Bangladesh Finance made a significant turnaround by securing a profit of Tk 225 million in 2025 from one of the highest losses - Tk 7.83 billion - in the country's non-bank financial institution (NBFI) sector a year earlier.

The achievement was mainly driven by strong recoveries from stressed loans, said Md. Kyser Hamid, managing director and CEO of the company.

The company recovered around Tk 1.77 billion in 2025 from stressed loans, he said, adding that loan rescheduling and lower provisions also contributed to the latest financial performance.

A year ago, Bangladesh Finance set aside money to maintain full provisions against defaulted loans and even stressed loans.

"Usually, provision is kept only for non-performing loans, but we allocated additional interest suspense and provisions against stressed loans in the past two years."

If any client fails to pay loan instalments for more than three consecutive months, their account gets suspended and the pending interest is not shown as income.

Bangladesh Finance kept provisions against investments of Tk 1.66 billion in 2023 and Tk 8.36 billion in 2024.

The CEO said the management had set aside more than what was necessary as interest suspense and kept higher provisions than required in 2023 and 2024, considering that the company might have to bear further financial shocks in the future.

These measures were taken to mitigate unforeseen credit risks, address potential losses early, prevent further deterioration and defaults, ensure adequate reserves, and safeguard overall financial health, he said.

With such precautionary measures already in place, aggressive efforts in 2025 to recover and reschedule defaulted loans enabled the company to reverse a substantial amount of provisions previously maintained.

Echoing Mr Hamid, Md. Sajjadur Rahman Bhuiyan, group chief financial officer, explained that after facing heavy provisioning in FY24, the company strategically focused on recovery in FY25.

"By deploying management to accelerate settlements and rescheduling major corporate loans, we successfully released substantial provisions, ultimately driving the company back to profitability."

Bangladesh Finance booked a provision write-back of Tk 2.13 billion, a dramatic reversal from the Tk 7.85 billion provision recorded in 2024, according to its auditor's opinion published on Sunday.Regional business directory

"The write-back significantly boosted the company's bottom line and marked a major improvement in asset quality management," said the auditor.

Mr Hamid said continued recovery initiatives, disciplined risk management and supportive regulatory policies were expected to further improve the company's financial health and support sustainable long-term growth.

However, the auditor warned that Bangladesh Finance still faces serious financial vulnerabilities.

It pointed out that the company continued to operate with negative consolidated equity of Tk 5.47 billion as of December 2025.

The auditor noted that the financial statements had nevertheless been prepared on a going concern basis after the management provided justification that the company would be able to continue operations in the foreseeable future.

Bangladesh Finance said its management conducted a detailed assessment in line with Bangladesh Bank guidelines and International Accounting Standard (IAS) 1 to evaluate whether the company could continue as a going concern.

The assessment considered financial performance, liquidity conditions, asset quality and capital structure.

According to the company, its board believes the institution has adequate resources and recovery plans in place to continue operations despite the negative capital position.Wealth management advice

The company also highlighted a sharp improvement in its provision coverage ratio, which rose to 496.96 per cent at the end of 2025, indicating a strong cushion against potential future credit losses.

Capital adequacy indicators also improved during the year, although they remained below regulatory requirements.

The standalone capital adequacy ratio improved to negative 31.84 per cent from negative 33.81 per cent a year earlier, while the consolidated capital adequacy ratio stood at negative 24.29 per cent.

Meanwhile, net asset value per share also showed signs of recovery. Consolidated NAV per share improved to negative Tk 28.85 in 2025 from negative Tk 30.05 in the previous year.

To restore financial stability, the company has prepared a long-term capital management plan along with a seven-year financial projection and a liquidity management strategy aimed at rebuilding capital strength and improving liquidity conditions, said the auditor.

The management acknowledged that confidence in the financial sector remains weak but said ongoing restructuring initiatives and expected regulatory support would help stabilise the company further.

The auditor also confirmed that subsidiaries - Bangladesh Finance Securities and Bangladesh Finance Capital - received unmodified audit opinions for 2025.

Recovery continues in Q1, 2026

Bangladesh Finance sustained its recovery momentum in the first quarter of 2026, posting a 120 per cent year-on-year increase in consolidated profit to Tk 20.71 million.

The company said the performance in the January-March period resulted from capital gains from investments in securities and further reversal of provisions maintained against loans, leases and investments.

It has sustained its recovery at a time when the sector overall has been under pressure from rising non-performing loans, liquidity stress and weakening depositor confidence over the past several years.

Predictable policies, improving liquidity flows and rebuilding investor confidence dominates the upcoming national budget as Bangladesh navigates a challenging economic landscape marked by inflation, sluggish investment and financial-sector vulnerabilities.

Talking to The Financial Express, days before the new government's maiden budget lands in parliament, Dr Rashed Al Titumir also explains that the government's economic strategy is built around a five-year framework of "recovery, restoration and reconstruction for acceleration".

"The budget size remains relatively small compared to the size of our economy and the financing needs in health and education," he says, stressing the need to increase public spending to reduce high out-of-pocket healthcare expenditures and build a skilled workforce through the promotion of technical education.

Asked about amendments to the Bank Resolution Act and efforts to address the banking-sector crisis, Dr Titumir says the government has adopted a diversified approach and is seeking strategic international partners to strengthen financial institutions.

"Bangladesh must better integrate with international banking standards and explore opportunities in the global Islamic finance market to benefit depositors, trade financiers and the broader economy."Digital news subscription

The government is also focusing on improving liquidity flows within the financial system.

"We must ensure the flow of liquidity. This requires proper incentives to increase the velocity of money. Banks holding excess liquidity should play a greater role in supporting productive investment," he says.

While acknowledging the current stagflationary pressures, the professor of development economics emphasizes that the government is pursuing economic correction rather than financial repression.

"We do not want financial repression. Our objective is to correct distortions and ensure that investors have access to funds without facing excessive financing costs."

Dr Titumir stresses coordination between fiscal and monetary policies while maintaining the operational independence of the central bank, free from political intervention.

On relations with the IMF, he says Bangladesh would continue discussions with the Fund to ensure that future policy commitments reflect the country's economic realities.

Describing the previous Hasina administration as "debtholic," he argues that the government had accepted several IMF conditions under the bailout programme that may not fully align with Bangladesh's current economic context.Bangladesh investment guides

"We will continue negotiations based on our own policy priorities and development needs."

Emphasizing the urgency of restoring international confidence as a prime objective, he notes that Bangladesh's debt-risk rating by the IMF from low to medium was a "hemorrhage" for the country's ability to access concessional financing.

"Lower international ratings affect investment, financing costs and market access. Consistent policies, macroeconomic stability and stronger institutions are essential for rebuilding credibility."

The government is also seeking to position Bangladesh as a regional logistics and connectivity hub by attracting internationally reputed port and logistics operators.

"We want to build Bangladesh into a logistics hub and create a benchmark that attracts internationally reputed operators through an inclusive and competitive process."

He says the government has already initiated investment discussions with stakeholders from Singapore, Saudi Arabia, the UAE, Denmark and Japan, particularly regarding opportunities around the Chattogram Economic Corridor.

Projects may be implemented through public-private partnerships, although other investment models are also being explored to ensure trade and economic benefits for Bangladesh.Development strategy reports

Dr Titumir highlights the importance of multimodal transport systems and stronger regional connectivity with Nepal, Bhutan, China, Myanmar and ASEAN economies.

