Top finance officials from around the world will convene in Washington this week under the shadow of the war in the Middle East, which has delivered a third major shock to the global economy after the COVID pandemic and Russia's full-scale invasion of Ukraine in 2022.

Top International Monetary Fund and World Bank officials last week said they would downgrade their forecasts for global growth and raise their inflation predictions as a result of the war, warning that emerging markets and developing countries will be hit hardest by higher energy prices and supply disruptions.

Before the Iran war broke out on 28 February, both institutions had expected to lift their growth forecasts given the resilience of the global economy - even in the wake of major tariffs imposed by US President Donald Trump beginning last year. But the war has delivered a series of shocks that will slow progress on recovering growth and beating back inflation.

The World Bank's baseline estimate now projects growth in emerging markets and developing economies of 3.65% in 2026, down from 4% in October, but sees that number dropping as low as 2.6% if the war lasts longer. Inflation in those countries was now forecast to hit 4.9% in 2026, up from the previous estimate of 3%, and could spike as high as 6.7% in the worst case.

The IMF warned last week that ⁠about 45 million additional people could also face acute food insecurity if the war persists and continues to disrupt fertilizer shipments needed now.

The IMF and World Bank are racing to respond to the latest crisis and support vulnerable countries at a time when public debt levels have reached record levels and budgets are tight.

The IMF said it expects demand for $20 billion to $50 billion in near-term emergency support to low-income and energy-importing countries. The World Bank has said it could mobilize some $25 billion through crisis response instruments in the near-term, and up to $70 billion in six months, as needed.

But economists are urging governments to use only targeted and temporary steps to ease the pain of higher prices for their citizens, since broader measures could fuel inflation.

"Leadership matters, and we've come through crises in the past," World Bank President Ajay Banga told Reuters, lauding work on fiscal and monetary controls that had helped economies weather previous storms. "But this is a shock to the system."

Countries now face a tough balancing act managing inflation while keeping an eye on growth and the longer-term challenge of creating enough jobs for the 1.2 billion people who will reach working age in developing countries by 2035.

IMF and World Bank also face a far different global landscape with tensions running high between the United States and China, the world's largest economies, and the Group of 20 major economies hobbled in its ability to coordinate a response.

The United States currently holds the rotating presidency of the ⁠G20, which also includes Russia and China, but it has excluded another member - South Africa - from participation, complicating the group's ability to coordinate on this crisis.

"You're trying to operate on consensus when there's no consensus in the world right now on anything," said Josh Lipsky, chair of international economics at the Atlantic Council.

Lipsky said statements by the IMF, World Bank and other multilateral lenders about their readiness to support countries hit hard by the war were clearly aimed at reassuring markets.

"It's a signal to private creditors. This is not a time to flee countries that are in problematic waters. They will have support from the multilateral development banks and the international financial institutions. This is not going to be COVID. This is something that we can handle."

TOUGHER CONDITIONS FOR MANY

Mary Svenstrup, a former senior US ⁠Treasury official now with the Center for Global Development, said many emerging market and developing economies entered the crisis worse off than just a few years ago, with lower buffers, higher debt vulnerabilities and lower reserves.

"We need to have this crisis be a catalyst for IMF stakeholders to really rethink how the Fund supports vulnerable countries with the recognition that we're going to be seeing more global shocks," she said. "We can't ask them to sacrifice growth and development for the sake of rebuilding buffers."

Svenstrup said countries should pursue more ambitious reforms if ⁠they received fresh funds. "There probably does need to be more financial support from the (international financial institutions) but it needs to be affordable, and it needs to be in the context of reform programs and potentially broader debt relief," she said.

Martin Muehleisen, a former IMF strategy chief who is now with the Atlantic Council, agreed, saying the IMF should work with donor countries to accelerate debt restructuring for borrowers and "get them off the debt cycle." New lending should be tied to a credible ⁠debt-reduction road map, he said.

Eric Pelofsky, vice president at the Rockefeller Foundation, said low-income and lower middle-income countries paid twice the amount to service their debts in 2025 than before COVID, limiting funds for education, health care and other critical social programs. Half were now in or near debt distress, up from a quarter, just a few years ago.

"This new conflict threatens any recovery that occurred since the pandemic or the Ukraine war, and it takes countries that have basically been treading water, trying to stay away from default, and keeps them in a long term debt-growth-investment trap," he said.

With a trillion?dollar economy in vision by 2034, the new government plans a big budget worth Tk 9.30 trillion for the next fiscal year for augmented funding of critically important sectors.Economic Forecast Report

In order to finance the substantially raised annual spending plan, the government has set a target to collect some Tk 7.95 trillion as revenue in the fiscal year 2026-27, officials say.

The decisions were made at a meeting of the committee for coordination on fiscal, monetary, and currency exchange on Friday night, as the budgeting exercise is getting in gear with little over two months left before the current fiscal year ends.

Official sources say the new government will have to make large allocations to fulfill a number of its electoral pledges in the next fiscal year, face the impacts of the ongoing conflict in the Middle East, and enhance salary of employees partially, and so the budget size is going to be increased significantly.

"The Middle East conflict alone is eating up a big portion of government subsidies now, but its impacts on the economy will be much bitter in the next fiscal year," says one official.

As such, he adds, the government is giving big target to the National Board of Revenue (NBR) for collecting revenue to meet the growing expenditure.

Also, the high revenue target is set as Bangladesh's tax-to-GDP ratio remains one of the lowest in the world by many accounts. The International Monetary Fund has pushed Bangladesh to increase the ratio to 9.20 per cent in the next fiscal year from the current rate of around 6.6.

In the new budget, sources have said, the size of the Annual Development Programme (ADP) is going to be Tk 3.0 trillion, significantly higher then the current development budget amounting Tk 2.3 trillion.Local Business Directory

The GDP-growth target has been set at 6.5 per cent for the next fiscal year while the government targets to keep inflationary pressure below 7.5 per cent then.

According to officials concerned, of the total ADP worth Tk 3.0 trillion for the next fiscal year, Tk 1.9 trillion, equivalent to 63.33 per cent of the total outlay, is set to be financed from government exchequer, while the remaining Tk 1.1 trillion is expected to be managed from external sources, mainly in the form of project loans and grants.

For the current fiscal year, the government initially approved an ADP of Tk 2.3 trillion, which was later revised down to Tk 2.0 trillion, comprising Tk 1.28 trillion from domestic resources and Tk 0.72 trillion from external financing.

The proposed allocation for the next fiscal year represents an increase of 48.44 per cent in domestic financing and 52.78 per cent in external financing.

