The Bangladesh Bank (BB) has allowed scheduled banks to launch fully digital “e-loan” services of up to Tk 50,000, stepping up efforts to widen financial inclusion and support the transformation towards digital transactions.

In a circular issued yesterday, the central bank said customers will be able to take e-loans for up to 12 months through end-to-end digital processes. These will cover customer onboarding, loan approval, disbursement and recovery.

Banks have been instructed to include the term “e-loan” in the service name and ensure that all stages of lending are conducted digitally, without physical documents or branch visits.

The move comes at a time when digital lending services are rapidly expanding globally due to increasing smartphone penetration, internet usage and mobile financial service adoption.

In many countries, banks and fintech firms now offer instant small-ticket loans through banking apps, e-wallets and other digital platforms, expanding access to credit and reducing reliance on informal borrowing.

The BB said the increasing use of digital devices in banking, along with expanded internet and mobile network coverage, has raised demand for digital lending through internet banking, mobile apps, mobile financial services and e-wallets.

“The availability of such services can play a vital role in promoting financial inclusion, familiarising marginal populations with digital financial services, and achieving the vision of a cashless society,” the central bank said in the circular.

Banks will be allowed to set market-based interest rates for e-loans. However, the rate cannot exceed 9 percent if they avail themselves of refinancing facilities.

The central bank has instructed lenders to clearly communicate all loan-related information, including annual interest rates, tenure, repayment methods, the disbursement process and any additional charges, before obtaining customer consent.

Banks have also been asked to take necessary steps to improve customer-level financial literacy regarding digital loans.

To strengthen security, the BB said customer identity verification must be conducted through biometric authentication alongside OTP and two-factor authentication (2FA) or multi-factor authentication (MFA), where necessary.

However, agents or third parties engaged by banks will not be allowed to store customers’ biometric data.

The central bank directed commercial lenders to follow existing rules on interest calculation, fees, loan classification and provisioning, while prohibiting CIB inquiry charges for e-loans.

Banks must prevent defaulted borrowers from accessing such loans by verifying existing liabilities before disbursement.

The central bank also mandated a six-month pilot before commercial launch and stressed strict compliance with cybersecurity and data protection laws, requiring all customer and loan-related data to be stored within Bangladesh.

Bangladesh already has experience in digital nano-lending through partnerships between banks and mobile financial service providers. In 2021, bKash and City Bank jointly launched an instant nano-loan service that offers small loans to selected users through the bKash app.

Several other banks have introduced digital lending products.

Dhaka Bank launched “e-Rin”, an end-to-end digital nano-loan service through its mobile app. Prime Bank introduced “PrimeAgrim” through its app, while BRAC Bank has also rolled out digital lending services.

As President Donald Trump prepares to meet with Chinese President Xi Jinping this week, the US auto industry and lawmakers on both sides of the aisle are hammering him with ​a simple message: Please don’t offer China any access to the US car market.

Trump in January told the Detroit Economic Club that it would be “great” if Chinese automakers wanted to build ‌plants in the US and employ Americans, adding: “I love that. Let China come in, let Japan come in.”

His comments rang alarm bells in an industry that had systematically lobbied successive administrations to bar Chinese cars from the US market with tough data security rules and high tariffs on electric vehicles.

So automakers, suppliers, steelmakers, unions and politicians have redoubled their efforts, arguing that Chinese automakers, with limitless state support, massive scale, an EV technology edge and rock-bottom prices, would crush domestic and other foreign producers, hollowing out the core ​of the US manufacturing base.

Democratic Senator Elissa Slotkin of Michigan went to the same forum in Detroit on Thursday specifically to urge Trump not to make a deal with Xi to allow Chinese investment ​in the US auto sector that brings Chinese-brand cars into US dealerships.

“Please don’t make a bad deal,” said Slotkin, who also promoted her bipartisan bill with Republican Senator Bernie Moreno of Ohio that would explicitly bar Chinese vehicles over data collection concerns.

Their Connected Vehicle Security Act, which has a bipartisan companion bill in the House of Representatives, would codify a data rule effectively banning ​Chinese vehicles implemented by former President Joe Biden, making a reversal extremely difficult.

The House bill would go further, banning industry partnerships with Chinese companies. Congressional aides told Reuters that with broad support, the legislation could pass this year, possibly ​attached to a transportation spending bill.

“Every vehicle on American roads is a rolling data collection device, capturing information on location, movement, people, and infrastructure in real time, and we cannot allow Chinese vehicles or components to be a part of that system,” sponsoring representatives Debbie Dingell, a Democrat, and John Moolenaar, a Republican, said in a joint statement.

They are both from auto-heavy districts in Michigan. Some 74 House Democrats, and 52 House Republicans signed letters recently urging Trump not to allow Chinese automakers to enter the American market.

INDUSTRY ​BACKS CHINESE AUTO BAN

The US auto industry has shown unusual unity in supporting a ban.

Groups representing US and foreign-brand automakers, car dealers and parts manufacturers in March told the administration that China’s efforts to dominate global auto ​production and gain access to the US market “pose a direct threat to America’s global competitiveness, national security and automotive industrial base.”

Steel industry groups followed through with a similar letter on April 30, and the Information Technology and Innovation Foundation (ITIF), which has criticized Trump’s ‌past tariffs on Chinese imports, also applauded the legislation to ban Chinese vehicles.

“Chinese automakers are not normal market competitors. Their EVs are the product of decades of state-backed mercantilism designed to help China capture global leadership in advanced industries,” said ITIF vice president Stephen Ezell.

“Once China’s subsidized firms are embedded in the US market, the economic and national security damage would be far harder to reverse — and it would not be limited to Detroit,” Ezell added.

US Trade Representative Jamieson Greer said in Detroit in April that there were no plans to change the connected car rule, and that autos were not on the agenda at the Beijing summit. Commerce Secretary Howard Lutnick also has ruled out Chinese investments in ​the US autos sector.

But Scott Paul, president of the Alliance ​for American Manufacturing, a domestic industries group, said there is a strong concern that Trump, who often talks of attracting more auto assembly plants to the US, could act alone.

“He’s left wiggle room in dealing with the auto sector,” Paul said.

Any plant approved would take two-to-three years to launch production, leaving consequences to Trump’s successor.

The White House and the Chinese embassy in Washington did not ​respond to requests for comment on the matter.

LOW PRICES, MARKET SHARE GAINS

The industry wants to avoid a repeat of Chinese automakers’ steady market share gains in ​Europe and Mexico. A growing auto affordability crisis in the US, where Kelley Blue Book estimates the average vehicle list price now exceeds $51,000, makes existing producers especially vulnerable to cheaper Chinese models.

Last year, Chinese brands doubled their share of Europe’s car market to 6 percent, but took 14 percent of Norway’s market, 9 percent in Italy, 11 percent in Britain and 9 percent in Spain, and consumer interest in Chinese EVs is growing as the Iran war spikes gasoline prices.

Canada is beginning to import 49,000 Chinese EVs annually and 34 Chinese auto brands are now on ​sale in Mexico, accounting for about 15 percent of that market at prices far below anything available in the US.

