The government has decided to form a joint committee comprising the Chattogram Port Authority (CPA) and customs authorities to remove trade barriers, expedite cargo clearance, and reduce business costs, Finance Minister Amir Khosru Mahmud Chowdhury said today (11 August).

He announced the decision while briefing journalists after a high-level meeting with senior port and customs officials at Chattogram Port. The committee, he said, will work to improve coordination between the two agencies and address operational problems that delay import-export activities.

The government's priority is to facilitate trade, boost exports and industrialisation, and strengthen the economy by removing the regulatory and procedural barriers faced by businesses, Khosru said.

"We are taking steps towards deregulation to remove the obstacles businesses have faced due to various regulations and complexities," he said.

The minister said the meeting identified specific problems between the port and customs authorities and decisions were taken to resolve them.

Nothing has been left open-ended. Each decision has been given a specific timeframe for implementation," he said.

The proposed joint committee will also address emerging problems between the two agencies and work towards resolving them promptly, he added.

Khosru said delays in port operations and customs clearance increase the cost of doing business, eventually pushing up prices for consumers.

"If cargo can be cleared and exports processed in less time, businesses will have lower operating costs. The benefit will ultimately reach consumers as well," he said.

Faster and more cost-effective import-export procedures would also improve Bangladesh's competitiveness in international markets, according to the minister.

"If import-export processes become faster and more cost-effective, Bangladesh's competitiveness in the international market will increase and the path towards building a trillion-dollar economy by 2034 will become easier," he said.

Asked about the operation of the New Mooring Container Terminal (NCT), Khosru said the key issue was not whether the terminal would be operated by the port authority or a particular entity, but whether its operator would work in the national interest.

"Whether the port is operated by domestic or foreign entities is not the main issue. Whoever operates the port must work under the same rules, protecting the interests of the country's economy, people and businesses," he said.

On reopening closed factories, Khosru said the government's decisions were aimed at creating an environment where industries could operate without unnecessary obstacles and at lower costs.

Asked about customs officials' seizure of illegal goods and allegations of irregularities, he said the government would take a strict stance against corruption.

"There will be no scope for corruption, nepotism or patronage under the current government. No matter how powerful those involved in irregularities are, they will not receive any concession," he said.

The minister also said the Asian Development Bank (ADB) vice-president was visiting Chattogram and that the multilateral lender had major development plans for the city.

Chattogram should be developed not merely as a logistics hub but as a leading centre of broader economic development, he said.

A meeting involving the ADB and relevant stakeholders was held yesterday to discuss about overall plan to develop Chattogram.

Artificial intelligence (AI) could replace workers in some tasks while increasing demand for labour in other parts of the production process, according to Canadian economist Jean-Louis Arcand.

The finding could have important implications for labour-intensive economies such as Bangladesh, where many workers are engaged in relatively low-productivity activities.

Arcand, president of the Global Development Network, said firms are likely to adopt AI first in tasks that are the weakest links in a production process. By removing these bottlenecks, AI could improve productivity in other tasks and increase demand for workers.

“AI is potentially labour’s friend,” Arcand said at a public lecture organised by the South Asian Network on Economic Modeling (Sanem) at BRAC Centre yesterday.

The lecture, titled “These Aren’t the Droids You’re Looking For: Endogenous AI, O-Rings, and the Bottleneck Reallocation Theorem”, examined how firms decide where to use AI and how its adoption could affect workers.

Arcand’s research builds on economist Michael Kremer’s O-ring model of production, which says that production involves a series of interconnected tasks. A failure in one critical task can disrupt the entire production process.

He illustrated the idea with the 1986 Challenger space shuttle disaster, in which the failure of a relatively inexpensive O-ring contributed to the destruction of the spacecraft.

In his extended model, firms can use AI to reduce the risk of failure in specific tasks. This can affect employment in two different ways.

Within a particular task, AI can substitute for workers if it can perform the job more efficiently. Firms may then need fewer workers or less-skilled workers for that task.

At the same time, AI can complement workers in other tasks. When it removes a bottleneck, workers elsewhere in the production process can become more productive, increasing demand for their labour.

“When you introduce AI in a given task, it can crowd out labour, but it can increase demand for labour in other tasks because it is complementary to workers there,” he said.

Arcand said the impact of AI on employment would depend on the technology, the tasks involved and the cost of adoption.

“If someone asks you as an economist what will happen with AI in terms of labour, the correct answer is: it depends,” he said.

His model suggests that AI is likely to be adopted first in tasks where the risk of failure is relatively high. This means its use may not be concentrated only in advanced jobs or industries. Firms could first use it where it can remove major bottlenecks and improve productivity.

This could be relevant to service-sector activities such as coding and online customer service, where AI can reduce errors and improve performance.

The research also suggests that AI could help narrow wage differences. In the O-ring model, small differences in worker quality can lead to much larger differences in productivity and wages because the tasks are interconnected. Arcand said AI could reduce some of these differences by improving weaker tasks.

A calibration using US data estimated that the mechanism studied in the model could increase GDP by about 0.5 percent in the short term. However, Arcand said the gains were relatively modest, and the cost of adopting AI remained significant.

His analysis also suggests that lower-income economies could benefit more from AI than high-income economies.

However, countries such as Bangladesh will need to adopt AI strategically and use it to address genuine bottlenecks if they are to realise these potential gains, he said.

Arcand said more research was needed to understand the effects of AI adoption in developing economies. He also expressed interest in collecting data on AI use in Bangladesh.

“We can eventually collect data in Bangladesh on AI adoption,” he said.

The government has formed a 22-member high-level taskforce to overhaul regulatory and administrative procedures that create hurdles for businesses and investors, with a focus on simplifying approvals, licences and other government services.

Finance and Planning Minister Amir Khosru Mahmud Chowdhury will head the National Taskforce on Deregulation and Business Facilitation, which includes relevant ministers, the prime minister's adviser on the Ministry of Finance, senior government officials and representatives of major business organisations.

The Cabinet Division issued a gazette notification forming the taskforce yesterday (9 August).

The taskforce will develop and oversee implementation of a reform roadmap for deregulation and business facilitation. It will review existing rules, regulations and procedures related to business and investment and identify unnecessary regulatory hurdles that can be removed or simplified.

It will also examine ways to introduce more efficient and investor-friendly systems and provide policy direction for simplifying procedures related to licences, approvals, clearances, taxes, customs, banking, capital markets, construction, environmental services and local government services.

The taskforce will provide policy guidance on introducing a Single Window, Service Level Agreements, deemed or automatic approvals and online tracking, among other digital services, to make government services faster and more predictable for businesses.

It will also work to resolve coordination problems among ministries and agencies and identify laws, rules, policies, circulars and administrative orders that need to be amended to facilitate business operations, investment and economic activities.

According to the gazette, the taskforce will work with the Invest Bangladesh Authority on a dedicated website and a grievance redress mechanism to monitor complaints, irregularities and delays faced by businesses and service users.

Implementation progress will be reviewed quarterly, and the taskforce will submit recommendations and undertake follow-up measures in line with the terms of reference set out in the gazette.

The taskforce includes the environment, industries and law ministers, as well as the prime minister's adviser on the Ministry of Finance and a member of the ICT taskforce.

Other members include the cabinet secretary, Bangladesh Bank governor, finance secretary, shipping secretary, National Board of Revenue chairman, Bangladesh Securities and Exchange Commission chairman and Registrar of Joint Stock Companies and Firms.