According to Implementation Monitoring and Evaluation Division (IMED) data, ministries and divisions together spent Tk 591.34 billion up to February, accounting for 30 per cent of the total revised allocation.Personal Finance Software

The proposed ADP breakdown shows, Local Government Division (LGD) is set to receive the highest chunk of Tk 366.20 billion in the next fiscal, followed by the Road Transport and Highways Division (RTHD) with Tk 329.03 billion.

Health Services Division is likely to see a significant jump in allocation to Tk 206.08 billion, more than six-fold compared to its revised allocation of Tk 31.28 billion in the current fiscal, elevating its position to third from the 15th.

Power Division is expected to receive the fourth-highest allocation at Tk 191.86 billion, followed by the Ministry of Science and Technology with Tk 173.66 billion.

Among other sectors, Primary and Mass Education is set to receive Tk 168.48 billion in development budget, while Secondary and Higher Education Division is likely to get Tk 138.36 billion.

Sources say Finance and Planning Minister Amir Khasru Mahmud Chowdhury, who chaired the meeting, discussed the challenges now the country's economy faces due to the Middle East turmoil, especially the high import costs of fuel oils and gas and the possible way of their funding.

Also, he asked the finance officials to keep in mind "long-lasting impacts of the war fallouts on the economy, the inflationary pressure, and government's electoral pledges alongside gradual deregulation of the economy" while preparing the budget.

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.

Bangladesh's Small and Medium Enterprise (SME) sector is witnessing a sharp decline in activity, with production down by as much as 30% in recent weeks amid the global energy crisis, rising raw material costs, and frequent load-shedding.

Mirza Nurul Ghani Shovon, President of the National Association of Small and Cottage Industries of Bangladesh (NASCIB), told The Business Standard that the situation is becoming untenable for many small-scale manufacturers.

"The energy crisis has pushed many institutions to the brink of closure. In many cases, production has already dwindled by 25% to 30%," Shovon said.

He noted that without a stable power supply, factories are unable to meet their production target, leading to a massive drop in output across the board.

The sector, which contributes over 28% to the national GDP and employs roughly three crore people, is currently navigating its toughest period since the pandemic.

The leather and chemical-dependent sectors are among the hardest hit. Ilias Hossain, the proprietor of Rajex Leather, revealed that essential production components have become extremely expensive.

"The price of chemicals used in leather processing has doubled, and in some cases, even tripled," Ilias claimed.

He added that the cost of imported raw materials from China – such as gum and pasting – has surged due to global supply chain disruptions linked to the Middle East conflict. "When raw materials cost this much, the price of every finished product, from belts to footwear, must go up, which then kills consumer demand."

While production is dwindling, sales are also being stifled by operational restrictions. Shofiqul Islam, owner of Topex Leather, pointed out that the government-mandated early closing of shops to save electricity has put businesses in a tight spot.

"We are forced to wind down by 7pm or 8pm. But our primary customers, specially service holders, usually come to shop after their office hours in the evening. Our wholesale and retail sales are taking a massive hit," Shofiqul explained.

Monoranjan Sarker Noyon, proprietor of Manikganj-based Noyon Handicrafts, told TBS that the current economic climate has forced a significant reduction in corporate and wholesale orders.

"Our production hasn't been hit significantly yet, but our orders have definitely decreased," Noyon said, noting that even long-term regular clients are unable to maintain their usual purchase volumes as consumer demand falters at the retail level.

Anwar Hossain Chowdhury, managing director of SME Foundation, echoed these concerns, stating that the impact on marginal and rural entrepreneurs is particularly severe.

"The supply chain is broken. Production and marketing are both suffering a negative impact that is easily predictable and deeply concerning," he added.

Despite the challenges, some niche sectors like handmade crafts remain resilient. Jannatul Ferdous, founder of Bhumi Artisan, noted that while her production isn't fuel-dependent, the overall economic slowdown might eventually weigh on even the most specialised markets.

To prevent a total collapse of the sector, industry leaders are calling for immediate government intervention.

"The banks have moved away from single-digit interest rates and returned to higher tiers," Shovon of NASCIB remarked.

"With production down by 30% and costs rising, these high interest rates will finish us off. The government must ensure a return to single digit interest rate to keep the SME economy alive," he said.

By fishing, Rafique Majhi earns about Tk 500 on a good day, if luck favours him. The income has barely changed over the years. After the pandemic, when the cost of daily essentials began to surge, food was the first item he cut back on.

At Mahipur in Patuakhali district, his family began seeing fish or eggs on their plates less frequently.

Over time, that has worsened rather than improved. When catches fail or fishing bans are imposed, borrowing has become more frequent. Each day, Rafique’s struggle is to secure three meals, often only rice and vegetables.

After weeks of disrupted fishing due to fuel shortages, he is now anxious about surviving the next fishing ban from mid-April. “Prices of everything have gone up, but income has remained the same,” said the 52-year-old fisherman.

Like him, many low-income households across the country are under pressure as earnings fail to keep pace with rising prices. The difference between income growth and inflation have driven real incomes down.

Official data show real incomes have remained negative for four consecutive years.

“It’s impossible to cover all basic needs,” said Kabir Hossain, an employee at a fish depot at Mohipur Fish Landing Centre in the same southern district.

He said his children often ask for better meals, but he cannot afford them. To manage daily expenses, he relies on borrowing almost every month. The upcoming fishing ban is also a major concern.

According to the Bangladesh Bureau of Statistics (BBS), inflation has outpaced wage growth for 50 consecutive months up to March, despite a gradual rise in pay since February 2022.

The wage growth rate stood at 8.09 percent in March, 0.62 percentage points below inflation of 8.71 percent, according to the Wage Rate Index. In the previous month, the gap between inflation and wage growth was 1.05 percentage points.

Unlike Rafique or Hossain, Prashanna Kumar Roy, a farm labourer at Rajpur union in Lalmonirhat, is not concerned about fishing bans. But his pressure comes from rising farming costs, which he said have reduced his income.

Roy, who used to earn Tk 15,000 to Tk 20,000 a month during the farming season, said it is now difficult to earn even Tk 14,000.

After cutting all possible expenses, including exhausting the very small family savings and skimping on nutritious food, the 45-year-old labourer said any emergency, such as medical needs, now forces him to take loans, adding to existing debt.

These people belong to the country’s informal sector, which makes up about 84 percent of the total employed population of 6.9 crore. A large share of them are now at risk of falling into poverty or is already below the poverty line.

