Between fiscal year 1995-96 and fiscal year 2021-22, Bangladesh experienced an average inflation rate of 6.3 percent over the 26 years. There were episodic divergences during FY2012 and FY2013 from this long-term trend, but they were corrected quickly. This stability of the price level has been a big win for Bangladesh, playing a major role in boosting investment and protecting the incomes of the poor and lower-income groups.

By contrast, Bangladesh has experienced an average inflation rate of 9.3 percent over the past four years, from FY2023 to FY2026, and the inflation rate remains stubbornly high. This unusually high pace of inflation has hurt investment and the incomes of the poor and lower-income groups. Even the middle class is now feeling the pain of rising prices that continue to outstrip income growth for most households. Inflation control is arguably the biggest economic challenge facing the government today.
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When the current episode of inflationary pressure first emerged in FY2023, most people believed it was a temporary phenomenon caused by the combined effects of Covid-19-related disruption to global supply chains and the trade disruption caused by the Ukraine war. There was therefore a belief that this external-shock-related inflationary episode would pass once the world adjusted to these events and the surge in global commodity prices and global inflation subsided. While global commodity prices have normalised and the global inflation rate has sharply declined, inflation in Bangladesh remains stubbornly high. Indeed, the average inflation rate in most countries has come down, including in India, Thailand, Malaysia, Indonesia and Vietnam, but not in Bangladesh.
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Sadiq Ahmed

Many explanations have been provided for why the inflation rate remains persistently high, including holding profiteers and syndicates responsible. In my own write-ups, I have argued that the inflationary spiral was ignited by Covid-19-related expansionary monetary and fiscal policies and then accentuated by a deep supply shock resulting from a sharp fall in the GDP growth rate, especially in the manufacturing sector, and unprecedented import cutbacks. Unfortunately, the inflationary effect of the supply crunch is not yet well understood or adequately reflected in policymaking. In particular, the adverse effects of the import crunch on domestic prices are still not well appreciated.

The country’s total import volume has fallen by 31 percent since FY2022. This is the outcome of trade and exchange restrictions and the fall in import demand for capital goods owing to the sharp slide in public and private investment rates. Some researchers may argue that FY2022 was an abnormal year. The cutbacks remain deep if, instead, the base-year values of FY2021 are used. Imports fell by 14 percent between FY2021 and FY2026. The import cutbacks were broad-based, although the deepest reduction happened in capital goods, which fell by 41 percent. Intermediate goods and consumer goods also saw substantial cutbacks, declining by 7 percent and 9 percent respectively.

With an average GDP growth rate of 5 percent and an empirically verified income elasticity of demand of 1, imports should have grown by 25 percent between FY2021 and FY2026 instead of falling by 14 percent. The import supply shock is obvious. Additionally, given the crunch in domestic supply, reflected in the sharp slowdown of GDP growth, especially in the manufacturing sector, the adverse effects of the import cutbacks on domestic prices and inflation are magnified.

The axe on imports is the bluntest instrument that policymakers tend to use to respond to a balance of payments crisis. Its temporary use is understandable to avoid an unsustainable run on reserves. But import control is a poor instrument for achieving a sustainable balance of payments position over the longer term. It is also inconsistent with GDP growth and price stability objectives.

Moving forward, to manage inflation, the government must pursue policy reforms that help increase both domestic and import supply. Since recovery of the domestic economy will take time in view of the deep-seated problems plaguing the Bangladesh economy, including the fragile banking sector, the crisis in the energy sector and the severe fiscal constraint, the fastest way of lowering the inflation rate is to allow a rapid recovery of imports, especially consumer goods, including food items. All import restrictions in terms of margin and licensing requirements must be eased. Import duties, including supplementary and regulatory duties, must be cut to the maximum extent possible, at least for a limited duration until domestic supply recovers and inflation is brought down to the 4-5 percent level.

The adverse BoP effects of rising imports should be tackled through export diversification and greater mobilisation of remittances. The exchange rate should be fully flexible and market-based, without intervention from Bangladesh Bank. A fully flexible, market-based exchange rate is essential to diversify and boost exports and mobilise remittances without the need for fiscal subsidies, which are in any case unsustainable in an environment of severe fiscal constraint.

