government monitoring is weak, and even where monitoring exists, the authorities often fail to take action against traders in line with the law. Although traders cite rising dollar prices as an excuse, in reality this has not had much impact, as the dollar rate has remained relatively stable for some time," he said.

This year's Ramadan will be more comfortable than last year: commerce adviser

Following the task force meeting yesterday, Commerce Adviser Sk Bashiruddin told journalists that prices of some commodities would decline in the coming Ramadan. He said imports of essential goods are 40% higher than last year, making this year's Ramadan more comfortable than the previous one.

He said supply, import and production data had been analysed, and the analysis showed that the Ramadan market would be better this year than last year.

He further said that at the task force meeting, traders assured the government that supplies of essential commodities would remain normal during Ramadan. Prices would stay under control, and some commodities would even become cheaper.

Referring again to the 40% increase in imports compared to last year, the adviser said that prices of essentials during Ramadan would remain within people's reach.

Concern over reduced soybean oil supply during Ramadan

Although the commerce adviser expressed optimism that supplies would increase during Ramadan, the report presented at the meeting warned of a possible shortage of edible oil supply this year compared to last year.

The meeting was informed that demand for edible oil during Ramadan is around 3 lakh tonnes. In November and December, a total of 3.66 lakh tonnes of edible oil were imported, including 1.08 lakh tonnes of soybean oil and 2.58 lakh tonnes of palm oil. In the same period of the previous year, imports stood at 3.72 lakh tonnes.

On the other hand, traders opened letters of credit (LCs) for importing a total of 3.92 lakh tonnes of soybean and palm oil in November and December, compared to 4.51 lakh tonnes in the same period of the previous fiscal year.

Ramadan will begin in mid-February. Edible oil imported under LCs opened in November and December will reach the market in February. As fewer LCs have been opened for imports compared to last year, it is feared that market supply will also be lower.

Britain's biggest banks including HSBC and NatWest are set to follow their European rivals and lift their key profit targets when they report annual earnings in the coming weeks, people close to the matter said.

HSBC is expected to raise its return on tangible equity (ROTE) outlook – a key measure of profitability – above current guidance of "mid teens or better," while NatWest is likely to upgrade its guidance for 2027, currently at 15%, to as much as 17%, two people said.

Barclays, which in October said it expected an ROTE of 12% or above in 2026, should also lift its targets, a third source familiar with the lender said.

Analysts have also said they believe Barclays and HSBC can raise their targets by as much as 200 basis points when they set out guidance for the coming years. They report their earnings on 10 February and 25 February, respectively.

In continental Europe, many banks have already lifted their profit goals, signalling confidence higher margins will last for years.

Increased profitability targets show banks expect to keep benefiting from benign interest rate conditions and continued loan and fee income growth, although aiming higher is not without risks and can leave investors disappointed if economies stutter.

Lloyds Banking Group could also lift its targets this year, aiming for ROTE to rise to as much as 18.5% by 2028 from this year's goal of more than 15%, analysts at Jefferies said this month.

The banks all declined to comment.

"UK banks have benefited from earnings resilience lasting longer than initially expected, supported by higher interest rates, robust credit quality and tighter cost control," said Peter Rothwell, head of banking at KPMG UK.

Lloyds and Deutsche Bank report full-year earnings on Thursday, kicking off the European bank reporting season following a bumper set of numbers on Wall Street.

Banks across Europe pushing profits higher

After years of poor profitability and share performance following the financial crisis, European banking stocks have more than doubled since early 2024 and risen 60% in the past year – far outpacing US banks.

Among European rivals, Spanish banks Santander and BBVA have grown income while keeping costs under control, raising expectations for improved targets.

JPMorgan expects BBVA to have delivered an around 20% ROTE in 2025, broadly in line with 2024, with profitability rising to 22% in 2026 and reaching 26% by 2028.

Santander could target a ROTE by 2028 of around 19–20%, up from 16.1% as of September, Barclays analysts said.

Germany's Deutsche Bank in November set a new ROTE target for 2028 of greater than 13%, up from its 2025 target of 10%.

Analysts expect Deutsche to confirm it met the 2025 target, alongside figures that could show its biggest profit since 2007.

Volatile markets and a flurry of corporate deals should also lift investment bank earnings, buoying the likes of Deutsche, Barclays and UBS, after most Wall Street banks reported rising revenues and a bullish outlook.