The presidents of the Federation of Bangladesh Chambers of Commerce and Industry, Foreign Investors' Chamber of Commerce and Industry, Dhaka Chamber of Commerce and Industry, Metropolitan Chamber of Commerce and Industry, Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association are also members.

The taskforce takes effect immediately and may co-opt additional members when necessary.

The initiative is part of the government's broader deregulation programme aimed at reducing unnecessary government procedures and delays in business and investment.

In the budget speech for fiscal 2026-27, the finance minister said deregulation would remove delays and unnecessary steps in government services and make them easier, faster, more transparent and more reliable for investors.

The government also announced plans to make online single-window services mandatory for approvals and licensing, complete the process from application to licence issuance within a maximum of seven days, and automate tax, customs and VAT systems.

27-member creative economy steering committee

The government has also formed a 27-member National Steering Committee on Creative Economy, headed by Finance and Planning Minister Amir Khosru Mahmud Chowdhury.

The committee includes representatives from the ministries of culture, industries, commerce, housing, planning, information and communication technology, tourism, women and children affairs, youth and sports, and information and broadcasting.

Representatives from the private sector and creative industries have also been included, including the Bangladesh Small and Cottage Industries Corporation, BRAC, HSBC Bangladesh, Bengal Foundation and Shanto-Mariam University of Creative Technology, as well as representatives from the fashion design and modelling sectors and other experts.

An additional secretary of the Finance Division will serve as the member-secretary.

The steering committee will approve sector-specific roadmaps for the creative economy, review their implementation, coordinate among relevant ministries and organisations, and provide policy direction.

It will also review the work of various sector-specific committees and assess implementation progress on a quarterly basis.

The government has constituted a 27-member National Steering Committee on creative economy to coordinate policy implementation and drive sector-specific growth across public and private entities.

The high-level panel is chaired by Finance and Planning Minister Amir Khosru Mahmud Chowdhury, according to a notification released on August 9.

Other members include key cabinet ministers, senior government secretaries, institutional representatives, and sector specialists, including fashion designer Bibi Russell, the notification adds.

Under its terms of reference, the committee will approve and review implementation progress of sector-specific roadmaps, provide inter-ministerial and inter-agency coordination and policy direction, and review the activities of various sector-specific committees.

It will assess progress quarterly, with secretarial support from the Finance Division.
Image

As defined by the United Nations Conference on Trade and Development (UNCTAD) in its Creative Economy Outlook 2024, the creative economy includes activities that generate and distribute goods and services rooted in creativity and intellectual capital, such as advertising, architecture, arts, design, music and film production, publishing and video games.

In Bangladesh, the sector has largely grown informally, driven by small craft entrepreneurs, independent filmmakers and boutique fashion brands, often with limited state support.

The steering committee’s formation follows calls from industry figures for a unified coordinating body for the sector.

At a virtual event organised by the Power and Participation Research Centre in July, film director and Chorki CEO Redoan Rony called for “a core strategy across all sectors, not just film or theatre, but crafts as well.” Bengal Foundation director general Luva Nahid Choudhury went further, calling a central commission essential for the sector’s sustainable development.

The move aligns with the government’s broader economic reform and deregulation package announced in the national budget, designed to diversify the economy, enhance business competitiveness, and support structural transformation as Bangladesh prepares for graduation from least developed country status.

Finance Minister Amir Khosru Mahmud Chowdhury, while delivering the fiscal year 2026–27 budget speech, announced that the government has set aside Tk 300 crore directly for creative economy development, with an additional Tk 500 crore expected from Bangladesh Bank’s corporate social responsibility funds.

“We have already prepared an action plan to implement coordinated activities involving the government, private sector and NGOs for the sustainable development of this sector,” he said at the time.

He separately mentioned plans for a dedicated 150-acre “theatre district” as part of the broader push.

UNCTAD data cited in the FY27 budget shows creative-sector contributions in developing countries ranging from 0.5 percent to 7.3 percent of GDP and employing between 0.5 percent and 12.5 percent of the workforce, depending on the country. Globally, UNCTAD estimates the creative economy at about 3 percent of world GDP, or roughly $2.25 trillion.

The government has set a goal, drawn from the ruling BNP’s election manifesto, to raise the creative economy’s contribution to GDP to 1.5 percent and generate 500,000 new jobs by 2035.

Khosru previously flagged a basic constraint the new committee will have to contend with: “there is little data available” on how much activities such as performing arts, design and stand-up comedy currently contribute to the economy.

The cabinet today (10 August) gave final approval to the draft Bank Resolution (Amendment) Act, 2026, repealing a provision that allowed former directors or owners of banks undergoing or slated for mergers to regain control under relatively favourable terms.

The approval came at a cabinet meeting chaired by Prime Minister Tarique Rahman at the Bangladesh Secretariat, according to a press release.

Under the Article 18 (A) of the existing bank resolution act, former directors or owners of banks, merging or listed for mergers, could pay 7.5% upfront of the amount injected by the government or the Bangladesh Bank to reclaim the banks while the remaining 92.5% was to be repaid within two years at 10% simple interest.

The provision was introduced as a market-based alternative to conventional bank resolution tools, allowing troubled banks to remain operational while being restructured, addressing capital and liquidity shortfalls, protecting depositors and investors, and reducing the government's financial exposure.

However, no individual or institution applied under the provision after meeting its conditions, prompting the government to move to repeal it altogether.

The cabinet also cleared the draft of the National Human Rights Commission Act, 2026 and the draft Visa Policy 2026 at the meeting.

The national human rights commission act is essential to protect, promote and ensure human rights.

According to the proposed law, the Commission will comprise a chairman and four commissioners, including at least one woman, following the recommendation of a search committee.

The cabinet also approved the draft Visa Policy 2026, aimed at making the entry and exit of foreigners into Bangladesh easier and more orderly, attracting foreign direct investment (FDI), businesses and skilled human resources, and modernising the existing visa system.

The new visa policy also aims to promote tourism and the hospitality sector, ensure technology and knowledge transfer, maintain national security and international diplomatic balance, and develop a modern, service-oriented immigration framework based on the principle of reciprocity.

Bangladesh Bank has waived inter-bank charges on all transactions made through the Bangla QR code system, a move aimed at expanding digital payments and encouraging small and marginal businesses to adopt cashless transactions.

The central bank has reduced the Interchange Reimbursement Fee, the charge paid between banks for processing a transaction, to zero for Bangla QR payments. As a result, neither the card-issuing institution nor the merchant's payment-receiving institution, known as the acquiring institution, will be able to impose any fee or service charge on such transactions.

Bangladesh Bank issued a circular on the matter today (10 August), directing all banks, mobile financial services providers, payment service providers and payment system operators to comply with the new instruction.

Earlier, on 1 July, the central bank had set a minimum Merchant Discount Rate of 1%, including VAT, for merchant payments made through Bangla QR. However, the additional charge failed to have the intended impact on market transactions and stakeholders subsequently called for its withdrawal.

In a separate circular issued today, Bangladesh Bank also announced incentives for sellers of goods and service providers for NPSB transactions made at merchant points through Bangla QR, with the incentive applicable to each transaction of up to Tk2,000.

Under the arrangement, the acquiring institution will receive an incentive equivalent to 0.10% of the transaction amount, or Tk1 per Tk1,000, while the issuing institution will receive 0.20%, or Tk2 per Tk1,000. The incentives will be disbursed monthly.

