Bangladesh’s financial system remains overwhelmingly bank-dominated with 765 other financial institutions making only a limited contribution to boosting the economy.

According to a Bangladesh Bank report, the other financial corporations (OFCs) — a broad group that includes non-bank financial institutions, insurance companies, brokerage firms, mutual funds and mobile financial services — together account for just 4.6 per cent of total financial sector assets, compared with 78.1 per cent held by banks.

This imbalance highlights a structural weakness, where alternative financing channels remain underdeveloped despite their large number and potential role.

BB identified 765 other financial institutions operating in the country.

These institutions are expected to complement banks by mobilising long-term funds and supporting capital market activities.

At the end of December 2025, total assets of OFCs stood at Tk 2.02 lakh crore, marking a 13.45 per cent increase from Tk 1.78 lakh crore in the previous year.

While this growth appears significant, it has not translated into stronger support for business investment or industrial expansion.

Instead, the sector’s role in direct financing remains limited.

A closer look at the asset composition explains the issue.

Around 85 per cent of OFC assets are concentrated in claims on other sectors, claims on banks, and claims on the government.

This indicates that a large portion of funds circulates within the financial system or goes into public sector instruments, rather than being channelled into private sector investment.

More concerning is the decline in lending activity.

Loans provided by OFCs dropped by 6.7 per cent year-on-year and 4.35 per cent on a quarterly basis.

This contraction suggests that financial institutions other than banks are reducing their exposure to credit at a time when the economy needs diversified funding sources, especially as banks face rising stress.

The term ‘claims’ in the report refers to financial assets held by institutions, such as loans, deposits, or investments in securities.

A higher share of claims on banks, for example, means OFCs are placing funds with banks instead of lending directly to businesses.

Such behaviour reduces their effectiveness as independent financing channels.

On the liability side, the structure further reflects limited market development.

Equity accounts for about 32 per cent of total liabilities, while insurance and pension-related reserves make up around 23.5 per cent.

These are relatively stable sources of funds, but they are not being fully utilised for long-term investment in the real economy.

The absence of a functioning bond market remains a key constraint.

Debt securities represent only a negligible share of liabilities and showed no meaningful growth over the year.

In most economies, bond markets allow companies and governments to raise long-term funds without relying on banks.

In Bangladesh, this channel remains largely inactive, placing more pressure on the banking system.

Within the OFC sector, life insurance companies hold the largest share of assets at about 25 per cent, followed by other financial institutions and brokerage houses.

Mobile financial services are also expanding, accounting for around 9.6 per cent of total assets, reflecting increased digital transactions.

However, these segments largely facilitate payments or manage savings, rather than providing substantial long-term financing for industry.

The long-term trend shows that OFC assets have more than doubled over the past several years, rising from Tk 92,640 crore in 2018 to over Tk 2 lakh crore in 2025.

However, a significant part of this increase is linked to improved data coverage rather than a fundamental expansion of financing capacity.

The report also highlights gaps in data reporting.

Out of 765 identified institutions, only 525 were included in the final analysis due to incomplete submissions.

The overall picture points to a financial system where banks continue to carry the primary burden of financing both short-term and long-term needs.

This creates asset-liability mismatches, as banks use short-term deposits to fund long-term projects, increasing financial risk.

Non-bank financial institutions have yet to evolve into effective channels for capital mobilisation.

In an interview with Daily Sun, Bangladesh’s commercial counsellor in Germany highlights opportunities in high-value, eco-compliant goods but warns of risks from LDC graduation, compliance pressures and overreliance on garments

A structural shift in German consumer and regulatory preferences toward sustainability is opening a significant export window for Bangladesh, with strong potential in high value-added and environmentally compliant products, according to Ch Md Golam Rabbi, commercial counsellor (deputy secretary) at the Bangladesh Embassy in Berlin.
“Germany, as Europe’s largest economy, is increasingly prioritising environmentally friendly, ethically produced and fully traceable goods. This shift is not temporary, it represents a long-term transformation of the market,” Rabbi said in an exclusive interview with the Daily Sun.
He noted that Bangladesh is well positioned to capitalise on this trend, supported by its growing portfolio of green factories, improved compliance standards and competitive manufacturing base.
The participation of three Bangladeshi companies at Techtextil & Texprocess 2026 at Messe Frankfurt signals a gradual but important shift toward higher-value market engagement.
Rabbi described Germany’s trade fairs as “high-impact commercial ecosystems” that go beyond exhibitions. “These platforms enable exporters to generate qualified leads, engage directly with decision-makers, analyse competitors and position their brands in a highly competitive environment,” he said.
He emphasised that trade fairs serve a dual purpose, as immediate business development tools and long-term strategic investments. Companies can test market responses, launch new products, gather direct buyer feedback and build partnerships across the value chain.
To maximise outcomes, Rabbi advised exporters to adopt a structured approach, including setting clear and measurable targets, scheduling meetings in advance and leveraging digital platforms such as LinkedIn to enhance real-time engagement and visibility.