COMPROMISING NUTRITION INVITES LASTING CONSEQUENCES

Mohammad Lutfor Rahman, professor of economics at Jahangirnagar University, said low-income households are cutting back on protein-rich foods such as fish, meat, eggs, milk and fruit, relying instead on basic calorie intake just enough to work the next day.

He said such compromises could have long-term consequences.

“A malnourished workforce cannot remain productive, and their physical capacity declines over time,” Prof Rahman said, adding that children in low-income families risk falling behind in cognitive development.

He said weak labour demand is adding further pressure.

Several sectors, including construction, have recorded weak or negative growth in recent months, reducing demand for labour.

“At the same time, more people are entering the labour force, creating excess supply and pushing wages down.”

The prof also pointed to sluggish public spending. “ADP implementation has been among the lowest in decades, cutting off an important source of income for workers,” he added.

In its latest monthly update, the General Economics Division (GED) warned that rising energy and utility costs could further increase real income pressures as households face higher spending on electricity, gas and transport, disproportionately affecting lower-income groups.

“This divergence underscores intensifying real income pressures, as households face rising costs without corresponding wage adjustments,” said the report.

It added that stagnant wages in this context highlight the erosion of purchasing power, particularly among lower-income groups whose spending is dominated by essentials.

The February assessment suggested inflationary pressures are rising faster than wage adjustments, widening the mismatch between incomes and expenditure.

“This identifies a need for coordinated wage and price management, as inflationary pressures continue to undermine real income stability,” the report said.

In March, wage growth in agriculture stood at 8.10 percent, up 0.01 percentage points from February. Industrial wages rose to 8.02 percent, while services recorded 8.23 percent.

The Wage Rate Index tracks wages of informal daily workers across 63 occupations in agriculture, industry and services.

To ease pressure, Prof Rahman called for targeted intervention. “The government should expand subsidised food distribution and consider compensation measures so low-income households can at least maintain minimum nutrition and purchasing power.”

Bangladesh Bank reported a slight rise in nominal wage growth in the second quarter of fiscal year 2025-26, with the wage index increasing to 8.07 percent in December 2025 from 8.02 percent in September, although still below the previous fiscal year.

All major sectors saw marginal gains, with agriculture at 8.16 percent, industry at 7.91 percent and services at 8.24 percent, supported partly by Aman harvest demand. However, wage growth continued to lag inflation, keeping real wages negative and steadily eroding household purchasing power.

WAR SHOCKS COMPLICATE INCOME OUTLOOK FURTHER

Last week, the World Bank projected weaker economic growth for Bangladesh in the current fiscal year, saying an additional 12 lakh people will remain below the poverty line mainly due to the impact of the US-Israel war on Iran.

Before the conflict in the Middle East, about 17 lakh people were expected to move out of poverty this year. That figure has now dropped to 5 lakh.

At the $3 international poverty line, an additional 14 lakh people are projected to fall into poverty over the same period, it added.

The Washington-based multilateral lender said the conflict is likely to affect Bangladesh’s economy materially, compounding existing vulnerabilities, including high inflation, financial sector stress, limited policy space and weakened confidence.

Mongla Port operations have come to a near standstill as lighter vessels responsible for unloading and transporting cargo from commercial ships are unable to operate due to a severe fuel shortage, leading to mounting financial losses for importers.

Owners of lighter vessels say most of their fleet is now idle due to the fuel crunch, disrupting cargo handling from mother vessels and delaying vessel turnaround time. As a result, importers are being forced to pay penalties for the extended stay of commercial ships at the port's outer anchorage.

They further said that since the outbreak of conflict in the Middle East, they have been unable to secure adequate fuel supplies from depots in Chattogram.

Vessel owners also complain that despite repeated appeals by the Lighter Vessel Owners' Association to the Ministry of Power, Energy and Mineral Resources, no effective remedial measures have been taken.

Sources say hundreds of empty lighter vessels have been anchored in the Pashur River in Mongla for several days. A similar situation has been observed in Rupsha and at Jetty no 4 and 5 in Khulna, where hundreds more vessels remain idle due to the fuel shortage.

Cargo from large mother vessels at the outer anchorage is usually transferred to lighter vessels and then transported via river routes to terminals in Dhaka, Narayanganj and other parts of the country. However, the fuel shortage has severely disrupted these operations.

Owner of MV Mimtaz lighter vessel Md Khokon said his vessel has been waiting for fuel for several days. "We are unable to get fuel from SK Enterprise as depot supplies are insufficient. This is the situation for all vessels," he said.

Mohammad Mamun, production officer at Seven Circle Cement in Rupsha, said delays in cargo unloading from commercial ships are causing significant financial losses.

"We are paying penalties of around $17,000 per day for each commercial vessel. Delays are increasing costs, and our plant is facing raw material shortages," he said.

Azadul Haque, AGM of Sheikh Cement Factory, said production has been completely halted due to the crisis. "Supply of raw materials is being disrupted and workers are sitting idle," he said.

HM Dulal, owner of Messrs Nuru and Sons, marine dealer and agent of Meghna Petroleum Limited in Mongla, said fuel demand has increased due to various government development activities, including river dredging and canal excavation, putting additional pressure on supply.

Engineer Prabir Hira, manager (operations) at Meghna Petroleum Limited in Mongla, said supply disruptions caused by the Iran conflict have affected fuel availability, and distribution is being carried out in line with government directives.

Despite no major surge in revenue collection, the government is planning a 50% increase in development spending in the upcoming 2026–27 fiscal year compared to the revised target of the current fiscal year.

To this end, the Ministry of Finance is set to allocate Tk3 lakh crore for the Annual Development Programme (ADP) in the upcoming budget, of which 1.90 lakh crore will come from government funds and around Tk1.10 lakh crore from foreign loans and grants, according to relevant officials.

In the current fiscal year, the government initially allocated Tk2.30 lakh crore for the ADP in the original budget. However, implementation fell short of expectations, leading to a downward revision to Tk2 lakh crore. Of this, Tk1.28 lakh crore was planned from domestic sources, while Tk72,000 crore was expected from external financing.

Data from the Implementation Monitoring and Evaluation Division (IMED) shows that, as of February, ministries and divisions have spent Tk59,130 crore, which is 30% of the revised total allocation.

The Local Government Division (LGD) is set to receive the highest allocation of Tk36,620, which is about 12.21% in the proposed Tk3 lakh crore ADP in the next fiscal year.

Roads Transport to get 2nd highest share; then Health

The Roads Transport and Highways Division (RTHD) is expected to secure the second-largest allocation at Tk32,903 crore, approximately 11% of total ADP allocation, according to preliminary estimates.

