The International Monetary Fund (IMF) today (14 April) projected that Bangladesh's gross domestic product (GDP) will grow by 4.7% in the current fiscal year (FY26), before slowing to 4.3% in FY27.

The FY26 growth forecast remains unchanged from the IMF's January projection.

Bangladesh's inflation is now expected to rise to 9.2% in FY26, higher than the earlier estimate of 8.9%.

However, the global lender projects inflation to decline sharply to 6% in FY27.

Meanwhile, the government has set a provisional target of 6.5% GDP growth for the next fiscal year, aiming to return to a high-growth trajectory as part of its ambition to build a trillion-dollar economy by 2034.

The government is also targeting an inflation rate of 7.5% in FY27, which is higher than the IMF's projection.

The IMF's growth outlook is more optimistic than forecasts by the World Bank and the Asian Development Bank, both of which released their projections earlier this month.

On 8 April, the World Bank expected the country's economy to grow by 3.9% in the current fiscal year, before rising to 4.6% in FY27.

The World Bank warned that Bangladesh's economy faces significant challenges with slowing growth and rising poverty for three consecutive years, persistent inflation, a stressed banking sector, weak revenue mobilisation, and subdued private investment, which is further compounded by the headwinds from the conflict in the Middle East.

Meanwhile, on 10 April, Asian Development Bank's latest Asian Development Outlook April 2026 forecasted Bangladesh's gross domestic product (GDP) to grow by 4% in FY26 and 4.7% in FY27, up from 3.5% in FY25.

Inflation is projected to remain elevated at 9% in FY26, despite some easing, reflecting persistently high global energy prices and ongoing supply disruptions. It is expected to moderate to 8.5% in FY27 as external shocks subside and domestic supply conditions improve, reads the ADB report.

It was warned that the downside to the outlook remains substantial, particularly if the conflict is prolonged.

Disruptions to global energy markets, shipping routes, and supply chains could drive sustained increases in oil and gas prices, intensifying domestic inflationary pressures and complicating ongoing disinflation efforts, thereby constraining macroeconomic policy flexibility.

While the World Bank and Asian Development Bank had lowered Bangladesh’s GDP growth forecast due to the Persian Gulf crisis and domestic vulnerabilities, the International Monetary Fund has kept its earlier projection unchanged.

The IMF’s World Economic Outlook projects Bangladesh’s GDP growth at 4.7 percent for FY2025–26, which was the same as its earlier projection from January.

However, IMF's growth projection is set to dip further to 4.3 percent in the next fiscal.

The World Bank revised its projection down to 3.9 percent growth from 4.6, while the ADB revised its forecast down to 4 percent from its previous projection of 4.7 percent.

Former World Bank Lead Economist Zahid Hussain told The Daily Star that the IMF’s forecast “appears rather strange,” adding that “it is the same as projected in their Article IV report released in January 2026".

The absence of any impact of the war in the current fiscal year is inconsistent with their own assumption that economies with vulnerabilities and limited buffers are likely to be hit hardest. Bangladesh is one such economy.

He also said individuals and firms in Bangladesh have been living with the growth and inflation impact ever since the war started. There is no reason in fact or logic to believe Bangladesh will remain insulated from the impact of the war for four months.

Hussain notes that the IMF’s 4.3% growth projection for FY27 is more realistic if its reference scenario, in which the war shock fades by June, materialises.

The government, however, remains confident, insisting that GDP growth will reach 5 percent in 2026.

A ship named 'MT Great Princess' arrived at Chattogram Port carrying 12,000 tonnes of jet fuel from Singapore this morning (14 April).

The cargo was supplied by Indian Oil Corporation Limited.

Two more ships, 'MT Term Damini' and 'MT Lucia Solis', are expected to arrive tonight with a total of around 68,000 tonnes of diesel.

As of 12 April, Bangladesh had an estimated stock of 22,000 tonnes of jet fuel, which can meet the demand for about two weeks.

The recent consignment has slightly increased the stock. Jet fuel consumption has been relatively low, with 21,000 tonnes sold in the first 12 days of the month, averaging 1,758 tonnes per day, slightly higher than last year.

Diesel consumption is significant in Bangladesh, accounting for about 63% of total energy consumption. The arrival of the two diesel-carrying ships tonight will further contribute to the country's energy supply.

The demand for diesel is high across various sectors such as transport, agriculture, industry, and power. In April, the total demand is around four lakh tonnes according to BPC.

To meet this demand, a detailed import plan has been implemented throughout the month.

At the beginning of April, two ships delivered a total of 61,000 tonnes of diesel on 12 April. Despite this, the demand pressure has not completely eased. Between 1 and 12 April, 133,000 tonnes of diesel were sold at an average daily rate of 11,138 tonnes.

As of 12 April, the available diesel stock was approximately 119,000 tonnes, which could cover the demand for about 10 days.

With the addition of two new shipments, the stock may last a few more days, but the long-term relief depends on continuous imports.

Currently, over 11,000 tonnes of diesel are being sold daily in the country.

BPC Chairman Md Rezanur Rahman told journalists that efforts are being made to source fuel from alternative suppliers to prevent any major crisis this month.

He mentioned that several ships have already arrived, and more are expected to come to ensure an adequate fuel supply.

Bangladesh is scrambling to secure urea imports after an international tender floated last month failed to attract any bidders, with the Aman paddy, the country’s second-largest rice crop, due for planting in June.

Authorities met Russian representatives yesterday to explore a government-to-government deal. At the same time, Dhaka is approaching nearby producers such as Brunei, as well as more distant and less conventional suppliers, including Latvia and Ukraine.

The government has also asked Saudi Arabia, a regular supplier, to consider alternative shipping routes.

Since the US-Israel war on Iran on February 28, the Strait of Hormuz -- a key artery for global fertiliser trade -- remains closed. It disrupts flows, accounting for roughly 30 percent of global fertiliser shipments.

Requesting anonymity, a senior official at the state-run Bangladesh Chemical Industries Corporation (BCIC), said they are currently in discussions with Russia, Latvia, Brunei, and Ukraine to secure imports.

“We are looking to get the fertiliser from these countries as they can ship using routes bypassing the Strait of Hormuz,” he said.

After a meeting with Russian representatives yesterday, he said Moscow is expected to submit a formal proposal soon.

The urgency follows the shutdown of five of the country’s six urea factories because of gas supply concerns after the US-Israel war on Iran. The conflict has reverberated across the Middle East, a crucial hub for fertiliser exports and for natural gas used in domestic production.

Bangladesh needs more than 26 lakh tonnes of urea each year. About three-quarters of demand is met through imports, as local plants often operate below capacity when gas is diverted to other sectors.