Sadiq Ahmed is vice-chairperson of the Policy Research Institute of Bangladesh (PRI). He can be reached at sadiqahmed1952@gmail.com.

The government yesterday (31 August) approved the 9th National Pay Scale, raising public servants' salaries by up to 142% – at a time when the country is grappling with energy crisis-driven production disruptions, weak revenue collection and years of high inflation.

Implementing the new structure will cost an additional Tk105,580 crore. Once all allowances take effect in January 2028, annual government spending on salaries and allowances will reach nearly Tk200,000 crore – roughly half of the revenue collection last fiscal year.

Under the new scale, basic pay for the lowest, 20th grade – where employees with Class VIII education are recruited – will rise 142%, from Tk8,250 to Tk20,010. This represents a 388% increase over the past 17 years.

Employees will also receive a house rent allowance of 50-60%, along with medical, education, transport and mobile phone allowances. Including these benefits, total monthly remuneration for a 20th-grade employee will reach around Tk35,000.

Grade 9 is the entry level for BCS cadre officers and first-class non-cadre officials. Their basic pay, which rose from Tk11,000 in 2009 to Tk22,000 under the 2015 pay scale, will double again to Tk44,000 under the new structure – a 300% increase from 2009.

Private sector employees in similar stages receive much less salary.

At the top of the hierarchy, Grade 1 basic pay will double to Tk156,000 from Tk78,000. Secretaries generally fall under this grade. Their basic pay was Tk40,000 in 2009, meaning it will have risen 290% over the period.

The new basic salaries will be introduced in three phases from 1 July this year to 1 July 2027, with all allowances taking effect simultaneously from 1 January 2028. Public servants retiring from July this year onwards will also receive pensions calculated under the structure.

Cabinet Secretary Nasimul Gani told journalists after the Cabinet meeting that the scale was approved considering the government's financial capacity, the broader economic situation, inflation, living costs, public servants' living standards, and the need for a balanced and rational pay structure.

However, sources said several ministers opposed implementation amid the government's financial constraints and difficulties in financing higher energy import costs. Prime Minister Tarique Rahman approved the proposal after hearing the ministers' views, they said.

Gani was also asked whether MPO-listed teachers would be covered by the new pay scale. He replied, "I cannot say at this stage. A decision will come when the matter is settled."

Asked whether the government had any plans regarding journalists' salaries, he said the issue had been discussed, but it was too early to say what decision would follow.

Government-appointed FBCCI administrator Md Fazlur Rahman said the phased implementation would not put significant pressure on private-sector wages or fuel inflation.

"Private-sector employees know their companies are stagnant. As the new pay structure will be implemented gradually, it will not significantly fuel inflation or force private firms to raise wages," he told TBS.

In a press release, the Cabinet Division said the new pay scale would strengthen public servants' financial security and motivation while helping build an efficient, dynamic and people-oriented administration.

When the 8th National Pay Scale was introduced in 2015 with a 100% increase in basic salaries, then finance minister Abul Maal Abdul Muhith said higher pay would curb corruption and restore dynamism to the administration.

Mahbub Ahmed, finance secretary at the time, told TBS yesterday that corruption had instead increased after the pay hike. "Corruption cannot be directly linked to whether a new pay scale should be introduced. Many officials are honest and shouldn't remain on the same pay scale for 11 years," he said.

One rank, one pension

The new pay structure also proposes a "one rank, one pension" system for military and civilian personnel, in line with the BNP's election manifesto.

Currently, military officers appointed to civilian organisations can receive pensions from both positions, with the same provision applying to civilian officials.

The dual-benefit system will be abolished and replaced with one-rank, one-pension. As data on civilian retirees before 2019 are unavailable, the system will be phased in by 2030.

The government will also raise pensions for long-retired public servants who receive much less than those retiring today from equivalent positions.

Pensions of up to Tk9,000 will be doubled; those of Tk9,001-20,000 will rise 75%; Tk20,001-30,000 by 65%; Tk30,001-40,000 by 60%; and pensions above Tk40,000 by 55%.

Employees with children with disabilities will receive Tk3,000 a month for each child with special needs. Mobile phone allowances, previously available only to officials up to Grade 5, will now be extended to all government employees.

