Bangladeshi banks have emerged as the weakest in South Asia in their ability to absorb financial shocks, after a large volume of previously hidden bad loans came to light following the fall of the Awami League-led government in August 2024.

As these losses surfaced, capital buffers of banks were eroded, pushing their capital adequacy ratio into negative territory by the end of 2025, according to Bangladesh Bank’s latest Financial Stability Report yesterday.

The capital adequacy ratio, also known as the Capital to Risk-Weighted Assets Ratio (CRAR), measures how much money a bank holds as a safety cushion against risky lending. In simple terms, it shows whether a bank has enough capital to absorb losses if borrowers fail to repay loans. A negative ratio means losses have wiped out that buffer entirely.

At the end of 2025, Bangladesh’s CRAR stood at minus 2.64 percent. By comparison, it was 17.20 percent in India as of September last year, 19.40 percent in Sri Lanka, and 20.80 percent in Pakistan at the end of 2025.

Under international Basel III rules, banks are expected to maintain a minimum capital adequacy ratio of 10 percent, plus an additional 2.5 percent buffer to protect against financial stress. Bangladesh is now far below that threshold.

The central bank report shows that Bangladesh’s banking sector was relatively stronger until 2023, but its financial position deteriorated drastically from 2024 after the political changeover.

In 2024, the sector’s capital adequacy ratio stood at 3.08 percent, compared with 16.7 percent in India, 20.6 percent in Pakistan and 18.4 percent in Sri Lanka.

Banking sector insiders say the collapse shows years of irregularities and large-scale financial scams during the Awami League government, which led to massive losses that were not fully disclosed at the time.

Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank and a former chairman of the Association of Bankers, Bangladesh (ABB), said the capital position of the banking sector has turned negative due to widespread financial scams.

According to Rahman, a number of banks have also availed themselves of regulatory deferral facilities. These are temporary measures that allow banks to delay recognising losses or meeting certain regulatory requirements, often used to ease short-term pressure on their balance sheets.

He said the situation could worsen further once these facilities are withdrawn or expire.

Bangladesh’s banking sector has long operated with lower capital levels than its regional peers, averaging around 11 percent in recent years. However, the ratio saw a steep decline of more than 8.5 percentage points from 11.64 percent a year earlier to minus 2.64 percent at the end of December 2025.

At the end of 2025, some 42 banks remained compliant with Basel III requirements, together accounting for more than 60 percent of total banking sector assets, according to the report.

It said the overall decline was driven mainly by weak capital positions in Islamic private commercial banks, specialised development banks and several state-owned banks.

Non-performing loans (NPLs), loans on which borrowers have stopped making repayments, were the central pressure point.

At the end of last year, bad loans in the sector stood at Tk 557,217 crore, or 30.60 percent of total loans. By March this year, the amount had risen further to Tk 588,704 crore, or 32.26 percent, according to Bangladesh Bank data.

Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM) and a former chief economist of the Bangladesh Bank, said the negative capital adequacy ratio pointed to deep structural weaknesses in the sector.

“The latest figures indicate that the sector’s health has deteriorated further compared to previous years. The problems are becoming increasingly severe and harder to resolve,” said Mujeri.

He added that the scale of damage has built up over many years.

“If policymakers want to restore the banking sector to a healthy and sustainable position, there is no alternative to taking strong and decisive corrective measures,” said the former BB economist.

Meanwhile, Mutual Trust Bank CEO Rahman said the current government has taken office at a difficult time, with the financial sector’s weakness adding to its challenges. “Therefore, the government must take the matter seriously. There appears to be no alternative to recapitalisation, but the government itself lacks the necessary funds.”

Recapitalisation refers to the process of injecting fresh capital into banks to restore their financial stability after losses. In practice, it usually involves government support or mergers between weak lenders.

In his budget speech last week, Finance Minister Amir Khosru Mahmud Chowdhury said that the government is spending around Tk 40,000 crore in the current fiscal year to recapitalise weak banks to restore discipline and stability in the banking sector.

He said Tk 20,000 crore of that amount was allocated to Sammilito Islami Bank, formed through the merger of five troubled lenders.

Rahman said broader structural reforms, including bank mergers and other resolution mechanisms, would be needed to stabilise the sector.

He pointed to Greece as an example of a country that faced a similar banking crisis but managed recovery through large-scale recapitalisation backed by the European Union.

Bangladesh, he added, does not have the same fiscal capacity.

Bangladesh’s leather sector is widely recognised as one of the country’s key export industries. Yet beneath this success lies a largely overlooked reality: a significant portion of the industry’s material flow ends up as low-value or hazardous waste despite being rich in recoverable resources such as collagen, proteins, fats, fibres and chromium compounds. Millions of hides processed annually generate tens of thousands of tonnes of tannery solid waste that remains largely underutilised. This waste stream is not merely a disposal burden but a continuous supply of valuable raw materials capable of supporting high-value industries.

In many developed economies, similar by-products are integrated into profitable secondary industries, forming the foundation of circular bioeconomies. In Bangladesh, however, these materials remain fragmented, informally handled and largely excluded from mainstream industrial planning. As a result, opportunities for value addition, import substitution and industrial diversification remain untapped. A key concern is the country’s growing dependence on imported products that could potentially be produced domestically from tannery waste, including collagen peptides, pharmaceutical-grade gelatine, cosmetic ingredients, organic fertilisers and biodiesel feedstocks. This reliance causes a continuous outflow of foreign currency and exposes the economy to external price volatility. At the same time, Bangladesh exports comparatively low-value semi-processed leather. Developing a domestic tannery waste valorisation industry would help substitute imports with local production and strengthen economic self-reliance.

The environmental situation is also becoming increasingly critical. Recent assessments indicate that more than 8.5 million hides and skins processed annually generate around 30,500 tonnes of tannery solid waste, including fleshing, trimmings, chrome shaving dust, buffing dust and leather scraps. With improved environmental compliance and certifications such as Leather Working Group (LWG) approval, tannery utilisation at Savar could rise from 30-40 percent to 90-95 percent. While this would improve export competitiveness, it would also increase waste generation to 60,000-90,000 tonnes a year. This expansion carries major climate implications. Organic tannery waste decomposes under anaerobic conditions in landfills, releasing methane, a greenhouse gas far more potent than carbon dioxide. Without intervention, emissions will increase significantly as production scales up.

Environmental impacts extend beyond greenhouse gases. Leachate from decomposing waste contaminates soil and groundwater, threatening water safety and reducing agricultural productivity. Chromium-containing waste, particularly shaving dust and wet-blue trimmings, poses additional risks through improper handling and unethical use in poultry and fish feed. Open dumping contributes to air pollution, foul odours and public health concerns around industrial zones such as Savar. Despite these challenges, tannery waste presents a strong opportunity for integration into global high-value markets. Demand for bio-based products is expanding rapidly in cosmetics, pharmaceuticals, renewable energy, sustainable materials and agriculture. Collagen-based products alone represent a multi-billion-dollar global industry.

Formal recognition of tannery waste valorisation as an independent industrial sector is therefore essential. At present, it exists without dedicated policy support, industrial classification or investment frameworks. Proper recognition would enable structured development, policy incentives and improved access to financing, strengthening Bangladesh’s transition towards a circular economy. The sector also offers strong potential for private investment across bio-refineries, renewable energy plants, biochemical processing, pharmaceutical and cosmetic intermediates, and organic fertiliser production. With rising global demand for sustainable products, early investment could position Bangladesh as a regional hub for green industrial development. Public-private partnerships, foreign direct investment and technology transfer will be essential.

Ultimately, the future of Bangladesh’s leather industry will depend on whether it continues with a linear production model or transitions to a circular, resource-efficient system.

The stagnation that has persisted in the rural economy for several years has intensified further. The flow of bank credit to rural areas has consequently continued to contract. Outstanding bank loans in the rural economy have not increased over the past year; instead, they have declined by more than BDT 45 billion, according to the central bank data. At the end of March 2025, outstanding bank loans in rural areas stood at around BDT 1.36 trillion. By March this year, that figure had fallen to around BDT 1.32 trillion.

The slowdown in the rural economy comes at a time when the country is receiving the highest remittance inflows in its history. Up to June 14 of the current fiscal year, expatriate Bangladeshis sent home $34.30 billion in remittances. In local currency terms, this amounts to more than BDT 4.22 trillion. A significant share of these remittances has flowed into rural areas. Since migrant families spend roughly two-thirds of remittance income on consumption, rural economic activity and demand for credit would normally be expected to strengthen.