Current stocks stand at around 300,000 tonnes, enough to meet demand until June. BCIC previously said it was working to build reserves to cover requirements in the second half of the year.

Saudi Arabia, the United Arab Emirates and Qatar are Bangladesh’s main suppliers, providing nearly 10 lakh tonnes annually. Since the war broke out, major producers in Qatar and Saudi Arabia declared force majeure and temporarily halted production.

In response to the US-Israel attack, Iran’s closure of the Strait of Hormuz has compounded supply disruptions, pushing up the cost of fertiliser and the natural gas used to produce it.

According to the World Bank’s latest commodity price data, urea prices have jumped by more than 50 percent compared with levels before the war began on February 28. The average price rose to $725.6 a tonne in March from $472 earlier.

Prices of other fertilisers, including diammonium phosphate (DAP) and triple superphosphate (TSP), have also surged.

In March, as prices climbed and the planting season drew closer, BCIC floated a tender to import 200,000 tonnes of urea. As it failed to attract any offers, a second tender is now underway with the closing deadline on Thursday this week.

Contacted, BCIC Chairman Md Fazlur Rahman said Saudi Arabia has agreed to supply 40,000 tonnes, but the shipment has yet to arrive because of the disruption in Hormuz.

“So, we have requested them to see whether the fertiliser could be shipped via alternative ports that would avoid the Strait of Hormuz and ensure delivery to Bangladesh,” he said.

Rahman said prices rose to $785-$786 a tonne last week and have climbed above $800 this week.

He said that higher prices would swell the subsidy bill, as the government provides urea and other key fertilisers such as DAP and TSP to farmers to ensure food production.

The government has set aside Tk 17,000 crore for fertiliser subsidies in the current fiscal year. Officials expect that figure to exceed Tk 30,000 crore next year if prices remain elevated.

Rahman said efforts are underway to restart factories closed because of gas shortages. “At present, the situation is quite complex and uncertain. We are making every possible effort to overcome this crisis.”

A blog published last week by the International Food Policy Research Institute said that rice production in countries, including Bangladesh, could suffer if fertiliser supplies remain disrupted.

“Rice is fertiliser-intensive and concentrated in South and Southeast Asia, regions heavily dependent on Gulf urea imports. India, Pakistan, Bangladesh, and much of Southeast Asia source a significant share of their nitrogen fertiliser from Gulf producers,” the authors wrote.

“If higher fertiliser costs persist into the second half of 2026 and coincide with an El Niño event, rice-producing regions could face both rising input costs and less favourable growing conditions at the same time,” it mentioned.

The newly elected BNP government is preparing a large expansionary budget in its first fiscal plan, aimed at meeting public expectations, accelerating development activities to create jobs, and restoring the economy to a higher growth trajectory through increased investment.

For the fiscal 2026-27, the government is planning to spend Tk9.30 lakh crore – up by 25% from the current fiscal year's budget, while the finance ministry is expected to set a revenue collection target of Tk6.95 lakh crore, according to budget documents drafted by the finance ministry.

If approved, the revenue agency will have to chase a target which is higher by Tk1,00,000 crore than that of the current year, a level economists consider beyond its existing capacity.

The National Board of Revenue (NBR) is facing a shortfall of nearly Tk72,000 crore against its target in the first eight months of the current year.

To mobilise additional revenue, the NBR may have to reduce tax exemptions across multiple sectors, raise value-added tax rates, and shift tariffs towards more market-based structures.

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said budget sizes typically grow by 12% to 15% annually, but the government is planning an increase of more than 25% to fulfil multiple commitments, making revenue mobilisation the central challenge.

"The main problem with the projected budget is the fiscal constraint and how to generate the required funds. How will so much money come? " she said.

She added that achieving such revenue targets with the current capacity of the NBR is unrealistic, and the government should instead set more achievable targets and focus on implementation.

Priorities in budget

The current fiscal year's budget stands at Tk7.90 lakh crore in the original estimate and Tk7.88 lakh crore in the revised version, with the NBR revenue target set at Tk5.03 lakh crore. By the end of February, revenue reached Tk2.50 lakh crore.

According to draft budget documents presented by the finance ministry at a meeting on Friday, the proposed budget prioritises welfare-based initiatives such as Family Card and Farmer's Card, in line with the election manifesto. It also focuses on containing inflation and maintaining macroeconomic stability.

Other key priorities include skills development to promote entrepreneurship and expand domestic and overseas employment, accelerating growth, strengthening agricultural support, expanding healthcare, restoring discipline in the financial sector, and removing investment barriers through deregulation.

The budget also places emphasis on developing the creative economy, including film, music, sports, and rural culture. The government has already initiated recruitment of sports and music teachers in primary schools and introduced incentive schemes for athletes.

Deficit financing

The next budget sets a revenue collection target of Tk6.04 lakh crore, equivalent to 9.21% of GDP. However, the tax-to-GDP ratio has fallen below 7% and continues a long-term decline.

To raise revenue, the government plans digitalisation of tax administration, expansion of the tax base, stronger institutional capacity, and higher non-NBR collections.

The finance ministry has also sharply raised the non-NBR tax target. Against Tk5,786 crore collected in the first eight months of the current fiscal year, the target for next year is Tk25,000 crore.

The fiscal deficit is projected at Tk2.35 lakh crore, or 3.4% of GDP. While the current fiscal year's original budget was smaller than the previous year, its deficit was also set at 3.4% of GDP, higher than the next budget's projection.

The deficit financing plan includes borrowing Tk1.19 lakh crore from banks and savings certificates, and Tk1.16 lakh crore from foreign sources.

In managing the deficit, the government is expected to shift towards lower-interest foreign loans instead of high-cost domestic borrowing. A significant share of annual budget expenditure on interest payments goes to domestic bank loans and savings instruments.

The finance ministry has projected Tk1.27 lakh crore for interest payments, of which Tk1.05 lakh crore is allocated for domestic debt interest and Tk22,500 crore for foreign debt interest.

Finance officials said, if energy prices rise, inflation does not ease, or liquidity recovery in the financial sector is delayed, the government may face higher interest payment pressures on domestic borrowing.

The IMF generally considers a deficit within 5% of GDP manageable. The government is, however, aiming for tighter fiscal discipline. Still, shortfalls in revenue could force additional borrowing.

The Annual Development Programme (ADP) allocation is set to rise by 50% from the current revised budget to Tk3 lakh crore, which officials expect will boost public investment and employment.

Finance officials said project public investment will reach 6.5% of GDP next fiscal year, arguing that each taka of government spending can attract multiple times more private investment. Private investment is therefore expected to rise to 24.9% of GDP.

Subsidy pressure to grow

Despite the large overall budget, subsidy allocations have not been fully adjusted for rising fuel import costs amid instability in the Middle East.