Regarding state-owned enterprises, he says public resources should be concentrated on essential public services such as education, healthcare and social protection.

The government is considering leasing closed factories under BJMC and BTMC through a transparent and competitive process, he adds.

The adviser strikes a note of optimism about restoring confidence in Bangladesh's capital market, noting that BNP-led governments had not experienced major stock- market scams.

"Investors have repeatedly suffered from market manipulation and weak enforcement. Restoring trust requires stronger governance and regulatory oversight," he says.

On evolving trade issues with the United States, Dr Titumir says Bangladesh remains committed to respecting international agreements while continuing consultations to protect its national interests.

"The US situation is evolving too as tariff issues go to Supreme Court."Currency exchange tools

There are issues that require consultation and dialogue.

Despite current challenges, Dr Titumir remains cautiously optimistic about Bangladesh's prospects.

"We are pursuing a strategy of recovery, restoration and reconstruction. With policy consistency, institutional reforms and renewed confidence, Bangladesh can unlock its growth potential and strengthen its position in the regional economy," he says.

Bangladesh's import policy in the making appears at odds with emerging trade requirements in the European Union and the United States as it proposes allowing apparel exporters to qualify for incentives with a minimum 30-percent local value addition.

Industry leaders say the EU's proposed Generalised Scheme of Preferences Plus (GSP+) framework will require "double transformation" for garment exports, which they estimate would translate into around 40-percent local value addition.Local trade insights

Similarly, exporters say recent US trade rules require at least 40-percent local value addition, failing which shipments could be treated as transshipments.

To qualify for the EU's proposed GSP+ framework, Bangladeshi garment exporters will need to comply with the double-transformation requirement, which industry leaders estimate would require around 40-percent local value addition - a level already achieved by many knitwear manufacturers, though.

However, woven-garment manufacturers, which typically have lower domestic value addition, may find it more difficult to retain duty-free access to the EU market following Bangladesh's graduation from least-developed-country (LDC) status in November 2026, according to trade economists and industry insiders.

The government, however, has also sought a deferral of the country's graduation process to leave the world's poor-country club.

"We proposed lowering the threshold to 20 per cent," says BKMEA President Mohammad Hatem, in reference to the draft Import Policy Order 2026-2029.

He argues that high-value products, particularly those made from man-made fibres (MMF), would struggle to meet the proposed 30-percent threshold, as raw material costs for such products are significantly higher than those of cotton-based items.Capital market software

"If the government does not revise the provision, it will discourage local industrialisation and efforts to increase domestic value addition in export-oriented apparel production," he predicts.

Hatem also raises concern over a proposed restriction on knit fabrics import in the draft policy. Referring to Commerce Ministry Additional Secretary Abdur Rahim Khan, he says the ministry had indicated that the issue would be addressed in the final version of the policy.

A recent Ministry of Commerce document states that following Bangladesh's graduation from the LDC status, exports to key destinations such as the EU, the United Kingdom, the United States, Japan and other markets will no longer enjoy duty-free access.

To maintain export competitiveness and safeguard market share, the ministry, in collaboration with stakeholders, has already initiated negotiations on free-trade agreements (FTAs), comprehensive economic partnership agreements (CEPAs), bilateral and multilateral trade agreements, and other preferential trade arrangements with major trading partners.

According to the document, maintaining duty-free market access after graduation will require major export-oriented sectors to raise local value addition to above 40-50 per cent. In some cases, compliance with product-specific rules (PSRs), including double-transformation requirements, will be necessary.

The policy on the anvil further notes eligibility for GSP+ preferences may require a minimum value addition of 40 per cent. Exports to countries such as Australia and Canada, which currently enjoy duty-free access, are already required to meet a value-addition threshold of at least 50 per cent.

"In nearly all recent trade negotiations, the requirement for double transformation as a condition for granting duty-free access to Bangladeshi exports has been strongly emphasised," the document reads.Economic trend data

It also highlights that Bangladesh has offered commitments in ongoing negotiations under which garments produced using yarn and fabrics originating from importing countries would be eligible for preferential tariff treatment in proportion to the share of such inputs used in production.

"Accordingly, if Bangladesh's garment industry, particularly knitwear manufacturers, becomes increasingly dependent on imported yarn, securing duty-free market access in the future may become significantly more challenging," the document forewarns.

Seeking anonymity, an apparel-sector leader says the government may consider cash support only for new product categories with 20-percent value addition, which could help diversify export offerings.

"The new items could include sportswear, wedding wear and tech wear, which may require imported fabrics and accessories. Once we start producing such products, the local industry will gradually develop around them," the exporter says.

BKMEA Executive President Fazlee Shamim Ehsan mentions that a recent US court decision put the implementation of the reciprocal-tariff policy on hold, meaning it is currently not applicable to Bangladesh or other countries.Local trade insights

According to the draft Import Policy Order, RMG exporters will be required to maintain a 30-percent value-addition threshold for children's garments, up from the current 15 per cent.

Knitwear and woven garment exports will also be required to attain 30-percent value addition, compared to the existing requirement of 20 per cent.

Exporters of underwear and other specialised garments made from synthetic fibres may face a minimum 40-percent value-addition requirement. Footwear exports, including both leather and non-leather products, may be subject to 30-percent threshold, while ship exports could face 40 per cent, and wooden furniture exporters 50 per cent.

Under the proposed policy, exporters who fail to meet the prescribed value-addition requirements will not be eligible for cash incentives or duty benefits on imported raw materials.

The Ministry of Commerce held a stakeholder consultation on the draft policy on May 22, bringing together industry representatives ahead of its finalisation.

An incremental assistance package announced by the Asian Development Bank (ADB) would fetch Bangladesh US$5.0 billion over next five years and increase the subsequent annual aid by 20 per cent.

The announcement came Monday when ADB President Masato Kanda met Prime Minister Tarique Rahman in Dhaka discussing Bangladesh's development priorities.

Such a bounteous financing commitment comes while the release of remaining sums from an as-much IMF lending package for the country stalls under conditions the new government feels unpalatable in the current context. City & Local Guides

The Integrated Growth Network Development Initiative presented by Mr. Kanda during his visit is designed to expand investment, create jobs, improve connectivity, and promote more balanced regional growth.

"The five-year package is expected to amount to about $1.0 billion a year and will be strategically integrated into ADB's enhanced annual sovereign commitment envelope for Bangladesh," the ADB Dhaka office says in a statement.

And the Manila-based development financier plans to increase its annual sovereign commitments for Bangladesh by 20 per cent from about $2.0 billion to about $2.4 billion annually over the medium term.

The higher annual envelope is hoped to support Bangladesh's development priorities, including investment-led growth, job creation, economic diversification, stronger governance, and a smooth transition from least-developed country (LDC) status.

The ADB president says: "Bangladesh is entering a critical new phase. ADB will help the country protect hard-won stability, unlock new sources of growth, and build a more diversified and resilient economy that delivers better jobs and wider opportunity."Wealth management advice

Marking Masato Kanda's visit, the ADB signed about $1.4 billion in loans as part of the 2026 annual-commitment programme.

The Asian Bank support is scaled up by $250 million to help in financing gaps linked to the economic impact of the Middle East conflict, which is adding pressure to Bangladesh's economy by way of driving up the cost of fuels, liquefied natural gas, fertilisers, and shipping.