Bankers, however, say that the rural economy has become largely subdued. The economic slowdown has forced many cottage, micro, and small industrial units in rural areas to shut down, while new ventures are not emerging. Demand for loans in rural areas consequently remains weak.

Many economists and stakeholders offer a different explanation. They argue that most banks lack the capacity to effectively extend credit to the rural economy. Despite years of urging, banks have failed to develop such capabilities. Initiatives introduced in the name of financial inclusion, such as agent banking and sub-branches, have primarily been used to mobilise deposits rather than expand lending. The ongoing crisis and instability in the banking sector have also negatively affected rural credit disbursement. To meet agricultural and rural lending targets set by the central bank, banks have become heavily dependent on microfinance institutions.

The main issue is a lack of demand for credit in the rural economy, said Mashrur Arefin, chairman of the Association of Bankers, Bangladesh (ABB). Speaking to Bonik Barta, the Managing Director of City Bank PLC, said: “Private-sector credit growth in the country has fallen to the range of 4 percent. In my entire banking career, I’ve never seen loan demand this low. If demand for credit is weak in urban areas, it’s not unusual that it has declined even further in rural areas. Many banks currently don’t even have the capacity to extend new loans. State-owned banks maintain a large branch network in rural areas, and we’re seeing stagnation in their credit growth as well.”

Mashrur Arefin noted City Bank is working to expand retail and small-scale lending through the extensive use of technology. “Through the MFS platform bKash, we’re providing unsecured digital nano loans ranging from BDT 500 to BDT 50,000. The outstanding balance of these microloans has now exceeded BDT 65 billion. Bangladesh Bank has announced new targets for agricultural and rural lending, along with several incentive packages. With political stability and a newly elected government having announced the budget, we hope that both the rural economy and the overall economy will recover quickly,” he further said.

Bangladesh Bank publishes Scheduled Banks Statistics every quarter, containing a wide range of banking-sector data. The latest edition shows that the total outstanding bank credit stood at around BDT 17.83 trillion at the end of March this year. Of this, around BDT 16.51 trillion was disbursed in urban areas, accounting for 92.59 percent of total bank lending. In contrast, outstanding credit in rural areas stood at only nearly BDT 1.32 trillion, representing just 7.41 percent of total bank loans, despite the rural economy contributing more than 30 percent to the country’s GDP.

Banks also collected nearly three times more deposits from rural areas than the amount of loans they disbursed there. At the end of March this year, outstanding rural deposits stood at approximately BDT 3.43 trillion, compared with around BDT 3.01 trillion in March 2025. This means rural deposits increased by BDT 424.80 billion over the past year. But outstanding bank credit in rural areas declined by BDT 46.12 billion during the same period.

Agricultural loans are also included within the total outstanding credit disbursed in rural areas. Outstanding agricultural loans stood at BDT 636.30 billion as of March this year, according to Bangladesh Bank data. But rather than increasing, the figure fell to BDT 632.47 billion in April. Banks have also become almost entirely dependent on microfinance institutions for the disbursement of agricultural loans.

Deposits collected from rural areas could have transformed the economy if they had been reinvested as loans within the same localities, believes Syed Mahbubur Rahman, managing director of Mutual Trust Bank. Speaking to Bonik Barta, he said, “It’s quite difficult for banks to deliver credit to the rural economy. Most banks lack both the capacity and the infrastructure required to extend such loans. Banks have consequently become dependent on NGOs for the disbursement of agricultural and rural credit.”

Regarding local lending, he said, “Services such as agent banking and sub-branches were introduced to promote financial inclusion. But marginalised communities haven’t yet fully benefited from these services. This is because banks are still using agents and sub-branches primarily to mobilise deposits. If the deposits collected from a particular area could be reinvested there as loans, the rural economy would become much more vibrant. Rural employment would increase as well. The opportunity hasn’t yet been lost. We’re trying to reach underserved communities through technology.”

Bangladesh has been experiencing high inflation for several years, while economic growth has slowed. GDP growth stood at 4.22 percent in FY 2023–24. It declined to 3.49 percent in FY 2024–25 and is projected to reach 4.14 percent in the current fiscal year. The inflation rate, meanwhile, stood at 9.42 percent in May, well above the target of reducing inflation to 6.5 percent set in the monetary policy.

Alongside economic stagnation, Bangladesh’s banking sector is also facing ongoing stress and instability. During the first quarter of the current year (January–March), non-performing loans (NPLs) increased by BDT 314.87 billion. By the end of March, total NPLs in the banking sector had reached around BDT 5.88 trillion, accounting for 32.26 percent of all outstanding loans.

The lending capacity of at least two dozen banks has become severely constrained. Even banks with excess liquidity or sufficient funds for lending aren’t extending adequate credit to entrepreneurs. Instead of increasing lending to the private sector, banks are showing greater interest in purchasing government Treasury bills and bonds. While private-sector credit growth has consequently fallen to 4.75 percent, credit growth to the government has exceeded 30 percent.

Former Chief Economist of Bangladesh Bank, Dr Mustafa K Mujeri, believes that survival itself has become increasingly difficult for rural entrepreneurs. Speaking to Bonik Barta, also the executive director of the Institute for Inclusive Finance and Development (InM), said, “The pressure of high inflation has made it extremely difficult for rural entrepreneurs to stay afloat. The decline in credit flows is also delaying their prospects of recovery and affecting their employment. Jobless people from rural areas are now migrating to cities. Banks and financial institutions need to become more proactive in providing credit in rural areas. The government must also come forward in this regard.”

The banks’ inability to adequately serve rural borrowers has led to the rapid expansion of microfinance institutions. The outstanding loan portfolio of 719 microfinance institutions, including Grameen Bank, has now reached BDT 2.05 trillion.

Government-supported organisations such as the Palli Karma-Sahayak Foundation (PKSF) and the SME Foundation have also expanded their activities in rural areas. Bangladesh Bank has now established a BDT 50 billion incentive fund for cottage and small entrepreneurs. PKSF has been entrusted with disbursing low-interest loans from this fund.

Commenting on the initiative, PKSF Managing Director Md Fazlul Kader told Bonik Barta, “The rural economy is experiencing a significant slowdown. To overcome this stagnation, microfinance institutions can play a more effective role than banks. PKSF is implementing a range of initiatives to address the situation. In addition to the BDT 50 billion being provided by Bangladesh Bank, another BDT 60 billion is being added through government support and our own financing. We’re working toward disbursing a total of BDT 110 billion in the rural economy. PKSF has more than three decades of successful experience as a catalyst for rural economic development and sustainable growth.”

The Executive Committee of the National Economic Council (Ecnec) yesterday approved a Tk 4,189 crore project to build supporting infrastructure for the Chinese Economic and Industrial Zone (CEIZ) in Chattogram’s Anwara.

Policymakers hope the CEIX will become one of Bangladesh’s largest foreign investment hubs, with project documents showing the zone is expected to attract at least $500 million in foreign direct investment and create more than 100,000 direct and indirect jobs once fully operational.

According to Planning Commission documents, Bangladesh sought a $221.18 million loan from China in 2018 for infrastructure development in the zone, and the Chinese government later agreed to finance the project under the its Preferential Buyer’s Credit (PBC) arrangement.

Of the total cost, Tk 1,722 crore will come from government funds, while Tk 2,467 crore is expected to be financed through loans under the PBC facility.

The project, titled Supporting Infrastructure Project for Chinese Economic and Industrial Zone, is likely to be implemented by the Bangladesh Economic Zones Authority (BEZA) between January 2027 and December 2031.

The CEIZ, being developed under a Bangladesh-China cooperation framework, is designed to attract export-oriented manufacturing investment and strengthen Bangladesh’s integration into regional and global supply chains.

Situated in Anwara on the southern bank of the Karnaphuli river, the economic zone enjoys strategic access to Chattogram Port, the Karnaphuli Tunnel and Shah Amanat International Airport, making it an attractive destination for foreign investors.

The Planning Commission said the project would enhance industrial competitiveness, promote export diversification and facilitate technology transfer through increased Chinese investment.