Geely’s EX2 EV starts ​at about $22,700 in Mexico, more than twice its price in the cut-throat Chinese market, but far below the cheapest Tesla Model 3 US price of $38,630.

Even Toyota, which undercut Detroit automakers in the 1980s and 1990s, is having difficulty with Chinese pricing in the Mexican market, said Toyota Motor ​North America division manager David Christ.

“Obviously there’s some level of government support, or else they couldn’t transact at that price,” Christ said in an interview. “So it has a huge impact on business.”

The Bangladesh Telecommunication Regulatory Commission (BTRC) has decided to restart joint drives against the marketing, sale and distribution of illegal mobile handsets after more than three years of inactivity.

The decision was taken at a recent commission meeting following a proposal from its Enforcement and Inspection (E&I) Directorate.

Alongside mobile phones, the regulator will also take action against other illegal radio and telecom devices across the country.

The BTRC has long carried out joint operations with law enforcement agencies to curb illegal telecom equipment, including unauthorised mobile phones and wireless devices.

While enforcement against items such as signal jammers, boosters, repeaters and illegal VoIP equipment has continued, action against illegal handset traders has remained suspended since April 2023.

According to BTRC documents, the enforcement activities were paused due to the rollout of the National Equipment Identity Register (NEIR) system and preparations for the 13th national parliamentary election in 2026.

The NEIR system was introduced in 2021 to verify legal mobile devices by linking IMEI numbers with national ID and SIM data. However, key features like blocking illegal handsets were never activated, leaving the system largely inactive.

Although the platform has recently been relaunched, handset blocking is still awaiting a policy decision from the new government, a BTRC official said.

The commission has recently observed a sharp rise in the use, production, import, marketing and sale of illegal mobile handsets and wireless equipment in divisional cities, city corporations and district towns.

It noted that these activities are punishable under the Bangladesh Telecommunication Regulatory Act, 2001.

Industry insiders said weak enforcement over time, the depreciation of the taka, rising global handset component prices and repeated tax increases have all contributed to the growth of the illegal handset market in Bangladesh, particularly in the smartphone segment.

According to industry estimates and BTRC data, grey-market smartphones now account for 40 to 50 percent of the country’s handset market, which is valued at around 1.7 billion US dollars. The grey market is expected to exceed 0.7 billion US dollars in 2025.

Data from Samsung shows that grey-market imports rose from 24 percent in 2022 to 40 percent in 2024. In the same year, 93 percent of premium phones from one brand and around 69 percent of mid-range phones in Bangladesh entered the market through unofficial channels.

The commission said illegal handsets and wireless devices are causing several problems, including consumers being misled with low-quality products, loss of government revenue from illegal imports, disruption in telecom regulation and network management, and financial losses for legitimate handset manufacturers.

In response, the E&I Directorate proposed restarting joint drives with law enforcement agencies, including the Rapid Action Battalion, police and executive magistrates, to stop these activities nationwide.

The commission has decided that enforcement drives will resume at an appropriate time after further instructions.

In a stark revelation of the deep-rooted financial distress within the country's largest private sector lender, Islami Bank Bangladesh PLC has reported that its classified loans skyrocketed by 44% to reach a staggering Tk94,322 crore at the end of 2025.

The figure, disclosed in the bank's latest audited financial statements, marks the highest volume of bad loans ever recorded by a single bank in Bangladesh's banking history.

The escalation of non-performing loans (NPLs) means that bad debt now accounts for a massive 51% of the bank's total loan portfolio, a sharp increase from the 42.36% recorded just a year earlier in 2024.

The magnitude of Islami Bank's crisis is further evidenced by its share of the national burden.

According to data from Bangladesh Bank, total classified loans across the sector stood at Tk5.57 lakh crore at the end of 2025, meaning Islami Bank alone accounts for 17% of the banking sector's total defaulted debt.

To provide context, Janata Bank holds the second-highest volume of classified loans in the country, which stood at Tk72,804 crore during the same period.

A senior official of the bank attributed this unprecedented surge to the exposure of "hidden" bad loans linked to the S Alam Group. The official explained that the previous management had systematically concealed these irregularities, but the new management's efforts to reveal the actual data have resulted in the skyrocketing numbers.

The 2025 audit report, prepared by Mahfel Huq and Co, chartered accountants, also revealed a massive gap in the bank's provisioning against bad assets.

The auditors issued a qualified opinion, noting that as of 31 December 2025, the bank required a total provision of Tk92,537.56 crore against its bad investments and assets. However, the lender maintained provisions of only Tk7,922.41 crore, leaving a monumental shortfall of Tk84,615.15 crore.

According to the auditors, failure to recognise the full provision shortfall significantly overstated the bank's assets, net profit and equity while understating its liabilities.

Furthermore, the audit firm drew attention to the bank's "going concern" status, stating that the financial statements were prepared based on the assumption that the bank will continue to operate only due to the extraordinary regulatory forbearance extended by Bangladesh Bank.

The auditors noted that the bank's ability to remain operational is entirely dependent on the central bank's ongoing policy support.

The bank's capital position is equally precarious. While the required capital based on Risk-Weighted Assets was Tk19,200.91 crore, the bank reported capital of only Tk9,855.19 crore.

This indicates a reported capital shortfall of Tk9,345.72 crore. However, the auditor clarified that if the Tk84,615 crore provision shortfall were fully taken into account, the bank's regulatory capital shortfall would actually reach a nearly incomprehensible Tk93,960.92 crore.

Under standard central bank directives, Islami Bank was required to maintain a Capital Adequacy Ratio (CRAR) of 12.50%, but it managed to report only 6.42%. Most tellingly, the auditor pointed out that without the central bank's special intervention, the bank would have incurred a solo aggregate loss of Tk84,507.83 crore for the year 2025.

Despite these grim realities, Bangladesh Bank granted the lender permission on 28 April 2026 to finalise its financial statements without incorporating the full provision adjustment.

This move was allowed due to the bank's insufficient profits, provided the shortfall was adequately disclosed to the market. In exchange for this life support, bank management must now submit a board-approved, time-bound action plan within one month to address the massive deficit, the auditor said.

The bank's exposure to the S Alam Group remains the primary engine of this collapse. Major borrowers identified in the report include S Alam Steels and Refined Sugar Industries, with an exposure of Tk10,394 crore; S Alam Vegetable Oil, with Tk14,899 crore; and S Alam Super Edible Oil, with Tk12,983 crore.

Financially, the bank's core performance has dwindled. Net investment income plunged by 40% to Tk1,847 crore in 2025. While the bank reported a technical net profit of Tk136 crore, this figure exists only because of the aforementioned regulatory forbearance.

As a result, the bank declared no dividend for its shareholders for the second consecutive year. This failure to reward investors has led to the bank being downgraded to the 'Z' or junk category on the stock exchange.

The market reaction has been one of paralysis. Currently, Islami Bank shares remain stuck at the floor price of Tk32.60.

