Stocks at the Dhaka Stock Exchange extended their gains today (22 April), with turnover crossing the Tk1,000-crore mark for the first time in two months as investors increased purchases of oversold and fundamentally strong shares.

Turnover at the premier bourse rose 13.67% to Tk1,056 crore from Tk929 crore in the previous session, marking the highest level since 17 February, when turnover stood at Tk1,222 crore.

The benchmark DSEX index gained 41 points to close at 5,299, while the blue-chip DS30 index rose 20 points to 2,005. The Shariah-based DSES index also edged up by 3 points to finish at 1,066.

Total market capitalisation increased by Tk2,587 crore to Tk6,86,184.18 crore, reflecting stronger investor participation and improved trading activity.

Market breadth remained sharply positive, as 213 issues advanced compared to 121 declining, with 57 stocks unchanged.

According to market insiders, the stock market had been maintaining a positive momentum following the election, but the ongoing Middle-East conflict interrupted that trend and created pressure throughout the month. As a result, the market moved into an oversold position, creating fresh buying opportunities for investors seeking fundamentally strong stocks at lower prices.

Declining yields on government securities encouraged a portion of funds to shift towards the stock market in search of better returns.

At the same time, investors are showing growing interest in December closing companies that are expected to declare attractive dividends. This buying interest has increased trading floor activity despite continued geopolitical uncertainty in the Middle East, leading to a higher volume of share transactions in the market.

However, large investors are still closely monitoring both domestic and international economic uncertainties. Analysts warn that if the Middle-East conflict worsens further, the market could face renewed pressure. For this reason, institutional and major investors are still maintaining a cautious investment approach despite the recent recovery in market activity.

Among the top gainers, Desh Garments led with a 9.96% rise, followed by Purabi Gen Insurance 9.95% and Samata Leather Complex, up 9.92%. Besides, Bangladesh Lamps, Bangas, Rupali Bank, Agni Systems, Monno Fabrics, Anwar Galvanising, and Mir Akhter Hossain Limited were placed at the top ten gainer list.

On the losing side, Shepherd Industries suffered the biggest drop at 7.59%, followed by Nahee Aluminum down 7.52%, and ICB Employees Provident MF 1: Scheme, which fell 7.89%.

In its daily market review, EBL Securities said that the capital bourse staged a strong recovery, buoyed by improved investor sentiment following the emerging signals of a potential ceasefire extension in the Middle East conflict, prompting continued accumulation of beaten-down scrips in anticipation of improved market momentum.

Market indices tracked a firm upward trajectory from the outset of the session with predominant buying interest, while investor participation strengthened steadily as the session progressed, driving broad-based price appreciation across most of the scrips, according to the commentary.

On the sectoral front, Engineering dominated turnover with a 17.3% share, followed by Textile at 13.9% and General Insurance at 13.5%.

Most sectors ended the session on a positive note. Financial Institutions rose 2.0%, Banks gained 1.7%, and Paper advanced 1.4%, leading the gainers.

On the other hand, a few sectors saw corrections. Tannery declined 0.7%, Ceramic fell 0.7%, and Services slipped 0.6%.

Meanwhile, the Chittagong Stock Exchange also closed in positive territory today. The Selective Categories' Index gained 37.0 points, while the All Share Price Index rose 60.4 points.

An outfit of high-profile global rating-agency Fitch suggests Bangladesh should continue with its high policy rate in lending in the high-inflation regime, ostensibly nay-saying pleas for rate cut.

"We now expect the Bangladesh Bank to maintain its policy rate at 10 per cent over FY2026/27 instead of cutting the rate," says a BMI report, available Wednesday.

Business Monitor International or BMI is a Fitch Solutions company that provides macroeconomic, industry, and financial market analysis globally.Banking sector news

The subsidiary of the American-British credit-rating agency, Fitch, makes such suggestion in view of high projected inflation, recent decline in long-term-borrowing costs, and renewed need for International Monetary Fund financing.

"This is a revised outlook from our previous projection of a rate cut during the new fiscal year. The revision comes despite BB Governor Mostqaur Rahman's reported preference for lower interest rates."

The agency says their new forecast primarily reflects Bangladesh's present economic circumstances, as they expect headline inflation will remain above the central bank's 6.5-percent target over FY2026/27, "hitting a high of 8.6 per cent".

"This is partly due to base effects created by low food-price inflation during H1 FY2025/26."

The Fitch outfit also expects the Iran conflict to contribute 0.13- percentage points towards headline inflation for the coming fiscal year through higher energy prices.

"Elevated inflation threatens the BB's price-stability mission, making a rate cut in FY2026/27 difficult to justify," it opines.

The report mentions that surging inflation in recent years has also eroded real wages in Bangladesh.

"This was particularly pronounced for industry-sector workers, which comprise 21 per cent of the economy's labour force. Although the salary declines slowed in 2025, this comes atop five consecutive years of falling real wages."Global economy analysis

It predicts that an uncontrolled supply-side shock to inflation will worsen this problem.

"This factor will make the BB even more cautious about cutting rates, which could cause inflation to run unchecked."

Falling long-term borrowing costs presents another reason for keeping the policy rate high.

The 10-year treasury yield has trended down since January 2025, despite the policy rate's elevated level. Over the same period, credit growth surged, driven by greater government lending.

"Apart from fuelling inflation, looser credit could also hasten financial flows towards lower-quality investments. This effect is probable given the fragility of Bangladesh's banking sector," the agency cautions.

Finally, it mentions, Bangladesh's government is seeking US$3.0 billion in financial support from the International Monetary Fund (IMF) and the World Bank.

"The government's spending needs are real. Aside from cushioning the blow of the Iran conflict on Bangladeshi households, Dhaka will probably have to recapitalise several banks as it reforms the financial sector."

However, IMF support is likely to be contingent on the government preserving a degree of macroeconomic stability.Bangladesh market report

Keeping monetary policy tight when economic conditions support such a move would preserve confidence among international investors over Bangladesh's medium-term prospects.

Singer Bangladesh Ltd reported a loss of Tk55.86 crore in the January-March quarter of 2026, despite posting modest year-on-year revenue growth.

According to its unaudited financials, the company's sales rose by 3.46% to Tk577.20 crore, up from Tk557.86 crore in the same period last year.

However, losses widened significantly from Tk35.89 crore in Q1 2025, reflecting mounting cost pressures and weak market demand.

Commenting on the Q1 financials, the company said that despite a slight increase in turnover, actual sales fell short of expectations due to a stagnant consumer electronics market.

"Domestic sales were stifled by high inflation, geopolitical tensions, and unfavourable weather, while the national election and extended Eid holidays further dampened demand," it said.

Although gross profit margins remained stable, Singer noted that rising costs could not be fully passed on to consumers due to strong price sensitivity in the market.