Germany anchors Bangladesh’s EU exports
The European Union continues to dominate Bangladesh’s export landscape, accounting for nearly half of total exports, which reached $48.28 billion in the 2024-25 fiscal year.
Within the EU, Germany remains the single largest destination. Bangladesh exported approximately US$8.8-9 billion worth of goods to Germany in 2024, with momentum continuing into 2025. Overall exports to the EU stood at around $23.9 billion in 2025, reflecting steady growth.
However, Rabbi cautioned that the export structure remains highly concentrated. “More than 80%-90% of exports to the EU are still readymade garments. While this has been a strength, it also exposes Bangladesh to structural risks,” he said.
With Germany’s demand evolving rapidly, he underscored the need to move beyond volume-driven apparel exports toward diversified, value-added products.
He identified emerging opportunities in light engineering, footwear, leather goods, technical textiles, pharmaceuticals, ICT services and jute-based eco-friendly products.
“European buyers are increasingly shifting toward man-made fibre (MMF), functional textiles and technical applications. Capturing this segment will be critical for future growth,” he added.

LDC graduation: Opportunity with risks
Bangladesh’s graduation from Least Developed Country (LDC) status in 2026 marks a turning point for its export competitiveness in the EU market. Unless the government’s request for deferment is approved, the country is set to graduate in November this year, bringing major changes to market access and tariff benefits.
Rabbi warned that the loss of duty-free, quota-free access under the Everything But Arms (EBA) scheme could lead to “preference erosion,” increasing tariff burdens on Bangladeshi goods.
“To sustain growth, securing GSP Plus status or negotiating free trade agreements will be essential,” he said, noting that competing countries such as Vietnam and India are already advancing through bilateral and regional trade deals.
Beyond tariffs, compliance will become a decisive factor. Exporters will need to align with stringent frameworks such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and Germany’s Supply Chain Due Diligence Act, which require robust environmental, labour and governance standards.
He also pointed to the loss of special treatment under WTO provisions, which could limit policy flexibility and increase pressure on domestic industries.

Compliance, cost and logistics challenges
Rabbi identified compliance as the most immediate and complex challenge.
“EU regulations are evolving rapidly, particularly around sustainability, due diligence and traceability. This requires continuous investment and institutional readiness,” he said.
Other constraints include limited product diversification, slower adaptation to MMF-based production, and inefficiencies in logistics and supply chains. Lead times, port handling capacity and freight costs continue to affect Bangladesh’s competitiveness compared to regional peers.
Additionally, global economic uncertainty and inflationary pressures in Europe are influencing buyer behaviour, leading to cautious sourcing strategies. Rising energy and raw material costs are further compressing exporters’ margins.
He also warned against overdependence on a narrow export base, noting that excessive reliance on a single sector could create long-term systemic vulnerabilities.

Embassy steps up engagement
To address these challenges and leverage emerging opportunities, the Commercial Wing of the Bangladesh Embassy in Berlin has intensified its engagement with the German market.
“Our focus is on building direct linkages between Bangladeshi exporters and European buyers through trade fairs, buyer-seller meetings and continuous engagement with industry associations and retail groups,” Rabbi said.
The embassy is also actively involved in policy advocacy, particularly in areas related to market access, sustainability standards and upcoming EU regulations.
Rabbi concluded that Bangladesh’s future export success in Germany will depend on its ability to align with evolving market dynamics.
“The opportunity is clear. But capturing it will require a strategic shift, toward sustainability, diversification, compliance and value addition. Those who adapt early will be the biggest beneficiaries in the German and broader EU market,” he said.

In the rolling, wind-swept grasslands of Chifeng in northern China's Inner Mongolia, towering white wind turbines line hilltops like sentinels over a hydrogen industry Beijing is trying to prise away from coal.

They are part of a $2 billion project - the biggest of its kind - that harnesses renewable energy to run banks of electrolysers that produce the molecules needed for fertiliser, marine fuel and low-emission steelmaking.

India shares China's "green hydrogen" ambitions, but its commitments are even more concrete and aggressive. Backed by subsidies worth some $2.1 billion, New Delhi is targeting 5 million metric tonnes of green hydrogen annually by 2030 - five times the current size of the global market and about double what analysts estimate Chinese output will be by then.

The massive bets by the world's two most populous nations come at the same time that the West has quietly backed away from its ambitious green hydrogen goals from the start of this decade after cost constraints proved stickier than anticipated.

What China and India have in common - despite very different motives - is the power and political will to force a market into existence, by underwriting projects, steering demand and pushing costs down through scale.

India has drawn private capital by pairing subsidies with offtake guarantees from refineries, fertiliser plants and steelmakers, making projects bankable from the outset.

The motivation is energy security. Hydrogen in India is overwhelmingly derived from imported natural gas, whose supply has suffered a sequence of shocks from the Middle East, Ukraine and the pandemic.

For China - able to deploy state-owned giants or attract private firms with large-scale, planning-led industrial projects - the aim is to preserve its dominance in hydrogen as the industry shifts towards cleaner energy.

In its five-year plan announced in March, Beijing listed green hydrogen alongside quantum computing, brain-computer interfaces and AI-enabled robotics as a frontier industry - an elevation in status that signals more capital will flow its way.

China: speed and scale

China invested $3.7 billion in green hydrogen production last year, more than double US levels, said Rystad Energy's head of hydrogen, Minh Khoi Le.

By 2031, China will have some 2.6 million tonnes per year online, representing $26 billion in investment, according to Rystad projections.

Much of 2025's outlay went into the Chifeng project, operated by Chinese wind turbine maker Envision Energy. It aims to sell green hydrogen and ammonia to markets in Asia, Europe, Latin America and the Middle East, and delivered its first green ammonia cargoes to South Korea's Lotte Fine Chemical in February.