Meanwhile, around 83% of the bank's total shares, which are linked to the S Alam Group, have been confiscated following orders from the central bank.

The Bangladesh Bank has allowed banks to facilitate remittances for visa bonds and refundable security deposits required by foreign embassies, high commissions and other competent authorities as part of visa processing.

The central bank issued a circular in this regard today (11 May), stating that banks will be permitted to remit funds on behalf of individual visa applicants where a visa bond or refundable security deposit is mandatory for obtaining a visa.

The central bank said the move is aimed at easing difficulties faced by Bangladeshi travellers when applying for visas overseas.

A senior Bangladesh Bank official said, "Simply put, from now on, if a foreign embassy or high commission requires a certain amount of money to be deposited as security before issuing a visa, that money can be legally sent through Bangladeshi banks."

"Many countries, especially the United States and some other developed nations, seek financial guarantees from visa applicants. The objective is to ensure that applicants return to their home country after the permitted period. Previously, sending such bonds or deposits involved many complications. The new instruction from Bangladesh Bank will simplify the entire process," the official added.

According to the circular, banks may also issue international or virtual cards in the applicant's name, preloaded with the required amount of bond or security deposit.

Existing international cardholders under travel entitlement facilities may also have their cards reloaded for the same purpose, provided the funds are used solely for visa-related requirements.

The facility will be applicable against balances maintained in Exporters' Retention Quota (ERQ) accounts, Resident Foreign Currency Deposit (RFCD) accounts, or through international cards issued against such accounts, subject to existing foreign exchange regulations.

Bankers and industry insiders believe the new policy will simplify visa processing for Bangladeshi applicants, particularly for countries such as the United States that require financial guarantees as part of visa procedures.

Bangladesh Bank has capped the interest and fees banks can charge on foreign currency trade financing at a maximum of 3 percentage points above internationally recognised benchmark rates, in a move aimed at easing costs for importers and exporters amid high global interest rates.

The central bank issued a circular in this regard yesterday (10 May).

According to the circular, banks from now on cannot charge more than the applicable benchmark rate, such as the Secured Overnight Financing Rate (SOFR) for US dollar-denominated financing or Euribor for euro transactions, plus 3% annually as the "all-in-cost" for short-term trade finance in foreign currency.

The new rule takes immediate effect from today (11 May).

The ceiling applies to three categories of foreign trade financing: short-term import trade finance, discounting of usance export bills, and advance payments against exports under open account transactions.

The "all-in-cost" includes interest, commissions, fees and other charges associated with such financing.

For example, if the (SOFR) for the US dollar stands at around 4.5%, banks will now be allowed to charge a maximum of around 7.5% annually for eligible trade finance facilities.

The latest instruction has replaced an earlier ceiling set by Bangladesh Bank in August 2025.

Bangladesh Bank officials said the revised framework aims to align Bangladesh's trade financing practices more closely with international market standards while preventing excessive markups by banks.

The measure is expected to benefit importers managing rising input costs as well as exporters seeking cheaper access to pre-shipment and post-shipment foreign currency financing.

Bangladesh Bank officials said the ceiling would also help ensure competitive pricing in trade finance and reduce the risk of businesses facing unusually high borrowing costs due to fluctuating global rates.

Oil prices rallied on Monday, a day after President Donald Trump said Iran’s response ‌to a US peace proposal was “unacceptable,” raising supply fears as the Strait of Hormuz stayed largely closed, which kept the global market tight.

Brent crude futures climbed $2.70 or 2.67 percent to $103.99 a barrel at 0902 GMT US. West Texas Intermediate was at $97.66 a barrel, up $2.24, or 2.35 percent. They rose to $105.99 and $100.37 ​a barrel, respectively, earlier in the session.

Last week, both contracts recorded 6 percent weekly losses on hopes for an imminent end to the 10-week-old conflict that would allow oil transit through the Strait of Hormuz. “Despite reassuring noises, our take is that the US and Iran are as ​far away from agreement as when this supposed ceasefire started,” analyst John Evans said.

“We do not see anything changing before Donald Trump visits China and asks for Beijing’s aid in pressuring Iran.”

Trump is scheduled to arrive in Beijing on Wednesday and is expected to discuss Iran among other topics with Chinese President Xi Jinping, according to US officials.

The world has lost about 1 billion barrels of oil over the past two months and energy markets will take time to stabilise even if flows resume, Saudi Aramco CEO Amin Nasser said on Sunday.

“Our bullish view remains and we align with Saudi Aramco’s opinion that even if Hormuz is settled and opened, it will take many months ‌for normality ⁠in oil supply to break out,” Evans said.

Saudi Arabian crude oil exports to China are expected to fall further in June after buyers cut nominations because of costly prices linked to the US-Iran conflict and lower supplies, trade sources told Reuters.

Meanwhile, three tankers carrying crude exited the Strait of Hormuz last week and on Sunday with trackers switched off to avoid Iranian attacks, Kpler shipping data showed. One was loaded with Iraqi crude and bound for Vietnam.

Japan’s ⁠industry ministry said a tanker carrying Azerbaijani crude oil was set to arrive as early as Tuesday, the first cargo of oil received from Central Asia since the Iran war began.

ANZ analysts ​expected Brent to remain above $90 per barrel through 2026 and around $80 to $85 per barrel into 2027 ​as demand growth ⁠resumes and inventories are gradually rebuilt.

In an attempt to hedge prices and ensure revenue, US producer Diamondback Energy bought options to sell the price difference between US West Texas Intermediate crude and Brent at around minus $42 a barrel in the coming months, a bet that could ⁠pay off ​if the US banned oil exports.

This would lead to a rise in domestic inventory as US refiners typically process less domestic crude than is produced in the country and would push down WTI prices and widen its discount to Brent.

Garment exporters yesterday urged the government to ensure uninterrupted power and energy supply, quick release of export receipts from banks, reopening of closed factories, and easing of customs rules.

Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) made the demands at a meeting with Prime Minister Tarique Rahman at his secretariat office in Dhaka.

In separate meetings with the two trade bodies, the prime minister listened to the problems and challenges they face in running their businesses.

After the meeting, BGMEA President Mahmud Hasan Khan said they discussed export diversification within the garment sector, reopening of closed factories, and the struggles many factories face for survival.

Regarding factory reopening, Khan said a total of 104 factories have informed the BGMEA about their closure so far. The BGMEA will scrutinise the cases of closed factories to identify the genuine reasons for the shutdowns. Following the scrutiny, the association will send recommendations for reopening those factories, as the government is working to open a Tk 20,000 crore fund to assist in their revival.

BKMEA President Mohammad Hatem said they thanked the prime minister for taking the initiative to defer Bangladesh’s graduation from the least developed country (LDC) category for three more years. The BKMEA also welcomed the government’s amendment of the labour law to meet international standards, as demanded by global stakeholders.

Hatem noted that some 400 factories were closed in the last three years, nearly 300 of them due to non-cooperation from banks. He explained that banks release export receipts to exporters’ lien accounts, but delays in payment often force loans into default, leaving exporters unable to pay suppliers on time.