The directive will come into effect for all Bangla QR transactions from 1 October 2026.

In practical terms, if a customer pays Tk1,000 at a shop by scanning a Bangla QR code, neither the customer's bank nor the merchant's bank will deduct any amount as a transaction charge.

Bangladesh Bank said the new facilities were introduced to expand the digital payment system across the country and encourage small and marginal businesses to adopt digital transactions.

The circular also sets out safeguards to prevent misuse of the incentive scheme. Transactions cannot be deliberately split into smaller amounts to qualify for incentives. No incentive will be provided for failed, cancelled, reversed, refunded, charged-back or disputed transactions.

If a merchant records an unusually high number or unusual pattern of transactions, the relevant acquiring institution must monitor and verify the activity. Institutions must also take measures to prevent misuse of the system, including artificial transaction-splitting and cash-out schemes.

Bangladesh Bank has reserved the right to verify and audit records relating to transactions, merchants, settlements and incentive payments. Any incentive paid in error or in excess will either be recovered or adjusted against future incentive payments.

The central bank said the initiative is intended to simplify merchant payments, bring small and marginal businesses into the digital payments system and help build a secure, affordable and interoperable digital payment network.

Investors in Bangladesh's economic zones are losing confidence after paying substantial amounts for plot allocations without receiving promised infrastructure and utility services, particularly uninterrupted gas and industrial water.

Many companies have yet to begin production because of utility shortages and slow infrastructure development, Bangladesh Economic Zones Investors' Association (Bezia) Chairman MA Jabbar said.

He raised the concerns at a meeting between the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and BEZIA at the BGMEA Complex in Uttara, Dhaka, yesterday. The meeting discussed the progress of plots allocated in five government economic zones prioritised for full operationalisation in the first phase, as well as policy barriers faced by investors.

According to a press release, only 27 companies are currently in production across the five government economic zones, covering 39,000 acres. Only 37% of the total allocated land is currently operational.

The meeting stressed the need to urgently resolve shortages of uninterrupted gas and industrial water. The two organisations also decided to jointly urge the government not to impose additional service charges before factories become fully operational.

To improve the investment climate, BGMEA and Bezia agreed to jointly raise several policy issues with the government. They called for a complete waiver of Beza-imposed service charges on utility bills until the promised uninterrupted utility supply is ensured.

They also sought equal sector-based cash incentives for investors inside economic zones, matching those available to businesses outside the zones.

The organisations termed the requirement for both master leaseholders and subsequent sub-lessees to pay Vat at 15% as double taxation and demanded a complete waiver of VAT on lease tariffs.

The meeting also called for allowing deemed exports to domestic bond-licence holders without EXP and EP documentation to reduce administrative complications and time loss.

Other priorities included making mutation of 99-year leases bankable and fully implementing one-stop services in economic zones.

Jabbar said 41 BGMEA-affiliated units have invested in the National Special Economic Zone in Mirsarai, Chattogram. This creates scope for BGMEA and Bezia to jointly address national and policy issues affecting the garment sector, he said.

He proposed including a BGMEA representative on BEZIA's board to strengthen coordination and promote sustainable industrialisation in economic zones.

BGMEA President Mahmud Hasan Khan welcomed the proposal and said the association would soon nominate a qualified representative.

The Bezia delegation was led by Jabbar and included Vice-President Md Halimuzzaman, Director Delwar H Titu, CEO Aparup Chowdhury and member Md Mustafizur Rahman. The BGMEA delegation was led by Khan and included Vice-President (Finance) Mizanur Rahman.

At the end of the meeting, the two organisations expressed hope that their joint policy advocacy would encourage the Bangladesh Economic Zones Authority to take swift and effective measures to resolve infrastructure challenges and policy complications in the economic zones.

Bangladesh managed to stem the downturn in its tax-to-GDP ratio last fiscal year with the proportion having edged up by 0.08-percentage point notwithstanding sluggish investment and economic activity, and waning purchasing power of both individuals and businesses.

As per the provisional revenue-mobilisation data from the National Board of Revenue (NBR), the tax-to-GDP ratio stood at 6.78 per cent in FY2025-26, compared to 6.70 per cent a year earlier.

However, the ratio slipped last year from 7.20 per cent in FY24.

The calculation is based only on the NBR's provisional tax-collection figures. The ratio may change once data on non-tax revenue and revenue collected by agencies other than the NBR are incorporated.

The NBR accounts for nearly 90 per cent of Bangladesh's domestic revenue mobilisation meant for financing the national budget.

It collected Tk 4.15 trillion in revenue in FY2025-26, registering a Tk 880-billion shortfall against its revised target of Tk 5.03 trillion.

The shortfall against the original target of Tk 4.99 trillion stood at Tk 840 billion.

Officials say repeated setting of "unrealistic revenue targets" is putting pressure on tax officials and demoralising them when they fail to get to the goals.

A senior NBR official has said revenue mobilisation largely depends on economic activity, particularly development expenditure under the Annual Development Programme (ADP).

But the latest ADP-implementation data show Bangladesh recorded one of its lowest implementation rates last year-only 67.52 per cent of the annual allocation spent.

"Unless overall economic activity normalises, revenue collection will not pick up to the expected level," the NBR official told The Financial Express.

Senior Research Director of the Centre for Policy Dialogue (CPD) Towfiqul Islam Khan thinks higher international prices of commodities, including fuels, helped generate additional revenue during the year.

He also points to disruption during the final quarter of FY2024-25 amid protests within the NBR over the proposed bifurcation of the revenue authority.

"However, the process or any systematic changes are missing, and the NBR is running at its traditional pace, posing challenges to meeting revenue targets in the future too," he says.

Administrative loopholes must be addressed, he suggests, adding that it is unrealistic to expect comprehensive reform within a year, but the government needs to start the process immediately.

He also suggests the government reduce expenditure and prioritise spending, given the country's persistently low tax-to-GDP ratio.

Economists say the marginal increase in the ratio is not significant, particularly as the appetite for domestic revenue is increasing amid a decline in foreign funding sources.

According to provisional NBR data, revenue collection increased by around Tk 450 billion from the previous fiscal year despite continued economic challenges.

Overall revenue collection grew by 12 per cent in FY2025-26.

The NBR, however, once again missed its revenue target, continuing a pattern seen in previous years.

Officials say weak development expenditure had a significant impact on domestic revenue mobilisation as a substantial portion of tax revenue comes from source taxes generated through government development activities.

At the same time, private-sector investment remained subdued, reflecting weak demand for credits and a cautious business environment.

Of the total NBR collection last fiscal year, VAT generated Tk 1.57 trillion, income tax Tk 1.45 trillion, and customs duty and import taxes Tk 1.12 trillion.

The modest improvement in the tax-to-GDP ratio, therefore, offers little comfort to policymakers, economists say, as Bangladesh's fiscal needs to continue to rise while the capacity to mobilise domestic resources remains constrained.

Immediate-past NBR chairman Abdur Rahman Khan said it was challenging to mobilise higher revenue last year than the previous one amid economic hurdles.

"The government should consider providing sufficient budget and logistics for revenue mobilisation so that taxmen can work smoothly," he suggests.

angladesh has moved to further strengthen trade and investment ties with New Zealand, targeting expanded cooperation across agricultural technology, dairy, green energy, pharmaceuticals, leather, jute, sustainable textiles and information technology.