These strains come as inflation remains high and the banking sector remains under stress.

The ADB will work with the government and development partners to track the situation and bring in additional financing and private investment, and help Bangladesh build a more resilient economy through more diverse energy sources and exports, and stronger institutions.

Also will it provide $2.0 million in technical assistance to support the preparation and implementation of Bangladesh's medium-term development framework and align ADB's forthcoming country-partnership strategy with government priorities.

Mr. Kanda also met Finance and Planning Minister Amir Khosru Mahmud Chowdhury, with discussions focused on Bangladesh's reform agenda, macroeconomic pressures, external- financing needs, and ADB's support for government's growth and resilience priorities.Local trade insights

The ADB chief met with key private-sector leaders discussing the opportunities and constraints shaping investment.

Also, the Bank is working with the government to mobilise additional private capital by deepening capital markets, preparing bankable projects, and attracting cofinancing and private investment.

The ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific.

Working with its members and partners to solve complex challenges together, the Asian Bank harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard the planet.

India has scrapped customs duties on cotton imports for five months, the government said on Saturday, as it seeks to boost supplies of contamination-free natural fibre for textile exporters amid strong overseas demand for yarn.

The easing of import restrictions by the world’s second-largest cotton producer is likely to lend support to global prices but is unlikely to trigger a surge in purchases as the rupee’s depreciation has made imported cotton slightly more expensive than domestic supplies.The current 11 percent import duty will be suspended until October 30, the government said in a statement.

India’s textile sector, like others, is under pressure from rising input costs as supply chains are disrupted by the Iran war.The measure is expected to support domestic producers, particularly small and medium-sized firms, by improving cotton availability, the government said.

However, industry officials said Indian cotton is currently the cheapest in the world and that ample supplies from this year’s crop are available domestically, which is likely to limit imports.

“At current price levels, imports are not economically attractive,” Vinay Kotak, president of the Cotton Association of India, told Reuters.“Export-oriented mills need contamination-free cotton and, to meet that requirement, around 600,000 bales could be imported during the duty-free import window.”

The cotton is likely to be sourced from Australia, Brazil, the United States and Africa, which have surpluses, industry officials said.India last year allowed duty-free cotton imports from mid-August through the end of December, helping drive imports to a record 4.7 million bales in the current marketing year, which began last October 1.Cotton is largely grown in rain-fed areas in India, and any disruption to monsoon rains from an El Nino weather pattern could reduce output from the new crop being planted from June and boost import demand, said a New-Delhi-based dealer with a global trade house. “In that scenario, the government could extend the duty-free import window beyond October, as it did last year,” he said.

Canada’s economy posted a surprise contraction in the first quarter versus the year before, making it two straight ‌quarters of annualised decline - which some economists call a technical recession - as the country struggles with US tariff uncertainty.

Gross domestic product declined at an annualised rate of 0.1 percent in the first quarter, Statistics Canada said on Friday, compared with a downwardly revised contraction of 1 percent in the fourth quarter of last year.

Analysts ​polled by Reuters and the Bank of Canada had predicted first-quarter growth of a robust 1.5 percent. On a quarterly basis, ​first-quarter GDP was unchanged against a decline in the fourth quarter of last year.

Canada’s economy has largely withstood trade uncertainty and tariff impacts for more than a year, but the knock-on effects of tariffs have sapped investments, hiring and ​expenditure, and driven up prices.

The upcoming review of the North American free trade deal and the crude price ​shock due to the Middle East war have added more layers of uncertainty.

The last two times Canada was in a technical recession were during the start of the pandemic in 2020 and during the oil shock in the beginning of 2015.

At that time there were two consecutive quarters of decline, both on ​an annualized basis and quarterly basis, StatsCan said. Economists were divided on whether Canada is in a recession or not.

“The trade-induced contraction in ​GDP last quarter meant the economy tipped into a technical recession at the start of the year,” said a note from Capital Economics, though rising ‌oil and gas activity mean the economy likely rebounded in April.

Randall Bartlett, deputy chief economist with Desjardins Group, said the group is not prepared to call the data a recession as the weakness in the Canadian economy was not widespread.

BANK OF CANADA SEES GROWTH OF 1.2% THIS YEAR

The BoC has said growth this year is likely to be at 1.2 percent, down from 1.7 percent last year. It will update its projections in ​July.

The first-quarter GDP was negatively ​impacted by a high level ⁠of imports into the country, but that was largely offset by a high accumulation of inventories, the statistics agency said.

Household spending grew, especially in financial services and food, but this was again mostly canceled ​out by a decline in business and government investments.

Business capital investment fell 0.7 percent, its fifth consecutive ​quarterly decline, StatsCan said.

On ⁠a monthly basis, GDP in March declined by 0.1 percent, against an estimate of flat growth.

An advance estimate from StatsCan showed that growth in April was likely to be 0.4 percent, highlighting a strong start to the second quarter.

Money markets are pricing in a rate hike of 25 basis ⁠points in ​December, even as most economists have called for no change in interest rates all ​through the year.

The Canadian dollar weakened after the GDP data and was trading down 0.28 percent to C$1.3819 to the US dollar, or 72.36 US cents. Yields on the ​two-year government bonds slipped further and were down 7.7 basis points at 2.430 percent.

The government has raised the retail price of octane, petrol and kerosene prices by Tk5 per litre for June though diesel price remain unchanged.

The energy division said the June price was adjusted in line with the international oil market movements.

According to a notification issued by the Energy and Mineral Resources Division on sunday, the price of octane has been set at Tk145 per litre effective from 1 June, up from Tk140 per litre in the previous month.

Petrol prices have also been increased by Tk5 per litre to Tk140, while kerosene has risen by the same amount to Tk135 per litre.

However, the price of diesel, the country's most consumed fuel, has been retained at Tk115 per litre.

The government said the revised rates were determined in line with changes in global petroleum product prices.

Under the new pricing structure, octane remains the most expensive fuel in the domestic market, costing Tk5 more than petrol and Tk30 more than diesel.

The latest increase marks the first upward adjustment oil prices in recent months.

The revised fuel prices will come into effect from Monday (1 June).

Depositors of six troubled non-bank financial institutions (NBFIs) yesterday demanded that the government issue a gazette notification ensuring full repayment of their deposits, along with profits, by the end of this year.
Speaking at a press conference at the National Press Club, an alliance of the affected depositors claimed that they were being kept in the dark about the government’s plans for them.
Neither the Bangladesh Bank nor the finance ministry had officially communicated with them despite a silent protest and memorandum submitted on May 6, they said.

In a press statement, the alliance said around 12,000 depositors were still waiting for clarity regarding the fate of their savings, many of whom had been unable to access their money since 2019.
“We are only hearing things through the media. No ordinance has been issued yet. No official government order has reached us,” said Jafar Ullah Khan, convenor of the Alliance of 6 NBFIs Depositors Recovery Committee.

“We will not accept any under process language as an alternative to a legal commitment. Issue the gazette notification. Fix a timeframe. Give it in writing,” he added.

The alliance argued that the central bank must take responsibility for ensuring their payment as the depositors had placed their life savings in institutions approved by the regulator.