He also demanded uninterrupted supply of power and gas to industrial units, as recent shortages of fuel oil have severely affected productivity. Hatem further raised concerns about the misuse of the bond facility and urged action against violators of bond licences.

Additionally, he called for easing National Board of Revenue (NBR) rules, particularly customs procedures, to smooth export and import processes and reduce lead times. He stressed that complex and time-consuming customs procedures have deterred both domestic and foreign direct investment.

Commerce Minister Khandakar Abdul Muktadir was present in both the meetings.

The dollar was steady on Monday after US President Donald ​Trump rejected Iran’s response to a US peace proposal, sending oil prices higher and prompting renewed concerns that ‌the conflict in the Middle East will drag on.

The US dollar index , which measures the greenback’s strength against a basket of six currencies, was little changed at 97.995.

Oil prices, meanwhile, jumped, with Brent crude up 3.6 percent at $104.94 a barrel, after President Donald Trump on Sunday rejected Iran’s response to a US proposal for peace ​talks, raising worries that the 10-week-old conflict may drag on.

Yet, markets still seem to believe that the conflict will be resolved, ​said Kenneth Broux, head of corporate research for FX and rates at Societe Generale.

“I think the reason for that may be the involvement of China,” he said. “The summit with China and the US later this week is, ​for me, the main event really,” Broux said, pointing to the influence the two countries have in the Middle East.

Trump and Chinese President Xi Jinping are set to discuss Iran, Taiwan, artificial intelligence, nuclear weapons and critical minerals when they meet, according to US officials.

Inflation and growth worries linked to higher oil prices, as well as any potential reaction from central banks, also continue to play on the ​market’s mind, Broux said.

US inflation data for April is due this week after the US jobs report released Friday showed that non-farm ​payrolls increased 115,000 in April, almost twice as fast as expected. Those figures reinforced expectations the Federal Reserve would keep interest rates unchanged for ‌some ⁠time.

The Fed held rates steady last month as expected, but the decision exposed its deepest split in decades, with three officials dissenting against signalling future rate cuts.

The Bangladesh Association of Banks (BAB) has urged the central bank to relax eligibility criteria for refinance schemes by removing current restrictions on banks with high non-performing loans (NPLs) and reducing general provisioning for rescheduled loans.

In a letter to the governor yesterday, the association proposed banks with NPL ratio below 20% should remain eligible for refinance and prefinance schemes for at least the next five years. It also requested to reduce the general provisioning requirement for rescheduled loans from 5% to 1%.

Currently, banks with high NPL ratios are often excluded from these facilities, which BAB argues unintentionally limits credit support to productive sectors such as SMEs, agriculture, and exports.

The BAB also sought policy support for income recognition during grace periods and several other reforms to help the sector navigate its current "challenging phase".

The letter highlighted that the banking sector is grappling with elevated NPLs, provisioning shortfalls, and liquidity pressures, necessitating coordinated and pragmatic policy interventions to restore investor confidence and maintain credit flow to the real economy.

Reforming rescheduled loan classification, provisioning

BAB has also expressed concerns over the financial impact of current regulatory treatment of policy-supported rescheduled loans. Under existing rules, these loans are generally treated as Special Mention Accounts (SMA), requiring a 5% general provision and carrying a 150% risk weight.

The association argued that these requirements place undue pressure on Capital Adequacy Ratios (CAR) and limit fresh lending capacity. Consequently, BAB requested the central bank to treat compliant policy-supported rescheduled loans as Unclassified (UC), reduce the general provision requirement from 5% to 1%, and assign a more moderate risk weight instead of the current 150%.

Furthermore, BAB pointed to a mismatch where banks incur funding costs on deposits during a borrower's one-to-two-year grace period but cannot recognise interest income.

The association proposed allowing accrual-based income recognition during the grace period or immediate recognition upon the expiry of the grace period to protect bank profitability.

Addressing capital pressures and tax hurdles

The letter also detailed how certain tax policies and market classifications are hurting the sector's stability. BAB requested an exemption from the 10% additional tax on stock dividends for banks maintaining capital adequacy under Basel III.

The association said penalising the retention of earnings through stock dividends discourages banks from strengthening their Tier-1 capital.

Additionally, BAB proposed several fiscal measures for the upcoming national budget, including reducing the corporate tax rate for listed banks to 30%, allowing loan-loss provisions as tax-deductible expenses for at least five years, and preventing the automatic migration of banks to the "Z Category" on the stock exchange if they are under approved restructuring or transformation programmes.

Strengthening recovery through AMC and legal reforms

To address "legacy NPL challenges", BAB proposed establishing a professionally managed national Asset Management Company (AMC). The AMC would acquire large classified portfolios, conduct forensic investigations, and facilitate faster settlements.

On the legal front, the association called for amendments to the Artha Rin Adalat Ain to include ultimate beneficiaries and the introduction of fast-track financial courts. It said judicial bottlenecks, such as the misuse of stay orders, continue to delay the recovery of classified loans.

Bank owners fear return of former directors

Also yesterday, leaders of the BAB met Governor Mostakur Rahman.

Speaking to reporters after the meeting, BAB Chairman and Dhaka Bank Chairman Abdul Hai Sarker said the association was concerned about a provision in the amended Bank Resolution Act that could allow former bank owners to return to banks.

He said the amended law had created scope for individuals who had siphoned money from banks to return. "People know who took money from banks. If they are allowed to return, public confidence in the banking sector will weaken further, creating the risk of another crisis."

He added that the government should consider the issue more carefully. He further said important policy decisions such as amendments to banking laws should be discussed with stakeholders beforehand.

The BAB chairman said the governor had assured them that former owners would not be able to return without fully complying with the conditions outlined in Section 18(A) of the amended law.

The meeting was also attended by former FBCCI president and Shahjalal Islami Bank Director AK Azad, United Commercial Bank Chairman Sharif Zahir, Pubali Bank Chairman Monzurur Rahman and Bank Asia Chairman Romo Rouf Chowdhury.

A high-powered committee led by the Bangladesh Bank has recommended extending the maturity of Beximco Ltd's Tk3,000 crore green sukuk by six years to 2032, instead of its scheduled maturity in December 2026, to avoid a potential default and protect institutional investors heavily exposed to the instrument.

The recommendation was finalised at a meeting held at the central bank yesterday under the leadership of Deputy Governor Md Kabir Ahmed, where the committee reviewed the feasibility of restructuring the terms and conditions of the "Beximco Green Sukuk Al Istisna".
The proposed extension remains subject to approval by the Bangladesh Securities and Exchange Commission, which has regulatory authority over bond approvals, tenure extensions and changes to profit rates.

Officials familiar with the discussions said the existing 9% profit rate on the sukuk could increase by around 1 to 1.5 percentage points following the extension, linked to the yield on five-year treasury bonds. The current yield on five-year government treasury bonds stands at 10.78%.
Cenbank moves to prevent default

The decision follows months of discussions within two separate committees formed to examine the sukuk's restructuring.