From dearness allowance to new pay scale

Following the fall of the Hasina government, the interim government announced a dearness allowance amid protests by public servants. It later dropped the plan after facing criticism for raising VAT on more than 100 products to boost revenue.

The interim government subsequently formed a pay commission, despite no fresh demand from public servants. The commission recommended a new structure days before the election, proposing salary increases of 100% for Grade 1 and up to 142% for Grade 20.

The interim government left office without implementing the recommendations, leaving the elected government to do so and creating pressure for their adoption.

The BNP had pledged a new pay scale in its election manifesto. Given the government's limited financial capacity, the Cabinet, chaired by Prime Minister Tarique Rahman yesterday, decided to implement it in four phases over two years.

Lessons from the 2015 pay scale

In 2015, a pay commission headed by Dr Farashuddin recommended doubling public servants' salaries and introducing a 5% annual increment.

It also recommended no further pay commissions, with annual increments to be adjusted for inflation whenever it exceeded 5%. The commission proposed scrapping the time-scale and selection-grade systems and automatically promoting officials to the next grade after 10 years without promotion.

Mahbub Ahmed, who was the finance secretary when the 2015 pay scale was implemented, told TBS yesterday that the government had planned a Finance Division wing to calculate inflation and recommend annual increments accordingly.

"But that did not happen. I can't remember why," he said.

As inflation rose amid the Russia-Ukraine war, the then Awami League government introduced an additional 5% incentive on top of the regular 5% annual increment after the 2024 election. The interim government later raised the incentive to 15%, which remains in effect. Public servants will lose the incentive once the new pay scale takes effect.

New pay scale justified amid inflation, but funding a challenge

-Fahmida Khatun, Distinguished Fellow, Centre for Policy Dialogue

The government pay structure has remained unchanged for a long time. During this period, inflation has risen significantly. As a result, the real income and purchasing power of employees, particularly those in lower and middle grades, have declined. Therefore, there is a reasonable case for increasing their salaries.

However, the key consideration is how the increase is implemented.

A salary increase does not necessarily lead to higher inflation. Its impact will depend on how it is financed, the scale of the increase, the availability of goods and services in the market, and coordination between monetary and fiscal policies.

If the increase is financed through bank borrowing, money creation or cuts in development spending rather than higher tax revenue, it could put additional pressure on the economy.

Higher incomes for government employees will increase consumption and aggregate demand. The government should therefore take steps to increase the supply of food, housing, transport, and goods and services to contain any resulting inflationary pressure.

Another important consideration is fairness. If government employees receive significant salary increases while the incomes of employees in autonomous institutions, state-owned enterprises, project-based and outsourced positions, as well as teachers, journalists and private-sector workers, remain unchanged, disparities and dissatisfaction among different professional groups could widen.

Although mechanisms exist to determine wages in different sectors, including the Wage Board for journalists, they are often irregular, outdated and weakly implemented. Salaries in the public and private sectors cannot be determined in the same way.

Nevertheless, there should be reasonable alignment among minimum wages, Wage Board decisions and the cost of living.

Financing the new pay structure will be a major challenge. The government already faces a budget deficit, which could widen significantly as a result of the additional expenditure. The budget, however, already includes an allocation for implementing the new pay structure.

Another key issue is whether higher salaries will be matched by improvements in the efficiency and capacity of government employees. If productivity does not improve, the country and the economy will receive little return from the additional expenditure.

On the other hand, if greater efficiency among government officials speeds up project implementation and reduces waste and corruption, the government could save money. In that case, the impact of the pay increase on inflation may be limited.

The government is introducing the new pay structure to improve the welfare of its employees, but it also has responsibilities towards workers in other sectors, particularly the private sector. It should take effective measures to prevent the new pay structure from widening the wage gap between public- and private-sector employees.

Salary was supposed to be inflation adjusted, can't recall why it didn't happen

-Mahbub Ahmed, Former finance secretary

The Pay Commission formed in 2015 under the leadership of Dr Farashuddin Ahmed had recommended that no new pay commission should be formed. Instead, government employees were to receive a 5% annual increment every 1 July.