The project includes construction of a multipurpose jetty, connecting roads and a bridge, along with utility infrastructure such as water storage facilities, a gas pipeline, a central effluent treatment plant and waste management facilities.

It also includes two power substations, around 20 kilometres of transmission lines, and nearly 12 kilometres of boundary walls with security gates.

Planning ministry officials said the project would prioritise land development and installation of essential utilities to make the zone investment-ready.

Planning Secretary SM Shakil Akhter said the first phase would focus on roads, power transmission lines and other services required to attract industrial investors.

Beyond attracting investment, the economic zone is expected to improve the commercial viability of the Karnaphuli Tunnel by generating industrial traffic.

Once factories begin operations, increased movement of raw materials, machinery, cargo and workers between Chattogram city, the port and the industrial zone is expected to raise tunnel usage, which has remained well below initial projections.

Mohammad Mohsin Ul Alam Swapan, vice-president of the Chittagong Chamber of Commerce and Industry, said the economic zone would bring significant economic benefits to southern Chattogram.

“The project’s proximity to the Karnaphuli Tunnel will increase tunnel traffic while easing pressure on Chattogram city,” he told The Daily Star.

“In line with the vision of developing a ‘One City, Two Towns’ model, the economic zone is expected to attract not only Chinese investment but also substantial domestic investment in surrounding areas.”

He said investor interest had already begun to grow around the project, with around 100 small and large enterprises purchasing land near the economic zone to establish factories and industrial facilities.

“The economic zone is also expected to accelerate the transformation of Anwara into a major industrial cluster, complementing existing investments in energy, power and manufacturing projects in the area,” he added.

Currently, around 4,000 vehicles use the tunnel daily, far below the projected demand of 18,500–20,700. The tunnel generates approximately Tk 10-11 lakh in toll revenue per day, while operation and maintenance costs stand at Tk 37 lakh to Tk 38 lakh, leaving a daily deficit of around Tk 26 lakh to Tk 27 lakh.

According to BEZA, more than 100 Chinese companies from sectors including leather, light engineering, medical equipment and chemicals have already expressed interest in establishing factories in the zone.

The project has faced years of delays despite land acquisition for the nearly 800-acre zone being completed under bilateral agreements between Bangladesh and China. Infrastructure development was initially assigned to China Harbour Engineering Company, but the two sides failed to finalise an agreement.

In 2022, China Road and Bridge Corporation was appointed as the new developer and later formed a joint venture with BEZA to move the project forward.

Listed companies have called on Bangladesh Bank to overhaul its credit reporting rules, arguing that financially healthy firms should not be held back by the poor borrowing records of their directors or nominating institutions.

The Bangladesh Association of Publicly Listed Companies (BAPLC) has urged the central bank to implement a more pragmatic Credit Information Bureau (CIB) reporting framework to ensure that financially sound listed companies are not unfairly penalised for the adverse credit records of their nominating institutions or individual directors.

A high-level delegation of the association, led by its President Riad Mahmud, made the request during a meeting with Bangladesh Bank Governor Mostaqur Rahman held at the central bank headquarters in the capital today (16 June).

The meeting focused on resolving critical regulatory bottlenecks that currently hinder the operational flexibility and growth of the country's premier corporate entities.

At the heart of the discussion was the impact of CIB reporting on companies where nominee directors serve.

Under the current practice, if a nominating institution such as a parent company or a financial firm is flagged in the CIB for a default, it often creates significant hurdles for the company where its nominee sits on the board, even if that company is entirely compliant and profitable. The BAPLC delegation emphasised that such "proxy defaults" create undue difficulties in securing credit and maintaining business operations, and called for a fair framework where a company's creditworthiness is judged solely on its own financial health.

Furthermore, the association raised concerns over the systemic challenges faced by large business groups. Currently, the adverse CIB status of a single sponsor, director, or guarantor can effectively freeze the credit facilities of all other entities within the same group.

The BAPLC also requested the Bangladesh Bank to move away from this blanket approach and instead adopt a "balanced and entity-specific" evaluation. They argued that otherwise healthy and compliant entities should not be deprived of financing due to the financial distress or defaults associated with an individual or a sister concern.

Beyond CIB-related issues, the BAPLC leaders advocated for an expansion of the government's newly announced Factory Revival Fund. While they appreciated the initiative to reopen shuttered units, they requested that the facility be extended to include restructured but financially distressed factories that remain operational. These units, according to the BAPLC, often suffer from severe working capital shortages. Providing them with support would sustain industrial operations, protect thousands of jobs, and prevent viable industries from sliding into total operational suspension.

The delegation also observed that the national economy needs to pivot toward the capital market for long-term financing to mitigate the rising risks of non-performing loans (NPLs) in the banking sector. They noted that a greater reliance on equity and debt securities for long-term funding would not only deepen the capital market but also help banks reduce asset-liability mismatches. By diversifying funding sources, the corporate sector could achieve more sustainable growth while lowering the pressure on the banking system.

Despite a proposed increase in the tax-free income threshold, many taxpayers, especially salaried individuals, are likely to face a higher tax burden from the next fiscal year.

In the new budget, Finance Minister Amir Khosru Mahmud Chowdhury has proposed raising the tax-free income limit by Tk 25,000 to Tk 375,000. Although the tax-free income threshold has been raised, much of the relief is offset by three major changes in the Finance Bill 2026.

One of the key proposals is the abolition of the 5 percent introductory tax slab.

Its removal means the lowest post-threshold rate rises to 10 percent, effectively increasing the marginal tax burden for lower-tier earners.

Under the proposed structure, individuals earning up to Tk 300,000 on top of the Tk 375,000 threshold will face a 10 percent tax rate.

An analysis found that a taxpayer earning a gross monthly income of Tk 74,000 could see their tax liability rise by nearly 49 percent in FY27

In the current system, taxpayers earning up to Tk 100,000 above the Tk 350,000 threshold pay only 5 percent.

Another change likely to increase pressure on taxpayers is a reduction in tax benefits linked to eligible investments.

The overall effect will be a higher effective tax burden, especially for higher income groups who rely on rebates to reduce liabilities.

An analysis by SMAC Advisory Services Ltd found that a taxpayer earning a gross monthly income of Tk 74,000 could see their tax liability rise by nearly 49 percent in fiscal year 2026-27, due mainly to slab restructuring and reduced rebate benefits.

During the presentation of the bill on Thursday last week, Khosru also proposed a five-year forward-looking tax framework for individuals, under which the first slab rate has effectively doubled from 5 percent to 10 percent.

The burden is expected to remain relatively high for middle-income people. Those earning up to Tk 100,000 a month will continue to face significantly higher tax outflows under the proposed regime.

By contrast, taxpayers earning more than Tk 250,000 a month will see their overall tax liability rise by around 10 percent, highlighting the uneven impact across income groups, according to SMAC Advisory Services Ltd.

Alongside the slab changes, the bill proposes a cut in the tax rebate available on investments in approved savings and financial instruments.

Currently, taxpayers can reduce their tax liability through investment rebates calculated at 15 percent of eligible investments. The proposal lowers this to 10 percent.

The maximum annual rebate is also set to fall to Tk 7.5 lakh from Tk 10 lakh.

As a result, taxpayers who depend on investment schemes to reduce their tax liability will receive smaller benefits unless they increase eligible investments before June 30, 2026.

“These measures will directly raise the effective tax burden on individual taxpayers, especially certain salaried employees,” said Snehasish Barua, a chartered accountant and tax expert.

The bill also introduces a new condition aimed at encouraging long-term savings. Under the proposal, investments must be held until maturity to qualify for tax benefits. If funds are withdrawn early, the rebate previously claimed will have to be repaid as additional tax in the year of withdrawal.

For instance, if a taxpayer withdraws money from a savings certificate before maturity, they will have to repay the tax rebate.

The annual investment limit for deposit pension schemes (DPS) eligible for tax benefits remains unchanged at Tk 1.2 lakh.

The bill also sets a Tk 5 lakh ceiling on investments in government securities that can be considered for tax rebate purposes.

The proposed measures are a part of the government’s broader effort to raise revenue and reduce the cost of tax incentives.

However, for the first time, the National Board of Revenue (NBR) has proposed an incentive for early tax return submission. Taxpayers who file returns by September 30 will be eligible for a rebate equivalent to 5 percent of payable tax or Tk 25,000, whichever is lower.

