A foreign-aid laden annual development budget of Tk 3.0 trillion in size is forthcoming as the new government has proposed 53-percent hike in project assistance for bankrolling its recipe,
FE

Officials say for the first time in two decades that such foreign loan-dependent development programme is being framed, now that the time of tightfisted of interim era is over.

Considering external and internal economic shocks, the past interim government slashed the project aid for consecutive two years for reducing dependence on foreign loan, but this government overturns that policy, they say.Economic Trend Reports

The project-aid target, mainly foreign loans, in the upcoming Annual Development Programme, accompanying the national budget, has been proposed at Tk 380 billion that is 53-percent higher than that in the revised ADP of the outgoing fiscal year FY2025-26, Ministry of Finance (MoF) and Planning Commission (PC) officials said Tuesday.

The PC has already finalised the Tk 3.0 trillion ADP for the next fiscal year (FY2027) with Tk 1.10 trillion targeted as project aid, to be borrowed from external sources. The remaining funds worth Tk 1.90 trillion will come from internal resources.

In the current fiscal's Tk 2.0-trillion ADP, the government allocated Tk 720 billion worth of PA, mostly come from foreign loans, while the remaining Tk 1.28 trillion is being provided from state coffers, usually mobilised from revenue income.

According to an FE analysis, Bangladesh government's highest growth in project-loan allocation in the ADP was in FY2016-17 as Bangladesh started the Rooppur nuclear power plant and metro-rail construction works.

Meanwhile, in the last FY2025, foreign debt, including interest and principal, was repaid with Tk 500 billion -- the highest ever.Business News Alerts

In the current FY2026, foreign-debt service cost Tk 430.61 billion during the first 9 months (July to March).

This foreign debt-repayment rate is 10-percent higher over the same period of the last fiscal year. The repayment rate has reached a point where it is more than the amount of loan received from development partners every month.

The installment repayment of the loan taken from Russia for the Rooppur Nuclear Power Plant will start soon, which will add up to the current debt-servicing obligation. According to the Economic Relations Division (ERD), some Tk 46.36 billion will have to be repaid every year. The time schedule for the repayment of many other big loans would also start within next few years.

Economist Masrur Reaz says the dependency on foreign loan would put further pressure on the repayment amid the lower revenue-income base.

"Following the current domestic and international situation, though the government has no good alternative except for borrowing foreign loans, but their best utilisation would have to be ensured," Dr Masrur notes.

According to a report by the Implementation and Monitoring Department (IMED) of the Ministry of Planning, government dependence on foreign loans and grants had increased in the last five fiscal years. The rate of use of domestic resources has decreased.Bangladesh Investment Guide

Meanwhile, the scope for loans on easy terms is becoming limited as most of the donors going for lending market-based loans. This has created additional pressure on loan repayment.

Some major development partners, including the World Bank, the Asian Development Bank (ADB) and Japan International Cooperation Agency JICA, are gradually making their terms and conditions harder.

Incidentally, currently, almost all of the foreign loans and grants in development projects are mainly loans. Grants are very small.

According to the Economic Relations Department (ERD), 90.67 per cent of the money released from development partners in the last fiscal year 2024-25 came as loans. Only 9.33 per cent were grants.

Officials of ERD and PC have told the FE that the proposed Tk 3.0-trillion ADP with the allocation of Tk 1.10-trillion project aid has been prepared by considering the government's election manifesto, the demands of various ministries, and the progress in the implementation of the ADP during the last 9 months.

The proposed ADP will be presented for approval in the National Economic Council (NEC) meeting soon ahead of presentation in parliament along with the national budget which is forecast to be around Tk 9.0 trillion in size.Economic Trend Reports

Meanwhile, the updated report of IMED shows that 40 per cent of the total allocation for foreign loans had been spent in the last nine months till March.

The government is moving ahead with a plan to bring the Bangladesh Investment Development Authority (Bida), Bangladesh Economic Zones Authority (Beza) and Bangladesh Export Processing Zones Authority (Bepza) under a single umbrella entity to streamline the investment ecosystem and improve coordination among investment-related institutions, Commerce Minister Khandakar Abdul Muktadir said yesterday (12 May).

"The government has undertaken a series of regulatory reforms aimed at reducing the cost of doing business, simplifying business entry and accelerating Bangladesh's transition towards a trillion-dollar economy," he said while disclosing the plan during a call-on meeting with a delegation from Business Initiative Leading Development (BUILD), according to a press release.

As part of the reforms, the government plans to introduce provisional licences valid for 12 months for six essential approvals, including fire service, DIFE and chamber memberships, allowing entrepreneurs to begin operations without delay, he said.

India today hiked import duties on gold and silver to 15% from 6% as part of measures to curb inbound shipments of precious metals amid a rising import bill due to the Middle East crisis.

The move came a couple of days after Prime Minister Narendra Modi's call for curbs on gold purchases for a year, along with other austerity measures to save foreign exchange.

The duty hikes will raise the overall customs duty on gold to 15%.

India, the second biggest gold importer after China, had in the 2024-25 budget cut customs duty on gold to 6% to boost the domestic gems and jewellery industry, curb smuggling and bring down local prices.

In 2022, India had increased gold import tax to 15% to check capital account deficit amid a falling rupee due to the Russia-Ukraine war that began in February that year.