Officials highlighted opportunities for joint investment, business-to-business links and export growth during talks with New Zealand Trade and Enterprise (NZTE).

Commerce Secretary Md Ataur Rahman led the Bangladeshi delegation. Joint Secretary (FTA) Md Firoz Uddin Ahmed and Deputy Secretary (FTA) Farhana Islam were also present, while NZTE’s Market Manager for Southeast and East Asia, Rachel McGuckian, attended the meeting.

Annual bilateral trade stands at around $450 million, with dairy and metal products accounting for a significant portion of Bangladesh’s imports from New Zealand, the meeting noted. Bangladeshi exports to New Zealand total about $147 million, with ready-made garments accounting for a major share.

Dhaka requested NZTE’s cooperation in expanding its non-RMG exports to New Zealand to make bilateral trade more balanced and diversified, said a commerce ministry press release.

The ministry highlighted pharmaceuticals, environment-friendly jute goods, leather, sustainable textiles and IT services as areas for new market opportunities in the New Zealand market.

Highlighting internationally recognised certifications and quality production systems, the Bangladeshi delegation said the country’s drug manufacturers could supply quality generic medicines and vaccines to New Zealand’s healthcare sector at competitive prices.

They also highlighted the availability of more than 650,000 skilled technology professionals and proposed business partnerships with New Zealand technology companies in software, fintech and digital services.

On the investment front, Bangladesh invited New Zealand businesses to invest in its special economic zones, highlighting opportunities in dairy processing, specialised nutritional products, cold-chain logistics, agri-tech, advanced manufacturing, renewable energy and environmentally friendly technologies.

The Bangladeshi delegation said various investment facilities were available for foreign investors in the special economic zones, adding that New Zealand companies could use these opportunities not only to invest in Bangladesh but also to expand their businesses into the wider South and Southeast Asian markets.

To turn bilateral cooperation into concrete outcomes, Bangladesh proposed three immediate steps: direct communication between NZTE’s Southeast and East Asia team and the Bangladesh Investment Development Authority (BIDA), virtual B2B meetings connecting New Zealand businesses with Bangladeshi exporters in pharmaceuticals, IT and leather, and enhanced coordination with New Zealand’s foreign affairs and trade ministry.

The two sides also agreed to establish a bilateral Business Council, and to organise and participate in trade fairs.

The meeting stressed the importance of building a balanced and mutually beneficial economic partnership by utilising the respective strengths of both countries.

Officials expect combining Bangladesh’s large market and manufacturing capabilities with New Zealand’s technological expertise and high-value export capacity to take bilateral trade and investment relations to a new height.

The proposed cost of the MRT Line-5 Southern Route has been cut by another Tk2,217.67 crore, mainly by excluding around Tk2,000 crore in payable interest from the project cost.

Revisions to land requirement and administrative costs have also helped bring the cost of the metro line, connecting Gabtoli and Daserkandi, down to Tk45,503.77 crore, officials said.
The Business Standard Google News Keep updated, follow The Business Standard's
The latest reduction follows a review meeting held at the Physical Infrastructure Division of the Planning Commission on 16 July. Dhaka Mass Transit Company Limited (DMTCL) sent the revised Development Project Proforma (DPP) to the Planning Commission yesterday.

Md Abdul Wohab, project director, said the latest cut was mainly achieved by reducing administrative expenses and revising the interest calculation.

"Some administrative costs previously included in the project have been reduced. The interest payable after the loan moratorium ends has now been separated," he said.

"These changes have reduced the project cost by around Tk2,000 crore. The remaining amount was adjusted through small reductions in several other cost items," he added.

Wohab said the cost reduction would not affect the project. "The project can move into implementation once the revised DPP is approved. Necessary preparations, documents, and land acquisition plans have already been completed."

Cost down by Tk9,115.19cr from original proposal

During the Awami League government, DMTCL had proposed Tk54,618.96 crore for implementing the project. Following the government's fall, the project cost was reviewed and reduced to Tk47,721.44 crore during the interim government's tenure. The latest revision has brought the cost down by Tk9,115.19 crore from the original proposal.

The project has been awaiting approval for a long time. After the current government took office, the project was presented to the planning minister for approval. They instructed officials to bring the proposed cost down further and make it more reasonable.

Project director Wohab said the current government is interested in implementing the project quickly and has a positive stance on it. "The project, which had remained stalled, has now become active again, and necessary steps are being taken to start work soon."

Cost cuts in interest, land acquisition

Planning officials said the project cost was reduced across multiple components after reviewing each item to identify areas where modest cuts would not affect implementation.

The biggest reductions came from "Reserve for Commitment Charge on Loan" and "Interest on Foreign Debt", which together accounted for nearly Tk2,000 crore in savings.

"We decided that these costs didn't need to remain in the project budget for now. The Finance Division will make the payments through its regular procedures," one official said.

Project documents show reducing land requirement from 23.09 hectares to 9.104 hectares alone is expected to save around Tk100 crore in land acquisition costs. Spending on vehicle purchases, consultancy, honoraria and other administrative expenses has also been reduced.

Tk30,306cr loans from ADB, South Korea

Under the revised proposal, the ADB and South Korea have given initial consent to provide Tk30,306 crore in loans, down from the previously proposed Tk32,332.92 crore. The government's contribution has been reduced to Tk15,197.66 crore from Tk15,388.51 crore.

The 17.2km route will include 13.1km of underground track and 4.1km of elevated track.

The route will run from Gabtoli to Daserkandi, via Technical, Kallyanpur, Shyamoli, College Gate, Asad Gate, Russell Square, Karwan Bazar, Hatirjheel, Tejgaon, Aftabnagar, Aftabnagar Centre, Aftabnagar East, and Nasirabad.

Why MRT Line-5 matters

According to DMTCL, a pre-feasibility study using primary survey data and a logit model found that 20.8% of metro passengers would shift from road-based transport.

Medium buses would account for 14.85% of passengers shifting to metro rail. Shifts from cars, motorcycles, and three-wheelers, would range from 0.02% to 2.71%.

The route alignment was finalised through an ADB-funded pre-feasibility study conducted by an international consulting firm. The study also reviewed existing MRT and BRT alignments, along with the Revised Strategic Transport Plan (RSTP) and other traffic studies.

The study estimates that around 9,24,000 passengers could use the route daily by 2031. The line is expected to meet growing east-west travel demand while helping create a more balanced and sustainable urban transport network for Dhaka.

Under the original RSTP, Line-5 was planned as Dhaka's first 35km east-west metro line. It was later divided into Northern and Southern routes. The Northern Route was assigned to Jica financing, while the Southern Route was taken up with ADB financing.

Bangladesh's gross foreign exchange reserves stood at $32.15 billion under the International Monetary Fund's BPM6 methodology as of today (10 August), according to the latest Bangladesh Bank data.

The BPM6 figure is considered a more internationally comparable measure of a country's usable foreign exchange reserves.

The latest reserve position comes a day after Bangladesh Bank reported that gross reserves had crossed the $32 billion mark.

The central bank has been working to maintain stability in the country's external sector and foreign exchange market amid efforts to strengthen Bangladesh's foreign exchange position.

The government has reduced the board size of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) from 80 to 48 members, tightened election rules and increased membership and affiliation fees through amendments to the Trade Organization Rules, 2025.

The changes were announced in a recent commerce ministry notification published on its website. Issued under Section 30 of the Trade Organizations Act, 2022, the notification introduces a series of reforms aimed at improving the governance of trade bodies.