"If we go back a year or two ago, China was not very visible on this situation of green hydrogen, and then two years later they have almost all the biggest projects in the world," said the International Energy Agency's hydrogen lead, Jose Bermudez.

China last year likely doubled its renewables-based hydrogen production capacity to 250,000 tonnes - more than half of the global total, and surpassing a 2022 target to produce 100,000 to 200,000 tonnes annually by 2025 - said Agora Energy China managing director Kevin Tu.

In Inner Mongolia and other places with high winds and strong sunlight, costs can fall to around $2 per kilogram for green hydrogen, close to parity with coal-based hydrogen, Tu said. On average, producing green hydrogen in China costs around $4 per kilogram, he said.

India: aggregating domestic demand

India has brought the price of producing green hydrogen as low as 279 rupees (around $3) per kilogram, from around $5 in 2023, when the government launched the National Green Hydrogen Mission under the clean energy ministry.

Abhay Bakre, who heads the mission, told Reuters that the cost should drop to near $2 by 2032 as technology improves, processes become more efficient and more components are made domestically.

Projects will begin delivering "large quantities" of green hydrogen as soon as next year, he said, and "scale up very fast" to hit the target of 5 million tonnes by 2030.

Under the initiative, industrial heavyweights including Larsen & Toubro, Bharat Petroleum Corp, GAIL and JSW Steel produce about 8,000 tonnes of green hydrogen and its derivatives annually.

New Delhi is kick-starting demand through state-run reverse auctions, where sellers try to undercut each other to win long-term contracts, effectively revealing the lowest price producers can bear.

The government said last month that suppliers and fertiliser companies had signed offtake agreements for 724,000 tonnes of green ammonia, which could cover one third of the country's hydrogen requirements.

Maintaining momentum will require "bold, sector-specific domestic initiatives, coupled with strategic international partnerships to unlock export potential", analysts at the Institute of Energy Economics and Financial Analysis wrote in a report.

"With one of the lowest costs of renewable power generation in the world, India is well placed to capture a significant portion of the export market."

Bangladesh and Ethiopia have agreed to elevate their bilateral relations to a higher level through enhanced economic cooperation.Economy news updates

Foreign Minister Dr Khalilur Rahman, now visiting Ethiopia, held a meeting with Minister of Foreign Affairs Gedion Timothewos and discussed issues of mutual interest.

The two Ministers exchanged views on areas of cooperation in both bilateral and multilateral relations, said the Ministry of Foreign Affairs of Ethiopia.

Gedion noted that Ethiopia continues to register sustained economic growth and invited Bangladeshi companies to engage in priority investment sectors identified by the Government, including renewable energy generation, agro-processing, the pharmaceutical and medical equipment manufacturing industries, as well as the broader manufacturing sector.

Minister Dr Khalilur underscored his country’s commitment to further strengthening bilateral relations with Ethiopia, particularly in the areas of trade and investment cooperation.

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.

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.

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.

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.

Stocks staged a moderate recovery today (21 April) as bargain hunters returned to the Dhaka bourse, lifting the benchmark index after two consecutive sessions of decline, although lingering geopolitical tensions in the Middle East continued to cap stronger gains.

The DSEX, the broad index of the Dhaka Stock Exchange (DSE), rose 24 points to settle at 5,257, while the blue-chip DS30 index advanced 4 points to close at 1,984. Market breadth turned positive, with 215 issues advancing against 108 decliners, reflecting renewed investor participation across sectors. Turnover also picked up momentum, jumping 13% to Tk929 crore, indicating improved trading activity.

According to EBL Securities, the market rebound was largely driven by opportunistic investors taking positions in beaten-down stocks at attractive valuations. The session began on a positive note with active participation from both buyers and sellers, but sustained buying interest throughout the day helped the market close firmly in the green, offsetting intermittent selling pressure.

The improved participation suggests cautious optimism among investors, who are gradually returning to the market amid expectations of economic recovery. However, analysts noted that the lack of any near-term resolution to ongoing Middle East tensions continues to weigh on sentiment, preventing a stronger rally. The geopolitical uncertainty has disrupted the market's earlier recovery trajectory, which had been supported by domestic political stability.

Sector-wise, trading activity was dominated by engineering stocks, which accounted for 16.1% of total turnover, followed by textile and general insurance sectors. The sectoral performance remained mixed, with life insurance, IT and general insurance posting notable gains, while cement, financial institutions and mutual funds experienced slight corrections.

Among individual stocks, City Bank, Acme Pesticides, Dominage Steel, Summit Alliance Port and Khan Brothers PP Woven Bag led the turnover chart, highlighting investor focus on both financial and manufacturing scrips.

On the gainers' side, BD Lamps, Nahee Aluminum, Samata Leather, Agni Systems and Ring Shine Textiles recorded strong price appreciation, while International Leasing, FAS Finance, Peoples Leasing, IFIC Bank First Mutual Fund and Shurwid Industries were among the major losers.

Meanwhile, the Chittagong Stock Exchange also ended the session higher, with its key indices posting modest gains, although turnover remained relatively low at Tk33.29 crore.

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.

The National Board of Revenue (NBR) fell short of its nine-month tax collection target by nearly Tk 1 lakh crore, leaving it needing to mobilise over Tk 2.60 lakh crore in the final quarter of fiscal year 2025-26 (FY26).