India's imports of the yellow metal went up by over 24% to an all-time high of $71.98 billion in 2025-26. In volume terms, however, the shipments dipped 4.76% to 721.03 tonnes in 2025-26.

Bangladesh Bank has purchased dollars from commercial banks for two consecutive days in the second week of May.
FE

The central bank bought $20 million from a commercial bank on Tuesday at a rate of Tk 122.75 per dollar, according to officials.

A day earlier, the regulator purchased $45 million from another bank at the same rate.

Arief Hossain Khan, executive director and spokesperson for the central bank, told bdnews24.com: “So far this month, up to $145 million has been purchased from the market.”Stock Market Data

The central bank’s cut-off rate for dollar purchases throughout May has remained Tk 122.75 per dollar.

According to Bangladesh Bank data, the regulator has bought a total of $5.82 billion from the market so far in the current fiscal year.

Following the trend of previous months, inward remittance has continued to maintain positive momentum in May.

In the first 11 days of the month, expatriates sent $1.44 billion in remittances, which is 56.4 percent higher than the same period last year.

During the corresponding period in 2025, remittance inflow stood at $922 million, the central bank said.

The increased remittance inflow has boosted foreign currency holdings at commercial banks, with many banks exceeding their foreign exchange retention limits.

At the same time, dollar demand has remained subdued due to lower import pressure.

In such a situation, Bangladesh Bank has been absorbing dollars from the market to provide local currency liquidity against remittances and maintain exchange rate stability.

The move is helping the central bank stabilise the dollar market while also increasing foreign exchange reserves.

On May 7, Bangladesh paid $1.51 billion in liabilities to the Asian Clearing Union (ACU).

Following the payment, Bangladesh Bank resumed dollar purchases on Monday after reserves declined.

The central bank again bought dollars on Tuesday to further strengthen reserves.

After Monday’s purchase, foreign exchange reserves stood at $29.56 billion under the BPM6 calculation method and $34.22 billion in gross terms, according to Bangladesh Bank data.

LafargeHolcim Bangladesh reported a net profit after tax of Tk112.2 crore for the first quarter ended 31 March 2026, down 19% from Tk139.1 crore in the corresponding quarter of the previous year.

LafargeHolcim Bangladesh reported a net profit after tax of Tk112.2 crore for the first quarter ended 31 March 2026, marking a 19% decline from the Tk139.1 crore recorded in the same period last year.

The multinational cement manufacturer said its bottom line came under pressure from rising energy costs and persistent inflation, driven largely by the broader macroeconomic fallout from the West Asia crisis, according to a company press release.

According to the company's financial disclosure, net sales during the January–March period stood at Tk803.8 crore, down 6% year-on-year from Tk851.5 crore in the first quarter of 2025.

Operating earnings before interest and taxes fell 31% to Tk123.3 crore, while earnings per share declined to Tk0.97 from Tk1.20 a year earlier.

Despite these headwinds, the company maintained a profit-after-tax margin of 14% through operational efficiency initiatives and strict cost-control measures.

Chief Executive Officer of LafargeHolcim Bangladesh Iqbal Chowdhury said despite persistent inflationary pressure, the company remains focused on resilience through innovation and operational excellence.

He added that specialised product lines, including Water Protect and Fair Face, continued to perform strongly, reinforcing the company's market leadership and consumer confidence.

Looking ahead, management acknowledged that the remainder of the year will remain challenging due to elevated inflation and energy costs. However, the company said it remains optimistic after implementing rigorous cost-efficiency measures and strategic pricing reviews.

The cement maker said it aims to sustain strong performance and preserve industry-leading margins by balancing innovation with operational efficiency as the economic environment gradually stabilises.

The company also began the year by diversifying its portfolio with the launch of Holcim Coastal Guard and Power Crete — specialised solutions designed for coastal environments and the ready-mix concrete segment. These new offerings are expected to contribute to performance growth in the coming quarters.

Meanwhile, the company's sustainability arm, Geo-cycle, co-processed around 12,000 tonnes of non-recyclable waste and achieved a 13% replacement of fossil fuels with alternative fuels, supporting both environmental sustainability and operational efficiency.

The country's premier bourse returned to a positive trajectory on Tuesday as the benchmark index snapped a five-day losing streak, supported by a significant surge in trading activity.

Market turnover at the Dhaka Stock Exchange (DSE) crossed the prestigious Tk1,000 crore mark for the first time in recent weeks, jumping by 54% to reach Tk1,101 crore.

While broad-based bargain hunting played a role in the recovery, the massive turnover was largely driven by a single heavyweight transaction in the block market, where shares of BRAC Bank worth Tk335 crore changed hands.

The benchmark DSEX index rose by 24 points to settle the session at 5,229. The blue-chip DS30 index followed a similar path, gaining 4 points to close at 1,989.

The day's trading reflected a shift in investor sentiment as opportunistic buyers moved in to accumulate fundamentally strong scrips that had become undervalued during the previous week's persistent decline, according to the market insiders.

Market breadth turned positive as well, with 188 issues advancing, 138 declining, and 67 remaining unchanged on the DSE floor.

According to the daily market review by EBL Securities, the capital bourse staged a modest recovery yesterday after five consecutive losing sessions. The market opened on a firm footing and maintained positive momentum throughout the day. Although the rebound offered some relief to the market's weakened sentiment, analysts said investors remain cautious amid concerns over potential policy developments and evolving geopolitical tensions in the Middle East.