France's Societe Generale, BNP Paribas and Credit Agricole may buck the trend as higher costs and domestic competition weigh on profits, analysts said.

A South Korean company, Park Handbag BD Ltd, is expected to establish a large-scale bag, luggage, and high-end garment manufacturing facility at the Bepza Economic Zone in Chattogram’s Mirsharai.

The proposed investment amounts to $80 million, according to an agreement signed between the Bangladesh Export Processing Zones Authority (Bepza) and the company at the Bepza Complex in Dhaka, a statement from Bepza said.

Md Tanvir Hossain, executive director for investment promotion at Bepza, and Beomjoon Park, chairman of Park Handbag BD Ltd, signed the deal, with Major General Mohammad Moazzem Hossain, Bepza executive chairman, also present.

Under the agreement, Park Handbag will develop the project on 57,600 square metres of land to manufacture handbags, backpacks, luggage, and a wide range of knit and woven garments, including polo shirts, T-shirts, padded and down jackets, trousers, sportswear, and undergarments.

Once fully operational, the project is expected to create employment opportunities for 10,960 Bangladeshi nationals. The products will be exported to major global markets, including the USA, UK, European Union, South America, and Asia.

Gold surged to a record high above $5,000 an ounce on Monday, extending a historic rally as investors piled into the safe-haven asset amid rising geopolitical tensions.

Bullion added 64% to its value in 2025, its biggest annual rise since 1979, driven by a mix of safe-haven demand, bets on US rate cuts, robust central-bank buying, de-dollarisation trends and inflows into exchange-traded funds. It is up 18% so far this year.

Here are some ways to invest in gold:

Spot market

Large buyers and institutional investors usually buy gold from big banks. Prices in the spot market are determined by real-time supply and demand dynamics.

London is the most influential hub for the spot market, with the London Bullion Market Association setting standards for gold trading and providing a framework for the over-the-counter market to facilitate trades among banks, dealers and institutions.

China, India, the Middle East and the US are other major gold-trading centres.

Futures market

Investors can also get exposure to gold via futures exchanges, where people buy or sell a particular commodity at a fixed price on a particular date in the future.

COMEX, part of the New York Mercantile Exchange, is the largest gold futures market in terms of trading volumes.

The Shanghai Futures Exchange, China's leading commodities exchange, also offers gold futures contracts. The Tokyo Commodity Exchange, popularly known as TOCOM, is another big player in the Asian gold market.

Exchange-traded products

Exchange-traded products or exchange-traded funds issue securities backed by physical metal, allowing people to gain exposure to gold prices without taking delivery of the metal itself.

Global gold ETFs saw record inflows in 2025, led by North American funds, according to World Gold Council data. Annual inflows surged to $89 billion.

Bars and coins

Retail consumers can buy gold from traders selling bars and coins in shops or online. Gold bars and coins are both effective means of investing in physical gold.

Investors in top consumers China and India have moved more towards purchasing bars and coins as opposed to jewellery amid surging spot prices.

What drives the market?

Investor interest and market sentiment

Rising interest from investment funds in recent years has been a major factor behind bullion's price moves, with sentiment driven by market trends, news and global events fuelling speculative buying or selling of gold.

Foreign exchange rates

Gold is a popular hedge against currency market volatility. It has traditionally moved in the opposite direction to the US dollar, since weakness in the US currency makes dollar-priced gold cheaper for holders of other currencies and vice versa.

Monetary policy and political tensions

The precious metal is widely considered a safe haven during times of uncertainty.

US President Donald Trump's trade tariffs have over the last year sparked a global trade war, rattling currency markets.

Trump's capture of Venezuelan leader Nicolas Maduro and aggressive statements on acquiring Greenland have added to volatility since the start of 2026.

Global central banks' policy decisions also influence gold's trajectory. Lower interest rates reduce the opportunity cost of holding gold, since it pays no interest.

Central bank gold reserves

Central banks hold gold in their reserves, and demand from this sector has been robust in recent years because of macroeconomic and political uncertainty.

The World Gold Council said in its annual survey in June that more central banks plan to add to their gold reserves within a year despite high prices.

Net central bank purchases in November totalled 45 metric tons, World Gold Council data showed, pushing the figure for the first 11 months of 2025 to 297 tons as emerging market central banks continued their significant gold buying.