If the inflation rate in any year was higher, the increment would also be adjusted in line with inflation.

A small wing comprising three or four officials under the Finance Division was supposed to be set up to calculate inflation and determine the appropriate rate of annual increments. But that never happened. I do not remember now why it was not done.

Even after salaries were doubled in 2015, corruption did not decline. Rather, it increased.

But it would not be right to compare corruption with whether or not a new pay structure is introduced. There are many honest officials in the administration. Those who do not engage in corruption should not have to remain on the same pay structure for 11 years.

At the same time, there are some positions where, if the salary offered is specified, many people would be willing to take up those jobs.

Government employees have been receiving salaries under the same pay scale for 11 years. Although they receive annual increments, those increases have not kept pace with inflation and the rising cost of living over this period.

A proposal has now been made to increase the salaries of peons by 100% and set their pay at Tk20,000. How can a family live in this country on less than that?

But the question is: where will the money for implementing a new pay structure come from?

The additional spending will ultimately put pressure on ordinary people. Government employees also pay taxes and VAT, so the burden will fall on them as well.

When the eighth pay structure was implemented in 2015, we conducted a study and found that the new pay structure did not cause a significant increase in inflation.

This was because the amount of money spent as a result of the new pay structure was not very large compared with the amount of money already circulating in the market.

But Bangladesh's financial problems have now become two-pronged. Whichever way you go, there is a problem. The revenue collection situation is not favourable. The target set in the budget is unlikely to be achieved.

As a result, a budget deficit is inevitable. Although funds have been allocated in the current fiscal year's budget to implement the new pay structure, there would be a budget deficit even without this additional expenditure.

Bangladesh's budget is equivalent to 15% of GDP, but actual spending stands at 12% to 14% of GDP. As a developing country, the budget should be around 25% of GDP. But this is not possible because of weak revenue collection.

Therefore, the government needs to focus on increasing revenue collection both to keep the economy dynamic and to implement the new pay structure.

Inflation will rise, putting pressure on private sector

-Anwar-Ul Alam Chowdhury Parvez, President, Bangladesh Chamber of Industries

It was not the right time to announce the new pay scale for government employees as the country is already facing persistent inflationary pressure.

The announcement could further fuel inflation in the market, which may have a negative impact on private-sector employees as well as industries, particularly labour-intensive sectors.

It will become difficult for private-sector employees to make ends meet. As a result, they are likely to demand higher salaries, which is understandable. However, given the current situation, does industry have the capacity to accommodate such wage increases?

The industry is already facing multiple challenges, including severe shortages of gas and electricity, high lending rates and an unstable law-and-order situation.

In this situation, if companies are forced to raise salaries, they will lose competitiveness as their production costs increase. They may struggle to sell their products, ultimately having a significant negative impact on industry.

Oil prices rose more than 3.5 percent on Monday after the US attacked an Iranian island in the Strait of Hormuz and Tehran said it had retaliated, as their conflict extended into its sixth month.

Brent crude futures were up $3.15, or 3.58 percent, to $91.25 a barrel at 0903 GMT, while US West Texas Intermediate crude was up $2.96, or 3.55 percent, to $86.36.

US forces struck two launchers on Iran’s Larak Island in the Strait of Hormuz on Sunday, the first known American strikes on the country since late July.

In response, Iran attacked two US air bases in Jordan, Iranian media reported on Monday, citing Iran’s Revolutionary Guards.

“Renewed military strikes in the Middle East and concerns of further oil supply disruptions have lifted oil prices,” said UBS analyst Giovanni Staunovo, adding that markets will now focus on whether the situation de-escalates or not.

US President Donald Trump said in a social media post on Sunday that Iran’s energy hub of Kharg Island was being “blown to smithereens”, but there was no evidence the island was under attack.

The post, which included an AI-generated video, provided no further details. Iran denied any attack on the island and said oil operations were continuing.

Efforts to negotiate an end to the conflict remain stalled as mediators seek to reopen the Strait of Hormuz, through which a fifth of global oil supplies passed before the war began at the end of February.

Part of the sharp market reaction reflected thin trading volumes due to a UK public holiday, said Saxo Bank analyst Ole Hansen.