Provisional data released yesterday showed collections of Tk 2.87 lakh crore during July-March, an 11 percent rise year-on-year, but well below the pace required to meet the full-year target of Tk 5.54 lakh crore.

Analysts say it is highly unrealistic to expect that the board will succeed in collecting nearly half of the full-year target in three months.

The board has consistently missed its annual target every year for over a decade. Yet in late November last year, the interim government revised the target upward from Tk 4.99 lakh crore, following strong first-quarter collections.

The revenue weakness is playing out against a deteriorating economic backdrop.

The country’s GDP growth slowed to 3.03 percent in the second quarter of FY26, down from 3.53 percent in the same period last year. Defaulted loans in the banking sector have reached Tk 5.45 lakh crore as of December 2025.

Finance Minister Amir Khosru Mahmud Chowdhury told parliament this month that the tax-to-GDP ratio has fallen from around 11 percent to below 7 percent, and that businesses are “in bad shape.”

More recently, the impact of the US-Israel war on Iran has been draining the state funds as the government was forced to buy fuel oils at high prices. Bangladesh imports about 95 percent of its energy, and state agencies have increasingly been forced onto the volatile spot market.

“The mounting costs are bleeding the exchequer,” the minister said on the sidelines of the IMF-World Bank Spring Meetings in Washington last week, citing nearly $2 billion in additional energy import costs following supply disruptions.

“On top of that, the tax-to-GDP (ratio) is not increasing because of business stress, the businesses are in bad shape,” he said, adding that if businesses do not recover, tax receipts will not improve.

He said the government has sought budget support from development partners and is pursuing structural fixes. It has prepared an action plan targeting a trillion-dollar economy by 2034, built around investment, employment and macroeconomic stability.

Amid consistent revenue shortfall, the government has turned sharply to borrowing. Net deficit financing reached Tk 1.05 lakh crore during July-February, up 67 percent from Tk 63,040 crore in the same period last year. Of that, Tk 88,309 crore came from the banking system.

Zaidi Sattar, chairman of the Policy Research Institute (PRI) and head of the National Taskforce on Tax Restructuring, said fiscal space has effectively closed.

“The gap between current expenditure and revenue means there is little to no surplus available to support development spending,” he said, adding that the Annual Development Programme (ADP) will likely depend almost entirely on deficit financing in the upcoming budget.

He warned that domestic borrowing carries serious risks. “It creates serious challenges, including fuelling inflation and potentially crowding out private sector investment,” he said.

Without fundamental reform in revenue administration, any substantial increase in collections is “almost impossible”.

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said weak imports will further dampen revenue in the final quarter.

“If the government depends heavily on banks, it will affect credit flow to the private sector,” he said, warning that without revenue growth, more extreme measures such as money printing could not be ruled out.

Describing the broader pattern, Razzaque said, “The revenue target is not binding, it’s aspirational. We set targets and repeatedly fail to meet them. We are stuck in a Catch-22.”

“Big budget, big revenue deficit, and the NBR failing to raise revenue -- this is the typical Bangladesh story,” he added, noting that despite talk of reforms, “we are not seeing the momentum or a firm commitment.”

He mentioned the IMF’s recent decision to withhold a loan instalment, citing that the country has failed to implement agreed reforms in the revenue and banking sectors.

This decision by the multilateral lender adds to the country’s pressure. “It sends a signal about reform commitment, and other development partners take such signals seriously,” Razzaque said.

Within the July-March figures, VAT from domestic activity was the largest contributor at 38 percent of total collection, rising 13.66 percent year-on-year to Tk 1.09 lakh crore. Direct taxes accounted for 33.5 percent, climbing 11.25 percent to Tk 98,501 crore, while import tariffs grew more modestly at 7.77 percent to Tk 80,223 crore.

Facing mounting pressure, the NBR is eyeing structural changes for next year. Speaking at a pre-budget discussion earlier this month, NBR Chairman Md Abdur Rahman Khan pledged to strengthen enforcement to curb tax evasion and gradually reduce existing tax exemptions aiming to raise revenue collections.

He informed that the board is considering a range of measures to strengthen revenue collection in the upcoming fiscal year 2026-27 (FY27), including the reintroduction of a wealth tax, a new inheritance tax, higher rates for the ultra-rich, and a rationalisation of existing tax exemptions.

“We are exploring the possibility of reintroducing a wealth tax,” Khan said at the event, noting that Bangladesh had such a levy from 1963 until it was abolished in 1999.

A committee has been formed to examine the matter.

Khan added that the NBR is weighing the introduction of an inheritance tax, at least on a limited scale, with a focus on high-value property transfers.

On tax exemptions, Khan signalled a gradual shift away from the status quo. “We are committed to gradually phasing them out and bringing beneficiaries into the regular tax regime.”

The NBR also plans to raise the top marginal income tax rate for ultra-rich individuals from 30 to 35 percent, a measure tentatively set for FY28.

More immediately, he said the NBR is considering raising the tax rate for individuals earning over Tk 1 crore annually by around five percentage points from FY27.

Commuters in Dhaka and across the country are being forced to pay increased bus fares despite no official announcement regarding fare adjustments following the recent increase in fuel prices.

This unregulated spike has triggered widespread frustration, often leading to heated altercations between conductors and passengers, with reports of passengers being forcibly offloaded for protesting the hikes.