In a major shift, the Health Services Division's allocation is projected to rise sharply to Tk20,608 crore—more than six times higher than its revised allocation for the current fiscal year—lifting the sector from 15th to third position in the ADP ranking.

The Power Division is likely to receive the fourth-highest allocation of Tk19,186 crore, followed by the Ministry of Science and Technology with Tk17,366 crore.

Meanwhile, Tk16,848 crore is expected to be allocated to primary and mass education, while the Secondary and Higher Education Division may receive Tk13,836 crore.

Officials from the Planning Commission said emphasis has been placed on improving ADP implementation by aligning projects with medium-term resource availability, ensuring feasibility studies before approving large projects, strengthening project monitoring, and maximising the use of project loans.

Recommendations also include enhancing the capacity of project directors, improving financial management, and strengthening budget implementation monitoring systems.

Meanwhile, ADP implementation rates have shown a declining trend in recent years. From FY2021–22 to FY2024–25, the implementation rate fell to 67%, and based on spending trends in the first eight months of FY2025–26, it may remain below 80%.

However, during the July–February period of the current fiscal year, implementation progress stood at just 29.6%.

The Bangladesh Poultry Industries Association (BPIA) has urged the government to halve taxes on the poultry sector in the proposed 2026-27 national budget.

According to a budget proposal sent to the National Board of Revenue recently, BPIA said production costs in the poultry industry have nearly doubled over the past five years, putting significant pressure on farmers.

As expenses continue to outpace earnings, many are forced to shut down operations.

Mosharaf Hossain Chowdhury, president of BPIA, said that in the current fiscal year, corporate tax in the sector has been raised from 15 percent to 27.5 percent, advance income tax from 1 percent to 5 percent, and turnover tax from 0.6 percent to 1 percent.

Such high tax rates are unprecedented for food production sectors globally, he said, adding that the increases have driven up the cost of poultry feed and other essential inputs.

Chowdhury called for an immediate reduction of existing taxes and duties by half to ensure the safeguarding of small and medium-scale farmers and sustain industry growth.

Without such measures, it will be increasingly difficult for marginal farmers to survive, he said

The BPIA president also stressed the need to eliminate middlemen and extortion practices across the supply chain, from farms to retail egg markets.

In addition, he called for electricity subsidies, easier access to credit, and prioritising poultry farmers under government agricultural support programmes.

Md Safir Rahman, secretary general of the BPIA, said that without special incentives in the upcoming budget, investor interest in the poultry sector may decline, potentially slowing the emergence of new entrepreneurs.

Garment exports from Bangladesh to the United States fell 2.54 percent to $5.59 billion in the July-March period of the current fiscal year.

The US accounts for about 20 percent of the country’s total annual apparel exports.

Exports to the United Kingdom, the third-largest destination with a 12 percent market share, also dropped 1.61 percent to $3.30 billion during the period, according to data from the Export Promotion Bureau compiled by the Bangladesh Garment Manufacturers and Exporters Association, published yesterday.

Amid a volatile global supply chain, shipments to Canada edged down 0.26 percent to $961.34 million in July-March.

Exports to non-traditional markets declined sharply, falling 8.05 percent during the period.

Overall, readymade garment (RMG) exports stood at $28.58 billion in July-March, marking a 5.51 percent year-on-year decline.

Shipments to the European Union, which accounts for 49 percent of Bangladesh’s total apparel exports, also fell 6.99 percent to $14.02 billion, as per the data.

India has further ​raised a windfall tax on exports of ‌diesel and aviation turbine fuel it imposed last month to ensure adequate domestic supply.

In a government notification on ​Saturday, India’s finance ministry increased the tax ​on diesel exports to 55.5 rupees per litre from 21.5 rupees per litre, and on ​exports of aviation turbine fuel to 42 rupees ​per litre from 29.5 rupees per litre, effective immediately. India also last month cut excise duty on petrol and diesel by ​10 rupees ($0.11).

Separately, to control a rise in airfares, ​it has also capped a monthly increase in aviation turbine ‌fuel prices for domestic airlines at 25 percent in April. Jet fuel accounts for up to 40 percent of an airline’s expenses. Global oil prices have surged past $100 ​per barrel ​as the flow of oil through the Strait of Hormuz, which serves as a conduit ​for 40 percent of India’s crude oil ​imports, remains heavily restricted due to the US-Iran war.

India, which ranks among the top five refining nations globally and is ​also the world’s third-biggest oil ​importer and consumer, relies heavily on overseas supplies.

Amid the prolonged fallout from the Russia-Ukraine conflict and emerging geopolitical risks from Iran-US tensions, Bangladesh's capital market is standing at a critical crossroads. For years, the narrative of our equity market centred on expansion and "new projects". However, in a high-interest-rate environment where the Taka's depreciation has inflated project costs, the priority must shift from growth to survival.

To revitalise our thinning IPO pipeline, the newly appointed adviser to the Prime Minister on Investment and Capital Markets, Tanvir Ghani, along with the Bangladesh Securities and Exchange Commission (BSEC), needs to rethink a fundamental constraint: the utilisation of IPO proceeds for debt repayment.

A market in retreat

The numbers tell a sobering story. Since the brief post-pandemic surge in 2021, appetite for Initial Public Offerings has sharply declined – from 13 IPOs in 2021 to zero in 2025. This stagnation is not merely a symptom of "poor quality" companies. Many robust, Tier-1 firms are currently over-leveraged, burdened by heavy debt taken for capital expenditure over the last four to five years. In the current climate, these firms cannot feasibly justify further expansion, yet they are bleeding from double-digit interest rates. The problem is structural, not reputational.

The BSEC deserves credit for its recent efforts in modernising the valuation process for IPOs with premiums. By refining these methods to reflect intrinsic value, the Commission has finally addressed long-standing valuation anomalies. However, the next logical step – to truly breathe life into the market – is providing these corporates the flexibility to repair their balance sheets.

The 30% ceiling: A barrier to consolidation

On 30 December 2025, BSEC finalised the Public Offer of Equity Securities Rules, 2025. While the commission amended valuation methods, one particular clause remains a bottleneck: a maximum of 30% of IPO or RPO proceeds may be used for repayment of outstanding loans or investments. While the rule ensures that loans being repaid were used for legitimate BMRE (Balancing, Modernisation, Replacement, and Expansion) purposes, the 30% cap is increasingly out of touch with corporate reality.