Allocations include Tk37,000 crore for power, Tk6,500 crore for LNG imports, Tk27,000 crore for fertiliser, and Tk9,600 crore for food assistance, taking total subsidies, incentives and cash support to Tk116,125 crore, up from Tk112,455 crore in the revised budget of the current fiscal year.

The finance minister told Parliament that the Iran conflict alone added Tk36,000 crore in subsidy pressure between March and June due to higher global fuel prices. Budget documents warn that prolonged instability could further increase funding needs for gas, electricity and fertiliser subsidies.

Additional funding pressures may arise from the BNP government's election pledges, including family and farmer cards. The government has begun paying Tk2,500 monthly to low-income households under these schemes, alongside Tk9,600 crore for broader social protection programmes.

In the current fiscal year, this allocation was Tk9,663 crore in the original budget and Tk10,214 crore in the revised budget.

In the next fiscal year, allocations for agricultural incentives, export cash support and jute exports remain unchanged, while remittance-linked incentives rise by Tk800 crore to Tk7,000 crore.

ADP allocations also show a sharp increase in health spending to Tk20,608 crore, about six times the revised level, lifting the sector from 15th to third position.

The largest development allocations go to the Local Government Division and Roads and Highways Division, followed by power, primary education, and secondary and higher education.

Brazil and the United States have become two key suppliers of corn to Bangladesh’s growing feed industry, as imports from India -- the traditional source -- have declined, according to a recent report by the US Department of Agriculture (USDA).

Bangladesh imported nearly 15 lakh tonnes of corn, also known as maize, in the first 10 months of the marketing year 2025-26 (MY26). Of this, 78 percent came from Brazil, while the remaining 22 percent was supplied by the US and India, with each accounting for 11 percent, the report on Bangladesh’s grain and feed sector, published last week, said.

The report said lower global maize prices encouraged traders and feed producers to import and stockpile large volumes. Bangladesh needs about 70 lakh tonnes of maize annually and imports around 15 lakh tonnes to cover gaps in local production.

“Growth in the poultry, dairy, and aquaculture sectors has increased demand for corn as a key feed ingredient,” the US agency said.

India has traditionally been a major supplier of corn to Bangladesh due to competitive prices, efficient logistics and shorter shipping times. However, since 2024, India’s exportable corn surplus has fallen sharply as it expanded corn-based biofuel production. As a result, Brazil has become the leading supplier for Bangladesh.

The report added that Bangladesh imported maize from the US in MY26 for the first time since 2018, after three local feed companies began purchases. This followed an agreement for Bangladesh to increase imports of US agricultural goods under a reciprocal trade deal aimed at reducing a trade deficit of more than $6.2 billion.

Under the deal, the US imposed a 19 percent reciprocal tariff on Bangladesh’s exports, on the condition that Dhaka would increase imports of US goods. The agreement covers wheat, soybeans and soy products, as well as cotton, with a total estimated value of $3.5 billion.

Total maize shipments from the US to Bangladesh reached about 160,000 tonnes in MY26, the USDA said.

The USDA projects that Bangladesh’s maize imports could reach 18 lakh tonnes, which is 27.2 percent higher than its estimate for MY25. However, it has lowered its forecast for MY27 to 17 lakh tonnes due to higher domestic production and larger beginning stocks.

Farmers are expected to harvest about 59 lakh tonnes of maize in MY27, up 1.7 percent from the previous year.

The report added that maize cultivation has expanded in recent years as farmers receive better prices due to strong demand from the local feed industry.

Farmers are prioritising corn because returns are about three times higher than production costs, while input costs are lower than for boro rice and vegetables grown in the same season.

Banks will be borrowing and lending among themselves for the short-term, using a new transaction-based reference rate from Wednesday.

At a press conference at its headquarters in Dhaka yesterday, the Bangladesh Bank (BB) announced the shift away from the long-standing practice of relying on quoted rates under the Dhaka Interbank Offered Rate (DIBOR).

Instead of simply using the rates banks said they would charge, the new framework draws on actual transactions to determine borrowing costs.

The new system is meant for improving transparency and efficiency in the money market. It also brings Bangladesh into line with global benchmarks such as the Secured Overnight Financing Rate (SOFR), published daily by the New York Fed and widely used in international markets.

Similarly, the BB will publish the new reference rates regularly on its website from Wednesday.

DIBOR, introduced in 2010, was based on rates banks reported for lending to one another. Over time, however, the system showed its weaknesses. Many commercial lenders did not provide data consistently, meaning the rate often failed to reflect real market conditions.

Under the new automated system, the BB will rely on actual interbank transactions and two new benchmark rates -- the Bangladesh Overnight Financing Rate (BOFR), and the Dhaka Overnight Money Market Rate (DOMMR).

BOFR is a secured, or risk-free, rate derived from interbank repo transactions. In a repo deal, one bank sells government securities to another with an agreement to buy them back later at a slightly higher price. The securities act as collateral, reducing the risk for the lender.

DOMMR, by contrast, is based on unsecured call money transactions. In this market, banks lend to one another for very short periods without providing collateral, relying instead on mutual trust and liquidity needs.

BOFR will be available for overnight and one-week tenors. DOMMR will cover overnight, one-week, one-month and three-month tenors.

According to the central bank, these rates will be calculated using a volume-weighted mean method so that larger transactions carry greater weight in the final figure.

This means if one bank borrows Tk 100 crore and another borrows Tk 5 crore, the larger deal will have a proportionately bigger influence on the average rate.

To prevent unusual deals from skewing the outcome, the BB will apply statistical techniques to filter out outliers.

For example, an exceptionally high lending rate on a single transaction would not be allowed to distort the benchmark. Similarly, if trading is thin on a particular day, the calculation will draw on data from recent working days to ensure stability.

The central bank expects the new framework to provide a dependable benchmark for pricing loans, bonds and floating rate instruments, and to support the development of new investment products.

Officials said the rates have been tested on a trial basis since March. They added that the system will be refined through regular monitoring and annual reviews.

The Bangladesh Securities and Exchange Commission (BSEC) has sought information from the DSE Brokers Association of Bangladesh (DBA) to evaluate its request for extending the deadline for complying with new margin rules by three months.

In a letter sent to the regulator last week, DBA asked to extend the deadline for complying with the requirements set out in the Bangladesh Securities and Exchange Commission (Margin) Rules 2025. In response, BSEC, in a letter issued on Sunday (April 12), sought information from the brokers’ association.

The rules came into force on November 1 last year, and are designed to strengthen risk management, protect investors and boost market stability. Three key provisions must be implemented within six months, with the current deadline set for April 30.