As a result, operating profit declined by 8.1%, driven by higher expenses related to rent, depreciation and salaries, amid broader economic struggle to balance the operational costs with subdued consumer durables demand.

The company also reported a sharp 41.4% increase in net finance costs, mainly due to nearly 50% higher interest expenses from increased short-term borrowing to support working capital and business expansion.

Additionally, the depreciation of the Bangladeshi taka against the euro led to foreign exchange losses on inter-company loans, the company said.

Sectors across Bangladesh are adjusting rates and restructuring costs in the wake of the government’s record fuel price hike, with freight charges from Chattogram port surging and consumer goods companies shrinking pack sizes and cutting trade margins to stay afloat.

On April 18, the government raised fuel prices to record highs -- diesel by Tk 15 per litre to Tk 115, octane by Tk 20 to Tk 140, petrol by Tk 19 to Tk 135, and kerosene by Tk 18 to Tk 130, with new rates taking effect at midnight.

The hike compounded a crisis that began in early March, when the outbreak of war in Iran pushed global energy prices higher and drove up transport costs before any official revision.

Already reeling from the supply disruptions due to the war, diesel-dependent industries, including agriculture, manufacture and transport, are now facing a double whammy. And in a highly inflated economy, the burden is likely to fall on customers soon.

FREIGHT RATES UP 30%

Transport fares between Chattogram port and destinations across the country have risen 25 to 31 percent since the April 18 hike, with rates remaining volatile for the past one and a half months.

When the Iran war began in early March, covered van fares from the port to Dhaka shot up from Tk 17,000 to a maximum of Tk 32,000. The rates later eased to around Tk 22,000 after Eid-ul-Fitr, only to climb again after the fuel hike.

On Tuesday, Ashis Chakraborty, owner of Chattogram-based clearing and forwarding agency AZ Trade International, hired five covered vans to transport imported fabrics, yarn, and chemicals for Mymensingh-based garment manufacturer PM Textile. It cost him Tk 29,000 per van.

PRAN-RFL Group, which relies on hired vehicles for around 40 percent of its cargo movement between Chattogram and its factories in Ghorashal and Habiganj, is absorbing similar increases.

Kamruzzaman Kamal, the company’s marketing director, told The Daily Star that covered vans now charge Tk 15,000 to carry export goods from Ghorashal to inland container depots in Chattogram -- Tk 3,000 above the previous rate.

Prime movers transporting import containers to the factories now cost up to Tk 42,000, compared to Tk 32,000 before the hike.

MOST MANUFACTURERS HOLD PRICES -- FOR NOW

On the manufacturing side, companies are deploying a range of measures to absorb the cost shock without immediately raising retail prices, though several have signalled that adjustments are becoming harder to avoid.

Many are resorting to shrinking the pack size. This is a classic example of “shrinkflation”-- which occurs when manufacturers shrink the package size, i.e., quantity of an item, without a corresponding price drop.

Tanveer Ahmed Mostafa, director of Meghna Group of Industries, said the severe global energy shock stemming from the Middle East conflict has directly hit the company’s costs from maritime freight to raw material procurement.

In a vertically integrated conglomerate like Meghna, such volatilities inevitably exert pressure on forward consumer outputs, he said, adding that the group is currently absorbing the pressure through internal cost-containment and supply chain optimisation.

“A price adjustment remains a possibility to ensure sustainable supply,” Mostafa said. “We are first exhausting all internal efficiencies.”

“While a price adjustment remains a possibility to ensure sustainable supply,” Mostafa said, for now they are “exhausting all internal efficiencies to keep” products affordable.

PRAN-RFL, a leading food processor and exporter, is holding the same position.

Marketing Director Kamal said, “The company is currently avoiding price increases despite rising fuel costs, as consumers are already under significant financial pressure from higher living expenses.”

Instead, PRAN is reducing trade margins and consolidating deliveries – minimising vehicle numbers, ensuring full-load shipments, and using larger vehicles where possible.

Increasing the maximum retail price, he said, “remains a last resort” and would only be considered if internal cost-control measures fail.

Unilever Bangladesh is also deferring any pricing decision, and is focusing on innovation and operational improvements to absorb costs.

Shamima Akhter, director of corporate affairs, partnerships and communications, said the company is prioritising operational efficiency and cost optimisation over immediate price increases.

Because many of its products are discretionary, she noted, price hikes risk reducing sales volumes.

She noted that global volatility, including higher fuel prices and increased raw material import costs, has already put pressure on production and distribution over the past two months.

Bombay Sweets, however, has moved more decisively. Khurshid Ahmad Farhad, the company’s general manager, said export prices have already been raised by 25 percent starting last month. In the domestic market, the company is adjusting on a product-by-product basis, either raising prices or reducing weights, but not both simultaneously.

Farhad described the April 18 hike as a second shock. Cost pressures had already been building, driven by sharp increases in raw materials, including chemical and petrochemical prices. When the latest price hike came, it pushed packaging costs up by 13 percent to 69 percent.

The company’s “Potato Crackers” product, retailed at Tk 10, has been reduced from 13 grams to 10 grams since the fuel hike. The change is already in the market. Farhad emphasized that increasing maximum retail prices further is difficult due to declining consumer purchasing power, making downsizing a necessary strategy.

“The company is currently prioritising survival over profit,” Farhad said. “Margins have already declined.”

FARMERS FACE A COSTLY HARVEST

The pressure is not limited to industry. Farmers are feeling the pinch during the Boro harvesting season. The surging diesel prices have made it costlier to rent harvesters. For instance, farmers in four haor districts of Sylhet depend on nearly 1,500 combine harvesters, which run on diesel, for bringing their crops home.

In Dingapota Haor in Mohanganj upazila, Netrokona, farmer Tofayel Khan cultivated Boro rice on 80 kathas of land this season, only for floodwater to submerge most of it before harvest.

He had to spend some Tk 660 per katha to harvest the remaining crops. Last season, the rate was Tk 550 per katha. “I am concerned about how to recover my losses.”

Foreign buyers are increasingly diverting garment work orders away from Bangladesh over concerns about energy reliability and an uncertain business climate, said Anwar-Ul Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries (BCI), yesterday.

“Buyers are telling us that within the next two to three months, Bangladesh may face electricity shortages. Because of that, their top management is discouraging them from placing new orders here,” he said, citing recent communications from international sourcing teams.

He made the remarks at a discussion with senior officials of the National Board of Revenue (NBR) at its headquarters in Dhaka. The NBR organised the meeting as part of its consultation with businesses and other stakeholders ahead of formulating tax proposals for the next fiscal year, 2026-27.

The BCI president said some orders had already been redirected to India and other competing countries, while others were being withheld amid growing uncertainty.

He added that several large buying houses had warned local suppliers of potential disruptions, triggering anxiety across the export-oriented manufacturing sector.

“Orders for July and August, which were expected by now, have either slowed significantly or stopped altogether. We are still in discussions, but in many cases we have not been able to secure the orders,” he said.