Passengers said buses are charging an additional Tk5 to Tk10 for short distance travel, while for long-distance, some operators are demanding Tk200 to Tk250 above the usual rate.

They also said a significant portion of the city's buses operate on CNG, but fares are being hiked based on diesel price hike, raising questions about the legitimacy of the adjustments.

Shamim Hossain, who regularly travels on the Rangpur-Jaldhaka route, said the fare was previously Tk95 but has now increased to Tk100, with transport workers citing higher fuel prices.

Meanwhile, visits to bus terminals found that fares on the Dhaka-Moulvibazar route have increased from Tk570 to Tk620. Passenger Nur Nabi Mostafa said buses on the Dhaka to Cox's Bazar, Chattogram and Sylhet routes are charging an additional Tk100 to Tk200.

The Bangladesh Road Transport Authority (BRTA) is responsible for determining the fares for non-AC buses and minibuses. As per official regulations, the fare for long-distance buses is fixed at Tk2.12 per kilometer.

In the Dhaka metropolitan area, the rates are Tk2.42 per km for buses and Tk2.32 per km for minibuses. However, passengers said these rates are rarely followed.

Back in August 2022, the government increased the price of diesel by 42% to Tk114 per liter. Consequently, bus fares were raised by BRTA to a maximum of Tk0.40 per kilometer. However, diesel prices were later reduced in three phases to Tk100 per litre, but fares were not lowered.

Transport operators said the fare structures fixed in 2022 are no longer commercially viable. They cited rising operational costs driven by currency depreciation and the soaring prices of spare parts.

According to passenger welfare groups, transport owners failed to implement either of these reductions.

Md Mozammel Haque Chowdhury, secretary general of Bangladesh Jatri Kalyan Samity, told the media that some transport owners are raising fares before any formal decision, putting pressure on passengers. He urged a participatory process to set fair fares and proposed a Tk 0.15 per kilometre increase.

Amid the situation, Prime Minister's Adviser for Information and Broadcasting Zahed Ur Rahman said the government is working to rationalise transport fares in alignment with fuel price changes. Speaking at a briefing yesterday (21 April), he said that discussions are ongoing to reach a balanced decision.

The government on Saturday raised diesel prices to Tk115 per litre, octane to Tk140, and petrol to Tk135, marking increases of Tk15 per litre for diesel, Tk20 for octane, and Tk 19 for petrol.

The next day negotiations between transport operators and the BRTA hit a deadlock, as owners demanded a comprehensive fare hike reflecting broader economic pressures, while the regulator insisted on capping increases strictly to rising fuel costs.

Ring Shine Textiles, a "Z" category company listed on the Dhaka Stock Exchange (DSE), has decided to take an interest-free loan from its sister concern, Lark Textiles, to repay its high-interest bank liabilities.

The decision was approved during a board meeting held on Monday and subsequently disclosed on the DSE website today (21 April).

Following the disclosure, Ring Shine's share price jumped 8.82% to close at Tk3.70.

Under the plan, Ring Shine will borrow Tk9.5 crore from Lark Textiles to settle outstanding dues with Eastern Bank Limited. The loan will carry a 10-year tenure, with repayments scheduled to begin in 2027 through ten equal annual instalments.

Ring Shine management hopes that replacing high-interest bank debt with interest-free funds will significantly reduce its interest burden and bolster its net income.

The company also noted that it has secured certain financial concessions from the bank under a debt rescheduling facility.

The implementation of this plan remains subject to shareholder approval, which the company intends to seek through an upcoming extraordinary general meeting (EGM) or annual general meeting (AGM).

The development comes as Ring Shine continues to grapple with severe financial distress. Since its 2019 listing, the company has declared dividends only in its debut year, failing to reward shareholders over the past six years.

The company's track record has also been marred by regulatory controversies. An earlier probe by the Bangladesh Securities and Exchange Commission (BSEC) uncovered major irregularities in its initial public offering (IPO), where a substantial number of shares were allotted without actual payment. Those shares were later sold, causing significant losses for general investors.

These beneficiaries later offloaded their shares, leaving general investors to face substantial losses.

Currently, Ring Shine is struggling with a mounting debt burden and poor operational performance.

Its last disclosed financial report for the January–March of FY26 quarter showed a staggering loss of over Tk46 crore.

Textile millers are suffering mounting losses as more than a dozen troubled banks have failed to settle overdue payments against local back-to-back letters of credit (LCs), leaving thousands of crores of taka in accepted bills unpaid for years.

Around Tk3,000 crore to Tk4,000 crore in overdue payments has accumulated over the past five years as banks failed to honour accepted bills after maturity, according to bankers, despite clear obligations under the Guidelines for Foreign Exchange Transactions 2018.

The unpaid bills relate to local back-to-back LCs, under which garment exporters buy yarn, fabric and other raw materials from local suppliers on the strength of export orders received from foreign buyers. Once a bank accepts a bill submitted by the local supplier, it becomes legally bound to settle the payment on the maturity date, usually within 120 days.

However, many banks have failed to do so even years after accepting the bills.

A back-to-back LC, also known as a local LC, is a financing mechanism where a master LC from a foreign buyer acts as collateral for a second, separate LC issued to a local supplier. Local LCs specifically facilitate sourcing raw materials from domestic suppliers for export-oriented industries, crucial in Bangladesh for garment manufacturing, often settled in local currency rather than dollars.