DBA’s letter said that brokerage houses need time for internal consultations, risk assessments, board approvals and integration of the new requirements into their operational systems.

The brokers’ association added that many firms are still finalising their policies and implementation plans due to a shortage of skilled personnel required under the rules, as well as limited technical support and client feedback.

Responding to the letter, BSEC asked for data so that the regulator can make a concrete decision regarding DBA’s proposal to extend the deadline.

BSEC asked how many brokers have already completed finalising the conservative policy of following the margin rules, and how many brokers have formed a risk management committee.

It sought information on companies that have not aligned with the risk-based capital adequacy rules of 2019, and also on brokers that have not applied for a time extension of provisioning of unrealised losses.

Additionally, the regulator asked for information on which brokerage houses hold non-marginable securities, and the cost value and market value of those securities.

BSEC gave the DBA three working days to submit the abovementioned information.

Commerce Minister Khandakar Abdul Muktadir has assured that the government will not impose any additional tax burden on businesses in the upcoming national budget despite mounting fiscal pressures.

Reducing the cost of doing business and easing access to government services are essential to boost private sector investment and trade, he made the remarks while addressing a pre-budget discussion organised by the Dhaka Chamber of Commerce and Industry (DCCI) at a hotel in Dhaka today (13 April).

The minister acknowledged that the government is under significant financial strain due to what he described as "over-ambitious projects" undertaken by the previous administration.

He noted that although Bangladesh's economy is valued at around $460 billion, nearly 70 million people remain below the poverty line, while the number of taxpayers is still relatively low.

Muktadir also pointed to the country's limited energy storage capacity, which forces reliance on higher-cost fuel imports from the spot market amid ongoing geopolitical tensions in the Middle East.

Emphasising the need for expansion of the tax net, DCCI President Taskeen Ahmed said sustaining economic growth would require automation and simplification of revenue collection systems.

He proposed raising the tax-free income threshold to Tk5 lakh, capping the maximum personal income tax rate at 25%, aligning the tax rates of non-listed companies with those of listed ones and abolishing the advance VAT system.

The business leader also called for modernisation of financial sector policies to ensure stability, reduction of non-performing loans, stabilisation of foreign exchange reserves, and rationalisation of policy interest rates to encourage manufacturing investment.

He highlighted the need for uninterrupted energy supply, diversification of export products and markets, and targeted incentives for promising sectors in the upcoming budget.

Mahbubur Rahman, president of the International Chamber of Commerce Bangladesh, observed that although calls to increase the tax-to-GDP ratio have persisted for years, there has been limited effective action.

He said that high lending rates, reduced credit flow to the private sector, and ongoing power and energy shortages are discouraging both domestic and foreign investment.

Mahbubur urged the government to explore alternative energy import sources and reduce reliance on intermediaries, while ensuring a stable and predictable policy environment.

Monzur Hossain, member (secretary) of the General Economics Division, emphasised that reviving sluggish economic growth remains a key priority for the government, underscoring the importance of promoting the cottage, micro, small, and medium enterprises sector and strengthening research activities to expand investment.

Former DCCI President Rizwan Rahman highlighted that bureaucratic complexities and alleged harassment from the tax authority are severely affecting the private sector.

He noted that the lack of effective initiatives to expand the tax net is increasing pressure on existing taxpayers and called for grassroots-level investment incentives along with higher allocations for healthcare and education.

Another former DCCI President Hossain Khaled said that only about 30% of transactions occur through formal channels, limiting effective revenue collection, and suggested that the current VAT system could be replaced with a GST framework.

KM Rezaul Hasanat David, president of the Bangladesh Independent Power Producers' Association, said expressed concern over delays in establishing a land-based LNG terminal and stressed the importance of expanding energy storage capacity and attracting joint and foreign investment.

Chief Economist of Bangladesh Bank Akhand Mohammad Akhtar Hossain emphasised the need to increase foreign investment, ensure accountability in government service delivery, and control inflation.

Participants across the four thematic sessions on income tax and VAT, financial sector, industry and trade, and infrastructure emphasised the need for comprehensive reforms, including automation of the revenue system, realistic tax collection targets, uninterrupted energy supply, improved infrastructure, stable exchange rates, lower lending rates, and stronger governance in the financial sector.

DCCI members, economists, researchers, and representatives from both public and private sectors also attended the event.

The Dhaka Chamber of Commerce and Industry (DCCI) has proposed raising the individual tax-free income threshold to Tk5 lakh and capping the maximum personal income tax rate at 25% as part of its recommendations for the national budget for fiscal year 2026–27.

The proposals were presented today (13 April) at a pre-budget consultation titled "Budget 2026–27: Private Sector Expectations," held at InterContinental Dhaka, with participation from policymakers, economists and business leaders.

Tax reforms and compliance measures

DCCI recommended setting the corporate tax rate for non-listed companies at 25%, aligning it with listed firms to ensure parity and encourage formalisation.

To improve compliance and transparency, the chamber proposed introducing a fully automated corporate tax return system.

It also suggested integrating the e-TDS platform with the National Board of Revenue (NBR) system to accelerate processing and enhance verification efficiency.

Additionally, DCCI called for the gradual withdrawal of advance tax at the import stage for manufacturers and a reduction for commercial importers.

VAT system overhaul

In the value-added tax (VAT) regime, the chamber proposed abolishing advance VAT and introducing a mobile application to complement the existing online system.

It also recommended implementing a single-step refund mechanism to expedite VAT reimbursements and reduce administrative delays.

Boosting private investment

To stimulate private sector investment, DCCI urged the rationalisation of interest rates and reducing government reliance on domestic bank borrowing.

The chamber also emphasised expanding access to credit through refinancing schemes and credit guarantee programmes to support businesses, particularly SMEs.

Capital market development

DCCI called for strengthening the capital market by increasing initial public offerings (IPOs) and encouraging large corporations and small and medium enterprises to go public.

It also proposed introducing long-term financing instruments such as bonds to diversify funding sources.

Sectoral support ahead of LDC graduation

Highlighting the importance of Bangladesh's upcoming graduation from Least Developed Country (LDC) status, DCCI urged targeted policy support for key sectors, including leather, pharmaceuticals, ICT, electronics and light engineering.

The chamber further recommended budget allocations for emerging sectors such as semiconductor research and artificial intelligence, along with the establishment of specialised industrial zones.

Infrastructure and investment incentives

To accelerate infrastructure development, DCCI proposed tax incentives, including exemptions on high-cost construction materials and machinery.

It also suggested introducing infrastructure bonds and sukuk to attract long-term investment.

Energy, governance and sustainability

DCCI stressed the importance of stable energy pricing through long-term import agreements and improved project management through real-time monitoring systems.