Chowdhury cautioned that a further downturn could follow if the situation does not improve.

Beyond energy concerns, he also highlighted the burden of minimum tax on loss-making businesses. Under the current rules, companies must pay a minimum turnover tax of 1 percent even if they incur losses, a provision he said is particularly challenging for small enterprises.

He urged policymakers to introduce a slab-based system for smaller firms and called for clearer safeguards regarding provisions in the Income Tax Act 2023 that allow tax officials to access business systems and financial records for withholding tax verification.

Md Abdur Rahman Khan, chairman of the NBR, along with other officials from both organisations, were present at the meeting.

The government has secured sufficient fuel supply to meet demand in May, with preparations underway for June and July, State Minister for Power, Energy and Mineral Resources Anindya Islam Amit said today (22 April).

He made the remarks in parliament while responding to an urgent public importance notice raised by Jamaat-e-Islami Ameer Shafiqur Rahman on addressing the "ongoing energy crisis" and reducing public suffering.

Highlighting stock, distribution and global situation, the state minister said fuel prices in the global market have increased by an average of 186.59% since the start of the Iran war.

Despite intense pressure for price adjustments, he said the government refrained from raising fuel prices during the peak boro irrigation season. "After irrigation demand eased, prices were adjusted, and even then, the increase was lower than in neighbouring countries," he added.

He also said the government remains open to constructive proposals. "If the opposition or any party has a clear plan to resolve the fuel crisis, the government is willing to consider it."

Opposition lawmakers also took part in the discussion on the proposal.

Bangladesh’s economy is facing renewed pressure from global geopolitical tensions and commodity market disruptions, with risks of elevated inflation, slower growth and mounting fiscal strain, according to Eric Robertsen, global head of research and chief strategist at Standard Chartered.

In an interview with The Daily Star, Robertsen said financial markets appear “overly optimistic” about a swift resolution of the ongoing Gulf tensions and the reopening of the Strait of Hormuz, a critical artery for global energy supplies.

If shipping resumes soon, it could take weeks or months for oil, gas and petrochemical supply chains to normalise, prolonging price pressures worldwide, Eric Robertsen said
He added that even if shipping resumes soon, it could take weeks or months for oil, gas and petrochemical supply chains to normalise, prolonging price pressures worldwide.

“Even when the Strait reopens, it will take time for exports to normalise and for supply chains to stabilise,” he said, adding that such shocks typically leave behind persistent economic damage across vulnerable economies.

He explained that governments tend to follow a predictable policy response during commodity crises, starting with subsidies to cushion consumers and businesses, followed by price caps, rationing and, in some cases, more aggressive interventions.

“What we have seen in this crisis is that many economies, particularly in Asia, have moved through all these steps very quickly,” he said, adding that such measures come at a high fiscal cost.

“There will be a negative impact on fiscal balances as governments step in to support their economies,” he added.

Robertsen also flagged rising risks of stagflation -- a combination of high inflation and weak growth, particularly for emerging economies like Bangladesh.

“The inflation impact is immediate in a commodity shock, but the hit to growth comes with a lag,” he said.

Bangladesh has been witnessing persistently high inflation for the last three years.

“Higher energy prices reduce disposable income and investment capacity, which ultimately weakens demand,” Robertsen said.

He cautioned that central banks face a difficult balancing act in such an environment.

“If policy tightening happens too early or too aggressively, it could worsen the growth outlook,” he said.

However, he noted a key relief factor in the current crisis: the absence of a sharp appreciation of the US dollar.

“This has not turned into a currency crisis, which is extraordinarily good news for central banks,” he said.

About the global outlook, Robertsen highlighted four key risks for emerging economies: higher inflation, weaker growth, potential policy missteps and deteriorating fiscal balances.

“For the next two quarters, there is a need to build a higher risk premium into both market expectations and economic forecasts,” he said.

He also pointed to a longer-term structural shift in the global economy.

“We are moving into a world where control over commodities becomes both an economic and geopolitical tool,” he said, citing recent examples of export restrictions on energy products and critical inputs.

“One of the key lessons is the importance of maintaining strategic reserves of oil and gas,” he said. “Many countries have learned the hard way that they were underprepared.”

As a result, he expects global energy prices to remain structurally higher even after the current crisis subsides.

Naser Ezaz Bijoy, the chief executive officer of Standard Chartered Bangladesh, said in the same interview that Bangladesh’s ongoing economic challenges have been building over several years.

“Bangladesh’s current challenges did not begin with the war. They started during Covid-19, followed by the Russia-Ukraine conflict, which created foreign currency pressures,” he said.

“There was a strong expectation that after the political transition, investment would pick up and economic activity would accelerate,” Bijoy said. “However, fresh external disruptions have continued to weigh on the outlook.”

He stressed that limited fiscal capacity remains a core constraint.

“Our tax-to-GDP ratio is weak, and revenue collection has been consistently low,” he said, warning that this leaves the country with less room to respond to shocks.

Government decisions to adjust administered prices, particularly in energy, are also adding to cost pressures.

“The government initially deferred price adjustments due to political sensitivities, but ultimately had little choice but to implement them,” he said, adding that such measures would inevitably affect both inflation and the cost of doing business.

At the same time, he emphasised that ensuring an uninterrupted energy supply is more critical than keeping prices low.

Bijoy also pointed to setbacks in external financing discussions. “The IMF negotiations did not progress as expected, which is another hurdle,” he said, adding that the issue would require high-level policy attention.

On the external sector, Bijoy said export performance has weakened in recent months, particularly in Europe.

“The decline in exports began around August,” he said, attributing it to softer demand, higher costs and intensifying competition from countries such as China and India.

Buyers are also changing sourcing strategies.

“They are increasingly diversifying and consolidating orders with larger suppliers who are better equipped to meet sustainability standards and manage risks,” he said.

Despite the slowdown, Bijoy does not foresee a sharp downturn. “We are seeing a modest dip in exports, around 4.5 percent, which may reach 5 to 5.5 percent. It is not a catastrophic situation,” he said.

Rancon Auto Industries Ltd (RAIL) has entered a strategic partnership with Japan’s Mitsubishi Corporation to manufacture vehicles in Bangladesh for sale in domestic and regional markets.

Under the agreement, Mitsubishi will take a 25 percent equity stake in Rancon Auto, which began local production of the Mitsubishi Xpander in June last year.

Announcing the joint venture at an event at Sheraton Dhaka yesterday, Rancon Holdings Group Managing Director Romo Rouf Chowdhury said the partnership would mark a major step forward for the country’s automotive sector.

Finance Minister Amir Khosru Mahmud Chowdhury, State Minister for Civil Aviation M Rashiduzzaman Millat and Japanese Ambassador to Bangladesh Saida Shinichi were present at the event.