The banking sector dominated the day's proceedings, accounting for a staggering 36% of the total turnover, primarily due to the high-value block trades. This was followed by the engineering sector with 11% and the pharmaceutical sector with 9.7% of the total trading volume.

In terms of returns, the jute sector led the gainers with a 2.5% increase, while services and information technology also posted gains of 1.6% and 1.2%, respectively.

On the other hand, the mutual fund sector faced the steepest correction of 2.2%, while the paper and tannery sectors also saw marginal declines.

Among individual performers, RD Food and Rahima Food topped the gainers' list, both surging by over 9.9%. Other notable gainers included Islami Commercial Insurance, Prime Textile, and VFS Thread.

Conversely, Meghna Pet emerged as the top loser, shedding 6.20% of its value, followed by Monno Ceramic and several mutual funds.

Monno Ceramic also featured prominently in the turnover chart alongside Dominage Steel, Acme Pesticide, Asiatic Laboratories, and NCC Bank.

The positive sentiment extended to the Chittagong Stock Exchange (CSE) as well, where the key indices settled in green territory. The selective categories' index (CSCX) gained 25 points, while the all share price index (CASPI) rose by 41 points.

Islami Bank Bangladesh reported that it incurred a loss of Tk288 crore in the January-March quarter of 2026.

According to the bank's price sensitive statement, its consolidated loss per share was Tk1.79 in the first quarter.

The bank said, it incurred the loss mainly due lower interest earnings, higher deposit cost and rising non performing loan.

Finance Minister Amir Khosru Mahmud Chowdhury directed authorities to work towards bringing at least one member from each of the country’s nearly 4 crore families under the Universal Pension Scheme (UPS) by 2030.

The directive came at a high-level meeting held at the finance ministry yesterday to review the progress, challenges, and future roadmap of the pension scheme.

During the meeting, officials said a total of 377,545 people had enrolled in the four existing schemes -- Probash, Progoti, Surokkha, and Somota -- as of April 30 this year.

The pension fund has so far accumulated Tk 256 crore in contributions, while total investments, including profits, have reached Tk 280 crore, according to a press release.

The previous Awami League government rolled out the UPS in August 2023 with a view to bringing the country’s growing elderly population under a single social security system.

Khosru stressed the need to further expand the pension scheme, particularly among people working in the informal sector, who account for nearly 85 percent of the employed workforce.

They remain without any retirement protection, he said.

Officials at the meeting also highlighted concerns over the country’s growing ageing population and the increasing dependency ratio in the coming decades, the press release said.

The meeting discussed several proposals aimed at making the scheme more attractive and inclusive, including the introduction of a Shariah-based pension scheme, lifetime pension benefits for nominees, and the inclusion of outsourced workers under the Progoti scheme.

Officials also informed the meeting that the Asian Development Bank (ADB) has pledged $100 million in concessional loans for a project to strengthen the UPS.

Currently, contributions can be deposited through 45 banks and financial institutions, as well as mobile financial services such as bKash and Nagad.

The finance minister also emphasised the importance of strengthening public confidence in the pension system through wider awareness campaigns, enhanced cybersecurity measures, and the recruitment of skilled professionals.

BRAC Bank reported that its consolidated net profit jumped by 44% to reach Tk695.68 in the January-March quarter of 2026.

According the bank's price sensitive statement, its consolidated earnings per share was Tk2.90 in the first quarter, which was Tk2.02 during the same quarter a year ago.

The bank said, net profit was driven by higher interest income as well as investment income. Moreover, robust performances fron the subsidiaries companies also helped to post such profit growth during the quarter compared to the previous year.

The Bangladesh Startup Investment Company (BSIC), a venture capital platform formed by 39 commercial banks, plans to invest from its inaugural $35 million fund in at least three firms over the next four months, according to officials involved in the process.

They, however, also said the number of recipient companies could exceed during the period.

The announcement of the investment came at the launch event of BSIC at the Radisson Blu Water Garden Hotel yesterday (12 May), where officials described the initiative as the country's first institutionally governed venture capital platform backed by banks.

Finance Minister Amir Khosru Mahmud Chowdhury attended the launch event as the chief guest, while Bangladesh Bank Governor Md Mostaqur Rahman was present as the special guest.

Mashrur Arefin, managing director of City Bank, serves as the chairman of Bangladesh Startup Investment Company.

The platform launched the "Onkur Bangladesh Fund 1" with committed capital of around Tk425 crore or $35 million. Participating banks will contribute 1% of their annual net profits to the fund, creating a recurring capital structure rather than a one-time allocation.

BSIC officials stated that the fund will invest in seed, late-seed and Series A-stage startups. While the investment scope is broad, agro-based and technology-focused ventures are likely to receive priority.

However, the company will not provide financing at the very initial stage of a startup. Instead, it plans to back ventures that have already demonstrated operational and growth potential, with further investments to be made in phases to support expansion.

Officials also said the disbursement policy is still being finalised, although investments are expected to be made through equity participation.

Alongside domestic investment, BSIC is also working to attract foreign investment into Bangladesh's startup ecosystem in an effort to strengthen funding opportunities for local ventures.

The launch event was attended by representatives from several international investment firms and development-focused organisations, including VentureSouq, Wavemaker Partners, 500 Global, Plug and Play, ADB Ventures, GFR Fund, Sturgeon Capital, Conjunction Capital and Orbit Startups, as well as regional technology media outlets Tech in Asia and FWDstart.