Banks' obligation

Speaking to The Business Standard, Mohammad Shahriar Siddiqui, Bangladesh Bank assistant spokesperson and director, said there is no provision for non-payment against accepted bills.

He explained that the central bank typically clears overdue payments by deducting the relevant amount from the commercial bank's account maintained with the Bangladesh Bank. However, in cases where document disputes arise, the central bank resolves them on a case-by-case basis upon appeal, he said.

"While some overdue payments exist with troubled banks, the central bank has explicitly instructed them to settle these liabilities immediately," Shahriar said.

This follows an earlier circular issued on 26 October 2022, in which the Bangladesh Bank noted that some banks were failing to follow settlement instructions, thereby disrupting foreign exchange operations.

Under that directive, banks were strictly ordered to settle all payments for both local and foreign LCs upon maturity. The circular also warned that failure to comply would lead to the cancellation of Authorised Dealer (AD) licences and disciplinary action against the officers responsible.

Overdue for years

TBS found numerous cases in which banks accepted documents from suppliers, including invoices and bills of lading, but then failed to make payment years after the maturity date.

Prosanta Kumer Das, manager of Ahmed Group, said the group has around $15 million, equivalent to nearly Tk200 crore, outstanding against accepted bills with several banks.

"When a bank accepts the bill, the liability shifts entirely to the lender," he said.

"In the case of foreign LCs, banks never delay payment. Even if the customer fails to pay, the bank settles the bill from its own funds. But they are not following the same practice for local LCs."

Prosanta said banks are supposed to create forced loans in the name of their exporter clients and use those funds to settle accepted local LC bills.

"Our operations have been suffering because of the long delays. We cannot repay the loans that we took to import raw materials, and our daily operations have been disrupted," he added.

Bank Asia has more than 400 such overdue cases with different banks, involving nearly $16 million, according to the bank.

Sohail RK Hussain, managing director of Bank Asia, said delayed payment against accepted bills has become common in recent years.

"In the case of foreign LC payments, the Bangladesh Bank immediately intervenes and settles the dues by deducting money from the banks' accounts held with the central bank," he said.

"The same intervention is needed for local LCs because at least 15 troubled banks are unable to make payments."

He said Bank Asia had recently sent reminder letters to two troubled banks to settle overdue accepted bills of their clients and was considering legal action against banks that continued to default.

The Bangladesh Textile Mills Association, the representative body for the country's textile entrepreneurs, does not have recent statistics on the total amount of funds currently stuck in this manner.

However, an official from the organisation noted that as of the last available data in November, the amount pending with banks stood at approximately $90 million.

How textile millers suffer

Industry leaders said the growing defaults have weakened Bangladesh's backward linkage industry for the garment sector, with textile mills struggling to repay loans, pay workers and continue operations.

Md Mosharaf Hossain, managing director of Mosharaf Composite Textile Mills, said around $2 million owed to his company remained unpaid, with some payments overdue for as long as five years. "Those payments should have been settled within 120 days of acceptance."

Most of the money is stuck with Islami Bank Bangladesh, Premier Bank, Agrani Bank and Exim Bank, he said.

Md Anwarul Islam, managing director and CEO of Agrani Bank, said banks have no scope to leave overdue payments unsettled for an extended period. "However, we will look into the matter if any such case persists," he added.

Despite repeated attempts, officials from Islami Bank Bangladesh, Exim Bank, and Premier Bank could not be reached for comment.

Documents seen by TBS show that one supplier delivered yarn worth around $1,92,000 in mid-2021 against six separate LCs opened by New Town Knitwear Company Limited. Four of the LCs were issued through Islami Bank Bangladesh and two through Exim Bank, yet the supplier has still not received the money nearly five years after the maturity date.

Similarly, payment for goods worth about $1,20,000 supplied to Optimum Fashions Wear Limited against three LCs has remained overdue with two banks for about 18 months.

Two other firms based in Narayanganj – Abanti Colour Tex Limited and Crony Apparels Limited – have failed to receive payment worth $4,72,000 and $35,000, respectively, even after two years.

Officials of the company said legal notices had already been served on the institutions concerned and on the relevant bank officials.

Furthermore, after repeated reminders over the past few years went unheeded, the firm has filed lawsuits against nine companies, to which raw materials were supplied, as well as the relevant bank officials.

TBS has obtained several documents related to the lawsuits and legal notices issued by the institution.

Mosharaf Hossain said, "Because we are not receiving payment on time, we cannot repay our bank loans," he said. "As a result, we have to pay additional interest. At the same time, a shortage of working capital is making it difficult to pay workers' wages and allowances."

"The same bank that cannot pay what it owes us is charging interest on our loans," he added.

Mosharaf said his company had always paid wages on time in the past, but had still not fully paid workers' salaries for March this year.

"Without support from the banks, we are disappearing from business," he said.

Saleudh Zaman Khan, managing director of NZ Apparels Limited, said his company had around $8,00,000 in unpaid bills for goods supplied to garment factories.

Some of the payments under Islami Bank LCs are now more than a year overdue, he said.

Besides Islami Bank, EXIM Bank, and Premier Bank, some other banks controlled by the S Alam Group are also failing to make payment, Saleudh said. "Because of this, we have to pay extra interest on our loans and divert funds from other businesses to avoid our loans becoming classified."