If approved by parliament, the changes will take effect from tax year 2026-27.

“Except for taxpayers in the lowest tax bracket, those with annual incomes of up to Tk 375,000, almost everyone else will face a higher tax burden under the proposed measures,” said Towfiqul Islam Khan, additional director (Research) at Centre for Policy Dialogue (CPD).

“The increase will be felt across income groups, but the impact will be more pronounced on the middle class. Although higher-income individuals will also pay more tax, the relative increase in tax liability is larger for middle-income earners.”

He said the changes would dilute the intended relief from inflation, as the purchasing power of middle-income households would come under further pressure.

“This group generally has lower disposable income and limited savings. As a result, their consumption capacity is likely to weaken, which could also affect demand for domestically produced goods and services,” Khan said.

He added that the government’s objective appears to be increasing revenue collection while reducing tax concessions linked to investments.

“The policy seems aimed at preserving incentives for productive and industrial investments, while scaling back the tax benefits individual taxpayers receive through investment-related rebates,” said Khan.

“While the government may have moved away from some of the IMF’s recommendations on reducing tax exemptions, this particular measure will put additional pressure on taxpayers, especially middle-income earners,” he added.

He said a detailed assessment is needed, but the overall direction is apparently clear. “A large number of taxpayers will end up paying more tax despite the increase in the tax-free income threshold,” he added.

Despite Bangladesh Bank's campaign to promote a cashless society, cash remains the dominant mode of payment in the country, accounting for 67.2% of total transactions in 2025, according to the central bank's latest annual report.

Data from Bangladesh Bank's payment systems department shows that digital platforms accounted for 32.8% of total transaction value during the year.

The figures, however, indicate gradual progress. In 2024, cash transactions accounted for 72% of total transactions, with the remainder conducted through digital channels.

According to the report, Tk209 lakh crore out of total Tk311 lakh crore was conducted in cash in 2025, while digital mode shared Tk102 lakh crore.

Digital payments include transactions through systems such as Real Time Gross Settlement, National Payment Switch Bangladesh, Bangla QR, internet banking and mobile financial services.

However, cash withdrawals and deposits through bank branches, ATMs or MFS agents are classified as cash transactions because physical money changes hands.

A transaction remains digital only as long as it stays within the digital ecosystem. Once cash is withdrawn or deposited, it is counted as a cash transaction, said a central bank official.

Informal economy remains a major hurdle

Experts say the persistence of cash reflects the size of the informal economy, where a significant transaction remains outside the formal banking system.

Although mobile financial services, digital banking and QR-based payment solutions have expanded rapidly, many businesses and individuals continue to prefer cash for convenience and to avoid greater financial scrutiny.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said, "The country's informal sector remains outside the banking system. A large share of economic transactions takes place there in cash, and we have not yet been able to bring these activities into formal financial channels."

Dr Md Zahid Hussain, former World Bank lead economist in Dhaka, said building a cashless society would remain difficult unless the informal sectors are brought under the formal financial system.

"Large businesses in transport, agriculture, and wholesale-retail trade continue to operate outside banking channels. Many of them are reluctant to join the formal system because doing so would expose them to taxation and regulatory oversight," he said.

Infrastructure, trust challenges

Bankers also point to infrastructure constraints as a major barrier to digital adoption.

Many consumers still lack access to smartphones, reliable internet connections or the digital skills needed to use electronic payment systems. Small merchants and rural businesses often lack the infrastructure required to accept digital payments.

Syed Mahbubur said policy support alone would not be enough to accelerate the shift.

"Digital payment systems must become easier, more accessible and more convenient if we want people to adopt them on a larger scale," he said.

Dr Md Touhidul Alam Khan, managing director and CEO of NRBC Bank, said banks face a dual challenge of ensuring security while making digital services simple enough for users with limited digital literacy.

He warned that fraud incidents, failed transactions and complicated interfaces may erode trust and push users back toward cash.

The banker also stressed the need for an inclusive transition, saying the objective should be to expand consumer choice rather than eliminate cash.

Digital payment adoption remains sluggish even as the country continues to bear the substantial costs of a cash-driven economy. According to banking sector estimates, Bangladesh spends between Tk20,000 crore and Tk22,000 crore annually on printing currency notes.

Although Bangladeshis have been eating less rice over the past two decades, public spending remains heavily concentrated on rice production, according to a new World Bank report.

As a result, investments in higher-value farming subsectors such as livestock, fisheries, vegetables and agro-processing are ultimately being discouraged, said the report.

Launched yesterday, the report, titled “Repurposing Agricultural Public Spending for Quality Growth and Jobs in Bangladesh’s Agrifood System”, found that rice occupies around 72 percent of cultivated land and receives about 80 percent of subsidy benefits.

Similar to subsidies, public spending is also heavily skewed towards rice, the report said.

High-value and fast-growing subsectors including livestock, fisheries, forestry, fruits and vegetables contribute nearly three-quarters of agricultural gross domestic product but collectively receive less than 20 percent of public spending support.

“This subsidy and public spending imbalance reinforces a structural bias away from diversification, even as diets and markets continue to shift toward higher-value foods,” the report added.

The report launch was jointly organised by the World Bank and the South Asian Network on Economic Modeling (Sanem) at Sheraton Dhaka.

Speaking at the event, Mansur Ahmed, senior economist at World Bank, said consumer demand is shifting away from cereals towards higher-value products, including fruits, vegetables, fish, livestock products and processed foods.

“A large share of agricultural spending continues to be directed toward fertiliser subsidies and rice-related support, while investments in research, extension services, innovation, market connectivity, and climate resilience remain relatively limited.”

According to Ahmed, as the country’s agri economy evolves, public spending must evolve with it.

The report found that agri research received only 4 percent of total outlays, while knowledge dissemination accounted for 8 percent and irrigation infrastructure 5 percent.

Together, these patterns point to a spending mix that is misaligned with the sector’s potential to support diversification, create better jobs and build a more competitive agrifood economy, according to the report.

Jonaed Shohol, research analyst at the World Bank, said more than 90 percent of agricultural spending is directed toward crops, with rice receiving the overwhelming share of support

“At the same time, livestock, fisheries, and other high-value agricultural activities which offer growing opportunities for income generation, employment, nutrition, and exports receive comparatively limited resources.”

He added that while these policies have contributed to food security gains, they leave limited fiscal space for investments that can drive long-term productivity growth.

The researcher said the challenge is no longer the level of spending but how effectively resources are allocated.

SUBSIDY BENEFITS TILT TOWARDS BIG FARMERS

The report also found that the top 20 percent of landholders receive about half of all fertiliser subsidy benefits in Bangladesh, while the bottom 40 percent receive only 15 percent.

It said fertiliser subsidies remain the largest form of farming support, accounting for about 80 percent of the agri ministry budget.

These subsidies have helped farmers maintain production and price stability. However, because support is linked to the amount of fertiliser purchased, farmers with more land receive a larger share of the benefits, the report said.

The World Bank noted that Bangladesh places a high priority on agriculture, allocating about 10 percent of total public spending to the sector.

“Yet, agricultural growth has slowed, productivity gains have weakened, and diversification into higher-value products has lagged.”

According to the report, correcting these imbalances could substantially raise yields and improve productivity.

The World Bank recommended expanding soil testing, strengthening farmer advisory services and rolling out the Farmer’s Card and e-voucher system so that agricultural support reaches poorer and climate-vulnerable areas.

It said better-targeted support could gradually free up resources for investments that raise productivity, promote higher-value agriculture and benefit poorer farmers.

MAKING SUBSIDIES MORE PRODUCTIVE

Jean Pesme, division director for Bangladesh and Bhutan, said that by modernising subsidy delivery and aligning public spending with emerging opportunities, Bangladesh can build a more resilient and productive agricultural sector while ensuring better value for public resources.

Selim Raihan, professor of economics at Dhaka University and executive director of Sanem, said the composition of agricultural spending has become a central concern.

“A growing share of the budget is allocated to recurrent subsidies, which limits fiscal space for high-return public investments such as research, extension services, irrigation, rural infrastructure, storage, marketing systems, food safety, and climate adaptation. These are the areas that drive long-term productivity growth and structural transformation,” he said.

Food and Agriculture Organization (FAO) Representative in Bangladesh Jiaoqun Shi said Bangladesh faces significant challenges in fertiliser use because of reliance on traditional farming practices, urea-heavy subsidies, limited soil testing and weak extension services.