It recommended prioritising the completion of ongoing projects over launching new mega projects to ensure efficient resource utilisation.

The chamber also called for establishing secure data centres for the service sector and allocating budgetary support for environmental, social and governance (ESG) compliance to enhance global competitiveness.

The Dhaka stock market began the week on a cautiously optimistic footing, with insurance stocks leading a broad-based rally that helped the benchmark index close in positive territory despite lingering geopolitical concerns and mixed investor sentiment.

The DSEX, the prime index of the Dhaka Stock Exchange (DSE), gained 13 points to settle at 5,271, while the blue-chip DS30 index edged higher to close at 2,002.

Market activity reflected a moderate level of participation, with 188 issues advancing against 145 decliners, while 66 securities remained unchanged.

Turnover also saw an uptick, rising 8% to Tk837 crore, although overall market capitalisation declined by Tk730 crore, indicating selective buying rather than a broad market surge.

According to EBL Securities, the market managed to post modest gains as investors returned to take positions in December-closing stocks, driven by expectations of favourable corporate earnings announcements. This renewed buying interest helped offset persistent concerns surrounding the fragile global backdrop.

Trading throughout the session remained volatile, with investors alternating between buying and selling positions during the mid-session. However, sentiment improved in the latter half of the day as buyers gradually took control, allowing the indices to close higher.

Within this mixed environment, the insurance sector stood out as the clear outperformer, attracting strong buying interest from short-term investors anticipating earnings-driven gains, according to the EBL securities.

General insurance stocks, in particular, dominated both turnover and price appreciation charts. The sector accounted for 14.2% of total market turnover, making it the most actively traded segment of the day. Engineering and pharmaceutical sectors followed with 13.7% and 11.8% shares of turnover, respectively, but neither matched the momentum seen in insurance counters.

The rally in insurance stocks was reflected prominently in the day's top gainers list, where companies such as Standard Insurance, Reliance Insurance, Pioneer Insurance and Phoenix Insurance all posted near double-digit gains.

Life insurance companies also posted gains, albeit at a more moderate pace, contributing to the sector's overall strength.

Despite the strong performance in insurance, the broader market showed mixed trends. Sectors such as services, telecommunications and financial institutions ended in negative territory, reflecting cautious investor sentiment amid external uncertainties. This divergence highlights a market still searching for clear direction, with gains concentrated in select sectors rather than being evenly distributed.

Among individual stocks, Khan Brothers PP Woven Bag, City Bank, Acme Pesticides, Lovello Ice-cream and Paramount Textile led the turnover chart, indicating continued investor interest in diversified sectors alongside the insurance rally.

Meanwhile, the port city bourse also mirrored the positive sentiment, as the Chittagong Stock Exchange saw its key indices edge higher. The CSCX index rose by 9 points to close at 9,048, while the CASPI index also recorded a marginal gain to settle at 14,774, although turnover declined sharply.

Berger Paints Bangladesh – a publicly traded multinational company – has received approval from the Bangladesh Securities and Exchange Commission (BSEC) to extend the deadline for utilising proceeds from its rights share issuance by one year.

The previous deadline of 31 March 2026 has now been extended to 31 March 2027. The company was formally notified of the approval through a letter issued today (12 April).

Company Secretary Khandker Abu Jafar Sadique told The Business Standard that the company had applied to the regulator seeking additional time.

"We received the approval letter today. The Commission has extended the utilisation period for all project-related expenditures by one year," he said.

Market insiders say the extension will support the company's ongoing expansion initiatives.

The company had earlier submitted a revised proposal to the BSEC seeking changes to the utilisation timeline of the rights issue proceeds. Under the revised plan, the deadlines for spending on land and infrastructure development, machinery and automation, as well as consultancy and other project-related costs have all been extended.

Earlier, the company's Board of Directors also revised the investment plan for establishing its third factory, increasing the total cost from Tk813 crore to Tk980 crore.

The increase was approved to incorporate design changes aimed at improving efficiency through enhanced automation, instrumentation, and a Manufacturing Execution System (MES). Higher construction costs driven by inflation also contributed to the revision.

Berger Paints noted that the adjustment was necessary due to a delay in the commencement of commercial production at its third factory, located at the national special economic zone. The change in the project timeline prompted the company to seek an extension to better align fund utilisation with the updated implementation schedule.

With the regulator's approval now in place, the company will be able to execute the project within a more realistic timeframe.

The share price of the paints maker closed at Tk1,393.10 on the Dhaka stock exchange today.

Berger Paints paid a 500% cash dividend, amounting to Tk231.88 crore, for the fiscal year 2023-24, which ended on 31 March. This represents the highest-ever dividend payout.

Bangladesh Autocars Limited has said there is no undisclosed price-sensitive information behind the recent sharp rise in its share price and trading volume, responding to a query from the Dhaka Stock Exchange (DSE) issued on 9 April.

In a statement published on the DSE website today (12 April), the company said it is not aware of any unreported development or material information that could explain the unusual movement in its stock.

The clarification follows a steep rally in the company's shares, which jumped 91% between 8 March and 12 April, reaching Tk240.60. Over the same period, its market capitalisation rose by Tk49.53 crore.

Despite the surge, valuation indicators have raised concerns among market observers. DSE data shows the company's price-to-earnings ratio climbed to 2,406 based on unaudited financials, while the audited price-to-earnings for FY25 stood at 1,336, well above the commonly accepted threshold of around 40.

Analysts say the company's small capital base has contributed to the volatility. It has a paid-up capital of Tk4.32 crore and 43 lakh shares outstanding, limiting free float and making the stock more susceptible to speculative trading. Sponsors and directors hold about 30% of the shares, further tightening supply.

Market participants have also recalled past concerns, noting that several individuals were penalised in 2019 for manipulating the company's share price.

Bangladesh Autocars, originally an automobile business, later expanded into CNG conversion and refuelling, setting up facilities in Tejgaon in 2003. However, industry insiders say margins in the conversion segment have declined in recent years.

Deposits in the country’s Islamic banking system rose 9.42 percent year-on-year to Tk 4.81 lakh crore at the end of December 2025, marking a rebound in shariah-based banks after years of irregularities and weak governance.

By the end of 2025, deposits with Islamic banking increased by Tk 41,434 crore compared with the corresponding quarter of 2024, according to the Bangladesh Bank (BB).

The trend over the past few years has been uneven. Deposits stood at Tk 4.09 lakh crore at the end of 2022 and rose to Tk 4.43 lakh crore by late 2023. They then slipped before regaining momentum through 2024.

Even so, the central bank said that some full-fledged Islamic banks remain under severe liquidity pressure, weighed down by persistent irregularities and poor accountability.

In the “Quarterly Report on Islamic Banking in Bangladesh”, the BB said that without good governance, the recovery will not last.