He added that LC agreements require banks to pay interest to suppliers if payment is delayed by more than five days after maturity. "But even after months of delay, we are not receiving that interest."

The volume of forced loans at Rupali Bank hit $1.87 billion by the end of December 2025, nearly doubling in four years, according to a Bangladesh Bank inspection conducted by its Bank Supervision Department.

Central bank data reveals a 91.59% surge since 2021 when forced loans stood at $976 million. The debt climbed steadily over the period, reaching $1.23 billion in 2023 and $1.49 billion in 2024.

In banking, a forced loan is triggered when an importer fails to settle a letter of credit (LC) or credit facility on time. In such cases, the bank must then pay the foreign entity from its own coffers, converting the unpaid obligation into an immediate loan in the importer's name.

Officials say the growing volume of such loans reflects importers' failure to settle LC liabilities on time, forcing the bank to convert those dues into loans – a shift that severely strains liquidity and asset quality.

Economists warn that rising forced loans are a red flag for a bank's financial health, signalling that borrowers cannot meet their obligations and increasing the risk of these debts turning into non-performing loans (NPLs).

Dr Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said the trend signals financial fragility within the bank.

"A rise in forced loans means the bank's financial condition has weakened. When a bank's forced loans approach $2 billion, it means the bank has already paid this amount to foreign banks, but the importers have not repaid the money to the bank," he said.

"Forced loans should not be allowed to increase. They can occur either intentionally or unintentionally, but in many banks in our country, forced loans are created through collusion between banks and customers. The bank's board needs to take stricter measures in this regard," he added.

A senior official of Rupali Bank told The Business Standard that most of the bank's forced loans are linked to the garment sector. The bank paid foreign banks against LCs opened by various garment companies in the country, but the money was not repaid to the bank.

Concerns over import payments, documentation

Moreover, the Bangladesh Bank has also uncovered extensive irregularities and a breakdown of internal controls within Rupali Bank's foreign exchange operations.

The state-owned lender reportedly paid $2.20 billion to foreign banks against import payments, but failed to provide proof that the goods entered the country – known as a bill of entry.

According to the inspection report, a large volume of these documents remains outstanding against bills that have already been settled. This indicates that while the bank has funnelled dollars abroad on behalf of importers, there is no verification that the corresponding goods ever entered the country.

The central bank, in the report, warned that these outstanding documents create a significant risk of money laundering and trade-based illicit outflows, as there is currently no evidence that the imported goods exist.

Central bank's rejection of new AD branch licence

The central bank also rejected Rupali Bank's application to open a new authorised dealer (AD) branch in Rajarbagh, Dhaka, in March this year, citing weak risk management. The decision was based on the findings in the inspection report.

Although the bank currently operates 28 AD branches, Bangladesh Bank raised alarms over the financial stability of its foreign exchange operations.

The regulator declined to grant the licence after observing that key indicators of the bank's foreign trade operations – including imports, exports, remittances and bill of entry submissions – have declined over the past four years.

However, in a curious development, the director of the relevant department responsible for AD licensing was transferred to another department, with 1 April marking his last working day. Later, another director assigned to the department was expected to join but was on leave abroad for medical treatment from 2 April to 5 April, according to department sources.

During that period, a note was submitted to the relevant executive director recommending that the bank be allowed to reapply for a new AD licence.

Declining foreign exchange indicators

The state-owned lender's foreign trade indicators have deteriorated sharply over the past few years.

Its import volume fell from $3.17 billion in 2021 to $836 million in 2025, while exports declined from $386 million to $213 million during the same period. Remittance inflows also dropped significantly, from $708 million in 2021 to $293 million in 2025, according to central bank data.

Bangladesh Bank noted that all major indicators related to the bank's foreign currency transactions have weakened.

Meanwhile, the bank's total non-performing loans reached Tk21,358 crore as of 31 December 2024, accounting for 41.60% of its total loans.

Inspection uncovers more irregularities

The inspection by the supervision department at five authorised dealer branches of Rupali Bank uncovered 46 serious irregularities and fraudulent activities.

Among the major findings were the concealment of actual loan liabilities by presenting Export Development Fund (EDF) and UPAS LC obligations, granting new credit facilities to the same customers despite existing forced loan defaults, and creating forced loans without approval from the head office.

The inspection also found that export proceeds were used to repay other loans instead of adjusting back-to-back LCs, and that "best exporter" certificates were issued in violation of regulations.

The report further said the bank received an "unsatisfactory" rating in three key areas – internal control and compliance (ICC), credit risk management (CRM), and ICT security.

A senior central bank official said the bank's NPL ratio exceeding 41% clearly indicates a deteriorating financial condition, warning that it could create greater risks for the bank in the future.

On the issues, Ahsan Habib, director at BIBM, said the growing backlog of bills of entry and the rising volume of forced loans are deeply worrying.

"Outstanding bills of entry and increasing forced loans are extremely alarming. It means money is going abroad but not returning to the country," he said.

"If the bank's board and management are not strong, it will be difficult to reduce these risks. The current board should identify which companies required the forced loans and bring them under accountability," he added.

Rupali Bank's response

Responding to the allegation, a Rupali Bank general manager familiar with the matter said around 95% of the bills of entry are linked to the Bangladesh Petroleum Corporation (BPC).

Central bank officials also acknowledged the matter and attributed the discrepancies to tariff valuation issues during BPC's fuel imports, noting that while discussions have been held between the BPC, the National Board of Revenue (NBR), and the central bank, a resolution remains elusive.