Officials said the platform is currently in discussions with international investors and development partners to mobilise additional capital alongside its own investments.

The initiative is being seen as a major effort to mobilise domestic financial capital for Bangladesh's startup ecosystem, which has historically relied heavily on foreign investors.

Speaking at the event, Amir Khosru said, "This fund will not be used for political motives, and there will be no political intervention." He said the fund would operate free from political interference and would be used solely to support the growth of startups.

"Bangladesh is entering a new phase of economic transformation, where future growth must increasingly come from productivity, technology, entrepreneurship, and private sector innovation," the minister further said.

"BSIC reflects confidence in our young entrepreneurs and in the ability of domestic institutions to help build the next generation of nationally and globally competitive companies."

Governor Mostaqur said the BSIC fund will be managed independently and will support start-ups, helping strengthen the rural economy. "BSIC represents an important step in mobilising domestic capital for productive, technology-enabled enterprises that can contribute to employment, productivity, and financial inclusion," he said.

"We expect the Association of Bankers, Bangladesh, to support the initiative of Bangladesh Bank in building a cashless society," he further said, adding that another initiative would be implemented in the coming days.

According to published data, Bangladesh's startup sector has received more than $1 billion through over 450 investment deals since 2010. However, less than 7% of the total investment came from domestic sources.

Addressing the event, Mashrur Arefin said the fund would prioritise SMEs and technology-based companies, although non-tech businesses would also be eligible. "This fund helps the growth of companies, and a company can expand their business through BSIC's equity participation," he said.

Mohammad Ali, managing director and CEO of Pubali Bank PLC and also a board member of BSIC, said the company also planned to support cottage-level startups.

"We will finance them, and if they succeed, we will work to turn them into corporations as well. That should be a way of journey," he said.

Separately, at the event, BSIC announced the appointment of Sami Ahmad, a global venture capital veteran, senior advisor at B Capital and previously a general partner at the firm, as an advisor to the BSIC board.

The board of Bangladesh Bank yesterday decided in principle to liquidate five non-bank financial institutions (NBFIs) from July this year, according to central bank officials.

The non-banks are FAS Finance, Fareast Finance, Aviva Finance, People’s Leasing and International Leasing.

Before the liquidation process begins, the central bank will announce a scheme for depositors. Under it, individual depositors with savings of up to Tk 10 lakh will receive a full refund of their principal amounts, but no interest payments.

Officials familiar with the matter told The Daily Star that the central bank will seek funds from the Ministry of Finance to meet the repayment obligations.

The decision was taken at the central bank board meeting yesterday. It was chaired by Bangladesh Bank Governor Md Mostaqur Rahman.

Central bank officials said that individual depositors with savings above Tk 10 lakh will be repaid on a proportional basis, depending on the availability of funds and the size of their deposits.

To manage the process, they said the central bank is planning to introduce a separate repayment mechanism.

Earlier, the Bangladesh Bank board under the interim government approved the liquidation of six non-banks, including Premier Leasing.

In November last year, it approved the liquidation proceedings under the Bank Resolution Ordinance 2025, the country’s first comprehensive framework for resolving failed banks and non-banks.

The latest decision to liquidate five NBFIs came amid protests by depositors of the distressed institutions.

On May 7, an alliance representing more than 12,000 depositors of six troubled NBFIs urged the central bank to take urgent steps to return their long-frozen funds.

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

The depositors have submitted multiple memorandums to the Bangladesh Bank governor, saying they have faced severe financial hardship, mental distress and a humanitarian crisis as their savings have remained locked for nearly seven years.

“Many depositors are unable to access treatment for critical illnesses such as cancer, kidney disease, and heart conditions due to a lack of funds,” one memorandum said, adding that several depositors had already died without receiving necessary medical care.

Over the years, several NBFIs have collapsed due to widespread mismanagement, weak governance and heavy exposure to non-performing loans. Poor regulatory intervention and oversight failures further deepened the crisis, eventually leading to liquidation.

Under the interim government, the regulator initially proposed liquidating nine NBFIs: FAS Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing and International Leasing.

According to Bangladesh Bank data, these nine institutions hold deposits worth Tk 15,370 crore, of which Tk 3,525 crore belongs to individual depositors and Tk 11,845 crore to banks and corporate clients.

After hearings in January this year, three institutions, Prime Finance, GSP Finance and BIFC, were given three to six months to improve their financial condition.

As of September 2025, the country’s 35 NBFIs had non-performing loans of Tk 29,408.66 crore, accounting for 37.11 percent of total outstanding loans of Tk 79,251.11 crore, according to Bangladesh Bank data.

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

Major Asian ​liquefied natural gas (LNG) importers Japan and South Korea ramped up coal-fired power generation in April and into early May, ‌market data showed, as the Iran war disrupted supplies of the super-chilled fuel and boosted prices.

Japan’s gas-fired power supply hit two-year lows in April and South Korea’s dropped to six-month lows, according to data from the Japanese Electricity Market Data Hub and Korea Power Exchange (KPX).

The switch underscores how the conflict is reshaping power ​generation patterns after Iranian retaliation to US-Israeli attacks knocked out 17 percent of LNG export capacity in No. 2 global supplier Qatar.

“The longer ​this war continues, the more switching we will see,” Andre Lambine, a power analyst at S&P Global Energy, told a recent industry event.