The reforms come as FBCCI prepares to hold elections under a government-appointed administrator. After the fall of the Awami League government in August 2024, the commerce ministry dissolved the elected FBCCI board on September 11, 2024. Since then, the organisation has been run by government-appointed administrators.

On July 26, the ministry appointed Md Fazlul Hoque, managing director of Plummy Fashions Ltd and former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), as FBCCI administrator.

He has been tasked with completing the election process and handing over responsibilities to the newly elected board within 120 days.

Under the revised rules, the new FBCCI board will consist of the president, one senior vice-president, four vice-presidents, 30 elected directors from chambers and associations, 10 nominated directors, and one representative each from the Women’s Chamber and the Women’s Association.

The executive committee’s term has been fixed at 24 months, with an extension to 36 months allowed only in exceptional cases.

Former FBCCI president Mir Nasir Hossain welcomed the reforms, saying the revised structure was better than the previous rules because it significantly reduced the number of nominated directors.

“At one point, the number of nominated directors had risen to 80. It was ridiculous,” he said. “The number has now been reduced to a more reasonable level.”

He said the revised rules allow five nominated directors each from the chamber and association groups. The nominees will be selected from organisations listed in the constitution based on their contribution to the national economy.

Anwar-ul Alam Chowdhury Parvez, president of Bangladesh Chamber of Industries (BCI), said the FBCCI board should ideally have no more than 40 to 42 members to ensure effective participation.

“When the board is too large, meaningful participation becomes difficult,” he said.

The revised rules also seek to improve election transparency by abolishing proxy voting, introducing one vote for each business entity with a valid Tax Identification Number (TIN), and requiring candidates to submit tax compliance documents within seven days of the publication of the voter list.

Anwar-ul Alam said the apex trade body should have balanced representation from all major sectors, including cottage and small industries, heavy industries, exporters, healthcare and services, so the government can receive informed policy recommendations.

He also said many successful entrepreneurs avoid contesting elections because serving in trade bodies requires significant time away from their businesses.

“If experienced entrepreneurs come forward, the government will receive better policy support from the business community,” he added.

He called for clear eligibility criteria to ensure capable leadership and broad representation from different sectors.

The revised rules also raise membership and affiliation fees.

Category-A organisations will charge a one-time admission fee of Tk 15,000 for both general and associate members, while Category-B organisations will charge Tk 10,000. Annual membership fees have been set at Tk 5,000 for Category-A organisations and Tk 3,000 for Category-B organisations.

One-time FBCCI affiliation fees will range from Tk 200,000 to Tk 500,000, while annual affiliation fees will be between Tk 60,000 and Tk 100,000. General Council members will also have to pay a one-time registration fee of Tk 20,000.
Google News LinkFor all latest news, follow The Daily Star's Google News channel.

Rizwan-Ur-Rahman, managing director of ETBL Securities & Exchange Ltd and former president of the Dhaka Chamber of Commerce and Industry (DCCI), said the higher membership fees were reasonable as they had remained unchanged for years despite rising operating costs.

“These fees go to the chambers and associations, not the government,” he said, adding that each organisation would continue to set its own membership fees through its governing process.

He said only organisations that fail to provide value to their members are likely to face resistance to the higher fees.

Asif Ibrahim, vice chairman of Newage Group, said the trade organisation reforms should go beyond administrative changes and help strengthen institutional governance and improve private sector competitiveness.

He welcomed measures such as direct voting, term limits and greater accountability, but said reducing the size of boards was one of the most important reforms.

According to Asif, smaller boards would improve efficiency, strengthen accountability and allow faster decision-making.

He also stressed the need for a predictable regulatory environment and warned against unnecessary government intervention.

Trade bodies, he said, should have greater freedom to contribute to export diversification, attract investment and support economic growth.

He added that the success of the reforms would depend on maintaining the right balance between regulatory oversight and institutional autonomy.

Although the Bangladesh Petroleum Corporation (BPC) raked in profits almost every year in the past decade, four months of the US-Israel war on Iran have upended the balance sheet of the government agency that imports, distributes and markets oil and petroleum products.

Just in the four months to June, the state-run fuel importer incurred a loss of Tk 18,699 crore, as it bought petroleum products at higher prices and sold them at lower rates. To cover the gap, the corporation has already drawn money parked with banks and spent funds earmarked for development projects.

Now the cash-strapped corporation estimates that it needs around Tk 20,000 crore as working capital to maintain the country’s mandatory 60-day fuel stock. Of that, it has asked the government for Tk 18,699 crore.

Citing the rapid depletion of its cash reserves, BPC said continued losses could affect its ability to open letters of credit (LCs) for future fuel imports, according to minutes of a BPC board meeting in July.

The scale of the cash squeeze is striking because BPC had built up a decade-long record of profits. It earned a cumulative Tk 48,618 crore in net profit from FY2015-16 to FY2024-25, making profits in nine of those 10 years.

Yet when the latest energy shock caused by the Middle East war struck, the corporation had no “General Reserve Fund” to fall back on.

BPC says no such fund has been created since its inception, despite provisions for one in the Bangladesh Petroleum Corporation Act. Now, after suffering an unprecedented loss, it has proposed to create a Tk 5,000 crore General Reserve Fund.

However, the proposal has not been approved. The board referred it to the internal Finance and Audit Committee for examination before bringing it back for a decision, according to the July meeting minutes.

The same meeting considered another proposal to use BPC’s existing Tk 1,579.71 crore Capital Reserve to meet fuel-import LCs. After not being approved at the meeting, that proposal was also sent to the Finance and Audit Committee for review.

DEV FUNDS SPENT, CAPITAL RESERVE UNDER PRESSURE

The cash shortage has already forced BPC to tap money set aside for development.

When the war began on February 28, the corporation had Tk 36,964 crore deposited with banks. By the end of June, that had fallen to Tk 18,524 crore, according to documents.

The deposits were held under various funds, including money earmarked for the proposed expansion of Eastern Refinery, show the papers.

BPC withdrew Tk 9,750 crore from the ERL Unit-2 project, Tk 3,000 crore from other development projects and Tk 2,250 crore from miscellaneous income to meet its working-capital needs. It also mobilised another Tk 640 crore from idle balances held in scheduled banks.

In all, BPC diverted or mobilised Tk 15,640 crore to keep its operations funded.

Now, BPC is considering its existing Tk 1,579.71 crore “Capital Reserve” as another source of working capital.

The reserve is invested in three-month fixed deposits with four state-owned banks. BPC proposed encashing the deposits upon maturity and using the money to meet working-capital requirements for fuel-import LCs.

The board, however, did not approve the proposal. It observed that the proposal required examination in light of international accounting standards and referred it to the Finance and Audit Committee before any final decision.

THE PRICE SHOCK

The sudden surge in international fuel prices wiped out more than four times BPC’s entire FY2024-25 profit in less than four months -- March, April, May and June.

According to the board documents, BPC’s loss reached Tk 18,691 crore through June 23. The monthly losses were Tk 2,248 crore in March, Tk 7,866 crore in April, Tk 2,621 crore in May and Tk 5,955 crore in June.

A subsequent calculation put the loss at Tk 18,699 crore.

April alone accounted for nearly 42 percent of the four-month loss, as the government kept domestic fuel prices unchanged despite the rise in international prices.

Although the government later raised fuel prices, they remained below the levels needed to reflect the global price shock, BPC says.