When contacted, a senior official at BPC declined to comment on the matter.

The bank's general manager further clarified that the discrepancies in the bill of entry amounts have arisen due to fluctuations in the dollar exchange rate.

On the rise in forced loans, he said, "Many garment sector businesses failed to make payments on time due to order cancellations and the slowdown following Covid. However, if we receive a new AD licence, our exchange earnings will increase, and the situation will normalise."

Giving priority to the rural economy, the proposed Annual Development Programme (ADP) for FY2026-27 has allocated the highest share to the Local Government Division, while significantly increasing allocations for ministries and divisions linked to education and health.

However, the Power Division has seen a cut in its proposed budget, according to a letter sent by the Finance Division to the Implementation Monitoring and Evaluation Division of the Planning Commission on 20 April.

The letter outlines the proposed allocations for the 10 highest-funded ministries and divisions.

These include the Road Transport and Highways Division, Ministry of Primary and Mass Education, Secondary and Higher Education Division, Power Division, Ministry of Science and Technology, and the Health Services Division.

The Local Government Division has been allocated Tk36,228 crore under the proposal, up from Tk34,702 crore in the current fiscal year's ADP.

The Roads and Highways Division, the second-largest recipient, has been allocated Tk31,064.51 crore, slightly lower than the Tk31,772.25 crore in the current ADP.

The Primary and Mass Education Ministry has seen a sharp increase, with a proposed allocation of Tk21,347.53 crore, up 267.8% from Tk5,803.43 crore in the current fiscal year.

The Secondary and Higher Education Division has received Tk20,835.44 crore, an increase of nearly 75%.

The Power Division's allocation has been reduced to Tk19,285.66 crore, down 18.63% from Tk23,702.76 crore in the current fiscal year.

The Ministry of Science and Technology has been allocated Tk17,315.74 crore, up 47%, with priority given to the Rooppur Nuclear Power Plant project.

The Health Services Division has seen one of the sharpest increases, with a proposed allocation of Tk26,808 crore, up 258% from Tk 7,484.36 crore in the current fiscal year.

The Shipping Ministry has been allocated Tk 10,968.9 crore, broadly in line with the current allocation of Tk 10,661 crore.

The Health Education and Family Welfare Division has received Tk8,444.85 crore, marking a 75.57% increase.

Among other allocations, the Water Resources Ministry has been proposed Tk 7,903 crore, while the Railways Ministry has been allocated Tk 7,547 crore, slightly higher than Tk 7,535 crore in the current ADP.

The Agriculture Ministry's allocation has been raised to Tk 6,540 crore from Tk 5,833.82 crore, while the Technical and Madrasah Education Division has been allocated Tk 6,112.99 crore.

Planning Commission sources said the Finance Ministry has proposed a total ADP size of Tk3,00,000 crore for FY27. The structure of funding was finalised at a meeting of the Budget Monitoring and Resource Committee on 10 April.

Of the total ADP size, Tk1,90,000 crore will come from domestic resources, while Tk1,10,000 crore is expected from foreign loans and grants.

The final ADP for FY27 will be placed before the National Economic Council (NEC), chaired by the prime minister, next month for approval, the Planning Commission said.

The government yesterday approved the direct purchase of 1.75 lakh tonnes of diesel and octane from two suppliers, bypassing the standard tender process as concerns deepen over Gulf supply disruptions caused by the US-Israeli war on Iran.

The Cabinet Committee on Government Purchase (CCGP) cleared multiple proposals from state agencies to that end at a cost of nearly Tk 1,700 crore.

As per the proposals, 100,000 tonnes of diesel will be bought from US-based Archer Energy LLC at Tk 674 crore. Another 75,000 tonnes of fuel, including 50,000 tonnes of diesel and 25,000 tonnes of octane, will be bought from Dubai-based DBS Trading House FZCO at Tk 1,023 crore.

The war on Iran, which began on February 28, sent oil prices spiralling after Iran effectively blocked the Strait of Hormuz, through which roughly one-fifth of global oil supply passes.

The head of the International Energy Agency said yesterday that the conflict is producing the worst energy crisis the world has ever faced.

Bangladesh is especially exposed to the volatility in the international energy markets, given its growing import dependency. Some 46 percent of the country’s total energy supply came from imports in 2023. In the fiscal year 2024-2025 (FY25), imports accounted for 65 percent of its power needs. with the reliance increasing every year.

The government has been scrambling for alternative suppliers. It earlier approved the purchase of 2 lakh tonnes of diesel from Kazakhstan.

In a separate development yesterday, the Cabinet Committee on Economic Affairs allowed Bangladesh Petroleum Corporation (BPC) to compress its tender preparation and submission period for refined fuel imports from 42 days to 10, a move designed to speed up procurement as supply pressures mount.

Finance Minister Amir Khosru Mahmud Chowdhury chaired the meeting.

Earlier, the committee approved the direct import of 2.75 lakh tonnes of fuel oil, which implies that the BPC can buy additional 1 lakh tonnes of petroleum through direct purchase method.

The BPC sold 68.35 lakh tonnes of fuel in FY25 and 43.5 lakh tonnes or 63 percent of the total sales were diesel, according to the BPC.

The state agency had imported 46 lakh tonnes of refined petroleum and 15 lakh tonnes of crude oil that year.