Shipping data showed the number of visible commodity vessels transiting the strait over the weekend fell to five a day, highlighting caution among operators concerned about attacks on shipping.

The United Kingdom Maritime Trade Operations agency said on Sunday that a tanker had been struck by a projectile while entering the strait on Saturday.

US Treasury Secretary Scott Bessent told Reuters on Sunday that the US was likely to impose new secondary sanctions on Iran every week.

Despite Monday’s rally, Brent and WTI were still on track to post modest losses for August after falling more than 4 percent last week, their first weekly declines in three weeks.

Trump also said on Sunday that oil secured under a recently struck deal with Venezuela would be used to replenish the US Strategic Petroleum Reserve, which has fallen to near its lowest level in 44 years.

The Dhaka Stock Exchange (DSE) started the week on a bearish note today (30 August), as widespread selling pressure across major sectors dragged its benchmark indices lower.

The broad-based DSEX index fell 41.39 points, or 0.73%, to close at 5,614.28, as investors continued to offload shares amid concerns over the impact of the ongoing energy crisis and persistent domestic economic headwinds on corporate earnings.

The Shariah-compliant DSES index declined 4.42 points, or 0.39%, to 1,128.12, while the blue-chip DS30 index dropped 12.66 points, or 0.59%, to 2,122.23, according to DSE data.

Despite the fall in indices, market turnover increased 11% to Tk518.03 crore, with 1.63 lakh trades executed involving more than 18.98 crore shares.

Market capitalisation declined by Tk1,477 crore to Tk6.96 lakh crore as prices of most listed shares fell.

Of the total market capitalisation, equity securities accounted for Tk3.49 lakh crore, while debt securities, mainly Treasury bills and bonds, accounted for Tk3.43 lakh crore.

The latest decline came after a sharp sell-off last week. Over the four trading sessions, the DSEX lost 130 points, or 2.25%, while total turnover fell 49% to Tk2,286 crore. Average daily turnover also declined 36.88% during the week.

In the previous week's four trading sessions, the DSEX fell 130 points, or 2.25%, with total turnover declining by 49% to Tk2,286 crore, while the average daily market turnover dropped by 36.88%.

DSE data showed market breadth was heavily negative, as prices for nearly 79% of traded stocks declined. A total of 392 issues were traded on the DSE, of which 309 declined, 49 advanced, and 34 remained unchanged.

EBL Securities in its daily market commentary said, the downbeat capital market endured wave of heavy selling in the opening session of the week, defying the brief recovery effort in the previous session, as concerns over a potential downturn in corporate earnings amid persistent domestic headwinds kept investors largely on the sidelines and weighed on overall market sentiment.

"From the outset of the session, the broad index remained on a downward trajectory; although the market attempted to recover in mid-session, widespread risk aversion and persistent late-session selling pressure dragged the index further into negative territory," it said.

On the sectoral front, Textile sector stocks accounted for the highest share of turnover by 31%, followed by General Insurance by 10% and Bank 9.5%.

Almost all the sectors posted negative returns, where Mutual Fund, Services and Ceramic exhibited the most corrections, while only Jute, Travel and Engineering sector stocks exhibited the highest returns on the bourse.

In terms of individual stock movements, the day's trading session saw selective interest in textile, insurance, and manufacturing equities, while mutual funds dominated the losers' list.

Saiham Cotton and Saiham Textile emerged as the top gainers of the day, alongside Sena Insurance, Monno Fabrics, and Sonali Aansh surged despite the wider market downturn.

Conversely, investor sentiment remained heavily subdued toward the mutual fund sector, with EXIM Bank 1st Mutual Fund, PF 1st Mutual Fund, AIBL 1st Islamic Mutual Fund, and ICB AMCL Second Mutual Fund leading the loser board alongside medical equipment supplier JMI Syringes and Medical Devices.

The port city bourse, CSE, ended in negative terrain. The Selective Categories' Index (CSCX) and All Share Price Index (CASPI) lost 55.6 points and 75.3 points, respectively.

Bangladesh must fix its worsening energy crisis and secure supplies to existing industries before courting new investment, business leaders and experts warned at a Dhaka seminar yesterday, cautioning that costly and unreliable energy is eroding industrial competitiveness.