Muinul Islam, former economics professor at Chattogram University, said the sharp increase in Bangladesh’s fuel import bill was primarily driven by higher global oil prices rather than a significant rise in import volumes.

“Bangladesh is paying the price for a war it is not part of,” he told The Daily Star.

He said geopolitical conflicts can rapidly increase the import burden of middle and low-income countries, exposing their economic vulnerabilities.

YEARS OF PROFITS, BUT NO GENERAL RESERVE

The absence of a General Reserve Fund has now emerged as one of the biggest questions raised by the crisis.

BPC says no General Reserve Fund was created since its inception, although the Bangladesh Petroleum Corporation Act contain provisions for one.

According to it, the corporation may establish a Reserve Fund, subject to a ceiling determined by the government, and that the board may set aside part of its profits at the end of each year for the fund.

The Act also says the fund can be used for contingencies, liabilities, repair or replacement of equipment and property, and acquisition of new property.

From FY16 to FY25, BPC earned net profits in nine of the 10 years, with only FY22 recording a loss amid the global fuel-price surge following Russia’s invasion of Ukraine. Its net profit over the 10-year period totalled Tk 48,618 crore.

During that period, BPC paid Tk 1,150 crore in dividends to the government, according to the papers. Between FY20 and FY23, the government also took Tk 11,500 crore from BPC surplus funds, documents show.

Its board paper says comparable national oil companies maintain general reserves and argues that such a fund would help BPC deal with emergencies and maintain energy security.

It has therefore proposed an initial Tk 5,000 crore General Reserve Fund, to be formed from retained earnings or accumulated funds reflected in its FY2024-25 financial statements.

It has also proposed transferring Tk 500 crore or 20 percent of annual profit, whichever is lower, to the fund from FY2025-26 onwards.

The board decided that the proposal should first be examined by the Finance and Audit Committee before being brought back for a decision.

Bangladesh’s trade deficit widened to a three-year high in fiscal year 2025-26, as import bills climbed even as export earnings stagnated, according to the latest Bangladesh Bank data.

The deficit stood at $27.28 billion for the year, a jump of 34 percent from FY25, said the central bank.

The country exported $43.85 billion worth of goods in FY26, almost unchanged from the previous year. Imports, meanwhile, rose 10.5 percent year-on-year to $71.14 billion, the largest annual import gain since FY22.

“Definitely, it indicates weak external performance, and global factors are more responsible for this than domestic ones,” said Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD).

He said imports grew mainly for inflationary reasons, particularly higher petroleum prices, while tariffs imposed by the Donald Trump administration, rising inflation in the West, and war-related supply disruptions have dampened orders from international buyers.

“So, this widening trade imbalance reflects the volatility stemming from global economic uncertainty,” he said.

Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), cautioned against reading the higher import bill as a sign of stronger investment or domestic activity.

“Bangladesh Bank’s import data show that capital-machinery imports have remained weak, while imports of industrial raw materials have also been subdued. This suggests that the increase in aggregate imports has not yet been accompanied by a broad-based revival in productive investment,” he said.

The RAPID chairman, however, noted that some recovery in imports is not necessarily a bad sign after years of import compression amid persistent inflation.

According to him, greater availability of food, fuel, essential consumer goods and production inputs can help ease domestic supply constraints, improve competition and reduce price pressures.

The more serious concern, he said, is what Bangladesh is importing, and what is happening to investment and exports at the same time. “If imports recover while capital machinery remains depressed and exports stagnate, the wider trade deficit is generating less additional productive capacity than one would normally hope to see.”

CPD’s Moazzem echoed the concern, saying, “Given that private credit growth stood at a historic low, it cannot be said that domestic demand and investment have spiked.”

For a developing economy, Razzaque said, a larger trade deficit can in fact be healthy when it reflects imports of machinery, technology and other inputs that expand future productive and export capacity.

He said, “What is unusual in the present situation is the combination of a sizeable increase in total imports with continued weakness in investment-oriented imports and virtually no export growth.

“This suggests that Bangladesh is experiencing some normalisation of domestic import demand, but not yet a strong investment-led recovery.”

Despite the widening deficit, Razzaque said it has not triggered an immediate balance of payments (BoP) crisis.

He noted that remittances rose to a record $35.6 billion in FY26, providing what he called an exceptionally large cushion that helped contain the current-account deficit to around $1.6 billion.

The overall BoP recorded a surplus of $6.6 billion for the year.

“This creates an interesting asymmetry in the economy: external-sector stability has improved considerably, but the improvement has not yet been matched by a comparable recovery in investment, industrial activity and export dynamism,” Razzaque said.

“Remittances and stronger reserves are giving Bangladesh valuable macroeconomic space. The challenge now is to convert that stability into productive investment and export growth,” he added.

Meanwhile, CPD’s Moazzem called on the government to focus on alternative energy sources such as renewables to reduce imports as he fears the volatility in the energy market could prevail in the coming months.

Terming the conflict worst global crisis since the Pandemic, ICCB said US-Israeli war on Iran has become one of the most serious geopolitical and economic crises in recent history, threatening global peace, trade, energy security and food supplies.

What began as a military confrontation is now sending shockwaves through international markets and exposing the vulnerability of an increasingly interconnected global economy, For the global business community, the consequences are profound, according to ICCB.

The conflict has disrupted critical energy infrastructure and endangered shipping through the Strait of Hormuz, one of the world's most important oil transit routes.

Rising oil and gas prices have increased transportation and production costs worldwide, placing renewed inflationary pressure on both developed and developing economies.

As a net importer of fuel, fertilizer and several essential commodities, Bangladesh faces mounting pressure from higher global energy prices, increased shipping and insurance costs, and disruptions to international supply chains, the editorial said.

These challenges are likely to fuel inflation, widen the trade deficit, increase fiscal pressure through higher energy subsidies, and raise production costs for export-oriented industries, particularly the ready-made garments sector, ICCB warned.

Rising fertilizer prices could also affect agricultural productivity and food prices, while prolonged geopolitical uncertainty may discourage foreign investment and complicate Bangladesh's efforts to sustain economic growth, maintain macroeconomic stability and achieve a smooth graduation from the Least Developed Country (LDC) category, the report said.

The economic and humanitarian costs of prolonged US-Iran conflict are becoming increasingly stark.

According to the United Nations Office for the Coordination of Humanitarian Affairs, the war in Iran is absorbing vast financial resources-estimated at around $2 billion per week-that could otherwise be directed toward saving more than 87 million lives globally, ICCB said.

International financial institutions have already warned that prolonged hostilities could significantly weaken global economic growth while fuelling inflation, according to the report.

For many developing countries, particularly those heavily dependent on imported energy and food, the conflict risks widening fiscal deficits, increasing debt burdens and delaying sustainable development goals.

According to the latest International Chamber of Commerce (ICC) and Oxford Economics joint Report, economic policy uncertainty has imposed a significant cost on global business investment.

The analysis finds that the surge in economic policy uncertainty in 2025 reduced real business investment by 1.4% across ten major economies, equivalent to approximately US$202 billion in lost or delayed capital spending. In an adverse 2026 scenario, that cost could rise to US$380 billion, while a return to greater policy clarity could generate an additional US$252 billion in investment-a swing of more than US$630 billion. In short, predictability and stability remain major economic assets.

A meeting was held today (10 August) to discuss the legal framework and organisational structure of the proposed Invest Bangladesh Authority, which will integrate the Bangladesh Investment Development Authority (Bida), Bangladesh Economic Zones Authority (Beza) and Bangladesh Public-Private Partnership Authority (PPP Authority).