The depositors did not gamble or make risky investments, they said, adding that teachers, pensioners, widows, and retired individuals deposited their savings relying on the regulator’s approval of the institutions.The depositors also rejected any proposal to return only the principal amount without profits.
Kawsar Hossain Chowdhury, co-founder and coordinator of the alliance, said contractual profits were promised under the deposit schemes and depositors should not bear losses caused by institutional failures and regulatory negligence.“Now, we are being offered only the principal money back -- as if years of waiting have no value, as if inflation does not exist,” he said.

Citing inflation data and contractual deposit rates, the alliance claimed that a depositor who invested Tk 10 lakh in 2019 had effectively suffered a loss of more than Tk 12 lakh due to inflation and loss of profit income.The platform also demanded criminal proceedings against directors, officials, and default borrowers responsible for the collapse of the institutions.

It called for recovery of assets from defaulters, publication of a public register naming responsible individuals, and ensuring that no one is exempted from liability.Munira Khan, former member of the National Human Rights Commission, said the affected depositors were not beggars seeking aid for underprivileged people, but rather demanding the return of their own funds stuck in the NBFIs.

She said they wanted an implementable roadmap for refunding the money, not verbal promises.The Bangladesh Bank did not issue any warning while the institutions, that the regulator itself had approved, were being looted, said Prof Farid Rashid Kamal, who is also one of the affected depositors.

Auditors and credit rating agencies also presented rosy pictures of the NBFIs, he added, noting that all those responsible for safeguarding the institutions failed in their duties.

“Now, it is a moral duty of the government to ensure the return of the funds,” he added.

Bangladesh's apparel exports to the European Union (EU) fell 19.26 percent year-on-year to €2.89 billion in January-February this year, according to data from Eurostat.

Exports stood at €3.57 billion during the same period a year earlier.

In terms of volume, Bangladesh’s apparel exports to the bloc declined 11.14 percent to 205.52 million kilogrammes during the two-month period.

Eurostat data also showed a decline in unit prices, with the average export price per kg falling 9.13 percent year-on-year to €14.04.

February saw export value falling 12.39 percent, volume dropping 3.30 percent, and unit prices declining 9.39 percent on a year-on-year basis.

During the January-February period, China’s apparel exports to the EU rose to €4.20 billion, although export value posted a negative growth of 4.01 percent. Unit prices declined 5.27 percent, while export volume increased 1.34 percent.

Meanwhile, Turkey recorded a 22.91 percent decline in apparel exports to the EU to €1.20 billion, while Vietnam posted a 2.06 percent fall to €711.73 million despite a 6.56 percent rise in unit prices.

During the same period, the EU’s total apparel imports saw negative growth at 11.27 percent year-on-year to €13.83 billion.

Apparel imports by the bloc also fell 6.23 percent in volume, while average unit prices declined 5.38 percent in 2026.

India's growing reliance on Venezuelan crude comes as the closure of the Strait of Hormuz disrupts a major corridor for its oil imports, forcing a rapid shift in supply chains and energy diplomacy.

What is driving the crisis?

The escalation of conflict involving Iran has led to the closure of the Strait of Hormuz, a key maritime route through which nearly half of India's crude oil imports typically pass. A US naval blockade of Iranian ports has also halted Iranian shipments to India this month. Reports Al Jazeera.

At the same time, supply from other Gulf partners has tightened. Imports from Saudi Arabia have fallen sharply from about 670,000 barrels per day in April to roughly 340,000 barrels per day in May. Indian officials have also raised concerns about maritime security after multiple incidents involving India-linked vessels, including one ship that sank following a suspected attack.

Why is India turning to Venezuela?

With Gulf flows constrained, India has increased imports from Venezuela, which now ranks as its third-largest crude supplier this month.

Shipments have risen by nearly 50% from April to around 417,000 barrels per day in May, after a nine-month period with no exports to India.

The country holds the world's largest oil reserves, estimated at 303 billion barrels, and about 17% of global totals. Its re-emergence as a supplier is also linked to shifts in US policy following the removal of former President Nicolas Maduro by US forces in January 2026, which led Washington to push Venezuelan crude into global markets.

What role is the United States playing?

The United States is actively shaping this realignment. US Secretary of State Marco Rubio is visiting India from (23–26 May) to discuss energy security and trade, with Washington signalling it wants to sell India "as much energy as they'll buy".

At the same time, the US is encouraging Venezuelan exports to reduce Iran's leverage in negotiations and to push diversification away from Russian oil.

Venezuelan Acting President Delcy Rodriguez is also expected in India next week to discuss future oil sales.

Can Venezuelan crude replace Gulf supply?

Venezuela's crude is ultra-heavy and sulphur-rich, making it harder to process in many refineries. However, it is considered well suited for Reliance Industries' Jamnagar refinery in Gujarat, one of the few global facilities designed to handle such grades efficiently.

This compatibility gives India a limited but important alternative supply option as Gulf flows remain disrupted.

However, the scale of Venezuela's current exports to India—around 417,000 barrels per day—remains well below the combined volumes historically sourced from Gulf suppliers, particularly during normal Strait of Hormuz operations.

What does this shift mean globally?

The US-backed reopening of Venezuelan oil flows is also seen as part of a broader effort to reshape global energy supply chains. The strategy aims to reintegrate Venezuela's oil sector—home to the world's largest reserves—into global markets while reducing leverage held by Iran and Russia.

US companies including Chevron currently produce about 250,000 barrels per day in Venezuela, while ExxonMobil is reportedly seeking to re-enter the country after nearly two decades.

Venezuelan oil is helping India offset some immediate supply disruptions from the Gulf, but it does not fully replace the scale or strategic importance of routes affected by the Hormuz closure.

The shift instead reflects a broader reordering of energy flows, where Venezuela is becoming a temporary pressure valve in a system still heavily exposed to geopolitical risks in the Middle East.

Only one bank will be able to pay cash dividends next year after the Bangladesh Bank barred lenders with paid-up capital below Tk 2,000 crore from making such payouts.

In a circular issued yesterday, the Bangladesh Bank (BB) said the move is aimed at strengthening the capital base of the banking sector. It also seeks to improve the ability of commercial lenders to absorb future risks amid a challenging global and domestic financial environment.

Only BRAC Bank and National Bank PLC (NBL) meet the higher paid-up capital threshold among listed lenders.

However, National Bank remains in significant losses, leaving BRAC Bank as the only institution effectively positioned to meet the requirement for cash dividend payments.

Even for banks that meet the paid-up capital threshold, the central bank has capped cash dividends at 50 percent of the declared payout, with the remainder to be issued as stock dividends.

The new rules will take effect from dividend declarations for the year ending December 31, 2026 and onwards, according to the Supervision Policy and Coordination Department of Bangladesh Bank.

The policy is expected to affect most listed banks, raising concerns among market participants about shareholder returns.

While the measure may improve the resilience of the banking sector in the long run, it is likely to reduce flexibility for banks that are otherwise financially stable.

Mashrur Arefin, chairman of the Association of Bankers, Bangladesh (ABB), the apex body of the country’s commercial bank executives, said, “This is a good move towards strengthening the capital base of the banks.”

He said a few banks with weak capital bases did take cash out in the past. But the shareholders of healthy banks will now suffer. “That’s not good.”

The ABB chairman said the dividend rule should instead have been linked to the Capital Adequacy Ratio, which he argued would have been fairer for shareholders of well-performing banks.