Rancon Holdings Group Managing Director Chowdhury said, “The landmark strategic alliance -- the first of its kind in the country’s automotive sector -- underscores the strength of Bangladesh-Japan trade relations.”

He added that the strategic investment is expected to enhance access to affordable and convenient vehicle financing, expand after-sales services, ensure spare parts availability, and strengthen distribution networks across the country.

“It will also facilitate the transfer of technology and knowledge to develop a highly skilled local workforce, while contributing to government revenue through VAT and taxes,” said Chowdhury, adding the company’s automobile arm has gradually built its manufacturing base since starting operations in 2017.

Rancon Auto, which focuses on multi-brand vehicle manufacturing and assembly, began with the local assembly of the Mitsubishi Outlander. It later expanded its portfolio to include the Fuso BM117, Mercedes OF1623, Proton X70, as well as trucks and pickups from JAC and GMC.

The company upgraded its factory in 2023 with a modern paint facility. The following year, it launched the locally painted and assembled Mitsubishi Xpander, which quickly gained traction, with monthly sales exceeding 100 units, making it the highest-selling brand-new vehicle in Bangladesh.

Despite this growth, Chowdhury said the country’s automobile market remains largely underdeveloped.

With one of the lowest per capita vehicle ownership rates in the region and a population of around 200 million, he said Bangladesh offers strong long-term demand potential as the middle class expands.

Against this backdrop, Rancon initiated discussions with Mitsubishi Corporation to leverage its manufacturing and distribution expertise. The talks culminated in the joint venture, under which Mitsubishi Corporation acquired a 25 percent stake in Rancon Auto Industries through direct foreign investment.

“This is a proud moment for us,” Chowdhury said, adding that the partnership reflects growing international confidence in Bangladesh’s industrial prospects.

He said it could be the first instance of direct foreign investment in four-wheel vehicle manufacturing in the country.

Chowdhury expressed hope that the move would encourage other global players to invest, helping build a stronger automotive manufacturing ecosystem capable of generating employment and eventually developing into an export hub.

He also pointed to regional examples such as Indonesia, Thailand, Malaysia, Vietnam, India and Pakistan, which have developed established automotive industries with export capacity.

Japanese Ambassador to Bangladesh Saida Shinichi described the joint venture between Mitsubishi and Rancon as a “significant milestone”, crediting engineers, technicians and government officials for their roles in bringing the project to fruition.

He said Mitsubishi had begun training Rancon engineers in 2024, followed by the launch of Xpander assembly in June last year, calling it evidence of strong collaboration between the two sides.

The envoy also highlighted Bangladesh’s efforts to improve the investment climate, including its first Economic Partnership Agreement (EPA) with Japan, signed in February, and initiatives such as the “Investment Gateway”.

He said the Mitsubishi Xpander is the only locally assembled Japanese-brand vehicle in Bangladesh, calling it the country’s first “made-in-Bangladesh” Japanese car.

He added that local assembly could support wider industrial development, including technology transfer, job creation and growth in upstream industries such as parts manufacturing.

Hiroyuki Egami, senior vice-president and division COO of Mitsubishi Corporation, reaffirmed the company’s commitment to bringing its global automotive expertise to the partnership.

In his speech, Finance Minister Amir Khosru Mahmud Chowdhury described the Mitsubishi-Rancon joint venture as a “refreshing change” for an automobile sector long dependent on imported vehicles.

“Bangladesh has traditionally depended on cars imported from Japan, Europe and the United States, a pattern that had become a way of life,” he said, adding that local assembly with a global brand like Mitsubishi marks a significant turning point.

He said Rancon’s experience in the automobile market makes it a suitable partner and expressed confidence that the collaboration would grow “from strength to strength”.

The minister highlighted the venture’s wider economic impact, pointing to its potential to raise value addition, create jobs and support industrial development, particularly in light engineering.

He added that the government is planning a dedicated zone for light engineering industries to support such initiatives.

At the programme, State Minister for Civil Aviation M Rashiduzzaman Millat announced that direct flights between Dhaka and Tokyo would resume next month, restoring a key air link between Bangladesh and Japan after a prolonged suspension.

He said the resumption would strengthen connectivity, facilitate trade and business, and deepen people-to-people ties between the two countries.

“You will be happy to know that we are starting flights to Tokyo from next month,” he said, adding that the move was expected to boost bilateral engagement on multiple fronts.

Inflation is likely to remain high and reach 8.6 percent in the fiscal year 2026-27 (FY27) due to higher energy prices driven by the war in the Middle East, according to BMI, a provider of insights, data and analytics.

The firm, owned by Fitch Solutions, said inflation may remain above the Bangladesh Bank’s (BB) 6.5 percent target set in its latest monetary policy.

It added in its report on Bangladesh published on Tuesday that this is partly due to base effects from low food price inflation during FY26.

Inflation averaged 10 percent in FY25, up from 9.7 percent in the previous year. It is expected to stay high at 9 percent in FY26, according to the Asian Development Bank in its April issue of the Asian Development Outlook.

The ADB projects inflation at 8.5 percent in FY27 as external shocks ease and domestic supply conditions improve.

BMI said that as inflation is expected to remain high, the BB may keep the policy rate unchanged at 10 percent in FY27 instead of cutting it, as it had previously projected.

“Our revised forecast reflects high projected inflation, a recent decline in long-term borrowing costs, and a renewed need for International Monetary Fund (IMF) financing,” said the report.

It added that the Iran conflict would add 0.13 percentage points to headline inflation in the coming fiscal year through higher energy prices.

“Elevated inflation threatens the BB’s price stability mission, making a rate cut in FY27 difficult to justify,” it said, adding that rising energy prices have made rate cuts untenable for many central banks worldwide.

The report said surging inflation in recent years has eroded real wages in Bangladesh, particularly for industry workers, who make up 21 percent of the economy’s labour force. Although salary declines have slowed in 2025, this follows five consecutive years of falling real wages, it added.

“An uncontrolled supply-side shock to inflation will worsen this problem. This will make the BB even more cautious about cutting rates, which could cause inflation to run unchecked.”

BMI also said falling long-term borrowing costs are another reason to keep the policy rate high. The 10-year treasury yield has trended down since January 2025, even though the policy rate remains elevated.

“Over the same period, credit growth has surged, driven by higher government borrowing. Apart from fuelling inflation, looser credit could also shift financial flows towards lower-quality investments. This is likely given the fragility of Bangladesh’s banking sector,” it said.

The report also noted the government’s request for $3 billion in financial support from the IMF and the World Bank.

“The government’s spending needs are real. Aside from cushioning the impact of the Iran conflict on Bangladeshi households, Dhaka will likely have to recapitalise several banks as it reforms the financial sector,” it said.

It added that IMF support is likely to depend on the government maintaining a degree of macroeconomic stability.

“Keeping monetary policy tight when economic conditions support it would help preserve confidence among international investors in Bangladesh’s medium-term prospects,” it said.