For a company with a high debt-to-equity ratio, an IPO that only clears 30% of its debt does not move the needle on its credit rating or profitability. If a firm is forced to deploy the remaining 70% of proceeds into new projects it does not need – or cannot afford to operate due to soaring energy costs – the IPO becomes a burden rather than a blessing. The rule, intended to protect the market, is instead keeping quality issuers away from it.

A concrete illustration

Consider a mid-sized Bangladeshi textile manufacturer – call it company ABC – that invested Tk400 crore in factory expansion between 2020 and 2022, financed primarily through term loans at rates that have since risen to 13-14%. Today, company ABC is profitable at the operating level: it generates positive EBITDA, its plant runs at 70% capacity, and its export receivables are regular. But its interest burden consumes nearly half of its operating profit, leaving little room for retained earnings or dividend distribution.

Company ABC wishes to raise Tk250 crore through an IPO. Its debt repayment need is Tk200 crore. Under the current rule, only Tk75 crore may go toward debt repayment. The remaining Tk175 crore must fund "new projects" – yet company ABC has no immediate CAPEX pipeline, no additional capacity need, and no appetite to add fixed costs in an uncertain energy environment. The result: either company ABC walks away from the exchange entirely, or it lists with an artificially constructed use-of-proceeds that satisfies the regulator but serves no genuine business purpose.

Had the cap been set at 80% or eliminated for qualifying firms, company ABC could reduce its interest burden by Tk200 crore, improve NPAT by an estimated Tk26-28 crore annually, and emerge as a fundamentally stronger listed entity – one that attracts institutional investor confidence rather than undermining it.

Why a higher threshold makes sense

Allowing a significantly higher proportion of IPO proceeds to be used for debt repayment offers several systemic benefits. First, firms replace high-cost bank debt with permanent equity capital, immediately boosting NPAT and improving return on equity. Second, by migrating corporate debt from the banking sector to the capital market, we reduce pressure on a banking system already struggling with non-performing loans. Third, in a volatile global economy, a lean and deleveraged company is more resilient than an over-extended one. Finally, a company with a repaired balance sheet – lower gearing, stronger interest coverage – is fundamentally more investable, and far more likely to sustain its listing price post-IPO.

What peer markets tell us

This is not an untested idea. India's SEBI imposes no numerical ceiling on the proportion of IPO proceeds directed toward debt repayment. Its 2025 amendment to the ICDR framework explicitly recognised capex-loan repayment as equivalent to capital expenditure – acknowledging that paying off a factory loan is economically indistinguishable from building one. Malaysia's securities commission similarly sets no regulatory cap, focusing instead on disclosure and time-bound deployment. Across the globe, the philosophy is consistent: disclose the intended use of proceeds, and let the market determine whether the proposed capital restructuring is acceptable.

Bangladesh's 30% statutory cap is an outlier in this landscape, substituting regulatory prescription for investor judgment.

A workable reform

The BSEC should consider a temporary three-to-five-year window during which the cap is lifted for companies meeting clear eligibility criteria: positive operating cash flow for at least two of the three preceding fiscal years; an auditor's certificate confirming that loans proposed for repayment were used for BMRE-eligible purposes; a pre-IPO debt-to-equity ratio exceeding 2.0x; no default classification with any scheduled bank or financial institution; and a 24-month undertaking against drawing new bank financing for overlapping CAPEX purposes. These criteria preserve the spirit of the original rule while creating a transparent, operationally credible pathway for genuinely over-leveraged but fundamentally sound firms.

The path forward

To bring the market back to life, we must stop viewing debt repayment as a "waste" of IPO funds. If a company used bank loans to build a factory three years ago, that factory is already a national asset. Paying off that loan with public equity is simply a change in capital structure – not a loss of value. Our peer regulators in India and Malaysia understand this. Without this flexibility, IPO activity will remain subdued, and our best corporate houses will continue to stay away from the exchanges – preferring to suffer under the weight of bank interest rather than enter a market that does not give them room to breathe.

It is time to prioritise financial stability over forced expansion.

K&Q Bangladesh Limited has entered into a direct operator billing agreement with Robi Axiata Limited to facilitate voucher sales for digital services such as Netflix, Google Pay and other platforms, a move expected to strengthen its revenue base and accelerate growth in the digital services segment.

According to disclosures from the Dhaka Stock Exchange, the partnership will allow the company to tap into Robi's extensive subscriber network, significantly enhancing its reach in the rapidly expanding digital payments and content ecosystem.

In addition to the latest agreement, the company has been actively expanding its footprint in the digital and technology space.

Earlier this year, K&Q Bangladesh signed an agreement with Bangladesh Satellite Company Limited to act as an authorised partner and sales agent for Starlink satellite-based internet services in Bangladesh. Under this arrangement, the company will handle nationwide marketing, sales, implementation, and operational activities for the service.

Separately, the company has also entered into an Application-to-Person (A2P) aggregator agreement with Robi Axiata, enabling it to provide SMS and notification delivery services for various applications and digital platforms. These services will be offered under a license issued by the Bangladesh Telecommunication Regulatory Commission.

In the first half of the 2025-26 fiscal year, the company reported earnings per share (EPS) of Tk5.83, marking a sharp increase from Tk1.67 in the same period a year earlier. Its net asset value per share (NAVPS) stood at Tk107.55 as of 31 December 2025.

For the FY2024-25, the company posted EPS of Tk9.49, a significant jump from Tk0.67 in the previous year, reflecting a notable turnaround in profitability. The board declared a 4% cash dividend for shareholders, while NAV per share rose to Tk101.72 at the end of June 2025.

The Dhaka Stock Exchange (DSE), the primary regulator of listed companies, has approved the transfer of 8.10 lakh shares of Shahjalal Islami Bank PLC sponsor-director Anwer Hossain Khan to Bangladesh Finance.

The DSE approved the share transfer outside of a gift transaction under Listing Regulation 47(1) (d) and other applicable laws, according to a disclosure published today (9 April).

Under this regulation, share transfers are allowed in cases of confiscation or loan default.

Based on the latest closing share price of Tk17.90 per share, the market value of the transferred shares amounts to Tk1.45crore.

The shares are to be transferred within the next 30 working days.

Anwer Hossain Khan is one of the sponsors and a former chairman of Shahjalal Islami Bank PLC.

According to the bank's 2024 annual report, he is also the chairman and managing director of Anwer Khan Modern Medical College & Hospital Limited, Modern Diagnostic Centre Limited, Anwer Khan Modern Nursing College, and Hazi Sakawat Anwara Modern Eye Hospital Limited, among others.