In April, coal-fired power supply in Japan surged 11.1 percent, the fastest pace in at least a year, as ​gas-fired power plunged 12.9 percent to 16,447 gigawatt-hours (GWh), statistics from the Japanese Electricity Market Data Hub showed.

Japan and South Korea typically use LNG to ​offset nuclear maintenance shutdowns before demand starts rising in June.

“Japan’s rising coal power output displaced roughly 4 LNG cargoes in April - already about half the annual imports the government expected to avoid by using more coal,” said Fei Xu, senior gas analyst at ICIS.

“This has helped maintain end-April LNG inventories near 5-year averages.”

South ​Korea’s coal-fired power supply rose 39.7 percent annually to 10,733 GWh in April - the sharpest rise since August 2019, while gas-fired power fell 6.4 percent, ​data from KPX showed.

Nuclear supply fell 2.7 percent annually in Japan and 14.6 percent in South Korea in April ‌and continued declining in the first 10 days of May, the data showed.

The conflict is reshaping power generation after attacks disrupted 17% of LNG export capacity in Qatar, the world’s second-largest supplier
That was offset by an 18.3 percent annual increase in coal-fired supply in Japan and 14.7 percent in South Korea in May, as gas-fired power plunged 23.4 percent and 12.2 percent respectively.

S&P’s Lambine said South Korea could use more coal as its coal-fired power plants remained underutilised, while ICIS’ Xu said Japan’s ability to switch from gas to coal may be larger and faster ​than expected.

Elsewhere, a heatwave across ​Southeast Asia drove a 12.3 percent surge ⁠in Vietnam’s coal-fired output to a record 17,864 GWh last month, pushing coal’s share in its power mix to the highest since March 2024, government data showed.

The war-induced LNG supply crisis and hot weather ​also drove a surge in Asian thermal coal shipments in May outside China and India - the top ​global coal users, ⁠with imports by countries set to rise 9.4 percent annually to 31 million metric tons, according to London-based DBX Commodities.

Vietnam’s electricity-grade coal imports surged to a record 5.4 million tons in April, Kpler data showed.

In May, coal imports by South Korea and Japan are on track for annual rises of ⁠more than ​50 percent and 20 percent respectively, the data showed.

Asian spot LNG prices have surged 62 percent since ​the start of the war, dwarfing a 13 percent rise in the Newcastle coal benchmark . Coal’s supply chain to Asian markets is unaffected by the war.

“Coal’s value is increasingly ​being defined by security rather than economics,” said DBX Commodities CEO Alexandre Claude.

The Bangladesh Semiconductor Industry Association (BSIA) began a four-day roadshow in South Korea yesterday, bringing together industry, academia, and government representatives to strengthen bilateral semiconductor collaboration.

The roadshow, running May 11-14, forms part of the Silicon River vision, which seeks to advance Bangladesh’s semiconductor and deep-tech sector through global partnerships, reads a BSIA press statement.

During the roadshow, the Bangladeshi delegation will meet major players across Korea’s semiconductor ecosystem, including SK hynix, HANA Micron, KAIST’s Global Commercialization Center (GCC), ETRI, and McKinsey & Company.

The discussions will specifically focus on critical areas of development, including packaging, AI hardware, design, testing, and commercialisation.

A key highlight of the event is a Letter of Intent signing between BSIA, the Center of Research Excellence in Semiconductor Technology (CREST), and KAIST’s GCC, aimed at advancing joint research, talent development, and technology commercialisation, according to the press release.

“Our objective is to learn from Korea’s remarkable semiconductor journey while building meaningful long-term partnerships in research, talent development, commercialisation, and industrial collaboration,” said BSIA President MA Jabbar.

The Bangladesh Association of Banks (BAB) has called for a reconsideration of certain provisions in the recently enacted Bank Resolution Act, saying that allowing former owners to regain control of troubled lenders through a limited upfront payment could raise concerns over accountability, governance and moral hazard.

The plea was made during a meeting between a BAB delegation led by Chairman Abdul Hai Sarker and Bangladesh Bank Governor Md Mostaqur Rahman at the central bank headquarters in Dhaka yesterday.

The association, which represents bank sponsors and owners, shared this view as the Bank Resolution Act was passed in the House last month. The revised law included provisions allowing former owners to reclaim merged banks under relatively easy terms.

According to the law, former directors or owners of banks under merger or listed for merger can pay 7.5 percent upfront of the amount injected by the government or the BB to regain control. The remaining 92.5 percent is to be repaid within two years at 10 percent simple interest.

While welcoming the government’s initiative to establish a structured resolution framework, BAB said the mechanism should ensure a strong “fit and proper” assessment, forensic audits, verification of fund sources and transparent regulatory oversight.

As part of its banking reform initiatives, the interim government approved the Bank Resolution Ordinance 2025. Under it, five crisis-hit lenders -- First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank and EXIM Bank -- were brought under the merger process.

The BB later issued a licence for a new state-owned entity, Sammilito Islami Bank PLC, in November last year, which is expected to become the country’s largest state-owned shariah-based lender.

A delegation of Bangladesh Association of Banks (BAB), led by its Chairman Abdul Hai Sarker, meets Bangladesh Bank Governor Md Mostaqur Rahman at the central bank headquarters in Dhaka yesterday. Photo: courtesy
After the Bangladesh Nationalist Party (BNP) came to power following the national election in February, the ordinance was amended and enacted as the Bank Resolution Act 2026.