Islamic banks now hold 24.38 percent of total deposits across the banking sector and account for 29.10 percent of total investments, according to the report.

The number of deposit accounts in the Islamic banking system rose to 4.1 crore by the end of December 2025, from 4.04 crore a year earlier.

Of the total deposits, the 10 full-fledged Islamic banks held Tk 4.11 lakh crore, or 85.47 percent of the market share. Islamic branches of conventional banks held Tk 29,681 crore, while Islamic windows of regular banks held Tk 40,231 crore.

Among the full-fledged shariah-based lenders, Islami Bank Bangladesh PLC attracted the largest individual share of deposits at 37.44 percent, followed by Al-Arafah Islami Bank PLC at 10.41 percent and First Security Islami Bank PLC at 7.94 percent.

The BB report showed that investment by Islamic banks grew 9.55 percent year-on-year to Tk 5.25 lakh crore. This was equal to 29.10 percent of total loans and advances across the banking sector at the end of December 2025, according to the BB.

Large industries took the biggest slice at 40.18 percent of all Islamic bank investment, followed by trade and commerce at nearly 33 percent.

The central bank said the Islamic banking system has been playing a significant role in mobilising deposits and financing in various economic activities in Bangladesh.

However, the number of rural branches of full-fledged Islamic banks has not grown in line with demand. “They may focus more on expanding their outreach into rural areas,” it added.

The BB said Islamic banks may invest more in socially beneficial industries, particularly in agriculture and small businesses.

The central bank recommended that Islamic banks explore new customer bases in microfinance, support women entrepreneurs, and meet the financial needs of public agencies.

Oil prices jumped above $100 a barrel on Monday as the US Navy prepared to block ships from reaching Iran via the Strait of Hormuz, a move that could restrict Iranian oil exports, after Washington and Tehran failed to reach a deal to end the war.

Brent crude futures rose $6.71, or 7.05%, to $101.91 a barrel by 0104 GMT after settling 0.75% lower on Friday.

"The market is now largely back to conditions before the ceasefire, except now the US will block the remaining up to 2 million barrels per day Iranian-linked flows through the Strait of Hormuz as well," said Saul Kavonic, head of energy research at MST Marquee.

President Donald Trump said on Sunday the US Navy would start blockading the Strait of Hormuz, raising the stakes after marathon talks with Iran failed to reach a deal to end the war, jeopardising a fragile two-week ceasefire.

He added that the price of oil and gasoline may remain high through November's midterm elections, a rare acknowledgement of the potential political fallout from his decision to attack Iran six weeks ago.

US Central Command said US forces would begin implementing the blockade of all maritime traffic entering and exiting Iranian ports at 10 am ET (1400 GMT) on Monday.

It would be "enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman," a CENTCOM statement on X said.

US forces would not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports, it added.

IG market analyst Tony Sycamore said the move would effectively choke off the flow of Iranian oil, forcing Tehran's allies and customers to apply the necessary pressure to get the waterway reopened.

Iran's Revolutionary Guards said on Sunday that any military vessels attempting to approach the Strait of Hormuz would be considered a violation of the two-week US ceasefire and be dealt with harshly and decisively.

Despite the stalemate, three supertankers fully laden with oil passed through the Strait of Hormuz on Saturday, shipping data showed. They appeared to be the first vessels to exit the Gulf since the ceasefire deal was struck last week.

Oil tankers are steering clear of the Strait of Hormuz ahead of the US blockade on Iran, shipping data on LSEG showed.

On Sunday, Saudi Arabia said it has restored full oil pumping capacity through the East-West pipeline to about 7 million barrels per day, days after providing an assessment of damage to its energy sector from attacks during the Iran conflict.

Treasury bill yields rose over the past week as increased government borrowing from banks, driven by mounting funding needs and weak revenue collection, put upward pressure on short-term interest rates.

According to data from the latest auction held today (12 April), yields on 91-day, 182-day and 364-day treasury bills increased by 31 to 33 basis points compared with the previous week. The yield on 91-day bills climbed to 10.16%, while 182-day bills rose to 10.33% and 364-day bills reached 10.39%.

A week earlier, on 6 April, yields stood at 9.85% for 91-day bills, 10.01% for 182-day bills and 10.08% for 364-day bills.

A senior official of a private bank said the rise in yields was primarily due to higher government borrowing from the banking system. "The government is facing a shortage of funds in its treasury, while revenue collection remains below target. As a result, it has increased its reliance on bank borrowing," he told TBS.

In addition to the regular auction calendar, the central bank conducted off-calendar auctions this month, raising Tk10,000 crore through 91-day treasury bills in two separate tenors to meet immediate funding requirements.

Treasury bill yields had previously crossed 11.5% before declining to below 10% in February this year, largely due to improved liquidity in the banking sector.

Economists attribute the renewed upward trend to increased government spending following the formation of a new administration after the national election, including expanded social support programmes.

A central bank official said treasury bill and bond yields are determined by the liquidity conditions in the banking system. "When liquidity supply in banks exceeds government demand, yields decline. Conversely, when demand for funds is higher, yields increase," the official explained.

Bankers noted that although the banking sector is not currently facing a liquidity shortage, the government's higher borrowing requirement has begun to push rates upward.

For the April to June quarter, the government plans to borrow Tk1,10,000 crore through treasury bills, including Tk44,000 crore in 91-day bills, Tk36,000 crore in 182-day bills and Tk30,000 crore in 364-day bills.

In addition, the government aims to raise Tk39,000 crore through treasury bonds to finance medium- and long-term needs.

Treasury bills are short-term government securities with maturities ranging from 91 to 364 days and are considered low-risk investments due to their fixed returns.

Treasury bonds, by contrast, are long-term instruments with maturities ranging from two to 20 years, through which the government raises funds for extended periods.

The DSE Brokers Association of Bangladesh (DBA) has asked the stock market regulator to extend the deadline for complying with new margin rules by three months.

In a recent letter to the Bangladesh Securities and Exchange Commission (BSEC), the association sought more time to meet the requirements set out in the Bangladesh Securities and Exchange Commission (Margin) Rules 2025.

The rules came into force on November 1 last year, and are designed to strengthen risk management, protect investors and boost market stability. Three key provisions must be implemented within six months, with the current deadline set for April 30.

In the letter, the association argued that the timeframe is too tight.

DBA said that brokerage houses need time for internal consultations, risk assessments, board approvals and integration of the new requirements into their operational systems.

The association said many firms are still finalising their policies and implementation plans due to a shortage of skilled personnel required under the rules, as well as limited technical support and client feedback.

The association also noted that aligning with risk-based capital adequacy standards requires system upgrades, staff training, internal audits and technology improvements.