“Fertiliser use is often guided by generalised recommendations rather than soil-specific nutrient requirements, as access to soil and fertility mapping remains limited. The subsidy structure favours urea, encouraging its overuse while discouraging balanced application of other essential nutrients and organic inputs,” he said.

Uzma Chowdhury, director at the PRAN-RFL Group, said all government departments are working to increase production, but insufficient attention is being paid to market development and distribution systems.

“Without alignment between producers and consumers, market distortions arise. The presence of multiple intermediaries prevents farmers from receiving prices that cover production costs or generate adequate income,” she said.

“Livestock, fisheries, and other sectors operate under different cycles, and even products like salt have distinct supply chains. A uniform policy approach cannot address these diverse needs,” she added.

Agriculture Minister Mohammed Amin Ur Rashid highlighted ongoing efforts to reduce production costs and improve efficiency through better soil management, reduced fertiliser overuse and the expansion of solar-powered irrigation systems.

“We are also working to reduce import dependence in selected commodities such as onions, jute seeds, and ginger through structured medium-term planning,” he said.

Referring to structural challenges in the sector, the minister highlighted issues related to market information gaps, post-harvest losses and price volatility.

“To address these challenges, we are promoting better demand forecasting, decentralised storage solutions, and improved supply chain efficiency to ensure fair prices for farmers and stable access for consumers,” he said.

He also noted efforts to improve soil health and irrigation systems.

Bangladesh's proposed budget is a weak and in parts "unprofessional" fiscal and macroeconomic framework, with its welfare-oriented aspirations undermined by limited implementation capacity and questionable underlying assumptions, says Dr Debapriya Bhattacharya.

The economist, also a distinguished fellow at the Centre for Policy Dialogue (CPD), made the arguments about such budgeting paradoxes while speaking Monday at a Citizen's Platform for SDGs, Bangladesh briefing titled 'National Budget 2026-27: What Is There for the Disadvantaged Citizens?' in the capital.

Dr Debapriya notes that although the policy direction of the budget appears broadly thoughtful and shows sensitivity towards low-income and vulnerable groups, it is "ultimately built on an underdeveloped fiscal structure that risks limiting its real-world impact".

He argues that the macroeconomic assumptions underpinning the budget do not fully align with current economic realities, pointing in particular to inflation, wage dynamics and savings trends.

According to him, FY26 growth of 4.14 per cent has failed to deliver inclusive outcomes as it has not translated into lower prices, meaningful employment expansion or improved earnings for disadvantaged populations.

He also questions the credibility of the inflation target of 7.5 per cent, saying that it appears disconnected from prevailing price trends.

Dr Debapriya further notes that low- and middle-income households are currently under a "triple pressure" of high inflation, stagnant real wages and declining savings, forcing many families to draw down their limited reserves simply to meet basic consumption needs.

He thinks expectations of a rapid economic recovery under the government's recovery, restoration and reconstruction approach are unrealistic within a one-year timeframe, given the structural constraints in key productive sectors.

He draws attention to weakness in major employment-generating sectors, noting that large-scale manufacturing growth fell to 1.76 per cent in FY26, while ready-made garment export earnings declined by 1.9 per cent between July and April, placing additional pressure on a sector that sustains millions of workers, particularly women.

He has stressed that without stronger momentum in agriculture, small and medium enterprises, garments and modern services, the benefits of growth would continue to bypass ordinary citizens.

He observes that past budgets have repeatedly relied on overstretching revenue-collection targets, a pattern he says is being repeated again, raising questions about feasibility in the absence of deeper institutional reform and improved tax governance.

However, Dr Debapriya points out that achieving these targets would require revenue growth of 52.9 per cent from a base that already missed its FY26 target by 22.7 per cent, making the assumptions appear highly ambitious.

He further highlights that around 59 per cent of incremental revenue is expected to come from indirect taxes such as value-added tax, customs duty and supplementary duty, a structure he says raises concerns of tax equity because such taxes affect consumers uniformly regardless of income level.

Value-added tax alone accounts for 32.9 per cent of the FY27 revenue target and 41.2 per cent of the incremental revenue, which he argues places disproportionate pressure on lower-income households.

He also warns that adjustments in VAT on essential goods and services, including LPG cylinders, restaurant meals and construction materials, could further increase cost-of-living pressures.

In addition, he notes, individuals earning between Tk 31,250 and Tk 37,500 per month may face higher marginal tax rates, adding to the fiscal burden on sections of the middle class already affected by inflation and weak income growth.

While critical of the fiscal structure, the economist acknowledges that the budget reflects a notable increase in social-sector prioritisation. According to the Citizen's Platform analysis, 59.5 per cent of incremental spending has been directed towards education, health and social protection, and social-protection expenditure has risen to 2.11 per cent of GDP and 15.39 per cent of the total budget, marking its highest level on record.

He notes that the government has consolidated social-security programmes from 95 to 90 and expanded Government-to-Person digital payments, now reaching over 32.6 million beneficiaries across 29 programmes, alongside the introduction of initiatives such as the Family Card and Farmer Card.

These steps, he says, indicate a policy shift towards welfare orientation, although he cautions that weak implementation capacity could limit their effectiveness.

He further points out that civil service pensions alone account for 24.51 per cent of total social-protection spending, which in effect reduces the fiscal space available for broader vulnerable populations.

He also mentions persistent gaps in coverage for informal-sector workers, climate-affected communities, indigenous people, Dalit population, persons with disabilities, third-gender communities and urban slum-dwellers, many of whom remain insufficiently targeted by existing programmes. The analyst also criticises the absence of unemployment insurance and the continued lack of a dedicated social-protection framework for informal workers, despite their large share in the labour market.

On external financing, Dr Debapriya cautions that the planned borrowing of around US$9.5 billion from institutions, including the International Monetary Fund, the World Bank and the Asian Development Bank, requires careful scrutiny to ensure that associated conditions do not adversely affect marginalised communities.

He also reiterates that energy subsidies are necessary but warns that the mechanisms for delivering such subsidies remain unclear. He further argues that wealth and inheritance taxes remain underutilised as potential revenue sources, while reliance on indirect taxation continues to dominate fiscal strategy.

At the same time, he says, increased taxation on savings instruments and financial assets risks discouraging small savers who depend on these instruments for financial security.

The High Court has directed the Bangladesh Securities and Exchange Commission (BSEC) to take necessary steps within one month to resolve complications surrounding the utilisation of unused initial public offering (IPO) funds of listed export-oriented textile manufacturer Ring Shine Textiles Ltd.

The company formally informed BSEC of the court's Rule Nisi through a letter to the regulator's chairman on 4 June, issued in response to Writ Petition No. 2872 of 2026.

Ring Shine claims that despite receiving shareholder approval, it has not been allowed to utilise the remaining IPO proceeds, hampering its business expansion plans and putting several industrial land leases at risk over unpaid liabilities to the Bangladesh Export Processing Zones Authority (BEPZA).

In its letter, the company alleged that prolonged delays and restrictions imposed by the regulator have prevented it from using the funds, severely affecting both its ongoing operations and expansion plans.

Near-unanimous AGM approval

Shareholders approved a special resolution at the 27th Annual General Meeting on 18 December 2024, with 99.994% of votes cast in favour. The resolution extended the timeframe for utilising the IPO proceeds by another year and revised the utilisation plan for approximately $3.6 million in remaining funds, including accrued interest, according to company disclosure.

Ring Shine said it submitted all required documents to BSEC including price-sensitive information disclosures, AGM minutes, and e-voting reports but the regulator did not approve its application to use the funds for shareholder-approved purposes, including settlement of outstanding dues to BEPZA. Multiple subsequent applications also failed to produce any resolution, and the IPO fund account maintained with BRAC Bank remains frozen.

Why the company goes to court

Ring Shine said it approached the High Court only after exhausting all administrative avenues, with the board filing a writ petition under Article 102(2) of the Constitution on 11 May 2026.

Legal experts noted that the issuance of a Rule Nisi indicates the court considers the matter worthy of judicial review and has sought explanations from the concerned parties. The final verdict could set an important precedent on the balance between shareholder decisions and regulatory authority in the utilisation of IPO proceeds.