Despite official assurances of adequate fuel stocks, underpinned by Bangladesh Petroleum Corporation (BPC) data, long queues and intermittent supply disruptions continued at filling stations across the country yesterday.

While analysts and experts have proposed measures such as an odd-even rationing system and digital tracking to manage demand and ease pressure on pumps, proposals remain sidelined, leaving motorists to endure hours-long waits and sporadic "no fuel" notices.

In response to the strain, the BPC has announced a 10-20% increase in supply of diesel, petrol and octane, with 13,048 tonnes of diesel, 1,422 tonnes of octane and 1,511 tonnes of petrol being distributed daily through three state-run marketing companies. However, the retail situation has yet to stabilise.

On the ground, the supply boost has not fully translated into availability at pumps. While waiting times have eased slightly in parts of Dhaka and Chattogram, motorists across much of the country continue to face delays and uncertainty.

Imports and stock data show no shortage

According to port and BPC sources, between 28 February and 21 April, 823,170 tonnes of fuel arrived at Chattogram port in 26 shipments.

Of this, 624,452 tonnes came as diesel in 16 vessels, 124,087 tonnes furnace oil in six, 53,364 tonnes octane in two, and 21,266 tonnes jet fuel in two. A Singapore-flagged vessel, Hafnia Cheeta, carrying 32,000 tonnes of diesel from Malaysia, docked yesterday around noon.

Based on an average daily demand of 12,500 tonnes, diesel imports over 53 days could meet around 50 days of demand. With a 12-day opening stock in early March, total availability should have covered about 65 days, indicating no supply shortage.

For octane, the country had an 18-day stock at the start of March. Imports of 53,364 tonnes, against a daily demand of 1,200 tonnes, add 45 days of supply. Local refineries produce around 700 tonnes daily, adding roughly 37,000 tonnes or 30 days' supply. Combined, availability reaches about 93 days.

Despite these figures, retail-level disruptions have continued.

Mismanagement, panic and weak oversight

The strain began between 28 February and 6 March, when over 175,000 tonnes of fuel were sold in just seven days – more than double normal demand – rapidly depleting reserves. In response, authorities introduced rationing measures, after which long queues formed across fuel stations nationwide. Many motorists were forced to wait for hours and often returned without fuel.

According to Bangladesh Petroleum Corporation (BPC) and port sources, 26 vessels carrying 823,170 tonnes of fuel arrived at Chattogram between 28 February and 21 April. Of this, 624,452 tonnes were diesel, alongside furnace oil, octane and jet fuel shipments. BPC data show that, in theory, the combined stock and imports were sufficient to meet demand for extended periods.

Despite this, retail disruptions persisted, with officials announcing a 10–20% increase in daily fuel distribution to ease shortages. Yet filling stations continued to report uneven supply, shortened operating hours and "no fuel" notices.

Analysts attribute the crisis to distribution failures rather than supply shortages. They cite irregular withdrawals in early March, panic buying triggered by expectations of price hikes, and weak monitoring across depots and stations as key factors. Some fuel was reportedly hoarded, while portions may have been smuggled due to price gaps with neighbouring countries.

Former Eastern Refinery general manager Monjare Khorshed Alam said early excess demand was not contained. "If the excessive fuel supply during the first week had been controlled, the crisis would not have become so severe," he said, adding that expectations of price hikes encouraged stockpiling.

Energy expert Professor M Tamim pointed to gaps in monitoring and the absence of tracking systems, which allowed irregularities in distribution. He also criticised early signals of price increases, saying they intensified hoarding behaviour.

Experts suggest that tools such as app-based fuel tracking and odd-even number plate rationing could have helped stabilise supply and reduce congestion at pumps.

The Chittagong Stock Exchange (CSE) has urged deeper collaboration and the deployment of Indian capital market expertise, particularly in promoting the commodity derivatives market.

CSE Managing Director M Shaifur Rahman Mazumdar made the call on April 19 when Rajeev Ranjan, assistant high commissioner of India, visited the port city bourse in Chattogram.

In a press release, the CSE said Mazumdar presented a strategic plan for Bangladesh’s capital market growth and diversification, highlighting opportunities for collaboration with India in several priority areas.

He sought cooperation in expanding other asset classes, positioning CSE as a multi-asset exchange, and invited Indian brokers and investors to explore opportunities in Bangladesh.

In his remarks, Ranjan said India has a wealth of experience in the capital market—expertise it is eager to share with Bangladesh.

By arranging joint technical sessions, specialized workshops, and knowledge transfer programs, Bangladesh can tap into India’s proven expertise to develop its financial market, particularly in commodity derivatives.

This, he noted, is an essential step for price discovery and risk management for Bangladeshi commodity stakeholders.

The Multi Commodity Exchange of India, a global leader in commodity derivatives, could serve as a blueprint for CSE once formal cooperation is established with the Securities and Exchange Board of India.

“India is fully committed to supporting Bangladesh’s ambitions. We see Bangladesh not only as a neighbor but as a true development partner, and we will walk this path side by side,” Ranjan added.

CSE Chairman AKM Habibur Rahman expressed hope for further strengthening bilateral cooperation in the development of Bangladesh’s capital market.

Commercial banks' borrowing appetite continues to fall amid a squeeze in credit demand in the face of persisting economic sluggishness in recent months.Economy news updates

Apart from the private sector's lower credit demand, the Bangladesh Bank (BB) keeps injecting liquidity in the form of buying US dollars from the market to keep the exchange rate stable, which further cut commercial lenders' borrowing appetite, according to money market experts.

It ultimately helps banks, which often go for borrowing either from the interbank market or the central bank to meet their requirements, lessen their liquidity appetite and borrowing by overcoming the demand-supply mismatch.

According to the latest Bangladesh Bank data, the monthly volume of call-money transactions, through which banks make short-term borrowing within themselves, dropped to Tk 945 billion in March from Tk 1.47 trillion and Tk 1.06 trillion recorded in September and December last year, respectively.

The central bank repo is another major instrument through which banks can borrow funds from the regulator.

The data shows commercial banks altogether borrowed Tk 1.55 trillion in July last year, but monthly borrowing dropped to Tk 996 billion in September and Tk 1.08 trillion in December.

This further dropped to Tk 986 billion in March 2026.Bangladesh market report

On the other hand, through the special liquidity facility, under which there are seven borrowing windows like assured liquidity support (ALS), assured repo (AR), and Islamic Banks Liquidity Facility (IBLF), banks overall borrowed Tk 1.43 trillion from the central bank in July last year.

The monthly borrowing volume declined to Tk 603 billion and Tk 383 billion in September last year and March this year, respectively.

Seeking anonymity, a central bank official says the banking regulator kept purchasing US dollars from banks since July 13 last year to stabilise the taka-dollar exchange.