Subsequently, five sponsor shareholders and former directors of troubled Social Islami Bank PLC applied to regain control of the shariah-based lender. However, senior BB officials told The Daily Star last week that the request was likely to be rejected as the merger process moves ahead.

Against this backdrop, BAB said international investors, development partners and global financial institutions closely monitor the credibility of financial sector resolution frameworks.

“Any perception of weak accountability may negatively affect investor confidence, depositor sentiment, and international financial perception regarding Bangladesh,” the association said.

It added that depositor protection, governance reform, financial discipline, transparency and long-term institutional stability should be prioritised in any resolution process.

BAB also urged the BB to consult it before finalising proposed amendments to the Bank Company Act, saying the changes could have a significant impact on board governance, capital raising, sponsor shareholding structures, independent director frameworks and management accountability.

The association said the banking sector is going through one of its most difficult periods.

“Elevated non-performing loans, provisioning and capital adequacy pressures, weak private sector credit growth, legal recovery bottlenecks, rising cost of funds, declining investor confidence, and global economic uncertainties continue to place significant stress on the sector.”

It added that the sector is suffering from broader confidence challenges.

“Public confidence, depositor trust, investor confidence, and international perception regarding governance, transparency, and institutional accountability within the banking sector are now critical issues requiring coordinated and balanced action.”

BAB urged the central bank to retain existing incentive bonuses for bankers in order to help banks retain skilled professionals. It also called for access to the BB’s refinance schemes for banks with non-performing loan ratios below 20 percent.

The association further pressed for changes in rules on income recognition, classification and provisioning, arguing that current requirements place undue pressure on capital buffers and restrict credit flow. It suggested allowing interest income recognition after the expiry of grace periods.

On rescheduled loans, BAB said existing classification and provisioning rules significantly increase risk-weighted assets and capital adequacy pressures, limiting banks’ ability to extend fresh lending to productive sectors.

It also proposed the creation of a professionally managed national Asset Management Company (AMC) to acquire classified loans, support restructuring and assist sector recovery, citing examples from Malaysia, South Korea and Indonesia.

On legal recovery challenges, BAB said the process for recovering defaulted loans remains slow and complex owing to case backlogs, delayed hearings, misuse of stay orders and weak enforcement of judgments.

To overcome this, BAB proposed amendments to the Artha Rin Adalat Ain to include ultimate beneficiaries and beneficial owners, the introduction of fast-track financial courts and dedicated recovery benches, along with mandatory hearings before stay orders are issued and time-bound limits on such orders.

“A major challenge currently faced by banks relates to accounts where courts direct loans to remain unclassified while regulatory inspections require provisioning treatment as ‘bad and loss’,” it said.

BAB said this creates inconsistencies in provisioning, affects profitability, increases capital stress and reduces lending capacity. It called for separate regulatory treatment for loans under litigation or stay orders, along with a phased provisioning framework.

“Such an approach will improve regulatory consistency while maintaining prudential discipline,” said the association.

Bangladesh Bank (BB) has allocated Tk 10 billion (Tk 1,000 crore) from its revolving Green Transformation Fund (GTF) for rural and local industrial sectors to promote environmentally sustainable industrialisation and accelerate green growth across the country.Bangladesh Investment Guide
FE

The initiative is aimed at supporting small-scale and regional entrepreneurs in acquiring environment-friendly machinery and components to transform local industries into greener and more sustainable production units, said a BB circular issued.

According to the circular, the central bank had earlier formed a revolving Green Transformation Fund amounting to Tk 50 billion (Tk 5,000 crore) from its own resources to support sustainable growth in manufacturing and export-oriented industries.

The newly earmarked Tk 10 billion (Tk 1,000 crore) has now been reserved exclusively for rural and local industrial enterprises in an effort to decentralise green industrialisation and expand sustainable economic activities beyond major urban centers.

Under the refinance scheme, participating financial institutions (PFIs) will receive funds from Bangladesh Bank at an interest rate of only 1 percent, while the maximum interest rate at the customer level has been fixed at 5 percent.

The loan tenure will range from two to five years depending on the nature of the project, while entrepreneurs will also be allowed a grace period of up to six months subject to the relationship between the borrower and the participating bank.Economic Trend Reports

The facility will support projects related to renewable energy, energy efficiency, water conservation and management, waste management, resource efficiency and recycling, and initiatives aimed at improving workplace environments.

Through these measures, the central bank intends to encourage the adoption of green technologies and sustainable production practices at the grassroots industrial level.

According to the circular, the maximum loan amount for a single borrower has been fixed at Tk 5 crore. The debt-equity ratio must not exceed 80:20 of the total import or purchase cost.

In addition, at least 10 percent of the total electricity consumption of financed projects must come from renewable energy sources.

Bangladesh Bank also imposed strict eligibility conditions for borrowers. Loan defaulters will not qualify for the scheme, and participating banks must verify updated Credit Information Bureau (CIB) reports of borrowers and all related interests before approving any financing.

All state-owned commercial banks will be eligible to participate as PFIs under the scheme. Private and foreign commercial banks, however, must maintain classified loan rates below 20 percent to qualify. Islamic Shariah-based banks have also been allowed to participate through their approved investment mechanisms.Financial Literacy Course

Banks interested in joining the programme will have to sign a “Participation Agreement” with the Sustainable Finance Department, although banks already operating under existing GTF agreements will not require new agreements.