“Shareholders have a reasonable expectation of cash returns when a bank is performing well. That incentive for supporting strong banking institutions is being overlooked,” said Arefin, who is also managing director and chief executive officer of City Bank.

“This will not help our agenda to encourage people to go to the capital market for their investments. I don’t know why CAR wasn’t considered. Is it because the government is seeking higher credit growth? But that connection is too distant.”

Banks can raise paid-up capital through rights shares to meet the Tk 2,000 crore threshold and retain eligibility for cash dividends. A rights issue allows existing shareholders to buy additional shares, usually at a discounted price, in proportion to their current holdings.

Asif Khan, president of CFA Society Bangladesh, also opposed linking dividend eligibility to paid-up capital, suggesting it should instead be tied to shareholders’ equity, capital adequacy ratio and provisioning levels.

He said that only one bank now effectively meets the Tk 2,000 crore threshold. So, most of the commercial lenders will be unable to pay cash dividends from next year, which could affect the capital market.

According to Dhaka Stock Exchange (DSE) data, National Bank PLC has the highest paid-up capital among listed lenders at Tk 3,219 crore, followed by BRAC Bank at Tk 2,289 crore and City Bank at Tk 1,749 crore.

Other major lenders include Eastern Bank (EBL), Islami Bank Bangladesh, United Commercial Bank, Pubali Bank, Bank Asia, Southeast Bank and Prime Bank, all of which fall below the paid-up capital threshold.

EBL’s paid-up capital stands at Tk 1,643 crore, Islami Bank Bangladesh’s at Tk 1,609 crore and United Commercial Bank’s at Tk 1,550 crore, according to Dhaka Stock Exchange (DSE) data.

Pubali Bank has Tk 1,496 crore, Bank Asia Tk 1,391 crore and Southeast Bank Tk 1,373 crore, while Prime Bank’s paid-up capital is Tk 1,218 crore.

Khan said many of these banks maintain strong capital adequacy ratios and have no provisioning shortfalls.

“So, why would they be barred from giving cash dividend?”

He also pointed to a possible policy conflict with the National Board of Revenue (NBR), which imposes higher tax on listed firms that do not pay cash dividends.

The Bangladesh Bank said the decision was taken considering the overall condition of the banking sector, depositor protection, financial resilience and the need to strengthen capital conservation buffers.

A senior central bank official said the policy was intended to improve the health of the banking sector and protect depositors’ interests.

Other eligibility criteria for dividend payout would remain unchanged, he added.

The Dhaka Stock Exchange (DSE) extended its rally for a fourth consecutive session today (23 May), as investor confidence strengthened following Finance and Planning Minister Amir Khosru Mahmud Chowdhury's pledge to ensure professional and skilled leadership at key financial institutions.

Speaking at a policy symposium in the capital, Finance and Planning Minister Amir Khosru Mahmud Chowdhury announced a complete ban on political appointments in the financial sector, including the Bangladesh Securities and Exchange Commission (BSEC).

He said the government would appoint only professional and competent individuals to key regulatory positions in a bid to restore investor confidence and strengthen corporate governance.

The announcement boosted market sentiment, triggering a broad-based rally and adding significantly to market capitalisation, according to market insiders.

The benchmark DSEX index rose 64 points, or 1.22%, to close at 5,328. Over the past four trading sessions, the index has gained a cumulative 125 points.

The blue-chip DS30 index also advanced strongly, climbing 34 points to finish at 2,030.

Market breadth remained positive, with 217 issues advancing, 117 declining, and 60 remaining unchanged.

Total market capitalisation at the premier bourse increased by Tk5,400 crore in a single day, while turnover rose 4% to Tk902 crore.

The minister also said the government would prioritise improving auditing standards and financial disclosure requirements to rebuild market credibility and attract foreign institutional investors.

According to EBL Securities' daily market review, the market opened strongly from the first trading bell, supported by aggressive buying in large-cap banking and telecom stocks.

The brokerage house said expectations of meaningful reforms, early signs of domestic macroeconomic stabilisation, and easing geopolitical tensions around the Strait of Hormuz – which had earlier dampened investor risk appetite – helped sustain the rally ahead of the Eid holidays.

Banking and telecom stocks led the gains, with major index contributors including BRAC Bank, Grameenphone, Robi Axiata, Square Pharmaceuticals, and City Bank.

Sector-wise, engineering stocks dominated turnover, accounting for 15.7% of total transactions, followed by pharmaceuticals at 15.4% and general insurance at 12.9%.

The cement sector posted the highest gain, rising 3.3%, followed by services at 2.8% and banking at 2.1%. The information technology sector was the only major laggard, declining 1.9%.

Several loss-making companies also featured among the day's top gainers, indicating renewed speculative activity among some investors. Meghna Cement Mills topped the gainers' list with a 9.86% rise, followed by Emerald Oil Industries, Aramit Cement, Regent Textile Mills, and Sena Insurance.

On the losing side, Daffodil Computers shed 9.36%, followed by Premier Leasing & Finance, Apex Spinning & Knitting Mills, and CAPM BDBL Mutual Fund 01.

In terms of liquidity, Asiatic Laboratories emerged as the most traded stock, followed by NCC Bank, RD Food, Mir Akhter Hossain, and Jamuna Bank.

The upbeat mood also spilled over to the Chittagong Stock Exchange (CSE), where key indices posted sharp gains. The Selective Categories' Index (CSCX) rose 81 points to 9,131, while the All Share Price Index (CASPI) gained 138 points to close at 14,838.

However, turnover at the port city bourse fell 20% to Tk24 crore.

Bangladesh’s public debt rose to around 41 percent of gross domestic product (GDP) in fiscal year 2024-25, with rising domestic borrowing and weak revenue mobilisation increasing fiscal pressure ahead of the country’s graduation from least developed country (LDC) status in 2026, the Asian Development Bank (ADB) said.

In a report titled Bangladesh at a Crossroads of Reforms, released earlier this month, the Manila-based lender said Bangladesh faces a moderate risk of both external and overall debt distress, with limited capacity to absorb shocks in the near term.
The ADB said the risks stem from structural weaknesses rather than a sharp deterioration in headline debt indicators.
Bangladesh’s tax-to-GDP ratio remains among the lowest among lower-middle-income economies, while persistent weaknesses in fiscal governance, public expenditure management and debt administration continue to undermine economic stability, the report said.
The lender warned that Bangladesh’s graduation from LDC status in November 2026 would gradually reduce access to concessional financing and trade support measures, increasing the need for stronger domestic revenue mobilisation and improved fiscal governance.

Domestic debt accounted for 55.6 percent of the country’s public and publicly guaranteed debt stock in FY25, increasing rollover and debt-servicing pressures amid weak revenue collection and a bank-dominated investor base. External debt made up the remaining 44.4 percent.

The report said external debt remained largely concessional and below solvency thresholds, although risks have increased following downward revisions to export data for FY2023 and FY2024.

Rising domestic borrowing is also increasing debt service-to-revenue pressures and strengthening sovereign-bank linkages, amplifying crowding-out risks for private sector credit and contingent liabilities, the ADB said.

Stress tests showed that disaster-related shocks pose the biggest long-term threat to Bangladesh’s debt sustainability.
Bangladesh’s tax-to-GDP ratio stood at 7.5 percent, constrained by weak compliance systems, fragmented administration and heavy reliance on manual processes.