According to the shareholding report as of December 2025, Anwer Hossain Khan owns 3.02 crore shares, or a 2.71% stake, in the company.

In October last year, the DSE approved the transfer of 30.62 lakh shares of Shahjalal Islami Bank held by Anwer Hossain Khan to LankaBangla Finance.

In 2025, Shahjalal Islami Bank reported a sharp rise in profitability, driven by strong growth in investment income and improved operational performance, while announcing a higher cash dividend for shareholders.

According to the bank's latest financials, its consolidated net profit surged 118% year-on-year to Tk368 crore in 2025, up from Tk169 crore in the previous year.

On the back of this improved performance, the board of directors recommended a 13% cash dividend for the year, up from 10% in 2024.

The bank attributed the strong profit growth mainly to higher net investment income, increased earnings from shares and securities, and a rise in other operating income.

Improved cash flow was supported by higher investment income and increased placements with banks and financial institutions.

Renewed geopolitical tensions in the Middle East unsettled Bangladesh's stock market today, as the sudden collapse of the Iran–US ceasefire erased investor optimism and triggered broad-based selling across sectors.

The Dhaka Stock Exchange (DSE) witnessed a broad-based decline, with the DSEX shedding 60 points to close at 5,257. Of the 390 traded securities, 306 issues declined, 70 advanced, and 14 remained unchanged, reflecting heightened investor caution.

According to EBL Securities, the market opened sharply lower as panic selling gripped investors early in the session.

Although a brief wave of bargain hunting provided temporary support, selling pressure intensified as the session progressed, driven by fading confidence and persistent uncertainty surrounding the evolving Iran–US conflict.

Turnover also took a hit, dropping 22% to Tk776 crore from Tk991 crore in the previous session, indicating reduced participation as cautious investors refrained from taking fresh exposure.

Sector-wise, engineering stocks dominated turnover, accounting for 15.9% of the total, followed by pharmaceuticals at 12.7% and textiles at 9.3%. Despite relatively high activity in these sectors, most ended in negative territory.

Mutual funds, travel, and life insurance stocks recorded the steepest corrections, reflecting the broader risk-off sentiment. A handful of sectors, including services and tannery, managed to post marginal gains, but these advances were insufficient to offset the overall market decline.

Among individual stocks, Khan Brothers PP Woven Bag topped the turnover chart, followed by Acme Pesticides, Lovello Ice-Cream, and Dominage Steel.

On the gainers' side, Bengal Windsor Thermoplastic led the rally, while Prime Finance, Familytex, Bangladesh Industrial Finance Company (BIFC), and Generation Next emerged as the worst performers of the day.

The bearish sentiment extended to the Chittagong Stock Exchange (CSE), where both key indices closed lower. The CSCX declined by 20 points, while the CASPI fell by 44.2 points, mirroring the cautious stance of investors across the country's equity markets.

As part of efforts to stabilise the market, the government is considering retaining existing taxes and duties on fuel imports even if retail fuel prices are raised.

For instance, the government currently earns around Tk38 per litre of petrol priced at Tk120. Under the proposed approach, the tax component would not be changed even if the retail price is adjusted to Tk140, instead of rising proportionately to about Tk45.

This would effectively prevent a Tk7 increase in consumer prices. Although the move would reduce government revenue, the authorities are pursuing a strategy of keeping fuel prices slightly lower in May and June to help contain inflation.

Officials said any upward adjustment in fuel prices would add to inflationary pressure, given its wide impact on overall costs. However, keeping taxes unchanged would help limit the extent of that pressure.

Finance Minister Amir Khosru Mahmud Chowdhury has asked the National Board of Revenue (NBR) to submit an urgent report analysing the potential impact of such a move on state revenue collection.

The directive was issued yesterday at the second meeting of the Fiscal, Monetary and Exchange Rate Coordination Council for the 2025-26 fiscal year. Several senior officials told TBS that the council also discussed broader measures aimed at easing inflationary pressure in the economy.

These include instructions to reduce additional costs faced by importers at ports, measures to lower cost build-up in pricing calculations across various commodities through directives to the commerce ministry.

The council further decided to explore the creation of a large fund to revive sick and closed industrial units. The proposed fund would be formed through a combination of loans from development partners and resources from the central bank's own financing mechanisms.

The virtual meeting, chaired by the finance minister, was attended by the governor, finance secretary, secretary of the Financial Institutions Division, NBR chairman, Economic Relations Division secretary, commerce secretary, and senior finance division officials, along with other ministry representatives.

Speaking to TBS after the meeting, Commerce Secretary Mahbubur Rahman said the coordination council had decided to reduce value-added tax and import duties on essential commodities.

"No country in the world imposes such high levels of duties and taxes on essential goods. These duties and VAT rates will be gradually reduced." he said. He added that discussions also focused on preventing traders from engaging in unjustified price hikes.

No need for fuel price hike if duties unchanged

Finance officials said that more than 32% in various duties, taxes and VAT are currently imposed on imported fuel oil. The NBR collects around Tk15,000 crore annually from this sector.

Due to the conflict in the Middle East, the government is now importing fuel at nearly double the previous prices, which has also doubled the volume of revenue collection.

"The BPC and Petrobangla sell fuel and gas at prices lower than their import cost. The Energy Division has long argued that the duties, taxes and VAT imposed by the NBR on fuel imports are unjustified. However, the NBR has not moved due to concerns over revenue loss," said one finance division official.

He also mentioned that the IMF has been pressing Bangladesh to reduce subsidies. In that scenario, fuel prices would need to be raised, which would significantly increase inflation. Against this backdrop, he said keeping existing duties, taxes and VAT on fuel imports could help the public.

"Fuel prices are adjusted by the government at the end of each month. Therefore, the finance ministry has asked the NBR to submit an analysis report before the end of May, ahead of the next price adjustment, on the likely impact of such keeping taxes unchanged," said another finance official.

Fund to revive sick industries

Finance ministry officials said a large fund will be created in the next fiscal year's budget to revive closed and sick industries, a commitment reflected in the BNP's election manifesto.

To this end, the council has instructed the Economic Relations Division to seek loan assistance from the Asian Development Bank, the Asian Infrastructure Investment Bank, and the World Bank.

"The fund will be formed by combining resources from development partners with financing from Bangladesh Bank," said a ministry official.

However, amid the ongoing conflict in the Middle East, the government has not taken any decision to increase incentives to boost remittance inflows. Instead, the focus will be on simplifying remittance transfer processes and ensuring that banks can disburse funds to recipients' families as quickly as possible.

The Bangladesh Bank has been tasked with taking necessary measures in this regard.