The circular, issued under Section 45 of the Bank Company Act, 1991 (amended in 2023), came into effect immediately.

To ensure accountability and transparency, participating financial institutions will be required to submit quarterly reports to the Sustainable Finance Department within 15 days after the end of each quarter.

Bangladesh Bank warned that fines may be imposed for providing false information or failing to comply with reporting requirements.

Prime Minister Tarique Rahman has assured garment exporters that the government will reopen all closed public and private factories across the country and provide support to struggling factories to prevent further closures.

However, state-owned closed factories will not be run directly by the government. Instead, they will be reopened through interested Bangladeshi entrepreneurs.

Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) shared the information with TBS after separate meetings with the prime minister at the Secretariat today (11 May).

After the meetings, top executives of BGMEA and BKMEA said the prime minister had asked for written proposals, after consulting factory owners, outlining what policy support is needed to reopen closed factories and rescue those on the verge of closure.

The two associations are expected to submit their written proposals after Eid-ul-Adha.

They said the prime minister placed the highest emphasis on employment generation. For that reason, he wants all closed factories in both the public and private sectors to reopen and also wants policy support for factories facing closure.

BKMEA Senior Vice-President Fazlee Shamim Ehsan, who attended the meeting, said the prime minister clearly mentioned two conditions for reopening state-owned factories through private management: they must be operated by Bangladeshi entrepreneurs, and they must produce the same products previously manufactured there.

There is no exact data on how many factories remain closed nationwide. After taking office, the BNP government initiated a Tk40,000 crore fund through Bangladesh Bank to help reopen closed factories. Around 300 garment factories are reportedly at risk of closure.

After the meeting, BGMEA President Mahmud Hasan Khan and BKMEA President Mohammad Hatem told The Business Standard they had requested that factories on the verge of closure also be given access to the fund.

They said the prime minister also wants to ensure no additional factories shut down and confirmed that vulnerable factories would receive assistance.

"The prime minister clearly told us that all closed factories will be reopened, and the government will provide every possible policy support to prevent any new closures. He also informed us of plans to reopen closed state-owned factories through privatisation," said BKMEA Senior Vice-President Fazlee Shamim Ehsan.

BKMEA President Mohammad Hatem told the prime minister that no entrepreneur would expand investment or bring in new investment unless gas and electricity supply improves.

He also requested removal of complexities surrounding the import of raw materials for man-made fibre and raw materials used in locally produced auxiliary chemicals.

The BGMEA delegation, led by President Mahmud Hasan Khan, met the prime minister first, followed by the BKMEA delegation led by President Mohammad Hatem. Each meeting lasted around an hour.

They informed the prime minister that identical support measures for all closed factories would not work, as each factory faces different problems. In response, the prime minister asked them to speak with factory owners individually and submit written reports detailing each case.

BGMEA President Mahmud Hasan Khan said, "The government cannot waive taxes or hand out money. But the prime minister asked us to submit written proposals on what type of policy support each factory needs so they can continue operations and preserve jobs. We will submit these after Eid."

He added that all duties and taxes on imports of equipment and batteries used for solar power generation and storage would be fully withdrawn.

BKMEA Senior Vice-President Fazlee Shamim Ehsan said, "The prime minister does not want foreign companies to run closed state-owned factories. He wants local entrepreneurs to operate them. But they must produce the same goods as before and meet international standards. Through this, the prime minister wants export diversification."

BKMEA President Mohammad Hatem said that during discussions on export diversification and reopening closed factories, the prime minister said anyone interested in reopening the Rajshahi silk factory should inform him.

He said the factory could be modernised to produce world-class silk products for export.

BGMEA President Mahmud Hasan Khan said the prime minister also stressed building export-oriented market networks, improving the business environment and diversifying exports.

"We told the prime minister that several Bangladesh Bank policies are pushing many operating factories towards closure. There are complications in accessing bonded warehouse facilities, and many factories are facing audit-related problems. We also highlighted barriers to simplifying import-export procedures.

"After receiving our written recommendations, the prime minister assured us that policies would be revised to simplify import-export procedures and improve the overall business climate," said BKMEA President Mohammad Hatem.

Commerce Minister Khandaker Abdul Muktadir, Housing and Public Works Minister Zakaria Taher, and Education Minister Ehsanul Haque Milon were present at the meetings

The Middle East war triggered the world's largest energy shock, with market recovery likely to extend into 2027 even if the Hormuz blockade is lifted soon, Saudi oil giant Aramco's CEO told investors Monday (11 May).

A day earlier, Aramco had announced a net profit rise of more than 25% in the first quarter of 2026 compared to the same period last year, fuelled by higher oil prices as exports remain blocked in the Strait of Hormuz.

"The energy supply shock that began in the first quarter is the largest the world has ever experienced," said Aramco CEO and president Amin H. Nasser.

"If the Strait of Hormuz opens today (11 May), it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalisation will last into 2027," he added.

Crude prices jumped during the first quarter from the mid $60s in early February to more than $100 a barrel in March as Iran's shutdown of the key waterway sparked a global energy crisis.

The market has seen an "unprecedented supply loss of about a billion barrels of oil", he said, putting the figure at roughly 880 million barrels.

"If the current disruptions continue at this rate, the market will lose around 100 million barrels for every week the Strait of Hormuz remains closed," he added.