Company's position

Speaking to The Business Standard, Ring Shine Managing Director Aniruddha Pial said the company had complied with all BSEC rules, regulations, directives, and corporate governance requirements before obtaining shareholder approval for the revised utilisation plan.

He said approximately $3.3 million in unused IPO funds has remained idle for a prolonged period despite overwhelming shareholder approval, while long-standing dues to BEPZA, subject to an annual surcharge of 24%, continue to accumulate. BEPZA has also been cancelling industrial plot leases over unpaid obligations.

Pial claimed that nearly one-third of the company's leasehold land has already been cancelled and is subject to legal disputes, adding that repeated requests to BSEC to release the funds in line with the AGM-approved resolution were unsuccessful.

He alleged that nearly a year after the application was submitted, the commission rejected the proposal and declined to implement the AGM decision, with a subsequent review petition also failing to produce any effective response.

"On one hand, investors' money remains unused, while on the other, suspended and cancelled plots are threatening the company's operations. With no alternative left, we sought relief from the High Court," he said.

He added that while the court has given one month to resolve the issue, the funds have yet to be released, with 20 days still remaining under the court order.

Risk of losing BEPZA land

The company said its inability to use the IPO proceeds prevented it from clearing outstanding liabilities to BEPZA, which has already cancelled the leases of industrial plots numbered 231–236 and 157–163. Final cancellation notices have also been issued for plots 224–231, 237–260, and 79–84.

Located in the Dhaka Export Processing Zone, these plots are considered critical to Ring Shine's manufacturing operations. The company warned that losing them could amount to the loss of nearly one-third of its allocated land, posing an existential threat to the company and potentially disrupting production, causing job losses, and significantly harming shareholder investments.

Ring Shine Textiles raised funds through an IPO in 2019, with plans to use the proceeds for business expansion, machinery acquisition, debt repayment, and working capital. However, changing business realities, rising costs, and other operational challenges prevented the company from implementing the original utilisation plan, and efforts to revise the allocation of remaining funds subsequently led to disagreements with BSEC.

Market participants believe the case has once again highlighted concerns over the proper utilisation of IPO proceeds and the protection of investor interests, reigniting debate over how much flexibility listed companies should be granted in adapting IPO utilisation plans to evolving business conditions.

International oil prices have fallen sharply amid signs of easing tensions between the United States and Iran, but consumers in Bangladesh are unlikely to see immediate relief at the pump as the government continues prioritising the recovery of subsidy costs accumulated during recent market volatility.

The international benchmark Brent crude, which is used to price refined petroleum products, stood at around $72.48 per barrel on 27 February, just before the Iran conflict escalated. It surged during the conflict, reaching a peak of $112 per barrel on 18 May – an increase of 54.5% from pre-war levels.

Since then, prices have retreated sharply. Brent was trading at $83.19 per barrel yesterday (15 June), down 4.74% in a single session amid reports of progress in potential US-Iran negotiations. The benchmark has now fallen 25.7% from its May peak, though it remains 14.8% higher than pre-conflict levels.

Despite the correction in global markets, Energy Division officials say domestic fuel prices are unlikely to be reduced in the near term.

"Oil prices are falling in the international market but are still higher than the pre-war level, which continues to require substantial subsidy support for diesel," said Monir Hossain Chowdhury, Joint Secretary (Operations Wing) of the Energy Division. He added that diesel still requires a subsidy of about Tk50 per litre.

"We are monitoring the global fuel market closely. Future decisions on price adjustments will depend on market movements, as discussions on the Iran issue are still ongoing," he said.

Officials estimate that fuel subsidies in FY2025-26 could reach around Tk5,000 crore, largely to keep diesel prices below cost. Petrol, octane and other petroleum products are currently priced largely in line with international markets and do not require subsidy support.

Middle Eastern crude benchmarks see steeper decline

The decline has been steeper in Middle Eastern crude benchmarks used for Asian pricing.
Murban crude, produced in the United Arab Emirates, fell from $110.04 per barrel on 18 May to $77.31 yesterday, a 29.7% drop.

Arab Light crude, used by Bangladesh Petroleum Corporation for refining at Eastern Refinery, declined from $119.09 to $87.75 over the same period, down 26.3%.

Prices were raised as global oil surged

Domestic fuel prices were previously raised on 18 April, when global markets spiked amid fears of supply disruption following the US-Israeli attack on Iran. At that time, Brent crude closed at $91.87 per barrel – already 26.8% higher than the pre-war level.

Diesel was increased to Tk115 per litre from Tk100, octane to Tk140 from Tk120, petrol to Tk135 from Tk116, and kerosene to Tk130 from Tk112. A second adjustment on 31 May added Tk5 per litre to octane, petrol and kerosene, taking them to Tk145, Tk140 and Tk135 respectively.

Energy expert M Tamim said declines in global prices do not always translate into lower transport or commodity costs domestically. "Price reductions during downward cycles rarely reach consumers, as bus fares and freight charges do not adjust accordingly. That is why there is limited pressure to reduce fuel prices," he said.

He added that stronger monitoring in the transport sector would be needed to ensure that any future reductions in fuel prices benefit consumers.

The era of customs authorities arbitrarily determining the value of imported consignments instead of accepting buyers' declared and actual transaction values is set to end.

To this effect, the National Board of Revenue (NBR) has issued an order, under which internationally recognised websites and journals will be used as valuation benchmarks.

Experts believe the move will not only prevent the practice of imposing additional taxes through overvaluation but will also reduce opportunities for revenue evasion through false declarations. As a result, consumers may be spared an estimated additional Tk15,000 crore in costs annually.

According to the NBR order, if the value information provided in import documents submitted by importers is found to be consistent with information from internationally recognised and independent pricing publications, websites or journals such as S&P Global Platts, Independent Commodity Intelligence Services (ICIS), London Metal Exchange (LME), Shanghai Metals Market (SMM), Bloomberg, International Sugar Organization (ISO), or similar publications, the importer's declared value may be accepted as the correct transaction value for customs assessment purposes.

A senior NBR official involved in the budget process, speaking to The Business Standard on condition of anonymity, said, "The journals mentioned cover nearly 95% of imported goods."

The websites and publications in question regularly update commodity prices and are widely used around the world as benchmarks for determining transaction values.

Businesspeople say Bangladesh customs authorities often continue to assess goods based on reference prices established when global prices were high. Although prices frequently return to normal levels or decline after temporary increases, customs authorities continue to use the higher reference values, forcing importers to pay additional duties and taxes, which ultimately raise consumer prices.

At the same time, if an importer purchases goods at a price higher than the reference value, that higher value must now be declared, reducing opportunities for under-invoicing.

NBR Chairman Abdur Rahman Khan told The Business Standard, "The new decision will reduce opportunities for both under-invoicing and over-invoicing. Assessment based on transaction value will ensure the government receives the correct amount of revenue, while reducing the scope for complaints from businesses.

"A major issue under the current valuation system is the large number of litigations and appeals. These disputes and appeals will decline significantly."

The NBR chairman said, "This will provide substantial relief to businesses."

Business leaders and experts have described the initiative as "groundbreaking". They argue that assessments based on actual prices will reduce the likelihood of higher costs for consumers while also limiting opportunities for money laundering.

According to recent estimates, importers paid nearly Tk30,000 crore in additional duties over the past two years because customs authorities assessed imported consignments at values higher than their actual import prices. Experts believe consumers ultimately bore this additional cost.

They also argue that the practice is unscientific and inconsistent with the principles of the World Trade Organization (WTO).

For years, businesses have opposed customs assessments based on reference values, instead demanding that import duties be calculated using actual transaction values.

The BNP-led political government has now moved to fulfil that long-standing demand.

Salman Karim, managing director of Confidence Infrastructure Ltd, one of Bangladesh's leading business conglomerates, said, "The decision to assess import consignments based on transaction values will be transformative for us.

"It will create opportunities to reduce both our costs and the harassment we face."

Snehasish Barua, a chartered accountant and director of SMAC Advisory Services Limited, told TBS, "This decision will reduce costs and harassment for compliant businesses, while non-compliant operators will face greater scrutiny."

Calling it a "landmark initiative", he said, "Whenever we attend hearings, we see that most litigation revolves around valuation issues. These disputes will now decline significantly, and the government will receive the correct amount of revenue."