Earlier, a Bangladesh Bank high-level committee and a separate 21-member working committee led by the Investment Corporation of Bangladesh, the trustee of the sukuk, had discussed extending the instrument's tenure.
However, officials said the central bank committee has now reached a final decision in favour of extending the maturity period.
Under the proposed arrangement, the ICB will formally inform the securities regulator of the committee's decision and initiate the required process for obtaining approval for the extension.

Officials at the meeting said the trustee would not inject additional funds to complete the partially developed Korotoa Solar Park, which had been financed through the sukuk's sinking fund.

The project suffered severe damage during political unrest surrounding the change in government in August 2024, when machinery and transformers at the solar park were burned, preventing the project from being connected to the national transmission grid.

According to officials, approximately Tk150 crore will now be required to make the project operational.

However, Beximco or a third-party investor may still revive the project with fresh investment. Any new investment would be recoverable only after sukuk investors are fully repaid.

Institutional investors heavily exposed

An official present at the meeting said Beximco Ltd's operations had effectively come to a halt following the political transition last year, making it impossible for the company to repay investors within the current maturity period ending in December 2026.

He said around 97% of the sukuk investors are institutional investors, primarily banks and bank subsidiaries. Failure to repay investors on time would place significant pressure on the banking sector, as banks could face provisioning requirements if the instrument were to fall into default.

"Considering the overall situation, the committee decided to extend the maturity period," the official said.

According to ICB's calculations, the Teesta Solar Plant financed through sukuk proceeds is currently supplying 200MW of electricity to the national grid and generating around Tk50 crore in monthly revenue.

Of that amount, approximately Tk7 crore is paid to Beximco as operational expenses, while the remaining revenue is used for periodic profit payments and contributions to the sinking fund.

Based on these cash flows, officials estimate that the sukuk, which has around Tk2,800 crore outstanding now, could generate around Tk3,600 crore in revenue over an additional 72 months.

ICB estimates also show that approximately seven months remain before the current maturity period expires. During this period, the project is expected to generate around Tk350 crore in additional revenue, while nearly Tk600 crore has already accumulated in the sinking fund.

Officials believe these funds, combined with cash flows generated during the extended tenure, would allow full repayment to investors within the revised maturity period.

Delays and project setbacks

Bangladesh Bank formed a 10-member committee last year to review and restructure the sukuk's terms. The committee included senior officials from Bangladesh Bank, ICB, the Bangladesh Securities and Exchange Commission, the Bangladesh Power Development Board and several leading banks.

The country's first asset-backed Shariah-compliant corporate green sukuk was issued by Beximco Ltd in 2021 and raised Tk3,000 crore.

Banks and their subsidiaries invested Tk2,439 crore through private placements, while Tk558 crore was raised through public offerings.

Of the total proceeds, Tk2,155 crore was ultimately spent on the Teesta Solar Plant against an original allocation of Tk1,886.83 crore. Another Tk39 crore was spent on the Korotoa Solar Project against an allocation of Tk308.31 crore, while Tk806 crore was used for textile expansion.

The Korotoa plant, planned as a 30MW solar project, had been expected to begin operations by June 2026. However, a fire during the August 2024 unrest damaged its transformers and site office, delaying implementation further.

Finance Minister Amir Khosru Mahmud Chowdhury has said the conditions being added by the International Monetary Fund (IMF) under the loan agreement are not “suitable” for the economy of Bangladesh.

He made the comments at a discussion titled “Roadmap to Building Bangladesh’s Economic Future in the Face of Global Uncertainty” organised by the Daily Bonik Barta in Dhaka on Monday.Economic Trend Reports

The finance minister said the government could not accept all IMF conditions out of “responsibility” to the people.

Khosru said, “Most of the development partners agree with the BNP’s election manifesto. They are my development partners. If they do not agree with me, I will not be able to move forward.

“There are disagreements in many places with the IMF, because the conditions that they are giving are not suitable for my economy.”

Explaining the government’s continued stance against the IMF’s conditions, he said: “We are an elected government with a responsibility to the people. We cannot do everything according to their words.

“That is why we have differences with some multilateral organisations, and these differences will continue.

“I will correct my course as much as it is consistent with my manifesto. It is not possible to do anything beyond this.”

Amid concerns about the release of the remaining amount of the loan agreement with the IMF, the minister claimed on Apr 18 that the IMF has a “positive” attitude to continue the loan programme.

Earlier, after a meeting with IMF Deputy Managing Director Nigel Clark in Washington DC, US, he told journalists: “The discussions [on the release of funds] are still ongoing.”Geographic Reference

About three weeks later, he indicated that Bangladesh had failed to meet the IMF’s conditions, even as the country sought an additional $2 billion beyond the existing loan package.

The additional funds were requested to tackle the fuel crisis amid the war in the West Asia.

However, the IMF reportedly imposed stricter conditions than those under the current agreement.

Bangladesh signed a $4.7 billion loan deal with the IMF in early 2023 after several rounds of negotiations during the Awami League government to address the financial crisis.

In June 2025, the interim government led by Muhammad Yunus increased the package by $800 million, raising the total to $5.5 billion.

So far, Bangladesh has received $3.64 billion in five instalments, leaving $1.86 billion outstanding. The sixth instalment and the remaining funds were due in December last year.

At the time, the IMF said the remaining amount would be released following discussions with an elected government.

Before disbursing the funds, the lender also sought progress on reform conditions, including improvements in revenue collection, where implementation has lagged.

The central bank has purchased $45 million from a single bank at a rate of Tk122.75 per dollar to beef up foreign exchange reserves after paying the Asian Clearing Union (ACU) liabilities.

The foreign exchange reserves under the IMF’s BPM6 manual stood at $29.56 billion on Monday after buying new dollars, said Arief Hossain Khan, executive director and spokesperson for the Bangladesh Bank.

According to him, the gross amount is now $34.22 billion.

The Bangladesh Bank has purchased $125 million from the market this month and a total of $5.79 billion so far in the current fiscal year.

After clearing $1.51 billion in the ACU payment for March and April on May 7, the reserves decreased to $29.47 billion.

After buying the dollar at Tk 122.30 on Mar 2, Bangladesh Bank increased the price by 45 paisa on Apr 15.Stock Market Data

The ACU is a regional arrangement through which member countries settle payments for intra-regional transactions on a multilateral basis.

The member nations include Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, and Pakistan.

The clearing union settles its accounts every two months. Sri Lanka, once a member, withdrew from the union in October 2022 amidst its severe economic crisis.

The country's banking sector posted robust profits in 2025 despite a sharp slowdown in private sector lending as higher returns from government treasury securities increasingly replaced traditional business lending as the sector's main source of income, raising concerns among economists and bankers over the sustainability of the model.

Several private banks, including BRAC Bank, City Bank, Midland Bank, Prime Bank and Jamuna Bank, reported strong profit growth during the year, driven largely by investments in government securities that offered comparatively risk-free returns amid weak demand for loans from businesses.
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According to published financial statements compiled by financial advisory firm Lion City Advisory, several banks posted strong earnings, with BRAC Bank and City Bank both crossing the Tk1,000 crore mark in 2025.