"The main discussion was about what the law and structure should look like. A second meeting will be held within a week to finalise the structure, Bida Executive Member and Head of Business Development Nahian Rahman Rochi told The Business Standard.

The new authority is expected to begin operations after the gazette is issued. A committee headed by the cabinet secretary is overseeing the integration of the three investment-related agencies.

The legal basis for the new authority was established through the passage of the Invest Bangladesh Bill 2026 in parliament, which provides for the integration of the three organisations' functions.

Under the new law, investment- and industrial-zone-related activities will come under a unified institutional framework. Investment and business-related registrations, licences, approvals and clearances will also be provided through a single digital platform.

The government aims to reduce overlapping functions and coordination gaps among the existing agencies and provide domestic and foreign investors with faster, easier and more coordinated services.

New authority to streamline investment services

Once formed, the Invest Bangladesh Authority will take over the assets, records, agreements, liabilities and other matters of Bida, Beza and the PPP Authority, along with their officials and employees.

The statutory body will be headquartered in Dhaka and may, with government approval, establish branches nationwide and liaison offices abroad. It will have a chairman and seven members, with the chairman serving as chief executive.

Its functions will include identifying investment opportunities, promoting Bangladesh to domestic and foreign investors, removing investment barriers and coordinating with relevant ministries and agencies.

It will also advise on using unused public land and facilities productively, assist in appointing foreign officials and consultants in industrial zones, help draft investment agreements and develop an industrial information database.

The governing board will include relevant ministers, the principal secretary to the prime minister, Bangladesh Bank governor, relevant secretaries and private-sector representatives, with the prime minister or nominee as chair.

A single digital platform will provide registration, licences, approvals, clearances, visas and work permits, with relevant agencies connected to it. The government expects the unified structure to reduce administrative overlap and improve the investment climate.

Strong remittance growth was not enough to offset a rising import bill, pushing Bangladesh's current account balance deeper into the red at nearly $1.6 billion for FY2025-26, according to Bangladesh Bank data released today (9 August).

Central bank data showed imports on a free-on-board (FOB) basis rose 10.5% to over $71.1 billion, up from $64.36 billion a year earlier. On a cost, insurance and freight (CIF) basis, total import payments expanded by 10.1% to $75.24 billion.

Although workers' remittances grew 17.3% to reach $35.59 billion, the record inflows failed to fully absorb the widening trade deficit, which ballooned past $27 billion.

Balance of payments data showed that the current account deficit stood at $1.59 billion in FY26, compared with $138 million in FY25.

Exports, meanwhile, declined by about 1% to $43.86 billion in FY26 from $43.96 billion a year earlier. The combination of rising imports and falling exports pushed the trade deficit to $27.28 billion, up from $20.40 billion in FY25.

The sharp deterioration marks a reversal from the earlier trend, when strong remittance inflows and a narrowing trade deficit had helped reduce the current account deficit.

Ahsan H Mansur, former governor of the central bank, said the current account position had deteriorated after remaining comparatively healthy until May.

"The position of the current account balance has deteriorated, which was comparatively healthy till May. A rising current account deficit reflects a trade deficit, with imports rising and exports declining. The widening of the current account has created discomfort in the balance of payments," he said.

He also raised concerns about the recent slowdown in remittance inflows and its implications for the foreign-exchange market.

"Remittance inflows were below $3 billion in the last two months, which is concerning for the dollar market as well. Bangladesh Bank should relax the exchange rate and should not cap the rate," he said. "After Eid-ul-Adha, the country has not witnessed remittances above $3 billion, and the greenback would have come through informal channels."

Mansur said the gap between the exchange rate offered through the banking channel and that in the informal market should not be allowed to widen, as it could make the market volatile again.

Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said, "The financial account would have more deficit if the remittance inflows are lower."

Financial account strengthens

Despite the deterioration in the current account, the financial account improved substantially in FY26.

The financial account recorded a surplus of $7.89 billion in FY26, compared with a deficit of $3.59 billion in FY25. Trade credit, an important component of the financial account, also swung into positive territory at $3.09 billion, compared with a negative $3.14 billion a year earlier.

Experts said the improvement in trade credit helped strengthen the financial account.

"Trade financing has improved the financial account as it reached a positive $3 billion, which was negative in the previous fiscal year," Mansur said. "On the other hand, the financial account has improved for both reserves and inflow of remittances."

Trade credit refers to goods or services received with payment deferred to a later date. In balance of payments accounting, it is treated as a short-term capital flow under the financial account because it finances imports.

Meanwhile, the overall balance reached $6.60 billion in FY26, compared with $3.39 billion in the previous fiscal year.

Ezazul said the improvement in the overall balance of payments was driven by the stronger financial account, whose surplus increased by more than $4 billion.

Bangladesh MFS market leader bKash is ploughing its net earnings back into technological infrastructure and algorithmic products, turning simple mobile transfers into data-driven financial services.

Founded in 2011 as a joint venture between BRAC Bank PLC and US-based Money in Motion LLC, the platform has grown to serve over 84 million verified customers -- roughly a third of Bangladesh’s 250 million registered mobile financial service accounts, according to central bank data.

Despite robust mobile network coverage, uneven smartphone adoption and spotty high-speed internet continue to impede a full transition to a digital economy. This gap is widened by low digital literacy and a pervasive informal market where cash remains the preferred medium to avoid taxes.

Addressing these barriers demands a coordinated effort combining public-private partnerships, targeted technology deployment, and sustained public awareness campaigns, industry insiders observe.

“By bringing essential financial services -- accessible through the simplest mobile phones -- to the doorsteps of everyday citizens, bKash has fundamentally reshaped the country’s digital transaction ecosystem,” said Shamsuddin Haider Dalim, head of corporate communications at bKash.

To expand digital usage, the platform has integrated over 200 features into its smartphone application while maintaining core access via basic feature phones. Tech integration has allowed over 1,200 readymade garment (RMG) factories to automate wage disbursements for nearly 10 lakh workers via its digital payroll system, while 2,800 billers now process utility payments through the network.

The strategy is generating strong financial returns. Post-tax profits more than doubled in 2025 to Tk 6.60 billion, up 109 percent year-on-year, propelled by higher user retention and product expansion.

Shareholders have opted against taking dividends, choosing instead to reinvest capital into tech expansion, the company said.

CASHLESS EXPANSION PUSH

To encourage customers’ shift, bKash focuses on giving users a ‘complete digital lifestyle.’ Currently, its users can access over 200 financial features and services through its app.

The MFS also offers scope for customers to add money from bank accounts or cash, keep savings and get loans from commercial banks and non-bank financial institutions (NBFIs) through the app.

By analysing transaction histories, bKash is increasingly using machine learning models to assess creditworthiness for individuals without formal credit histories.

Through a partnership with City Bank, 37 lakh users have accessed over Tk 10,000 crore in digital loans ranging from Tk 500 to Tk 50,000 as of May, with credit scoring determined entirely by automated behavioural algorithms.

A similar data-led approach is being rolled out to bridge credit access for small businesses. A pilot programme with BRAC Bank evaluates merchant transaction volumes via QR codes to extend instant, collateral-free microloans directly to vendor accounts.

bKash users can now open digital savings directly through the app with five commercial banks and an NBFI.