Although reforms such as the Income Tax Act 2023 and expanded digital tax services have been introduced, the ADB said tax administration still relies heavily on manual systems and fragmented databases. Revenue collection often falls more than 15 percent short of targets because of unrealistic projections and institutional weaknesses.

The report also highlighted weaknesses in debt management systems and warned that state-owned enterprises are creating additional fiscal risks as liabilities and government guarantees continue to rise.

The lender said these vulnerabilities are increasing Bangladesh’s overall fiscal risk exposure at a critical stage of its economic transition.

The rate of development spending improved marginally in the first ten months of the current fiscal year 2025-26, but the amount of money spent during the period was actually lower compared to a year earlier.

Spending under the Annual Development Programmes (ADP) stood at Tk 86,516 crore during the July-April period, or 41.41 percent of the total revised allocation, according to data released yesterday by the Implementation Monitoring and Evaluation Division (IMED). In April alone, spending rose 5.22 percent.

The ten-month execution rate is slightly higher than the 41.31 percent achieved during the same period of FY25 but is Tk 6,908 crore less in absolute terms.

The revised ADP allocation for FY25 stood at Tk 2.16 lakh crore, while it was Tk 2.08 lakh crore for FY26.

The marginal uptick in the execution rate does little to reverse a multi-year slide in budget implementation.

The 10-month ADP execution rate stood at 49.26 percent in FY24, 50.33 percent in FY23, and 54.57 percent in FY22.

In FY25, the full-year development spending hit a historic low, with only 68 percent of the revised ADP implemented, the weakest performance since FY1976-77.

The decline in the actual money spent reflects the disruption of a mid-year political transition following the uprising, which prompted several project directors and contractors to step away from their positions. Economic uncertainty compounded the slowdown.

The Health Services Division has performed the worst, implementing only 22.15 percent of its July–April target despite rising concerns over healthcare access.

With two months left in the fiscal year, analysts say Bangladesh is on course for another year of weak ADP execution.

The shortfall may also dent revenue collection by the National Board of Revenue, which collects advance income tax and VAT from implementing agencies. However, lower execution could also help contain the budget deficit and reduce government borrowing from the banking sector.

Among top-allocated ministries, the Ministry of Science and Technology’s execution rate stands at 80 percent, driven largely by the Rooppur Nuclear Power Plant expenditures.

The Energy and Mineral Resources Division follows at 68 percent, and the Ministry of Agriculture at 62 percent.

Meanwhile, despite the sluggish implementation trend, the new BNP-led government has announced an ambitious development budget of Tk 3 lakh crore for the upcoming FY27.

Bangladesh Bank yesterday announced a Tk 60,000 crore stimulus package aimed at reviving the struggling private sector amid slowing growth and persistent inflation concerns.

Announcing the package at a press briefing at the central bank headquarters, BB Governor Md Mostaqur Rahman said the initiative was designed to address industrial disruption and financial sector vulnerabilities while supporting employment generation.

The package has two main components.

The first is a Tk 41,000 crore refinancing fund to be mobilised from banks with surplus liquidity through long-term deposits of at least three years at a 10 percent interest rate. Under the arrangement, Bangladesh Bank will provide refinance at 4 percent interest, while the government will subsidise the remaining 6 percent.

The second component is a Tk 19,000 crore fund sourced directly from the central bank’s own resources with a government guarantee.

Under the overall scheme, large borrowers will be able to access loans at around 7 percent interest, while smaller loans may carry slightly higher rates because of administrative and operational costs. Detailed implementation guidelines will be issued through upcoming circulars, the central bank said.

A major portion of the refinancing fund -- Tk 20,000 crore -- has been allocated for reopening closed factories, making it the single largest allocation. Another Tk 10,000 crore has been earmarked for agriculture and rural economic activities.

The cottage, micro, small and medium enterprise (CMSME) sector will receive Tk 5,000 crore, while Tk 3,000 crore each has been allocated for export diversification and the North Bengal Agricultural Hub initiative.

The Tk 19,000 crore BB-funded portion will support 10 targeted schemes, including pre-shipment export financing, CMSME support, overseas employment financing, startup funding, and youth-focused employment programmes.

This is the largest stimulus package since the then government provided Tk 2,37,679 crore under 28 separate programmes to ensure a quick economic recovery from the fallout of the Covid-19 pandemic.

According to the governor, the latest package is expected to generate more than 25 lakh jobs across industries, SMEs, agriculture, exports, startups, and youth employment initiatives.

Mostaqur said Bangladesh’s GDP growth has slowed significantly over the past three years, falling from 5.8 percent to 4.2 percent and likely declining further to around 3.7 percent.

He attributed the slowdown to disruptions in industries including garments, textiles, steel, ceramics, information technology, and broader manufacturing.

He also pointed to mounting stress in the financial sector, including a sharp rise in classified loans, declining depositor confidence, and high borrowing costs that have discouraged SME expansion.

The governor further cited capital flight and alleged illicit financial outflows, saying financial irregularities had weakened the banking system and intensified liquidity pressures.

Despite the central bank’s optimism, bankers and economists have expressed concern over the package’s design, funding structure, implementation feasibility, and possible inflationary impact.

Mashrur Arefin, chairman of the Association of Bankers, Bangladesh (ABB), described the package as “an excellent plan” but said effective implementation would be crucial.

He questioned the sourcing of the fund, arguing that banks’ surplus liquidity is already largely invested in treasury bills and bonds. He also noted that banks need to maintain some idle funds for day-to-day operations, limiting their ability to participate.

Mashrur suggested that instead of relying solely on bank deposits, Bangladesh Bank could inject liquidity by lowering the repo rate against treasury bills and bonds or reducing the cash reserve ratio (CRR).

According to him, such measures would make the package more workable and allow banks to lend at the intended 4 percent spread.

He also acknowledged that the initiative could fuel inflation, but said boosting employment and economic activity was also necessary under current conditions.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, also supported the intent but warned that implementation would be difficult.

He said banks are unlikely to lend to closed or failed factories because of the high risks involved. Restarting such units would require operational restructuring, management changes, workforce rehiring, and resolution of underlying financial and operational problems.

If revival efforts fail, banks risk losing their funds entirely, he said.

Mahbubur said credit growth has slowed to around 4.7 percent not because of a liquidity shortage, but due to a lack of viable borrowers. He also cited structural bottlenecks -- including inadequate infrastructure, weak law enforcement, and energy shortages -- as major constraints on investment.

Even operational factories are struggling because of gas shortages and rising electricity and energy costs, he said, adding that unresolved Covid-era stimulus loans continue to burden the banking sector.

He warned that because Bangladesh Bank would eventually recover refinance funds from commercial banks when schemes mature, the package could add further pressure on lenders already grappling with high default rates.

Responding to journalists’ questions at the briefing, the governor clarified that the package does not involve printing new money, but rather reallocating idle liquidity already present within the banking system.

He said some banks have excess liquidity while others face shortages, and the objective is to channel idle funds into productive sectors through refinancing mechanisms.

Mostaqur also said Tk 6,000 crore from the Tk 19,000 crore central bank allocation had already been deployed from BB’s surplus funds. He said the central bank earns around Tk 20,000 crore annually in profit, allowing it to finance the initiative without triggering inflation through money creation.

The governor also acknowledged weaknesses in previous stimulus programmes, particularly during the Covid-19 period, when a small number of large business groups reportedly received a disproportionate share of funds.