China kept adding gold to its reserves, with its holdings totalling 74.15 million troy ounces at the end of December from 74.12 million in the previous month as it extended its buying spree for the 14th month in a row.

Poland's central bank, which held 550 tons of gold at end-2025, aims to lift reserves to 700 tons, Governor Adam Glapinski said this month.

The Bangladesh Textile Mills Association (BTMA) has called for urgent government intervention to stop what it described as unfair advantages in yarn imports that are severely affecting local spinning mills.

The demand was raised at a meeting on Monday (26 January) between BTMA President Showkat Aziz Russell and senior officials of domestic textile mills, particularly spinning mill representatives.

The association later shared details of the meeting in a press release issued last night (26 January).

According to mill representatives, domestic spinning mills are facing heavy losses due to an unusually high volume of yarn imports under duty-free bonded warehouse facilities. They alleged that these imports benefit from incentives and subsidies provided by neighbouring countries' governments, creating unequal competition that is pushing local industries towards an existential crisis.

Speaking at the meeting, BTMA President Showkat Aziz Russell said that, in line with previously announced programmes to protect domestic industries, the decision to keep all textile mills closed from 1 February would remain in effect.

He warned that without the immediate withdrawal of existing unfair advantages in yarn imports and the adoption of effective policy measures, the country's textile sector would face severe consequences.

He also noted that yarn imports from India have increased by approximately 137% over the past year compared to the previous year. He said that around 50 spinning mills have already shut down, while at least another 50 are at risk of closure.

As a result, nearly 200,000 workers and employees have lost their jobs, signalling a serious social and economic crisis, according to him.

During the meeting, senior mill officials urged the government to take swift and effective steps to exclude 10-30 count yarn from bonded warehouse facilities, in line with recommendations from the Ministry of Commerce.

Expressing hope for a positive outcome, the BTMA president said the government would take prompt and effective policy decisions to safeguard domestic industries, investments and the large workforce employed in the textile sector.

The European Union has raised concerns over Bangladesh's non-tariff barriers in trade, with a significant focus on customs procedures, Commerce Secretary Mahbubur Rahman said today (26 Janaury).

Speaking at an event in Agargaon, Dhaka, marking International Customs Day, he revealed that a recent meeting with an EU delegation highlighted 15 key issues relating to customs processes and daily operations, urging simplification.

"Our import tariffs are among the highest in the world, which they accept legally. But non-tariff barriers are not acceptable," Mahbubur Rahman said.

He added that excessive protectionist measures, such as mandatory 100% luggage scanning at airports, create long queues without meaningful benefits.

Zaidi Sattar, chairman of the Policy Research Institute (PRI), stressed the need for urgent trade policy reforms, noting that reforms delayed over the past 15 years must be implemented within the next three to five years to prevent Bangladesh from lagging behind competitors.

He highlighted that import duties currently raise $11 billion annually and should be reduced to 1% of GDP to promote trade and job creation.

Secretary Mahbubur Rahman told The Business Standard, "Currently, import tax collection is 2.5% of GDP. But it should not exceed 1%."

Mubinul Kabir, member of the Customs Policy wing, said programmes like the Authorised Economic Operator (AEO) and pre-arrival processing remain underutilised. "We are considering relaxing the conditions for AEO," he added.

NBR Chairman Abdur Rahman Khan acknowledged complaints regarding inconsistent service delivery. "The same product, imported from the same country on the same day, should not be assessed differently by two officers," he said.

Regarding the duty-free import of raw materials under bond licenses, he said, "Many argue that without the bond facility, the country's industrialisation would have mirrored China's progress."

Nine companies get AEO recognition

At the event, nine companies were recognised as Authorised Economic Operators. They are: Hatil Complex Limited, Asia Paints (Bangladesh) Limited, BRB Cables Industries Limited, Footsteps Bangladesh Limited, Omera Cylinder Limited, Jihan Footwear, Shoeniverse Footwear, Cutting Edge Industries Limited, and MBM Garments Limited.

AEO-certified firms can move consignments directly from ports to their warehouses without physical inspection, with documents verified in advance. Customs officers may inspect the warehouse if needed.

The facility, often called the "VIP pass of trade," is granted to companies with strong compliance records. Currently, fewer than 20 companies hold AEO recognition in Bangladesh.

Seventeen NBR officers received the Certificate of Merit from the World Customs Organisation for their service contributions.