Rushing the process could trigger operational errors or disrupt margin services, it added.

Moreover, thousands of existing loan accounts contain non-marginable securities of considerable value. Enforcing the six-month deadline, the association said, could prompt distressed sales, cause market volatility, inflict avoidable losses on retail investors and tighten liquidity.

It also pointed to the current strain on the capital market following the Middle East war and fuel crisis, mentioning that immediate enforcement would add to the pressure.

A measured transition is essential to protect investors, the letter said.

DBA said that an additional three-month extension, taking the compliance period to nine months until July 31, 2026, would allow brokerages to complete the necessary system and policy upgrades and ensure a smooth adjustment for existing loan clients.

“We respectfully seek your kind consideration and approval for an extension of the compliance timelines stipulated in the Margin Rules 2025,” added the association.

China's long-term strategy of diversifying energy sources and building stockpiles is helping it weather disruptions from the Iran war, although some sectors still face major snags, analysts say.

China is a net importer of oil and more than half of its seaborne crude came from the Middle East last year, according to analytics firm Kpler.

The conflict triggered by Israel and the United States against Iran has halted almost all shipments from the Gulf area for six weeks now, with a shaky ceasefire deal struck this week extremely unlikely to lead to an immediate recovery.

However, Beijing's long-running prioritisation of energy security has left it well-prepared for such shocks, analysts told AFP.

A "general concern about the geopolitical situation" in recent years has spurred Chinese leaders to ensure sufficient storage construction and stockpiling of strategic reserves, said Muyu Xu, senior oil analyst at Kpler.

Those efforts mean China now sits in a far better position than several of its Asian neighbours, such as Japan and the Philippines, she said.

But so far Beijing has not been "in a rush" to initiate releases from its substantial strategic reserves, said Xu.

'Vindicated'

This is partly because China's decades-long mission to diminish its traditional reliance on coal and fossil fuels is beginning to flourish.

The large-scale efforts to transition to renewable energy mean "China is relatively well placed" to deal with the current situation, said Lauri Myllyvirta, co-founder of the Centre for Research on Energy and Clean Air.

Wind, solar and nuclear capacity has been added to China's populous coastal provinces, while improved grid infrastructure carries electricity to them from inland.

"There would be much more oil and gas imports needed to power those provinces" otherwise, said Myllyvirta.

While dependencies still exist -- including in the vast manufacturing sector -- renewable energy is "helping a lot on the margin", he said.

Li Shuo, director of the China Climate Hub at the Asia Society, told AFP that the current energy crisis "vindicates China's long-standing 'all-of-the-above' strategy".

President Xi Jinping is seeking to leverage the renewables build-out even further as geopolitical turmoil mounts.

State broadcaster CCTV aired a segment on Monday in which Xi was quoted as calling for accelerated construction of a "new energy system" to safeguard energy security, although it did not mention the Middle East war.

'Teapot' trouble brewing

For Beijing, the "more serious risk" is not immediate energy shocks but a potential global economic downturn caused by the conflict, the Asia Society's Li said.

Some sectors will inevitably feel the pinch, presenting new hurdles for leaders struggling to jumpstart sluggish activity.

Among them are "teapot" oil refineries -- small, private outfits that have historically benefited from access to sanctioned Iranian and Venezuelan crude acquired at a discount.

The loss of Iranian crude could be a death knell for many of these operations, which are mainly concentrated in the eastern province of Shandong and are already reeling from Washington's military intervention in Venezuela this year.

Beijing likely has "mixed feelings" about that, Kpler's Xu told AFP.

On the one hand, teapots account for around one-fifth of China's refining capacity, also providing substantial employment, she said.

However, their lax environmental standards, less predictable tax generation and competition with state-owned giants means that their shutting down is "not entirely bad news for China", said Xu.

Chipmaking, which Xi has declared a strategic priority, is another sector likely to encounter challenges as the Strait of Hormuz remains shut.

Qatar is one of the world's few large-scale producers of helium -- vital for semiconductor manufacturing -- and supplies have ground to a halt since the war began.

The chemicals industry could also face "significant pressure" from the disruption, Michal Meidan from the Oxford Institute for Energy Studies wrote in a recent report.

On a national level though, she said, "the impacts can be smoothed out".

"While the economy will not be immune to higher prices and reduced economic activity, stakeholders are already taking pre-emptive measures in case the disruption is protracted," she wrote.

The government needs to allocate more to education, health, and social protection in the upcoming budget, and ensure that the funds are properly utilised to create a better future for every child in the country, development specialists and donor agencies said yesterday.

Speaking at a roundtable, they pointed out that utilisation of development budgets in both sectors has hovered around 50 percent for at least two fiscal years. The discussion, regarding strengthening investment in social sectors in the upcoming budget, was jointly arranged by The Daily Star and Unicef with support from the European Union.

Md Ashiq Iqbal, social policy and economic specialist at Unicef, said in fiscal year 2024-25 (FY25), utilisation of the development budget of education was 47.4 percent while it was 9.8 percent in the health sector.

According to him, the underutilisation of funds pointed to significant room for efficiency gains. “Over 50 percent gain is possible for education and health within the existing envelope.”

But he stressed that efficiency alone would not close the gap, as overall investment remains critically low to begin with.

The social policy expert noted that Bangladesh’s spending on education is one of the lowest shares in the world -- just 1.5 percent of its GDP on education against a government target of 5 percent.

The gap between current and target investment is 70 percent, which has widened over the past decade, he added. “Significant budgetary steps are required to progressively reach the target.”

Health spending stands at 0.7 percent of GDP, also among the world’s lowest. “The same thing is happening in the social protection budget too.”

Iqbal depicted the consequences of the spending failure, citing child welfare data.

Some 6.5 percent of primary school-age children are out of school, he said, adding that attendance falls sharply after primary school while foundational skills improve but remain far too low. “Bangladesh’s primary education progress is in stagnation.”

The Unicef official also said, “serious” risks persist in public health.

Two in five children and one in 13 pregnant women show elevated blood lead levels. The neonatal mortality rate stands at 22 per 1,000. Nearly two-thirds of children aged 6 to 23 months live in food poverty, as social protection coverage shrank in recent times.

In fiscal year 2024-25 (FY25), utilisation of the development budget of education was 47.4 percent while it was 9.8 percent in the health sector
Iqbal welcomed the commitments made by the ruling BNP in its manifesto on education access and quality, child survival, and malnutrition.

He called for allocating at least 2 percent of GDP to quality and inclusive education of children, with increased funding for foundational learning and teacher development, and at least 1.5 percent of GDP for health, with ringfenced vaccine budgets and free medicine for the poor.