BRAC Bank recorded the highest net profit in the sector, posting Tk2,250 crore in 2025, up 57% from Tk1,432 crore a year earlier. The bank's investment in government treasury securities rose to Tk40,647 crore in 2025 from Tk28,671 crore a year ago, accounting for 31% of its total assets. Treasury investments contributed 32% of its total income during the year.
City Bank reported a consolidated net profit of Tk1,324 crore in 2025, marking a 31% increase from Tk1,014 crore in 2024. The bank's treasury investment rose sharply to Tk19,125 crore from Tk12,487 crore a year earlier, representing 23% of its total assets. Treasury operations accounted for 35% of the bank's income in 2025.

Jamuna Bank invested Tk19,402 crore in treasury securities, accounting for 45% of its total assets, up from Tk12,411 crore in 2024. The bank generated 23% of its operating income from lending to the government.Midland Bank increased its treasury investment to Tk3,273 crore in 2025 from Tk2,127 crore a year earlier, with government securities accounting for 26% of its total assets. Treasury income contributed 37% of the bank's total income during the year.
NCC Bank also significantly expanded its exposure to government securities. Its investment in treasury securities rose to Tk9,100 crore at the end of December 2025 from Tk6,591 crore a year earlier. The bank earned Tk609 crore from treasury operations in 2025, accounting for 21% of its operating income.

Shift towards government securities

Bankers say the combination of high lending rates, weak business confidence and global uncertainty has discouraged private sector borrowing and pushed banks towards safer investment instruments.

According to Bangladesh Bank data, private sector credit growth fell to 6.03% in February, the lowest level in 21 years. The figure declined from 6.1% in December and remained far below the 10.13% growth recorded in July 2024.

Although credit growth briefly rose to 6.58% in November, analysts attributed the increase to loan restructuring ahead of the 12 February national election rather than fresh investment in productive sectors.

At the same time, government borrowing from the banking system accelerated sharply.

Data from Bangladesh Bank, the Centre for Policy Dialogue and the Asian Development Bank show that total banking sector deposits rose to Tk21 lakh crore at the end of December 2025 from Tk18.83 lakh crore a year earlier, representing an increase of 11.57%.

Meanwhile, banks' investment in treasury bills and bonds surged more than 40% year-on-year to Tk5.38 lakh crore from Tk3.82 lakh crore.

Total banking sector assets stood at Tk28.09 lakh crore at the end of 2025, growing by only 6% compared with the previous year.

Ershad Hossain, director at Putnam Capital Advisory Pte Ltd, said banks were increasingly moving away from lending to businesses and relying heavily on government securities offering yields of around 10% to 12%.

"Private sector credit growth has dropped to 6.03%, a 21-year low, while government borrowing from banks has surged by 24%, exceeding the central bank's ceiling," he said.

"This shift has fundamentally altered banks' income structure, with the majority of operating income now coming from government securities rather than traditional lending."

He also warned that the trend is already affecting the broader economy. Imports of capital machinery, a key indicator of industrial investment, fell 10.43% between July 2025 and March 2026, while banks now hold 67% of public debt. He added that the sector's capital adequacy ratio had dropped to 1.53%, far below the minimum regulatory requirement of 12.5%.

Concerns over crowding out

Economists have warned that excessive government borrowing from banks could crowd out private sector investment by reducing the availability of credit for businesses.

They say prolonged dependence on treasury income could weaken industrial expansion, slow job creation and reduce long-term economic growth.

City Bank Managing Director Mashrur Arefin described the rise in treasury investments at the expense of loan growth as "a major negative signal" for the economy.

"Over the past year, there has been virtually no alternative to making profits from treasury bills because businesses are not borrowing," he said.

According to him, political uncertainty, external economic risks and weak investor confidence have discouraged businesses from opening large letters of credit or importing capital machinery. Even borrowers with approved credit limits are not fully utilising them.

He said banks with strong public confidence and stable deposit inflows were placing increasing amounts of liquidity into government securities because demand for corporate loans remained weak.

Mashrur warned that the trend was not sustainable in the long run.

"If credit growth does not recover, economic growth will eventually slow and banks themselves will suffer," he said.

He added that City Bank is shifting focus towards small loans, digital nano-credit and microfinance through platforms such as bKash to offset weaker corporate lending demand.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, described the growing dependence on treasury income as an "underlying weakness" in the banking sector.

He said a sustainable banking model should rely primarily on financing productive private sector activities and supporting entrepreneurship rather than depending on government borrowing.

"Investment in government securities may be safe, but it does not directly contribute to investment growth or employment generation," he said.

According to him, businesses remain reluctant to borrow because of geopolitical tensions, political uncertainty and an unfavourable business environment.

He said improving logistics support, introducing effective single-window services and reducing the cost of doing business would be necessary to revive private investment and encourage banks to increase lending to productive sectors again.

Abdullah Al Faisal, director at Lion City Advisory Limited, said the growing reliance on treasury income reflected rising risk aversion among banks and weakening credit demand.

"Such income is non-core and highly sensitive to interest rates, making bank profitability less sustainable over time," he said.

Economists and bankers alike caution that while treasury investments currently offer attractive and secure returns with virtually no default risk, the continued shift away from productive lending could weaken the banking sector's long-term role in supporting economic growth.

The government is set to implement the much-anticipated Padma barrage project at an initial cost of Tk 33,474 crore, aimed at reviving five major river systems and storing 2,900 million cubic metres of water in the Padma river.

The project, to be executed in two phases by 2033, will require a total investment of nearly Tk 50,443 crore.

Covering about 37 percent of Bangladesh’s land area, spanning 26 districts and 163 upazilas across four divisions, the Padma-dependent region has long suffered from water shortages due to upstream diversions.

The barrage is expected to be a game-changer for agriculture, fisheries, biodiversity, and economic growth.

The project gained momentum after a meeting on May 6 with Prime Minister Tarique Rahman, where he highlighted the project’s potential impact on GDP and gave directives for its implementation.

The feedback was incorporated and the proposal for the first phase is set to be placed before the Executive Committee of the National Economic Council on Wednesday for approval.

The first phase would be paid from the government’s own funds and it includes the construction of the 2.1km-long Padma barrage at Pangsha in Rajbari district.

The barrage will feature 78 spillways, 18 undersluice gates, two fish passes, a navigation lock, guide bunds, and approach embankments.

Hydropower plants will be set up at Padma barrage and Gorai off-take, which is the crucial entry point of the Gorai-Madhumati river. The plants will generate 113 megawatts of electricity.

The first phase also includes the dredging and re-excavation of the 135.6km Gorai-Madhumati river and 246.46km Hisna river systems.

The other works include Gorai off-take with 15 spillways, fish pass, navigation lock, and hydro-power plant (36.6 megawatt); Chandana off-take (four spillways); Hisna off-take (five spillways); and construction 180km afflux bund.

The Hisna off-take, often referred to in conjunction with the Hisna-Mathabhanga river system in Bangladesh, is a critical component in water management designed to restore flow from the Ganges river system.