Under such forex-market intervention, the central bank has so far bought $5.68 billion from the market and injected more than Tk 650 billion into banks, he says.

"This intervention plays a major role in commercial banks' plummeting borrowing trend," he says.

In fact, he says, commercial banks now park their surplus liquidity in the central bank's deposit instrument called Standing Liquidity Facility (SDF) significantly despite lower gains at the rate of 7.50 per cent, while the call money rate is around 10 per cent.

According to the central bank data, the monthly volume of fund banks deposited in the SDF increased to Tk 578 billion in March from last December's count of Tk 424 billion.

Managing Director and Chief Executive Officer of Mutual Trust Bank Syed Mahbubur Rahman says the private sector's credit demand keeps plummeting, reaching 6.03 per cent by the end of February 2026.

He says industrial units are facing difficulties in their operation due to various factors like the energy crisis and the recent crisis in the Gulf countries worsened the situation further.

"So, the investment avenues of banks kept shrinking in recent months. That is why their borrowing appetite continues to drop," the experienced banker adds.

Picture a garment factory in Ashulia on a Tuesday morning. Machines hum, deadlines loom, and a buyer waits on a shipment. Then the power cuts out. The generator kicks in. Diesel is expensive and polluting. The factory absorbs the cost and carries on. This is not a crisis. This is Tuesday. Bangladesh’s energy crisis is the “common cold” of the RMG sector: chronic, underestimated and quietly debilitating. Painful, yet rarely dramatic enough to force action. The prescription is known, and the reforms are within reach, but the cost of inaction is no longer theoretical. What was once a logistical headache has become an existential threat.

On the factory floor, reality is harsher. Chronic gas shortages idle machines, delay shipments and raise costs. Global buyers are asking tougher questions about carbon footprints. With only 5.24 percent of installed capacity coming from renewables, we are not merely missing targets; we are risking competitiveness in a market that rewards reliability and sustainability. The country aims to generate 40 percent of its electricity from clean sources by 2041. Yet, of 32,345 MW total capacity, renewables account for just 1,695 MW. In more than a decade, the renewable share has risen by barely 3 percent, while investment has continued to favour fossil fuels. The energy mix is also unbalanced. About 82.7 percent of renewable capacity comes from solar, with minimal contributions from wind and hydro. Limited diversification leaves the grid exposed to supply and price shocks.

Industry is already paying the price. Gas shortages, often exceeding 1,300 MMCFD, mean factories receive well below the required fuel. To keep production lines running, many rely on diesel generators. That raises costs and erodes margins already squeezed by currency depreciation and global price competition. Energy insecurity is making Bangladeshi goods more expensive, precisely when buyers demand lower prices. The greater risk lies in compliance. The EU, our largest export market, is tightening environmental standards. Buyers increasingly link orders to carbon intensity.

Waiting until 2030 is not an option. Four shifts are urgent. First, enable private power. A Merchant Power Plant framework should allow producers to sell directly to large industries at market rates. The policy must be bankable and free of excessive open access tariffs. RMG hubs should be able to sign long-term power purchase agreements with solar and wind developers. Second, modernise the grid. The transmission and distribution network was not designed for variable renewable generation. Scaling up clean energy requires smart grid investment, faster net metering rollout and a clear modernisation roadmap with financing and timelines.

Third, remove fiscal barriers. The FY2025-26 budget cut import duties on solar panels and inverters to 1 percent, but mounting structures still face duties of 58.6 percent and battery storage remains heavily taxed. Duty relief must extend to all essential components so that fiscal policy aligns with national energy goals. Fourth, mobilise green finance. Bangladesh needs up to $980 million annually until 2030 to meet renewable targets, several times the current annual investment of $238 million. The Tk 200 crore single borrower cap under the Green Transformation Fund is too small for utility-scale projects. Developing a liquid green bond market and securing risk guarantees from development partners would help attract investment at scale.

The textile and RMG sectors must be central to energy policy. Policies detached from factory realities will fail. The priority must shift from announcements to implementation. Renewable energy is no longer a distant aspiration or a branding exercise. It is an industrial necessity. If we do not accelerate the transition now, we risk leaving our most vital sector behind as global trade shifts towards low-carbon production.

The writer is a former director of BGMEA and additional managing director at Denim Expert Ltd

Assistant US Trade Representative (USTR) Brendan Lynch for South and Central Asia will visit Bangladesh soon, US Ambassador to Bangladesh Brent T Christensen said today.

The ambassador shared the information during a meeting with Commerce Minister Khandakar Abdul Muktadir at the commerce ministry’s secretariat office in Dhaka.

Trade experts believe the USTR may discuss various trade-related issues during the visit, as Bangladesh and the USA signed the Agreement on Reciprocal Trade on February 9 this year.

He comes to Bangladesh months after the USTR began investigations into production overcapacity in different sectors across 60 countries, including Bangladesh, and into forced labour practices.

In today’s meeting, various aspects of strengthening bilateral trade, investment, and economic cooperation between Bangladesh and the United States were discussed, according to a statement from the commerce ministry.

The US ambassador noted that expanding bilateral trade would be beneficial for both countries.

The commerce minister said his ministry, along with other relevant ministries, is working on formulating the new Import Policy Order. He expressed hope that the draft of the Import Policy Order 2026 would soon be shared with the business community for feedback.

Both sides expressed interest in further expanding cooperation in trade, investment, and policy matters, the statement read.

Bangladesh confronts a nearly trillion-taka record revenue shortfall in the bygone three quarters of this financial year, scaling up pressure on government's fiscal management.Bangladesh market report

Until March, the National Board of Revenue (NBR) had lagged behind its target by about Tk 980 billion, marking the largest deficit in the country's history for the July-March period.

Revenue officials say the gap was partly due to an upward revision of the target without adequate assessment of prevailing economic conditions, as the interim government raised the tax-revenue target from Tk 4.99 trillion to Tk 5.03 trillion for the first time.

Revenue growth remained weak, rising only 2.67 per cent in March.

Over the July-March period, the NBR had collected Tk 2.87 trillion against a target of Tk 3.85 trillion, leaving a deficit of Tk 979.90 billion.

None of the three major tax heads met their targets, with income tax posting a shortfall of Tk 400 billion, VAT Tk 340 billion and import duty Tk 229.73 billion.

Officials and analysts attribute the poor performance to sluggish business activity, declining imports, weak investment inflows, Middle East tensions, rising fuel prices and persistently high inflation.

The large shortfall is set to put further pressure on the new government to manage rising expenditures and secure external budget-support funds.Banking sector news

On Tuesday, Finance Minister Amir Khosru Mahmud Chowdhury held a meeting with Prime Minister Tarique Rahman discussing conditions tied to the loan from the International Monetary Fund (IMF) and the next course of action.

Under the original US$4.7-billion IMF loan programme, Bangladesh is required to increase revenue by at least 0.5 per cent of GDP annually, although the tax-to-GDP ratio declined by 0.66-percentage points last year instead of a coveted rise.