Infrastructure upgrades are also driving merchant acceptance. The company has deployed over 800,000 central-bank-standardised ‘Bangla QR’ codes across its network of nearly one million merchants -- the largest deployment by any single firm in Bangladesh.

OVERCOMING THE DIGITAL DIVIDE

It was observed that two primary customer groups remain underserved by the financial sector: those restricted by the digital divide and those lacking traditional credit histories.

For individuals without smartphones or reliable internet, bKash allows anyone with a basic feature phone to access core services.

The second group -- the people without formal credit history -- has traditionally been excluded from formal banking. To bring them into the formal net, bKash has pivoted to developing data-driven financial products.

Meanwhile, to keep customers’ money secure, bKash proactively collaborates with law enforcement agencies to combat illegal transactions like hundi and cyber threats.

Over the past 15 years, the MFS contributed to a behavioural shift towards a cashless economy, Shamsuddin said.

“However, the journey is not over. The primary gap remaining is achieving a sustainable behavioural shift from a cash-reliant mindset to a cashless lifestyle, ensuring every citizen, regardless of digital literacy or geographic location, confidently navigates cashless tools,” he added.

The American Chamber of Commerce in Bangladesh (AmCham) on Sunday called for policy reforms to promote innovation, investment, cybersecurity and ICT-led growth in Bangladesh.

AmCham leaders also suggested involving foreign investors in policymaking and national business forums to bring global expertise and international best practices in the process and help create a more competitive, transparent and investment-friendly business environment.

They made the recommendations at a policy dialogue titled "Accelerating Bangladesh's Digital Future: Policy Priorities for Innovation, Investment and ICT-Led Growth" held at a city hotel. Rehan Asif Asad, adviser to the prime minister on post, telecommunications, ICT, science and technology, attended the event as the chief guest.

Moderated by Rubaba Dowla, chair of the AmCham ICT Subcommittee and country managing director for Bangladesh, Nepal and Bhutan at Oracle, the dialogue focused on four areas: building a competitive digital economy, developing trusted digital infrastructure, accelerating AI, innovation and talent, and strengthening government-industry partnerships.

Speaking at the event, Rehan Asif Asad outlined five government priorities for the ICT and telecommunications sector, which has been designated a thrust sector.

The priorities include consistent and forward-looking policies under a five-year tax framework, improved mobile and broadband connectivity, digital public infrastructure, development of AI-ready talent and promotion of electronics manufacturing.

He said the telecom sector faces an effective tax burden of 51-56 per cent, compared with a global average of 22-27 per cent.

On digital infrastructure, Asad outlined the government's plan for 'One Citizen, One ID, One Digital Wallet', based on Estonia's X-Road platform. The system would be provided free of charge, with each ID linked to bank accounts and the National Board of Revenue.

He noted that the government also plans to equip 23,000-30,000 engineering and science graduates each year with skills in AI, cybersecurity and data, while introducing these subjects into school curricula.

Citing Vietnam's growth in consumer electronics exports from $1 billion to $217 billion over a decade, Asad stressed the need to promote electronics manufacturing through incentives similar to those provided to the garment sector.

In his opening remarks, AmCham president and Mastercard vice president Syed Mohammad Kamal welcomed the government's ratification of the Personal Data Protection Act (PDPA), saying the final legislation incorporated most of AmCham's recommendations.

While welcoming some measures in the Finance Act 2026, he called for greater clarity on the new digital permanent establishment provision linked to the 100,000-subscriber threshold.

He also urged the government to reconsider the increase in the turnover tax for internet service providers from 1.0 per cent to 1.5 per cent of gross receipts and facilitate inbound and outbound international payments for technology companies and startups.

Kamal also called for greater involvement of foreign investors in policymaking and national business forums to bring international expertise and best practices into the process.

Representatives of AmCham member companies, including Citibank, Cisco, HSBC, Mastercard, MetLife, Pathao, PwC, Standard Chartered Bank, ShopUp and Visa, raised issues concerning digital payments, cloud services, cybersecurity, data governance and AI talent.

They called for open-loop ticketing on metro and toll systems, wider access to Bangla QR and the "One Citizen, One Wallet" initiative for international payment networks, and alignment of cloud policies for banks and non-bank financial institutions with the PDPA.

They also urged early formation of the National Data Governance Authority, wider use of digital signatures and enforceable electronic agreements, stronger national cybersecurity and closer industry-academia cooperation to address shortages of AI and data engineering talents.

In response, Asad said RFID-based automated toll collection was being tested and Bangladesh Bank had agreed to open Bangla QR for inward international payments as a first step.

He said the "One Citizen, One ID" platform would be open to both domestic and international networks, while Startup Sandbox provisions would be fine-tuned in consultation with the broader startup community.

Identifying national cybersecurity as his immediate priority, Asad said work on a national AI policy would begin in the fourth quarter through a joint team comprising representatives from the private sector, government, academia and research institutions.

He also stressed the need to expand submarine cable capacity, noting that Bangladesh currently has six terabytes of capacity against peak national demand of 12 terabytes.

Bangladesh posted a record balance-of-payments surplus worth US$6.6 billion in the past fiscal year as stronger financial-account inflows helped outdo a gap left by widening current-account deficit.

The overall balance surplus was nearly 95-percent higher than the previous fiscal year's level, according to the latest balance-of- payments data from the central bank.

The current-account deficit widened to $1.59 billion in the FY2025-26 from just $138 million a year earlier.

Economists attribute the overall surplus largely to a sharp increase in the financial account, which rose to $7.89 billion during the year.

The financial account was supported mainly by the "other investment" category, which includes loans and other forms of financing from multilateral and other international institutions.

Trade credit, a form of short-term cross-border financing, also contributed to the increase.

The divergent movements in the current and financial accounts signify the extent to which external financing helped Bangladesh maintain a surplus in its overall balance of payments despite a sizeable trade deficit.

The trade deficit widened to $27.29 billion during the year, with imports far outstripping exports.

Export earnings edged down to $43.86 billion during the period, while import payments rose to $71.14 billion, accounting for an increase of more than 10 per cent.

The sharp rise in import costs was partly driven by higher global energy prices amid the red-hot Middle East crisis.

Payments for petroleum products surged by 107 per cent during the period, according to the central bank data.

Capital-machinery imports also picked up, rising by nearly 14 per cent as business activity and investment sentiment improved following the February general election.

Despite the widening current-account deficit, the overall external position remained comfortable, says Dr Ezazul Islam, director-general of the Bangladesh Institute of Bank Management or BIBM.

"I think the BoP remained in the comfort zone despite the widening current-account deficit," Dr Islam told The Financial Express.

He said the current-account deficit was not an immediate concern because exports started recovering.

Dr Islam, a former executive director of Bangladesh Bank's research department, said the central bank's exchange-rate policy had helped make the local currency more attractive and supported remittance inflows.

"The exchange rate remained stable due to the pursuit of a strong policy during the period," he added.

Another economist, who requested anonymity, said the improvement in the balance of payments was partly driven by increased external borrowing.

Such inflows could strengthen the external position in the short term, the economist said, but they also create future repayment obligations for Bangladesh.

The economist notes that the inflows had nevertheless helped the country rebuild its foreign-exchange reserves and improve its external liquidity position for the time being.

The latest figures underline the changing composition of Bangladesh's external balance: while the trade and current accounts remained under pressure, borrowing and other financial inflows provided a substantial offset and pushed the overall balance into a record surplus, he commented.