The off-take is part of wider efforts to combat silting and ensure water supply during the lean season, acting as a crucial channel for diverting water into regional rivers like the Hisna.

However, activities under the first phase will directly benefit 19 districts and 120 upazilas in four divisions: Khulna (Kushtia, Meherpur, Chuadanga, Jhenaidah, Magura, Jashore, Narail, Bagerhat, Khulna, Satkhira), Dhaka (Rajbari, Faridpur, Gopalganj), Rajshahi (Pabna, Rajshahi, Natore, Naogaon, Chapainawabganj) and Barishal (Barishal, Pirojpur).

The second phase includes construction of additional supportive infrastructure and restoration of Chandana-Barasia, Baral and Ichhamati river systems.

Five river systems -- Hisna-Mathabhanga, Gorai-Madhumati, Chandana-Barasia, Baral and Ichhamati -- would be revived.

The revived river flows will reduce salinity intrusion in the southwest, restore biodiversity in the Sundarbans, and improve drainage and irrigation.

It would ensure water supply to the Ganges-Kobadak (GK) Irrigation Project, the North Rajshahi irrigation project, Godagari pump house, and Rooppur nuclear power plant.

The project would ensure irrigation for 2.88 million hectares of net cultivable land and boost the annual production of rice by 2.39 million tonnes and fish by 2.34 million tonnes.

The idea of a barrage on the Padma dates back decades.

Between 1960 and 2000, four studies were conducted to identify suitable sites. In 2005, a detailed feasibility study was launched, completed in 2013 by a consortium of local and foreign consultants.

The study highlighted dry-season water scarcity due to upstream withdrawals at India’s Farakka Barrage, which has severely reduced flows in Bangladesh, drying up river systems and damaging agriculture, fisheries, navigation, and biodiversity.

The country's premier bourse, the Dhaka Stock Exchange (DSE), extended its losing streak for the fourth consecutive session today (10 May), as a lack of favourable catalysts and persistent selling pressure on major large-cap scrips dampened investor sentiment.

The benchmark index opened the week on a dismal note, resulting in a significant erosion of the market's total valuation. In the last four consecutive sessions, the market capitalisation of the Dhaka bourse dropped by approximately Tk9,800 crore, settling at Tk6.76 lakh crore.

The benchmark DSEX index shed 13 points today, or 0.25%, to close the session at 5,220. The downturn was more pronounced in the blue-chip segment, with the DS30 index slipping by 11 points to reach 1,990.

The market breadth remained negative, as 194 issues declined compared to 161 that managed to advance, while 39 scrips remained unchanged on the DSE floor.

According to the daily market review by EBL Securities, market participants are currently adopting a cautious "wait-and-see" approach, monitoring for a major catalyst that could drive a persistently favourable momentum. The market witnessed sustained selling pressure across influential stocks, although participation remained evident as some investors shifted their focus toward small-cap and momentum-driven scrips.

Trading activity saw a notable contraction, with daily turnover on the DSE dropping by 14% to stand at Tk727 crore.

On the sectoral front, the engineering sector accounted for the highest share of turnover at 13.8%, followed closely by general insurance and the textile sector, both contributing 13.1%.

In terms of returns, the mutual fund sector emerged as the top performer, posting a substantial 6.7% gain. This rally was primarily driven by the regulatory directive for converting closed-end mutual funds into open-end structures, which triggered fresh buying interest across the segment. The tannery and jute sectors also managed to exert positive returns of 2.7% and 1.5%, respectively.

Conversely, sectors such as paper, ceramics, and textiles faced the steepest corrections, with the paper sector declining by 1.7%.

Individual stock performance reflected the day's volatility. The top gainers' list was heavily dominated by mutual funds, with AB Bank First Mutual Fund, First Bangladesh Fixed Income Fund, IFIL Islamic Mutual Fund, and PHP First Mutual Fund all hitting the 10% upper circuit limit. Continental Insurance also surged by 10% to join the top gainers.

On the flip side, Saiham Cotton was the top loser, shedding 5.60% of its value, followed by Alif Manufacturing, Sonar Bangla Insurance, Peoples Leasing, and Mir Akhter.

Liquidity was concentrated in a few specific scrips, with Monno Ceramic, Dominage Steel, BD Thai Food, Summit Alliance Port, and Apex Spinning emerging as the most traded stocks of the day.

The bearish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the key indices also ended in the red. The broad CASPI index dipped by 56 points to close at 14,646, while the CSCX ended 35 points lower at 9,012. Trading volume at the port city bourse remained relatively low, with turnover standing at Tk14.94 crore.

Bangladesh’s foreign exchange market came under mild pressure in March as heightened global uncertainty stemming from the Middle East war situation pushed up exchange-rate volatility and interbank dollar transactions, according to a monthly report by the central bank.

The interbank exchange rate rose to Tk 122.75 per dollar at the end of March from Tk 122.30 per dollar at the end of February 2026, reflecting marginal depreciation.

However, on a year-on-year basis, the movement in the exchange rate resulted in a nominal depreciation of 0.61 percent against the US dollar, said the report on exchange rate and foreign exchange market dynamics.

The variability in the exchange rate increased considerably, and rates moved within a wider range in March 2026 after a period of low variability since December 2025, according to the report published yesterday.

The Bangladesh Bank report said that while the spread in the interbank market and in the bank’s sales to clients remained stable, the spread in the bank’s purchase from the client market edged up on average to Tk 1.19 per US dollar in March from Tk 0.99 per dollar in February.

The global economic uncertainty stemming from the Middle East was propagated through the foreign exchange market, as reflected in the daily average spread of spot exchange rates, defined as the daily maximum minus minimum rate, said the report.

At the same time, the volume of daily average spot transactions rose to $62.17 million in March from $37.27 million in February as banks increased dollar trading amid growing global economic uncertainty.

“An increase in exchange rate flexibility and a rise in liquidity in the foreign exchange market led to a rise in interbank spot foreign exchange transaction volume on average in March 2026, with some fluctuation in daily transactions,” said the report.

At the same time, the volume of swap transactions edged up markedly during the period. The average daily swap transaction doubled to $100.82 million in March from $53.54 million in February.
As such, the share of swap transactions in total interbank transactions rose to 62 percent in March from 59 percent in February. By contrast, the share of spot transactions declined.

The Bangladesh Bank said swap transactions increased at a faster rate than spot transactions amid growing war-driven uncertainties.

The report said that since the foreign exchange market has experienced gentle pressure, the central bank reduced the pace of its foreign exchange purchases in March to only $25 million, far lower than $1.53 billion in February, “as a part of cautious and prudent market management.”

Bangladesh's foreign exchange reserves have fallen below the $30 billion mark following the latest payment to the Asian Clearing Union (ACU).

Bangladesh Bank spokesperson and Executive Director Arief Hossain Khan today (10 May) said that the country's reserves stood at $29.48 billion under the BPM-6 calculation method.

"According to BPM-6, the central bank's reserves now stand at $29.48 billion, down from $30.96 billion reported on 7 April," he said.