In the remaining three months of the fiscal year, from April to June, the NBR will need to collect about Tk 2.15 trillion, which translates into Tk 710 billion to Tk 730 billion per month, far exceeding the current monthly average of Tk 300 billion to Tk 370 billion. Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), says weak revenue mobilisation has forced the government to rely more on bank borrowing to meet expenditures, warning that a year-end shortfall now appears inevitable and describing the situation as worrisome.

"Although the government has started trimming development spending to contain the budget deficit and ease borrowing pressure, such measures cannot be sustained for long."

The revenue target for the next fiscal year, set at Tk 6.04 trillion, will be difficult to achieve unless the NBR intensifies efforts to reduce tax exemptions and identify new sources of revenue, the economist forewarns.Global economy analysis

He cautions that if the current shortfall persists, achieving nearly 50-percent growth in revenue mobilisation next year would be unrealistic under prevailing economic conditions.

The economist, however, welcomes government move to introduce property tax and inheritance tax in the upcoming fiscal year as a positive step.

Finance Minister Amir Khosru Mahmud Chowdhury on Tuesday told Parliament that Bangladesh’s foreign debt stood at around $78 billion as of February 2026.

“According to the account up to February, 2026, the foreign debt of the Bangladesh government amounts to $78,067.20 million,” he said while replying to a starred question from independent lawmaker Rumeen Farhana (Brahmanbaria-2).Bangladesh economic indicators

Earlier, the Tuesday’s sitting of parliament started at 3:00 pm with Speaker Hafiz Uddin Ahmad, Bir Bikram, in the chair.

The finance minister said the Economic Relations Division (ERD) repays foreign loans on behalf of the government.

Each fiscal year, a projection is prepared to estimate the total expenditure for servicing foreign debt including both principal and interest, and necessary allocations are kept in the national budget.

Loan repayments are being made from the budgetary allocation throughout the year following a scheduled plan.

In reply to a scripted question from treasury bench member Md Shamsur Rahman Simul Biswas (Pabna-5), Khosru said that the government received a total of $85,992.64 million (nearly $86 billion) in foreign loans from 2008–09 fiscal year to 2025–26 fiscal year.

During the same period, the government repaid $22,328.47 million in principal and $8,696.82 million in interest, he said.

As of December 30, 2025, the foreign debt stood at $77,279.12 million ($77 billion), said Amir Khosru.

He told the House that from the 2007–08 fiscal year to February of 2025–26, the government borrowed a total of $87,396.03 million and repaid $22,050.79 million in principal.

“As a result, the country’s foreign debt amount increased by $65,346.24 million during this period,” the minister added.

US President Donald Trump said he would indefinitely extend the ceasefire with Iran to allow for further peace talks, although it was not clear on ​Wednesday if Iran or Israel, the US ally in the two-month war, would agree.

Trump said in a statement on social media the US had agreed to a request by Pakistani ‌mediators "to hold our Attack on the Country of Iran until such time as their leaders and representatives can come up with a unified proposal ... and discussions are concluded, one way or the other."

Pakistan's leaders have hosted peace talks in Islamabad to end a war that has killed thousands of people and shaken the global economy.

But even as he announced what appeared to be a unilateral ceasefire extension, Trump also said he would continue the US Navy's blockade of Iran's trade by ​sea, considered an act of war by Iran.

On my personal behalf and on behalf of Field Marshal Syed Asim Munir, I sincerely thank President Trump for graciously accepting our request to extend the ceasefire to allow ongoing diplomatic efforts to take their course.

With the trust and confidence reposed in, Pakistan…
— Shehbaz Sharif (@CMShehbaz) April 21, 2026

There was no response early on Wednesday to Trump's announcement from senior Iranian officials, although some initial reactions from Tehran suggested Trump's comments were being treated ​skeptically.

Tasnim News Agency, affiliated with the Islamic Revolutionary Guards Corps, said Iran had not asked for a ceasefire extension and repeated threats to break the US blockade ⁠by force. An adviser to Iran's lead negotiator, the speaker of parliament Mohammad Baqer Qalibaf, said Trump's announcement carried little weight and may be a ploy.

Trump's wartime rhetoric has veered between extremes. In an ​expletive-filled threat against Iran only two weeks ago he promised that a "whole civilization will die tonight", while at other times has appeared keen to end the violence and market uncertainty.

With his announcement, Trump again pulled ​back at the last moment from his threats to bomb Iran's power plants and bridges. United Nations Secretary General António Guterres and others have condemned those threats, noting international humanitarian law forbids attacks targeting civilians and civilian infrastructure.

NEXT PEACE TALKS UNCERTAIN

The US and Israel began the war on February 28 with aerial bombardments of Iran. The conflict quickly spread to Gulf states that host US military bases and to Lebanon once the Iran-allied militant group Hezbollah joined the fighting.

Israeli ​Prime Minister Benjamin Netanyahu has for decades sought to oust Iran's leadership, but Trump has given shifting and sometimes contradictory rationales for joining Israel to launch the war and how he foresees it ending, stirring confusion ​in global markets.

More than 5,000 civilians have been killed across the region and hundreds of thousands displaced so far, mostly in Iran and Lebanon, and the war has led to the virtual closure of the Strait of Hormuz, a ‌vital chokepoint in ⁠global energy markets between Iran and Oman, sending oil prices soaring and fears that the global economy could enter a recession.

Iran has repeatedly exploited its ability to control the passage of oil tankers and other ships in the strait in response to US and Israeli attacks.

Trump said in his statement he was willing to extend the ceasefire because "the Government of Iran is seriously fractured, not unexpectedly so," a reference to US-Israeli assassinations of some of the country's leaders in the war's first weeks, including the late Supreme Leader Ayatollah Ali Khamenei, who has been succeeded by his son.

A few hours before his announcement, Trump had told ​the CNBC news channel that he was not inclined ​to continue the temporary truce and the ⁠US military was "raring to go."

Those comments came as tentatively scheduled peace talks in Islamabad seemed on the verge of falling apart: US Vice President JD Vance, whose presence has been requested by the Iranians, had planned to return to Pakistan on Tuesday.

Before Trump's latest announcement, a senior Iranian official told Reuters that Iran's ​negotiators had been willing to attend another round of talks if the US abandoned a policy of pressure and threats, and rejected negotiations aimed ​at surrender.

Iran has condemned the ⁠US Navy intercepting and seizing two commercial Iranian ships at sea as part of its blockade, the second earlier on Tuesday, with its foreign ministry accusing the US of "piracy at sea and state terrorism." The US, joined by multiple other countries, has condemned Iran for impeding freedom of navigation in the Strait of Hormuz.

A first session of talks 10 days ago produced no agreement, with much of the focus on Iran's stockpiles of highly ⁠enriched uranium.