The loss was offset in part by oil flows bypassing Hormuz, the release of strategic government petroleum reserves, and Saudi Arabia's East-West pipeline -- which avoids the blockaded strait, he said.

Saudi Arabia has used the pipeline at its maximum capacity of 7 million barrels per day to deliver oil despite the blockade.

US-Iran talks have failed to produce a lasting deal following a truce last month, with US President Trump on Sunday (10 May) rejecting Tehran's response to Washington's proposal as "totally unacceptable".

"If and when normal trade and shipping resume, we anticipate a very robust return to demand growth significantly higher than the initial estimate for the growth in 2026," Nasser said.

The oil-rich Gulf has borne the brunt of Iran's attacks during the war, with Tehran targeting US assets but also civilian infrastructure, including energy facilities.

In Saudi Arabia, facilities in Riyadh, the Eastern Province, and the industrial city of Yanbu were all targeted. This included infrastructure for oil and gas production, transport and refining, and petrochemical plants and power facilities.

DBH Finance PLC has reported results for the first quarter of the year ended on March 31, 2026.

For the quarter, the company reported net profit after tax of Tk 196 million, which is 26 per cent higher than the corresponding quarter of the previous year, said a press release.

Its EPS for the quarter stood at Tk 0.97 compared with that of Tk 0.77 of the same quarter last year. Net interest income rose by 31 per cent and operating income increased by 8 per cent for the quarter.

The company’s NPL remained around 1 per cent of the portfolio, which is one of the lowest in the industry.

As per the release, DBH Finance achieved highest Credit Rating AAA for twenty consecutive years.

Commenting on quarterly results, managing director and chief executive officer Nasimul Baten said, ‘Our results reflect our operational strength and customer-first approach. In a difficult macro environment, our sustained focus on efficiency, service excellence and asset quality continues to drive DBH’s success and set itself apart from most of the other financial institutions of the country.’

DBH is serving customers through its 17 branches covering all divisional headquarters and providing financial assistance for creating home ownership through its conventional schemes as well as Islamic finance wing. Also, the company is collecting term deposits and Mudaraba deposits from the retail and corporate customers.

DBH has a loan portfolio of Tk 4,538 crore and a deposit portfolio of Tk 4,618 crore as on March 31, 2026.

Indian shares opened lower on Monday, weighed down by higher oil prices after the US and Iran failed to reach a peace deal, while jewellery and travel-linked stocks fell after Prime Minister Narendra Modi urged citizens to limit travel and gold purchases due to the Iran war.

The Nifty 50 fell 0.85% to 23,970.10 as of 9:15 am IST, while the BSE Sensex shed 0.89% to 76,638.09.

All 16 major sectors logged losses at the open. The broader small-caps and mid-caps lost 0.5% each.

Oil marketing companies such as BPCL, HPCL and Indian Oil fell about 1% each, while travel-linked stocks also declined, after Modi urged citizens to reduce fuel consumption and limit non-essential foreign travel amid the Iran war.

Jewellery stocks Titan, Senco Gold and Kalyan Jewellers lost between 3% to 4.5% after the comments.

Airline operator Interglobe Aviation lost 3.2%.

Brent crude jumped 4.1% to about $105.5 a barrel after US President Donald Trump on Sunday dismissed the Iranian response to Washington's proposal for peace talks as "unacceptable".

Higher crude prices are detrimental for the world's third-largest oil importer, as they exacerbate inflationary pressures and weigh on growth and corporate earnings.

IPDC Finance PLC reported a 78.52 percent year-on-year increase in net profit after tax to Tk 6.5 crore in the first quarter of 2026, driven by higher net interest income, strong investment earnings and disciplined cost management.
Earnings per share rose to Tk 0.16 in the January-March quarter from Tk 0.09 a year earlier, reflecting improved after-tax profitability
Despite a challenging macroeconomic environment, operating income grew 24.40 percent year-on-year to Tk 94.2 crore, according to a press release.

Gross interest income increased 6.01 percent year-on-year to Tk 242.5 crore, supported by sustained asset portfolio deployment and prudent lending. Interest expenses rose at a slower pace of 1.74 percent to Tk 184.4 crore, reflecting easing funding costs.

As a result, net interest income expanded 22.33 percent year-on-year to Tk 58.1 crore, reversing the margin pressure experienced through much of 2025.

“Our first-quarter performance reflects the resilience of IPDC’s business fundamentals and the disciplined execution of our strategic priorities,” said Rizwan Dawood Shams, managing director of the company.

“We remain committed to maintaining sound risk management practices and creating long-term value for all stakeholders while supporting Bangladesh’s evolving economic aspirations,” he added.
Investment income, a major growth driver, climbed 32.51 percent year-on-year to Tk 31.7 crore due to stronger yields from government securities and a broader treasury portfolio. Commission and brokerage income also rose 13.29 percent to Tk 38 crore.

Operating expenses increased only 3.52 percent year-on-year to Tk 39.7 crore, helping profit before provision jump 45.79 percent to Tk 54.5 crore.

As of March 31, 2026, loans, advances and leases stood at Tk 7,374.3 crore, down 1.18 percent from December 2025, reflecting selective credit deployment amid a recovering demand environment.

Total deposits grew 1.60 percent to Tk 6,324.7 crore, reinforcing the company’s funding base and depositor confidence.

Meanwhile, the company’s net asset value rose to Tk 18.01 in March 2026 from Tk 17.85 in December 2025.