Current valuation system can increase taxes by 50%

The total tax incidence on polypropylene fibre (PP fibre) – the main raw material used to manufacture geobags – including duties and taxes, is approximately 28%.

A Confidence Group company manufactures geobags. Salman Karim told TBS that the average import price of PP fibre over the past two and a half years has been around $1,200 per tonne. However, customs authorities assessed imports using a reference value of $1,550 per tonne, roughly 30% higher than the actual price.

He said, "Although actual import prices have increased recently due to developments in the Middle East and other factors, they still remain below $1,350 per tonne. Yet importers have been paying duties based on the inflated valuation used over the past two and a half years.

"As a result, importers in this sector have been paying around Tk70 crore in additional import taxes every year."

He added, "This increased our costs and pushed up product prices."

Faridur Rahman, a small importer based in Mirpur who imports switches, sockets and other electrical and electronic products, told TBS, "The value used by the NBR for assessing switches and sockets is around 50% higher than the actual value, which significantly raises our costs."

"We have no choice but to pass these additional costs on to consumers because our profit margins are already very small," he said.

A new report titled "Tax Policy for Development: A Reform Agenda for Restructuring the Tax System," prepared by the National Task Force for Tax Reforms, found that overall import values in FY24 and FY25 were increased by up to 15% compared with importers' declared transaction values.

While the report does not quantify the additional revenue collected through loading, importers estimate they paid up to Tk15,000 crore extra annually, or roughly Tk30,000 crore over two years. According to NBR data, more than Tk2 lakh crore in import taxes was collected during those two fiscal years.

Accessing the data will cost money

NBR sources said access to the international databases mentioned in the order will require paid subscriptions, with total annual costs estimated at around Tk2 crore.

The NBR chairman said the subscription process for these platforms has already begun.

However, another source said discussions on obtaining subscriptions have been ongoing for the past year with little progress, largely due to bureaucratic delays.

The NBR official said, "Importers themselves may subscribe to these databases and provide the data to the NBR, and the NBR will accept it."

However, the cost could be prohibitively high for small importers.

The official suggested another option: "Instead of individual businesses subscribing separately, their trade associations could obtain subscriptions and share access among members."

"What we need is access to the data. If importers can obtain access themselves and share it with us while our own process is delayed, we will accept it," he said.

Berger Paints Bangladesh Limited has recommended a 525% cash dividend for the financial year ended 31 March 2026, subject to shareholder approval.

The proposed dividend means shareholders will receive Tk52.50 per ordinary share of Tk10.

The recommendation was approved at a meeting of the company's board of directors today (15 June), alongside the audited financial statements for the year.

According to the financial statements, Berger Paints posted a consolidated net profit of Tk372 crore during the financial year. Its consolidated earnings per share (EPS) stood at Tk76.83.

The company has scheduled its Annual General Meeting (AGM) for 24 August to seek shareholder approval for the dividend and the audited financial statements.

The record date has been fixed for 7 July. Shareholders whose names appear in the company's records on that date will be eligible for the dividend and entitled to participate in the AGM.

The Dhaka Stock Exchange (DSE) today (15 June) suspended trading of shares of Sonargaon Textiles Ltd, a listed textile company, midway through the trading session, citing an unusual surge in both share price and trading volume.

Under listing regulations, the bourse may suspend trading of a security if unusual market activity is detected, particularly when it is believed to be driven by rumours, undisclosed material information, or possible manipulation.

In such cases, the exchange may ask the issuer to take corrective action and halt trading until the issue is resolved.

Sonargaon Textiles is a loss-making company, posting a loss of Tk2.12 crore in FY25.

It also continued to incur losses in the first nine months of FY2025-26.

Despite this, and in the absence of any price-sensitive disclosures, the company's share price has seen a sharp rise in recent sessions, nearly doubling within a month.

Since 10 March, the stock surged 158% to Tk87.50 today, up from Tk33.90, according to DSE data.

In a disclosure published on the exchange website, the DSE said trading was halted for the rest of the day due to an abnormal price hike of 9.92%, coupled with a significant rise in turnover.

Responding to queries from the DSE, the company said it was not aware of any undisclosed price-sensitive information that could explain the recent surge in price and trading volume.

The DSE also halted trading of Shyampur Sugar Mills shares earlier for similar reasons.

Trading resumed a day later on Sunday. Following the resumption, its shares fell around 17% over two trading sessions, closing at Tk202 each the same day.

The country's premier stock exchange extended its upward momentum for a third consecutive session yesterday, with the benchmark index climbing to a nine-and-a-half-month high, driven by strong buying in blue-chip stocks and a sharp rally in Islami Bank.

Despite late-session profit-taking pressure that saw more than half of traded issues decline, the Dhaka Stock Exchange (DSE) managed to stay resilient above the 5,600-point mark, supported by selective accumulation in large-cap shares.

The DSEX rose 15 points, or 0.27%, to settle at 5,640, its highest level since late last year. The DS30 index also edged up by 8 points to close at 2,128, reflecting broadly positive sentiment among blue-chip counters.

However, market breadth remained negative, underscoring cautious trading activity, as 184 issues declined against 145 advances, while 66 remained unchanged.

Total turnover increased by 7% to Tk1,456 crore, indicating improved liquidity flow and sustained investor participation.

According to EBL Securities, the market showed notable resilience as investors continued accumulating attractively valued blue-chip stocks. A key driver of the session was sustained buying pressure in Islami Bank Bangladesh PLC, which surged 10% to hit the upper circuit breaker.

Market insiders attributed the rally to expectations of government-backed regulatory support aimed at easing the bank's liquidity stress, which helped restore investor confidence in the stock.

Despite strong momentum during mid-session trading, many investors opted to book profits after the index reached a multi-month peak, leading to mixed sentiment toward the close.

Sheltech Brokerage Limited noted that the day's movement was shaped by a combination of selective accumulation and profit-taking pressure. Although the session opened with broad-based buying interest, selling pressure intensified from mid-session onward. However, support from the banking and large-cap pharmaceutical sectors helped absorb losses and ensured a positive finish for the key indices.

On the sectoral front, general insurance dominated turnover, accounting for 15.9% of total trade, followed by the banking sector with 13.3% and textiles with 10.1%.

In terms of performance, the ceramic sector led the gainers with a 1.9% rise, followed by banking at 1.2% and cement at 0.9%.

On the losing side, the miscellaneous sector declined 3.9%, while life insurance and general insurance dropped 3.1% and 1.1%, respectively.

Islami Bank topped the gainers' list, followed by Sonargaon Textile, Emerald Oil, and Meghna Condensed Milk.

On turnover, IPDC Finance was the most traded stock with Tk81 crore, followed by NCC Bank and Beximco Pharmaceuticals.

Beximco Limited emerged as the top loser, falling 9.95%, followed by ICB Employees Provident Mutual Fund and Shyampur Sugar.

The positive momentum was also reflected on the Chittagong Stock Exchange (CSE), where the CSCX index rose 12 points to 9,423, while the CASPI gained 52 points to reach 15,395. Turnover at the port city bourse surged 75% to Tk42.46 crore.

Restructuring Bangladesh's economy by addressing its structural weaknesses and battling inflationary pressures and global economic instability is one of the top priorities of the current government, said Finance Minister Amir Khosru Mahmud Chowdhury.
The government is working to reduce waste in government expenditure, reduce non-priority spending and ensure thriftiness in administrative outlay in addition to implementing election promises, he said during a discussion on the supplementary budget for the 2025-26 fiscal year in parliament on Monday, bdnews24.com reports.

"Since the formation of the current government, the restructuring of the country's economy by addressing the weaknesses of its internal structures, and tackling inflationary pressures and global instability has been one of the government's top priorities,” the senior BNP leader added.

He said the government has taken various effective initiatives to improve the living standards of the people and revive the economy.

Also highlighting the issue of subsidies in the power and energy sectors, the finance minister said that they had to be adjusted due to global economic headwinds.

He also spoke of addition, Family Cards, Farmer Cards and the expansion of honorarium-based social security programmes for imams, priests and muezzins.

"For these activities, some adjustment of expenditure and deficit in the supplementary budget had to be made," he said.

Proposal to Reduce Expenditure in the Revised Budget

Discussing the revised budget for the current fiscal year, the finance minister said the government's net spending in the main budget for FY26 was estimated at Tk 7.9 trillion.