He said stricter monitoring and safeguards would be introduced this time to prevent concentration of benefits and improve accountability.

Mostaqur further admitted the depth of the banking sector crisis, saying a significant amount of banking funds had been lost through irregularities, loan scams, and financial mismanagement.

Many of these bad loans, he said, were not traditional defaults caused by business failure, but funds siphoned off without adequate collateral.

As part of the overall package, Bangladesh Bank also announced a Tk 500 crore fund from corporate social responsibility (CSR) resources to support creative industries. Unlike the stimulus loans, this fund will not require repayment.

Economists, however, remained cautious.

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said the package appeared well-intentioned but lacked sufficient evaluation and consideration of alternatives.

He argued that controlling inflation should remain the top priority and warned that such stimulus measures could intensify price pressures and increase public hardship.

He also noted that stimulus alone does not guarantee improvement in underperforming sectors and that global experience shows such measures can sometimes fuel inflation and create additional macroeconomic imbalances.

Zahid Hussain, former lead economist of the World Bank’s Dhaka office, described the package as a countercyclical measure typically suited to periods of weak demand and low inflation.

However, he said Bangladesh currently faces a more complicated situation, with slowing growth alongside persistently high inflation.

Under such conditions, he warned, additional stimulus may not necessarily increase output and could instead push prices up faster than production if supply-side constraints remain unresolved.

The implementation of the Revised Annual Development Programme (RADP) recorded a slow pace during the first ten months (July-April) of the current 2025-2026 fiscal year, hitting an execution rate of 41.41 percent.

According to the latest report released by the Implementation Monitoring and Evaluation Division (IMED) of the Ministry of Planning, government agencies spent Tk 86,516.08 crore out of the total RADP allocation of Tk 2,08,935.53 crore earmarked for the fiscal year, UNB reports.

This performance indicates a notable slowdown in project execution compared to previous fiscal years, highlighting persistent challenges in administrative momentum and development spending following recent structural and political changes.

An analysis of the IMED data reveals a consistent downward trajectory in both RADP allocations and execution rates over the last few fiscal years.

In the current FY 2025-2026, out of a reduced RADP allocation of Tk 2,08,935.53 crore, the ten-month expenditure stands at Tk 86,516.08 crore, reflecting an execution rate of 41.41 percent.

During the same July-April period of FY 2024-2025, the expenditure was Tk 93,424.83 crore against an allocation of Tk 2,26,166.88 crore, yielding an implementation rate of 41.31 percent.

In FY 2023-2024, the implementation rate stood significantly higher at 49.26 percent with an expenditure of Tk 1,25,315.68 crore out of a Tk 2,54,391.64 crore allocation.

For FY 2022-2023, the execution rate was 50.33 percent with Tk 1,19,064.39 crore spent out of Tk 2,36,560.67 crore.

In FY 2021-2022, the 10-month implementation reached 54.57 percent, with an expenditure of Tk 1,19,829.74 crore out of Tk 2,19,601.91 crore.

The monthly progress for April also reflected a sluggish development drive.

In April 2026 alone, the government managed to implement only 5.22 percent of the development budget, translating to an expenditure of Tk 10,908.84 crore.

This single-month progress is slightly higher in percentage than the previous year's performance, where April 2025 recorded a 4.66 percent implementation rate with a spending of Tk 10,530.75 crore, but it remains heavily constrained compared to historical trends. Planning Ministry officials cited multiple structural issues contributing to the slower release and utilisation of development funds this fiscal year.

The primary setbacks include the ongoing rigorous review of development projects to realign national priorities, which has temporarily paused funds for several major initiatives.

Furthermore, administrative reshuffles, delays in appointing new project directors, and strict compliance checks on new procurements have extended execution timelines.

The exit or inactivity of several contracting firms following political transitions late last year has also left numerous physical infrastructure projects partially stalled.

With only two months left in the current fiscal year (May and June), ministries and execution agencies face tremendous pressure to fast-track their pending bills and accelerate construction phases if they are to prevent large sums of development funds from returning unutilized.

The European Union and Mexico will on Friday sign a deal reducing tariffs on each other's goods as both seek to lessen their dependence on trade with the United States.

The expansion of an accord dating to 2000 comes as Mexico fights hard to preserve a three-way free trade agreement with the United States and Canada, which is crucial to all three economies.

The EU is Mexico's third-largest trading partner, lagging far behind the United States and China.

Mexican President Claudia Sheinbaum has stressed the importance of "opening other horizons" at a time when both Mexico and the European Union are grappling with US President Donald Trump's tariff offensive.

The updated agreement to be signed by Sheinbaum and European Commission President Ursula von der Leyen during the eighth EU-Mexico Summit removes most remaining barriers to trade and investment.

It facilitates trade in auto parts, a sector particularly affected by Trump's tariffs.

"Mexico wants to reduce its dependence on its northern neighbor, but also on Asian, or rather, Chinese, supply chains, and in Europe we are pursuing the same objectives," an EU official told AFP on condition of anonymity.

On a visit Thursday to Mexico City, the EU's foreign policy chief Kaja Kallas, said the deal would create new opportunities for "both economies to compete globally" and build on the momentum of the past decade, which has seen a 75-percent leap in EU-Mexican trade.

Earlier this week, the European Union moved to end a trade standoff with Trump by agreeing to implement a deal signed last year with the United States, which sets tariffs on most European goods at 15 percent.

Average US tariffs on Mexican goods are a quarter of that -- with many avoiding levies altogether under the USMCA (United States, Mexico, Canada) agreement.

The lower tariffs enjoyed by Mexico will benefit the European Union, according to Sergio Contreras, president of the Mexican Business Council for Foreign Trade.

Mexico will be "the point of convergence, the platform for the European Union and North America to come together," he said.

Bangladesh Bank has issued new directives for commercial banks regarding the declaration and distribution of cash dividends to shareholders, apparently to enhance the financial capacity of banks and reinforce the overall capital base of the banking sector.

Banks with a paid-up capital of less than Tk2,000 crore will not be allowed to declare any cash dividends, according to a circular issued by the central bank today (23 May).

Also, the banks that meet all statutory requirements and qualify to distribute profits can pay a maximum of 50% of their total declared dividends in cash.

The directives will come into effect from 31 December 2026.

The central bank clarified that while these new measures introduce stricter caps, all other existing instructions from previous relevant circulars, including the DOS circular issued on 13 March 2025, will remain fully effective.

No bank except BRAC Bank allowed to offer cash dividends

Under the new directives, only BRAC Bank will be allowed to declare cash dividends. Meanwhile, although National Bank has paid-up capital above the required target, it will not be able to provide dividends due to its high volume of non-performing loans.

A review of the data shows that among the currently well-performing banks in the capital market, none of the top-ranked banks in various indices, including The City Bank, Eastern Bank, Mutual Trust Bank, Prime Bank and Dutch-Bangla Bank, will be able to declare cash dividends.

Mashrur Arefin, managing director and CEO of City Bank, told TBS that the move has merit from a financial stability perspective, as some banks distributed high cash dividends despite weak capital positions.

He, however, expressed concern that the policy treats both strong and weak banks equally, which could negatively affect the stock market and investor confidence.

Mashrur said shareholders of well-managed banks deserve cash returns when banks perform consistently well, questioning why the Capital Adequacy Ratio (CAR) was not considered a key factor, arguing that banks with stronger CAR positions, such as 17-18% instead of the minimum 12.5%, should be allowed to provide cash dividends.