Tk9.2 lakh crore FY27 budget

Finance officials said the ministry at the Coordination Council meeting proposed a large budget of over Tk9.20 lakh crore for FY27, as the government moves to contain inflation and create jobs.

They said higher spending will be driven mainly by global economic risks, rising subsidies and increased allocations for social protection. Additional interest payments and a planned partial salary adjustment for government employees are also contributing to the expansion of the budget.

Officials noted that total revenue mobilisation for the next fiscal year may be set at around Tk6.90 lakh crore. Of this, more than Tk6 lakh crore is expected to come from the NBR.

In the current fiscal year's original budget, the NBR was tasked with collecting nearly Tk5 lakh crore. The Centre for Policy Dialogue (CPD) has warned that the shortfall could reach Tk1 lakh crore by year-end. Despite this, the revised budget has already raised the revenue target by an additional Tk20,000 crore.

Rising subsidy burden, economic outlook

Higher global fuel prices are expected to raise subsidy requirements by Tk36,000 crore, the finance minister said on Thursday. The original allocation for gas and electricity subsidies stood at Tk42,000 crore.

Officials said the additional pressure has pushed the government to increase revenue targets.

Inflation for the next fiscal year is being targeted at 7.5%. Finance officials said easing geopolitical tensions in the Middle East and stabilising fuel prices could help bring inflation closer to the target.

The GDP growth estimate has not yet been finalised, with officials considering a range of 6.2% to 6.5%. International agencies, however, have projected Bangladesh's growth at around 3.9% for the current fiscal.

The finance minister, finance secretary and ERD secretary travelled to Washington on Friday night to attend IMF meetings. An official present at the Coordination Council meeting said discussions were concluded early due to the visit. Budget deliberations are expected to resume after their return.

In a statement to parliament on 10 April, the finance minister said budget preparations are underway amid multiple economic pressures. He said the objective is not only growth, but also a sustainable, transparent and inclusive economy, while acknowledging public expectations and inherited constraints.

Fiscal framework and financing mix

The FY26 budget was set at Tk7.90 lakh crore, later revised to Tk7.88 lakh crore following cuts in development spending and higher allocations for subsidies and operating costs.

Officials said the FY27 budget deficit is projected at around Tk2.70 lakh crore, within 5% of GDP. Of this, around Tk1.50 lakh crore is expected from domestic borrowing, while Tk1.20 lakh crore will come from external sources, largely as budget support.

The finance minister has directed the NBR to prepare a plan to raise the tax-to-GDP ratio to 10% by FY28. Measures to reduce the cost of doing business and revive closed industries were also discussed at the coordination meeting.

Spending priorities, welfare programmes

Around 67% of expenditure in the next budget is expected to go towards operating costs, while 33% will be allocated to development spending. Officials said large-scale new development projects are unlikely in the near term.

The government also plans to introduce a "Family Card" programme covering 50 lakh families, along with separate cards for farmers, fishermen and livestock producers. A youth sports initiative will provide scholarships for talented athletes aged 12 to 14.

Salary increases for public sector employees and expanded job creation commitments are expected to cost nearly Tk1 lakh crore in the next fiscal year.

The latest amendment to the labour law has sparked concern among experts and labour leaders, who warn that key provisions introduced during the interim government have been rolled back, potentially depriving many employees of benefits and protections.

The Labour (Amendment) Bill 2026, passed in the parliament on Thursday, has removed provisions that had brought officials and employees under the definition of workers, raising concerns that many will now be excluded from benefits such as gratuity, provident fund and other service entitlements.

The bill was passed in parliament by voice vote after being placed by State Minister for Expatriates' Welfare and Overseas Employment Md Nurul Haque on behalf of Labour and Employment Minister Ariful Haque Chowdhury.

The earlier amendment had been introduced through an ordinance issued on 17 November 2025 by the interim government.

Experts said the removal of officials and employees from the worker definition would leave many without access to benefits guaranteed under the labour law. They also noted that the new amendment modifies a previous provision that stated workers could not be blacklisted, replacing it with a clause that workers cannot be "unfairly blacklisted."

In addition, several fundamental rights of trade unions and collective bargaining agents have been curtailed, including their ability to file cases in court or represent workers in certain forums. Provisions related to the formation of provident funds have also been made stricter, according to experts.

Syed Sultan Uddin Ahmed, chairman of the Labour Reform Committee during the interim government, told TBS that the changes do not align with earlier commitments. "Several agreed provisions from the tripartite committee have not been included in the new amendment," he said.

He added that the committee had recommended including officials and employees under the labour law framework so they could access service benefits similar to workers. "Now these people will be deprived," he said.

Criticising the changes, Nazma Akhter, general secretary of Bangladesh Labour Congress, said the decision to exclude officials and employees is not justified. "After working for 10 to 15 years or more, they receive no benefits beyond salary. The previous inclusion should not have been withdrawn," she said, urging reconsideration.

She also opposed the revised clause on blacklisting, arguing that the issue concerns workers' rights rather than questions of fairness. "Blacklisting itself deprives workers of their rights," she said.

Nazma further warned that limiting the authority of collective bargaining agents undermines workers' representation and violates Bangladesh's commitments under international labour standards. "This is a violation of Bangladesh's commitments to the ILO Convention."

TBS attempted to contact M Humayun Kabir, additional secretary at the Ministry of Labour and Employment, for comment. However, he did not answer the call, and there was no response to a text message detailing the enquiries by the time of publication.

BKMEA hails the move

The amendment comes after the Bangladesh Knitwear Manufacturers and Exporters Association called for the removal of officials and employees from the worker definition, among other demands.

The organisation welcomed the passage of the bill, stating that earlier changes introduced ambiguity and could have created unrest in the industrial sector. It also warned that such provisions risked sending negative signals to foreign buyers.

Khalilur Rahman, Bangladesh's foreign minister, said the country is pursuing a "slowly but surely" approach to strengthening bilateral relations with India, emphasising patience and incremental confidence-building following the formation of a new government.

In an interview, Rahman described the future of ties through the prism of a "slowly but surely" concept, signalling a preference for gradual progress over rapid diplomatic breakthroughs. He characterised the current atmosphere in New Delhi as one of convergence, noting that both neighbours are "willing to engage, talk and take initiatives" after Tarique Rahman assumed office, says NDTV.

He said Dhaka's strategy centres on gradual normalisation rather than accelerating negotiations, stressing the importance of "patient confidence-building" to rebuild trust and sustain long-term cooperation.