However, due to the slow pace of implementation, especially the Annual Development Programme (ADP) in the pre-election period, it has been proposed to reduce the total expenditure by Tk 20 billion to Tk 7.88 trillion in the revised budget.

He said the budget deficit in the revised budget has been estimated at Tk 2 trillion, which is about 3 percent of the GDP.

The finance minister said that the allocations for 27 ministries, departments and other institutions have increased in the revised budget, amounting to Tk 561 billion.

On the other hand, the outlay for 35 ministries and departments has decreased by Tk 593.48 billion.

Thanking the members of parliament who participated in the discussion on the supplementary budget, he urged them to approve the proposed grants.

Finance Minister Amir Khosru Mahmud Chowdhury on Monday said the government has made adjustments to the expenditure and budget deficit in the supplementary budget to address economic challenges while continuing social safety net programmes.
Moving the Supplementary Budget Bill in Parliament, he said since assuming office, the government has undertaken effective measures to improve people's living standards and revive the economy.

The minister noted that rebuilding the economy remains one of the government's key priorities amid global uncertainties, structural weaknesses within the economy and inflationary pressures."We are trying to reduce wastage in public expenditure, curtail non-priority spending, lower administrative costs and ensure greater efficiency in government spending," he told the House.

At the same time, Khosru said, the government is working to implement commitments made in the BNP election manifesto.

However, due to the global economic situation, he said, adjustments were made to electricity and energy subsidies, while social safety net programmes expanded through initiatives such as Family Card, Farmers' Card and allowances for imams, muezzins and priests.

To accommodate these measures, the government made adjustments to expenditure and the budget deficit in the supplementary budget, the minister added.

Considering the slower pace of government spending, particularly the implementation of the Annual Development Programme (ADP) before the election, the revised budget proposed a reduction of Tk 20 billion, bringing total net expenditure down to Tk 7.88 trillion.

Khosru said the revised budget proposed a deficit of Tk 2.0 trillion, equivalent to 3.3 per cent of the country's Gross Domestic Product (GDP).

According to him, allocations for 27 ministries, divisions and other institutions have been increased by Tk 561.1759 billion under the supplementary budget, while allocations for the remaining 35 ministries and divisions have been reduced by Tk 593.4867 billion.

Thanking lawmakers for what he described as a lively discussion on the supplementary budget, the minister urged Parliament to approve the grants sought for expenditures other than charged expenditures outlined in the supplementary financial statement.

He formally requested all members of parliament to endorse the supplementary budget proposals for the current fiscal year.

Bangladesh received US$1.54 billion in remittances during the first 14 days of June 2026, marking a 30.04 percent increase compared with the corresponding period of the previous year, according to the latest data

The country received US$1,541.30 million in remittances between June 1 and June 14 this year, up from US$1,185.29 million received during the same period in June 2025.

On June 14 alone, expatriate Bangladeshis sent home US$179.08 million through official banking channels.

The steady inflow of remittances has also strengthened the country’s external sector performance during the current fiscal year.

According to the data, total remittance inflows stood at US$34.30 billion during the period from July 2025 to June 14, 2026, compared with US$28.69 billion received during the corresponding period of fiscal year 2024-25.

As a result, remittance earnings recorded a robust 19.54 percent growth during the current fiscal year up to June 14, 2026.

The Dhaka bourse is developing software to monitor investors' funds and shareholding positions in real time, in a bid to curb corrupt practices by brokers involving consolidated customer accounts (CCA).

Once the DSE-iMON (Integrated Monitoring Platform) is installed, the bourse will be able to detect any unauthorised movement of funds from the CCA - a bank account maintained by brokers - by cross-matching investors' deposits with shares purchased in their BO accounts.

The premier bourse has designed the features of the software and an internal team is now working to develop it.

"Our board has approved the project at a recent meeting. The software is likely to be installed by December this year," said DSE Managing Director Nuzhat Anwar.

The initiative comes against the backdrop of repeated incidents of misappropriation of investors' funds by brokers. Funds had been siphoned off from CCAs long before the regulatory bodies could learn about the financial frauds.

Thousands of investors are yet to receive their hard-earned money embezzled by five brokerage firms, including Tamha and Mashihor Securities.

DSE-iMON will cross-check data across brokers' back-office systems, banks, the Central Depository Bangladesh Ltd. (CDBL) and the Dhaka bourse. It will automatically send an alert if there are anomalies in the data. On receipt of the alert, the DSE will verify the status of the CCA with the help of the bank with which the account is maintained.Bangladesh market insights

Currently, the DSE is not allowed to check CCAs opened with scheduled banks.

"The DSE will need indemnity from brokers to check the bank accounts," Ms Nuzhat said.

A majority of brokers have agreed to allow the DSE to scrutinise their bank accounts following any abnormal transactions.

Under the existing reporting framework, every TREC (Trading Right Entitlement Certificate) holder is required to submit a report on its CCA status to the DSE on a monthly basis. The reports are unaudited and the DSE has no scope to verify if the reports, prepared on company letterheads, are authentic.

Sources at the DSE said there were times when they found such reports to be inaccurate.

For example, a broker once showed a shortfall of investors' money worth around Tk 70 million in its CCA, but the amount was later found to be more than Tk 200 million in an investigation.

The sources said that initially some brokers opposed the idea of installing DSE-iMON. They were convinced when told that they would no longer have to prepare reports on CCA with the software in place.

The existing regulatory oversight often remains incomplete and any action to protect investors is often delayed. The DSE-iMON system will bring solutions through continuous monitoring of investors' CCA balances and shareholding positions.

The information regarding CCA balances will be cross-checked with the help of banks.

The system is therefore expected to enhance transparency, improve compliance monitoring and enable early detection of irregularities.

DSE-iMON has been conceptualised as the prime bourse sought a technology-driven solution.

The DSE has a mandate to see if TREC holder companies comply with securities laws and regulatory directives, said Ms Nuzhat. DSE-iMON will help ensure continuous monitoring instead of periodic inspections, enabling earlier detection of irregularities and compliance issues.

As encrypted data will be matched automatically, the platform will improve investors' data privacy while minimising human access to sensitive investor information.

The exchange's integrated platform will also reduce dependency on manual inspections, spreadsheets and ad hoc investigations, allowing regulatory staff to focus on high-risk cases.

The prime bourse will grade brokers using the technology based on the extent of their compliance. Brokers obtaining good marks will face less scrutiny while highly non-compliant brokers will come under frequent investigations.

Finance Minister Amir Khosru Mahmud Chowdhury today (15 June) placed the revised and supplementary budget for fiscal year 2025-26 in parliament, proposing total expenditure of Tk7.88 lakh crore and a budget deficit of Tk2 lakh crore.

The proposed deficit is equivalent to 3.3% of the country's gross domestic product (GDP).

The finance minister presented the revised and supplementary budget on the seventh day of the second session of the 13th National Parliament.

In his budget speech, he said the government's net expenditure in the original FY26 budget was estimated at Tk7.9 lakh crore.

However, due to slower implementation of the Annual Development Programme (ADP) during the pre-election period, total expenditure has been reduced by Tk2,000 crore in the revised budget.

He said revitalising the economy by overcoming global uncertainties and domestic economic weaknesses remains one of the government's top priorities following its formation.

To that end, the government has taken measures to prevent wasteful spending, reduce expenditure in non-priority sectors and maintain administrative austerity, he added.

The finance minister said subsidies in the power and energy sectors had been adjusted, while social safety net programmes, including the Family Card and Farmer Card schemes, as well as honorariums for imams, priests and muezzins, had been expanded.

He said expenditure and deficit estimates in the supplementary budget had been adjusted to accommodate the costs of these programmes.

Following the budget presentation, Speaker Hafiz Uddin Ahmad initiated voting on demands for grants relating to expenditure other than charged expenditure for FY26.

He said that under Article 89 of the Constitution, charged expenditure may be discussed in parliament but is not subject to voting.

The speaker informed the House that the supplementary budget contains 25 demands for grants. Opposition lawmakers submitted 304 cut motions against these demands.

Considering time constraints, cut motions relating to eight ministries and divisions, including the Finance Division, Planning Division, Ministry of Commerce, Ministry of Science and Technology, Local Government Division, Ministry of Water Resources, Ministry of Food and the Anti-Corruption Commission, will be discussed. The remaining demands will be disposed of through voting.