He also said he is waiting to see how tax regulations align with the new policy.

The move to strengthen banks' capital base is positive, as some weak banks previously paid excessive cash dividends despite poor financial conditions, said Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank.

A better approach would have been linking dividend approvals to the CAR, a practice followed in many countries, he said, notifying that Bangladesh's banking sector remains undercapitalised by global standards, while bank shares often fail to reflect actual performance.

Preventing well-capitalised banks from paying cash dividends could further weaken the stock market and reduce incentives for investors supporting financially stable institutions, added Syed Mahbubur.

Twenty-seven countries have moved since the Iran war started to put in place crisis instruments that could quickly access funding from existing World Bank programmes, according to an internal document viewed by Reuters.

The World Bank document did not name the countries or the total amount of funds potentially being sought. The World Bank declined to comment.

The document showed that three countries had approved new instruments since the Middle East conflict began on 28 February while the others were still completing the process.

The war and resulting disruption of global energy markets have hit global supply chains and prevented vital fertiliser shipments from reaching developing countries.

Officials in Kenya and Iraq have confirmed they are seeking rapid financial support from the World Bank to deal with the war's fallout, such as surging fuel prices hitting the African nation and a massive drop in oil revenue for Iraq.

The 27 countries are among 101 that had access to some form of pre-arranged financing instrument that they could tap in a crisis, including 54 that signed up to the Rapid Response Option, which allows countries to use up to 10% of their undisbursed financing.

World Bank President Ajay Banga last month said the bank's crisis toolkit would allow countries to draw on pre-arranged contingent financing, existing project balances and fast-disbursing instruments to access an estimated $20 billion to $25 billion.

He said the bank could also reorient parts of its portfolio to bring the total to $60 billion over six months, with further longer-term changes possible to bring the total to around $100 billion.

At the time, the head of the International Monetary Fund, Kristalina Georgieva, said she expected up to a dozen countries to seek $20 billion to $50 billion in near-term assistance from the global lender. But few requests have been logged, according to three sources familiar with the matter.

"Countries are definitely in wait-and-see mode," said one of the sources, who spoke on condition of anonymity.

Kevin Gallagher, director of the Global Development Policy Centre at Boston University, said countries were more willing to seek World Bank funds than negotiate with the IMF because IMF programmes generally require austerity measures that could compound the social unrest already seen in countries like Kenya.

Amid economic stress triggered by the Middle East war, the government had set a target of securing at least $3.2 billion in budget support from development partners, but the response has so far reached only about half of expectations.

As an alternative, authorities have begun repurposing the remaining funds through loans from ongoing development projects that are not immediately required.

Officials at the Economic Relations Division (ERD) said repurposing could unlock more funds than traditional budget support, allowing flexibility for critical spending for energy and food.

A letter sent by the Finance Division on 12 April asked the ERD to take steps to secure the $3.2 billion. However, the government has so far received assurances of $1.665 billion, ERD officials said.

This includes $1 billion from Asian Development Bank (ADB), $315 million from Japan, $250 million from the Asian Infrastructure Investment Bank (AIIB), and $100 million from Opec.

The government is also working on repurposing around $1.6 billion from development projects, officials said, adding the process is ongoing and the figure is likely to get higher.

An ERD senior official told The Business Standard that low-impact and slow-moving projects are being reviewed for repurposing, in consultation with development partners.

The reallocated funds will be channelled into short-term, one-year interventions in energy, food security and social protection. This, officials said, will help address immediate pressures while improving disbursement efficiency and ensuring more effective use of external loans.

ADB providing $1 billion support

ERD officials said the government had sought the full $1 billion in budget support from the ADB for the current fiscal year, which is now being received. Officials added that two budget support agreements are set to be signed on Monday in the presence of the ADB president.

Under the Second Strengthening Social Resilience Program, the ADB will provide $250 million as budget support. Under the Strengthening Economic Management and Governance, the ADB will extend a further $750 million.

ERD officials also said that $250 million will be reallocated from projects that have long remained stalled in implementation and disbursement.

WB prioritising repurposing

Amid shifting priorities in external financing, the World Bank is leaning more towards loan reallocation rather than fresh budget support for Bangladesh in the current fiscal year.

According to ERD sources, the government had formally sought at least $500 million from the lender under the Green and Climate Resilience Development Policy Credit. However, no final decision on budget support has been received so far.

A senior ERD official said Bangladesh is unlikely to receive budget support this fiscal year. Instead, the focus has shifted to repurposing unused pipeline loans.

A review of ongoing World Bank-financed projects shows that around $1.835 billion could potentially be mobilised through faster disbursement and reallocation for urgent needs.

Of this, a $785 million contingency fund has already been created under the Rapid Response Option (RRO) and Contingent Emergency Response Project (CERP) framework by reallocating funds from eight projects.

These include $239 million from the Gas Sector Efficiency Improvement and Carbon Abatement Project, $30 million from the Jamuna River Sustainable Management Project-1, $60 million from the Learning Acceleration in Secondary Education Operation, $15 million from the Road Safety Project, $95 million from the Resilient Urban and Territorial Development Project, $140 million from the Chattogram Water Supply Improvement Project, $74.4 million from the Regional Waterway Transport Project-1, and $134.6 million from the Environmental Sustainability and Transformation Project.

Officials said the government has decided to use this money under the CERP mechanism, which allows rapid deployment of funds for emergency imports of food, fuel and medicines.

The facility remains valid for up to six years, with individual activities limited to one year. Necessary omnibus amendments will be made to existing financing agreements, while the Finance Division will prepare the implementation framework.

The CERP mechanism allows unused funds from ongoing projects to be quickly redirected during sudden crises, without requiring lengthy new project approvals.

Separately, the government is set to introduce for the first time a $250 million emergency Investment Project Financing (IPF) facility, designed for rapid use similar to the RRO-CERP.

ERD sources said the $250 million IPF is not new borrowing, but a consolidation of cancelled or unused allocations from World Bank projects scheduled to close in FY26.

AIIB to provide $250m against $750m request

The government had sought $750 million in budget support from the AIIB. However, the lender has agreed to provide $250 million under the "Strengthening Economic Management and Governance" programme.

An additional $350 million is set to be reallocated from an ongoing AIIB-financed project. The funds will be diverted from the "Sylhet–Tamabil Road to a 4-Lane Highway" project.

ERD officials said disbursement under the road project has remained stalled for a long time due to complications in land acquisition. As a result, the government has decided to restructure the loan and repurpose the unused funds.

Japan trims support to $315m from $500m

The Japan International Cooperation Agency (Jica) initially agreed to provide $500 million in budget support in the current fiscal. The amount has since been reduced to $315 million.

Finance officials said the loan will be used in line with IMF recommendations. The support is expected to help increase social protection spending, strengthen revenue management.

Meanwhile, the government is set to receive $100 million in budget support from the Opec Fund (OFID) to help meet urgent financial pressures. However, requests for $200 million from France and $150 million from Germany remain uncertain, according to ERD sources.

ERD data show Bangladesh received a record $3.44 billion in budget support in FY25 from development partners. This compares with $2.03 billion in FY24, $1.767 billion in FY23, $2.597 billion in FY22 and $1.09 billion in FY21.