Trump wants ​to take the uranium out of Iran in order to prevent the country from enriching it further to the point ​where it could develop a nuclear weapon. Iran says it has only a peaceful civilian nuclear program and a sovereign right to continue that as a signatory of the nuclear weapons non-proliferation treaty.

Commerce Minister Khandakar Abdul Muktadir today sought Australian investment in Bangladesh’s solar power generation sector to meet the growing domestic demand for electricity.

The minister made the call at a meeting with Australian High Commissioner in Bangladesh Susan Ryle at the minister’s secretariat office in Dhaka.

The two discussed strengthening bilateral trade, investment, and economic cooperation between Bangladesh and Australia, according to a statement from the commerce ministry.

The minister said his government has been working to create an investment-friendly environment and is particularly encouraging foreign investment in the renewable energy sector.

He added that revitalising existing industrial enterprises, establishing new industries, and generating employment are among the government’s current priorities.

The government has been activating industrial sectors with assets worth approximately $7 billion, and making them production-oriented through private investment is a key objective.

In this context, the minister invited increased Australian investment in Bangladesh’s solar power generation sector.

Ryle said bilateral trade between the two countries currently stands at around $5.14 billion and continues to grow steadily.

She highlighted significant potential for investment in Bangladesh, particularly in the energy sector—especially renewable energy.

A high-level Australian delegation is exploring opportunities for cooperation in green energy, innovation, and technology, the high commissioner also said.

She mentioned that around 28,000 Bangladeshi students are currently studying in Australia, making it one of the most important destinations for Bangladeshi students.

Both sides expressed interest in expanding cooperation in trade, education and scholarships, enhancing the capacity of officials of the Ministry of Commerce, and increasing collaboration in infrastructure development.

The conflict between Iran and the United States and Israel is creating the ​worst energy crisis ever faced by the ‌world, the head of the International Energy Agency (IEA) said on Tuesday.

"This is indeed the biggest crisis ​in history," Birol told France Inter ​radio in an interview broadcast on Tuesday.

"The ⁠crisis is already huge, if you combine ​the effects of the petrol crisis and the ​gas crisis with Russia," he added.

The war in the Middle East has choked up maritime traffic in ​the Strait of Hormuz, which is a ​conduit for a fifth of global oil and liquefied ‌natural ⁠gas flows.

It has also come on top of the effects of Russia's war with Ukraine, which had already severed Russian gas supplies to ​Europe.

Birol had ​said earlier ⁠this month that he viewed the current situation in global energy ​markets as worse than previous crises in ​1973, ⁠1979 and 2022 combined.

In March, the IEA agreed to release a record 400 million barrels of ⁠oil ​from strategic stockpiles to ​combat rising oil prices caused by the U.S.-Israeli war with ​Iran.

Recovering defaulted loans is a more complicated process for banks than one might think. The verdict for a case with a financial loan court takes years. But when a bank gets the verdict in its favour, it cannot yet go and auction the mortgaged properties to recover the loan defaulted. It must then file another case – called an execution case – for that purpose and this takes another few years before being disposed of.

While the original case itself may take 5-10 years to conclude, the execution case required to enforce the verdict in a bank's favour and sell the mortgaged assets also takes several more years.

Bank officials say this "double legal process" significantly prolongs and complicates loan recovery, causing banks to incur substantial losses as they pursue legal procedures for years.

Experts in banking law argue that the provision requiring a separate execution case after obtaining a verdict should now be amended. In many countries, court rulings on defaulted loans can be directly enforced without requiring a separate process.

According to Supreme Court statistics, 33,406 such execution cases are currently pending in courts (joint district judge courts) across the country, involving approximately Tk57,000 crore in bank dues. Among these, 1,108 cases have been pending for over a decade, involving more than Tk10,000 crore. Nearly 14,000 cases have been pending for over five years, involving about Tk22,000 crore.

As of December last year, around 78,000 cases involving over Tk2,50,000 crore in defaulted loans were pending in financial loan courts.

How execution cases drag on for years

In one case, ARM Food Ltd took a Tk57 crore loan from a Janata Bank branch in Narayanganj in 2004. After the loan defaulted, the bank filed a case in 2009, claiming about Tk94 crore with interest. In 2016, the court ruled in favour of the bank, allowing the mortgaged property to be auctioned.

To enforce the verdict, the bank filed an execution case in July 2016. However, the case remains unresolved, preventing the auction of nearly two acres of land and a house held as collateral.

A lawyer for the bank said the original case took about seven years to resolve, while the execution case has remained pending for nearly a decade due to a High Court stay order obtained by the borrower.

Legal complications

Experts say execution cases follow nearly the same legal procedures as the original cases. After filing an execution case under Sections 26, 27, and 28 of the Financial Loan Court Act, 2003, the court issues notices asking why the mortgaged property should not be auctioned.

Defaulters often exploit legal loopholes to delay proceedings, taking years to respond to summons and using influential lawyers to prolong hearings. Although the law requires execution cases to be resolved within a month and auctions to be conducted within 15 days, this is rarely followed in practice.

Defaulters also frequently file writ petitions in the High Court, which often issues stay orders and rules asking why the execution case should not be dismissed. These rulings remain unresolved for years, effectively halting the original execution process.

Extent of High Court stays

According to Supreme Court sources, as of February, 4,809 out of 33,406 execution cases, involving over Tk13,000 crore, are currently stayed by the High Court. Among them, 806 cases have remained stayed for more than five years.

In another case, LSG Leather Products defaulted on a Tk39 crore loan from AB Bank in 2008. The court ruled in favour of the bank in 2017, but the execution case was stayed by the High Court in 2018. Since the rule issued by the court remains unresolved, the mortgaged property cannot be auctioned.

What could be the solution

Former Bangladesh Bank deputy governor and former AB Bank chairman Mohammad A (Rumi) Ali said in countries such as the US, the UK, Switzerland, Singapore, and Malaysia, court verdicts in loan recovery cases are directly enforced by relevant authorities without requiring separate execution cases.

He noted that Bangladesh's current system – where a verdict must be followed by another case and then routed through district administration – is unnecessarily complex and needs reform.

He added that the shortage of judicial manpower already delays case disposal, and requiring a separate case for enforcement only worsens the situation. Simplifying the process would benefit both banks and borrowers as prolonged delays increase liabilities for borrowers due to accumulated interest and penalties.

Advocate Ahsanul Karim, a constitutional and company law expert, told The Business Standard that the law was enacted in 2003 – nearly two decades ago – but has yet to be updated to meet present-day needs. He said that once a law is enacted, it should be revised periodically in line with changing realities.

He noted that the Money Loan Court Act is widely applied and closely tied to the country's overall economic system. Due to various minor flaws in the law, banks face significant difficulties and incur unnecessary costs and delays. Therefore, he emphasised that amending the law has now become an urgent necessity.