Energy cooperation has emerged as a key indicator of improving ties, Rahman said, pointing to India's support during global energy disruptions. "We have a pipeline and India is supplying diesel to Bangladesh," he said, referring to ongoing supplies during the Middle East crisis.

Water sharing and climate resilience are also expected to play a central role in future engagement. With the Ganga Water Treaty due for renegotiation later this year, Rahman described equitable water management as a "civilizational bond". "Water is finite. Ganga means life," he said, underscoring the importance of the river system.

He also highlighted shared environmental challenges, saying, "People are people. Whether it is in India or Bangladesh, we are facing exactly the same type of climate crisis," and called for a climate-resilient framework that could underpin bilateral relations for decades.

On broader strategic and economic relations, Rahman said Bangladesh's foreign policy is not a "zero-sum game". "Our relationship with other countries is not a problem," he said, referring to ties with partners such as China, which he said are driven by market forces rather than strategic alignment against India. He characterised India as a "structural presence" in Bangladesh's development, particularly in regional infrastructure and economic integration.

Rahman also highlighted the importance of people-to-people connections, citing shared cultural and geographic links, including borders and rivers. He said improving visa systems would be key to facilitating greater mobility and delivering tangible benefits for citizens in both countries.

An amendment to the Bank Resolution Ordinance has created a legal pathway for former owners to reclaim control of distressed banks currently under resolution.

The amendment specifically impacts the ongoing merger of five distressed institutions – First Security Islamic Bank, Social Islamic Bank, Union Bank, Global Islamic Bank, and Exim Bank – which were being consolidated into Sammilito Islami Bank under the previous interim government's reforms.

Under the new provision passed in the parliament on Friday, former owners can apply to the Bangladesh Bank to reacquire their shares, assets, and liabilities, potentially leading to the dissolution of the newly merged entity.

Of the five banks, four were controlled by the S Alam Group chairman and controversial businessman Saiful Alam, while Exim Bank was under the control of Nassa Group Chairman Nazrul Islam Mazumder.

Experts have criticised the amendment, warning that it undermines the credibility of banking sector reforms and effectively allows those responsible for financial distress to regain control.

Conditions for ownership recovery

The government amended the ordinance by introducing Section 18A. Under the new regulations, applicants seeking to regain control must submit a formal undertaking. This includes a pledge to repay all funds as determined by the government or the central bank, provide fresh capital, and restore financial solvency.

They are also required to settle all liabilities to depositors and creditors, pay outstanding taxes, and reconstruct risk management and compliance frameworks.

Financial terms for the recovery include an initial pay-order of at least 7.5% of the total determined amount within three months of approval. The remaining 92.5% must be paid over two years with a 10% simple interest rate.

Following approval, the Bangladesh Bank will supervise the institution for two years before a special committee conducts a final investigation into compliance, with the option to revoke approval in case of failure.

Government defends 'market solution'

Finance Minister Amir Khosru Mahmud Chowdhury described the move as a "market solution" aimed at ensuring fairness, equity, and investment protection.

He explained that the government has already invested approximately Tk80,000 crore into weak banks and may need another Tk1 lakh crore – a financial burden he described as unsustainable in the current global economic climate.

"This new arrangement places the obligation of recapitalisation and liability settlement on the applicants, reducing the pressure on the government and the Deposit Insurance Fund," the minister stated.

He added that the option remains open to any suitable party deemed fit by the central bank, not just former shareholders, and argued that keeping banks operational preserves asset value and protects employment.

Experts warn of 'credibility destruction'

The move has drawn sharp criticism from experts who were involved in drafting the original resolution framework.

Zahid Hussain, former lead economist of the World Bank's Dhaka office and a member of the interim government's banking reform task force, warned that the amendment destroys the credibility of the reform process.

"A clear roadmap has been provided for former owners to re-occupy banks that were distressed due to their own mismanagement and the siphoning of funds," he told The Business Standard.

The economist estimated that for the five merged banks, the total required payment would be roughly Tk35,000 crore. He expressed concern that the terms are so lenient that former owners could easily pay the initial 7.5% and borrow the remainder from the banking sector itself.

Uncertain future for Sammilito Islami Bank

According to Zahid, the future of Sammilito Islami Bank now rests entirely on the discretion of the returning owners. "If they choose to operate the five banks as separate entities once again, the merged institution will cease to exist."

He noted that the move sends a signal to the market that individuals responsible for financial irregularities can still return to positions of ownership.

India has further ​raised a windfall tax on exports of ‌diesel and aviation turbine fuel it imposed last month to ensure adequate domestic supply.

In a government notification on ​Saturday, India's finance ministry increased the tax ​on diesel exports to 55.5 rupees per ⁠litre from 21.5 rupees per litre, and on ​exports of aviation turbine fuel to 42 rupees ​per litre from 29.5 rupees per litre, effective immediately.

India also last month cut excise duty on petrol and diesel by ​10 rupees ($0.11).

Separately, to control a rise in airfares, ​it has also capped a monthly increase in aviation turbine ‌fuel ⁠prices for domestic airlines at 25% in April. Jet fuel accounts for up to 40% of an airline's expenses.

Global oil prices have surged past $100 ​per barrel ​as the ⁠flow of oil through the Strait of Hormuz, which serves as a conduit ​for 40% of India's crude oil ​imports, ⁠remains heavily restricted due to the US-Iran war.

India, which ranks among the top five refining nations globally and ⁠is ​also the world's third-biggest oil ​importer and consumer, relies heavily on overseas supplies.

Eastern Bank PLC (EBL) has signed a memorandum of understanding (MoU) with the Mongla Port Authority (MPA) to introduce advanced digital banking services at Mongla port.

Md Jabedul Alam, head of transaction banking at the bank’s corporate banking division, and AKM Anisur Rahman, member (engineering and development) of MPA, signed the MoU recently at Mongla port in Bagerhat, according to a press release.

The partnership aims to improve the efficiency of financial transactions at the port by implementing secure, modern and seamless digital payment and collection solutions.

Under the initiative, EBL and MPA will jointly develop a comprehensive digital ecosystem, enabling port users to carry out transactions smoothly through the bank’s digital banking platform.

Among others, Captain Mohammad Shafiqul Islam, harbour master of the MPA; Md Kamal Hossain, deputy secretary (director, traffic); Md Mahfuzur Rahman, deputy chief finance and accounting officer; Md Fazle Alam, chief audit officer; Lt Col Md Arif Billah, chief engineer (mechanical and electrical); and Mohammad Arif Chowdhury, head of cash management at EBL’s transaction banking division, were also present at the event.