The ACU is a regional payment arrangement that facilitates settlement of import transactions among its nine member countries – Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka.

The payment mechanism allows the member states' central banks to settle eligible cross-border transactions on a multilateral basis. ACU payments are made every two months.

To move the country's capital market beyond its share-dependent structure, the regulator and Chittagong Stock Exchange (CSE) have intensified efforts to launch a commodity derivatives market.

Stakeholders say commodity derivatives could open a new horizon by introducing new products, risk management tools and a modern price discovery framework. However, the initiative has been delayed several times due to gaps in technology, legal readiness, broker preparedness and policy coordination.

These issues were highlighted at a workshop titled Commodity Exchange: Potential, Structure and Future, jointly organised in the capital on Sunday by the Capital Market Journalists' Forum and Chittagong Stock Exchange.

Speaking as chief guest, Bangladesh Securities and Exchange Commission Commissioner Farzana Lalarukh said, "We want to take the capital market to a much higher level. But we also need to understand how prepared we really are. We want to move forward with full readiness."

She said CSE's commodity derivatives regulations were approved at a commission meeting in 2025 and most regulatory work has already been completed. The next phase will begin once the exchange ensures readiness, product selection and operational capacity.

Farzana Lalarukh said the country's capital market has three main pillars – equity, bonds and commodities. However, Bangladesh's market has long remained largely equity-dependent.

Emphasising the responsible role of journalists in avoiding confusion or rumours among the public regarding commodity derivatives, she said, "Your pen is very powerful. Please write about commodities in a way ordinary people can understand. It has to be explained from the basics."

She added, "Some progress is being seen in the bond market. Now we want the derivatives market to develop as well."

She explained that the two major objectives of the derivatives market are price discovery and hedging – meaning creating expectations about future prices and protecting against price risks. She noted that this could play an important role in an agriculture-based economy.

Chittagong Stock Exchange Chairman AKM Habibur Rahman said around Tk100 crore has already been invested to launch the commodity derivatives segment. However, further investment will be needed to make it fully operational.

He said, "We have been preparing for this since 2023. We had hoped to launch it last year, but that was not possible. We expect the segment to become operational within this year."

Chittagong Stock Exchange Managing Director Saifur Rahman Mazumder said the country's stock market is still operating mainly as a "simple equity market". Introducing derivatives or commodity products like developed markets would require major changes in the technological and regulatory framework.

He said the country's exchange technology is still heavily dependent on foreign sources. Since advanced trading platforms, servers, software and hardware are import-dependent, both time and costs have increased.

"We completed most of the technological preparations around one and a half years ago. But we could not move forward because of some legal and coordination-related limitations," he said.

CSE Managing Director Saifur Rahman Mazumder acknowledged that the project had been delayed due to a lack of coordination among different agencies and stakeholders.

In his view, "To create a new market, the regulator, exchange, brokers and government all need to work together. No new product can succeed without a coordinated effort."

He added that launching the commodity market would require new types of brokers, authorised traders and a separate legal framework. Preparatory work is still ongoing.

Stakeholders said cash-settled futures trading in comparatively simple products will be introduced first. Later, essential agricultural products such as rice and wheat are also planned to be included.

According to stakeholders, the country's capital market has long suffered from weak confidence, low liquidity and a limited range of products. In that context, commodity derivatives could create new opportunities. However, success will require equal emphasis on technological capability, strict regulation, skilled participants and investor awareness.

The workshop was chaired by Capital Market Journalists' Forum President Monir Hossain, while CMJF Secretary Ahsan Habib moderated the event

Bangladesh has failed to capture a significant share of China's declining apparel exports to the United States despite sharp tariff-driven falls in Chinese shipments, with much of the diverted business instead moving to Vietnam and Cambodia, according to the latest US import data and industry experts.

Data released by the Office of Textiles and Apparel show that US apparel imports fell nearly 12% year-on-year during the January-March period of 2026 following the imposition of reciprocal tariffs from mid-2025.

Bangladesh's apparel exports to the US market declined 8.38% during the three months compared with the same period a year earlier.

The decline was not limited to Bangladesh. Eight of the top 10 apparel exporters to the US market recorded lower shipments during the period. However, while exports from China and India fell sharply by 53% and 27%, respectively, Vietnam and Cambodia managed to increase exports by 2.77% and 18%.

Industry experts said the relatively higher tariffs imposed on China and India reduced US imports from those countries, but Bangladesh was not emerging as the primary alternative supplier.

Instead, countries such as Vietnam, Cambodia and Indonesia are capturing a large share of China's lost market.

Sheheb Udduza Chowdhury, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said China maintains a strong position in man-made fibre apparel, while Vietnam, Indonesia and Cambodia have also developed strong manufacturing capacity in the segment with substantial Chinese investment.

"Since China is facing difficulties because of the additional tariffs, many of those purchase orders are shifting to these countries," he told The Business Standard.

"That is why Bangladesh is not being able to capture the market share left by China."

Mohiuddin Rubel, an apparel industry researcher and former BGMEA director, said countries like Vietnam, Indonesia and Cambodia are effectively utilising Chinese raw materials to consolidate their hold on the market segments China is being forced to vacate.

US apparel imports decline

According to Otexa data, the United States imported apparel products worth $17.76 billion during January-March 2026, compared with more than $20 billion during the same period a year earlier.
Photo: TBS Infograph
Photo: TBS Infograph

Despite the decline, Vietnam retained its position as the largest apparel exporter to the US market, with exports valued at $39.84 billion.

Bangladesh moved into the second position from February this year, overtaking China for the first time. Bangladesh's exports stood at $2.03 billion, while China's exports fell to $1.69 billion.

Indonesia, India, Cambodia, Mexico, Pakistan and Honduras followed among the leading apparel exporters to the US market.

Exporters expect recovery after June

Bangladeshi apparel exporters said export growth is likely to remain subdued globally, including in the US market, until June, although they expect conditions to improve in the second half of the year.

Sheheb Udduza Chowdhury said export momentum could improve from the months following July.

He said exporters expect the current market uncertainty to ease by then and anticipate a more permanent resolution regarding US reciprocal tariffs, which could help revive demand.

Tariff uncertainty persists after court ruling

Meanwhile, uncertainty surrounding the US reciprocal tariff regime continues after the Trump administration appealed against a court ruling related to the 10% tariff.

International media reported that a US court on 7 May ruled in favour of three companies challenging the tariff. However, exporters said the ruling currently applies only to the three plaintiffs involved in the case.

Reuters reported that the Trump administration filed an appeal against the ruling the following day.

As a result, Bangladeshi exporters said the 10% tariff remains effective until a final judicial decision is reached.

Mohiuddin Rubel said the court had not suspended collection of the tariff entirely and that the verdict was based solely on arguments presented by the three individual plaintiffs.

"The Trump administration filed an appeal on May 8, 2026, against the court's ruling regarding Section 122," he said.

"If the administration's appeal is accepted, importers will not be able to reclaim the 10% tariff. Conversely, if the appeal is denied, those importers will be able to apply for refunds. The same process will apply to others who are applying or preparing to apply."