Prof Rashed Al Mahmud Titumir, finance adviser to the prime minister, said the government inherited an economy burdened with multiple problems, further aggravated by current global pressures.

He explained that with inflation persisting, the government could not adjust fuel prices and was instead focusing on proper utilisation of spending.

The official also said the government was moving toward a universal social protection system to eliminate inclusion errors, exclusion errors, and fragmentation with one card per family for service delivery.

In addition, he said, for the first time, farmers would also receive cards through scheduled banks, entitling them to multiple subsidies. The government hopes to reduce errors and create fiscal space through these initiatives.

The government was also focusing on transparency and accountability in spending, with budget implementation effectiveness and digitalisation of revenue collection among its priorities, Titumir added.

The PM’s adviser also flagged that conditions attached to loans taken by the previous government from the International Monetary Fund (IMF) were creating pressure that “may not be child-friendly or women-friendly”.

Criticising the United Nations for reportedly not speaking out on these issues, he called for better coordination and harmonisation in the intergovernmental organisation.

Rana Flowers, country representative of Unicef Bangladesh, said she recognised that the government inherited an economy where debt obligations are rising, and economic uncertainties came from the global arena.

She pointed out that the situation demands figuring out how to use limited resources efficiently.

The Unicef official urged the government to focus on improving capital development, child education and social protection.

Rasheda K Choudhury, executive director of the Campaign for Popular Education, said education spending should be treated as an investment in human capital.

“If we curb corruption, if we curb violence against women and if we curb drug addiction, it will free up substantial funds for social sectors,” she said, urging the government to actively court non-resident Bangladeshis for support.

Prof Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue, said the government needs to prioritise its spending and draw up plans to adjust investment in the social sectors.

Gitanjali Singh, country representative of UN Women, called for higher social sector allocations alongside a tracking system to ensure expenditure efficiency.

She also urged the government to raise tax revenue and shift toward progressive taxation, given the constraints on fiscal space.

Prof Abu Eusuf, executive director of Research and Policy Integration for Development (RAPID), called on authorities to publish the actual education budget by subtracting the technology budget from it, and urged the reinstatement of the child budget.

He also asked for the social protection budget to be broken down clearly, separating pension obligations from other programmes.

Furthermore, the policy expert proposed establishing eight top-class hospitals -- one per division -- so that people do not need to travel to Dhaka for specialised care.

On revenue, he noted that tax exemptions amount to 6 percent of GDP and urged the government to widen the tax base without pressuring existing taxpayers.

Mahfuz Anam, editor and publisher of the Daily Star, said he has been covering child issues for many years as a journalist, and the same stories keep recurring.

While the country has made some advances, it remains far from where it needs to be, he added, urging all to use the newspaper to improve child rights issues.

Kishower Amin, programme manager of Public Financial Management, said revenue reform was essential, including reform of the revenue board and full digitalisation of tax systems.

Without higher revenue collection, she said, increases in health and education spending would not be possible.

Mosammat Ayesha Akther, deputy director of the National Academy for Educational Management of the Ministry of Education, Shumon Sengupta, Country Director of Save the Children in Bangladesh, Lole Valentina Lucchese, programme manager of Social Protection of EUD, and Stanley Gwavuya, Chief-SPEAR of Unicef, also talked at the event.

The DSE Brokers Association of Bangladesh (DBA) has requested a three-month extension from the capital market regulator to comply with newly introduced margin rules, citing concerns that the current April deadline could trigger massive sell-offs and further destabilise an already distressed market.

In a formal letter to the Bangladesh Securities and Exchange Commission, the DBA – a primary intermediary representing brokerage firms of the Dhaka Stock Exchange – urged the regulator to move the compliance deadline from 30 April to 31 July 2026.

The commission formulated Margin Rules 2025, which came into effect on 1 November, and introduced several critical requirements aimed at strengthening risk management, investor protection, and overall market stability.

However, in the newly introduced rules, three key provisions require compliance within six months by 30 April.

Saiful Islam, president of DBA, told The Business Standard, "The timeframe mandated in the rules is insufficient for compliance; that is why we have sought an extension."

He said that to comply with the rules, brokers would need to sell a significant amount of shares, which would put pressure on the market.

"Currently, the capital market is going through a distressed situation resulting from the US-Iran war. In such a situation, if brokers comply with the rules, the market will suffer further," he added.

In the letter to the commission, the DBA said, "Brokerage houses require adequate time for internal consultations, risk assessment, board approvals, and integration into operational systems. Most brokerage houses are still in the process of finalizing policy and implementation due to a lack of skilled resources specified by the rules and adequate technical support and client feedback."

It said full alignment with risk-based capital adequacy necessitates significant system upgrades, staff training, internal audits, and technological enhancements. Rushed implementation may lead to unintended operational errors or temporary disruptions in margin services, said the DBA.

Regarding the sale adjustment of non-marginable securities from existing margin loan clients, it said thousands of existing loan accounts hold non-marginable securities of significant value. A six-month deadline could force distressed sales, create market volatility, cause avoidable losses on retail investors, and strain liquidity, said the DBA.

Moreover, during the current distress situation of the capital market due to the recent war and fuel crisis made it difficult to impose the rule, as it will affect the distress furthermore, it said. "A timely transition is essential to protect investor interests."

The association further said an additional three-month extension, making the total compliance period nine months up to 31 July 2026, would provide brokerages to complete necessary system and policy upgrades to ensure smooth, non-disruptive adjustment for existing loan clients.

According to of the commission, the total negative equity stood at Tk10,425 crore as of February 2025, including Tk8,005 crore in principal margin loans and Tk2,420 crore in accrued interest.

The stock market after the 2010 crash caught the gigantic negative equity problem as the regulator then verbally ordered firms not to trigger forced selling, according to sources.

A total of 146 firms – 102 brokerage houses of the DSE, 39 merchant banks, and five brokerage firms of the Chittagong Stock Exchange (CSE) – have been struggling with negative equity for years.

Negative equity refers to a deficit in owners' equity, which occurs when the value of assets used to secure margin loans falls below the outstanding loan balance.

Brokerage firms and merchant banks had extended margin loans to clients for share purchases, but the current market value of those shares is far below their purchase price.

Negative equity is created when a broker or merchant bank does not trigger the forced selling of securities that a client buys with money borrowed from the broker or merchant bank.

As a result, lenders have been unable to adjust the loans through share sales, causing the negative equity to persist for years. To ease the mounting pressure on lenders, the regulator has been extending deadlines for adjusting negative equity and maintaining provisioning.

If the loans are not recovered for one year, the firms need to keep provisioning against the total lending amount of principal. But the firms were able to maintain only Tk2,946 crore, and net provision deficit stood at Tk5,058 crore, the data showed.