They made the remarks at a seminar on “Bangladesh’s Energy Security Challenges: Powering a More Competitive Business Climate”, jointly organised by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange of Bangladesh (PEB) at the MCCI office in Gulshan.

Mohammad Iqbal Chowdhury, CEO of cement producer LafargeHolcim Bangladesh, urged the government to prioritise existing investors before seeking new ones.

“We have been spending so much time on seminars and programmes to invite new investors. My humble request to the current government is: please do not go for any new investor yet,” he said.

“First, come to the existing investors. First supply us properly, first make us happy, and then go for new investors. If you do not have the raw material, you cannot produce,” he added.

He called for a 20-year energy strategy, saying investors cannot plan around short-term policies. “Energy has to be sustainable, affordable and reliable.”

Fazlul Hoque, administrator of the country’s apex trade body, The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said he too had advised authorities not to seek new investment in the industrial sector until existing industries achieve stability.

“I am not an investment expert, but I have urged against new industrial investment and suggested exploring other sectors for investment,” he said. “If I cannot survive today, I don’t need to know what happens after 10 years. That’s the truth.”

Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, said gas shortages had become a major problem for textile mills, many of which rely on captive power generation.

“My job is to flag the problem -- what went wrong, how we can fix it and what the interim policy should be. But the question is, are the policymakers listening to us?” he said.

Showkat complained that Bangladesh had failed to secure long-term energy contracts when prices were low, unlike India.

“We were happy buying gas at spot rates instead of going for long-term contracts,” he said, adding that the current situation was foreseeable.

He urged the government and experts to formulate an interim policy to keep industries running.

Ijaz Hossain, chairman of ESTex Foundation, a consultancy organisation specialising in industrial sustainability, said the energy crisis had gone beyond a supply problem and become an economic one.

“The number one problem we created for ourselves is that we did not price gas correctly,” he said, noting that industries once paid Tk 8 per cubic metre but now pay around Tk 40 while struggling to receive adequate supplies for the past three years.

“Who is going to, in their right mind, invest with this kind of gas situation?” he asked, calling for a comprehensive energy policy, greater use of renewables and realistic pricing.

Moynul Islam, president of the Bangladesh Ceramic Manufacturers and Exporters Association, said the crisis was threatening the industry’s survival.

“Throughout my career, I have failed to convince the government that gas is the raw material for ceramics. Without gas, you cannot produce ceramics,” he said.

“When factories start closing, the pressure will fall on the government, banks and ordinary people,” Moynul said.

Asif Ibrahim, vice chairman of apparel manufacturer New Age Group, said inadequate gas pressure was slowing production, delaying orders and hurting exports.

He urged the government to prioritise export-oriented industries and provide credible load-shedding schedules so factories can plan.

“The private sector is not asking for cheap energy. They are asking for competitive, transparent and predictable energy pricing,” Asif said.

He informed that his factory invested around Tk 3 crore to Tk 3.5 crore to install 566kW of rooftop solar, meeting about 25 percent of peak demand.

Yet, reliance on diesel remains costly and is further eroding competitiveness, he said.

M Masrur Reaz, chairman and CEO of PEB, described the energy crisis as the “number one constraint” on businesses and warned that it threatens growth and exports.

He said Bangladesh had faced energy problems for at least three years, largely due to domestic policy mismatches, but the situation had now become acute.

“Bangladesh needs short-term measures as well as medium- and long-term steps to build robust energy security,” Masrur said.

Farooq Ahmed, secretary general of MCCI, said factories were operating below capacity because of gas shortages and frequent power outages.

He said better management of the existing system alone could resolve nearly half of the problems.

Bangladesh’s imports from India continue to rise despite restrictions imposed by both countries on the movement of some goods, while exports to the neighbouring country remained almost unchanged.

The country imported goods worth $10.96 billion from India in fiscal year 2025-26, up from $9.62 billion a year earlier, according to National Board of Revenue (NBR) data.

In contrast, exports to India stood at $1.75 billion in FY26, compared with $1.76 billion in the previous fiscal year.

The figures show that trade between the two neighbours has continued despite restrictions introduced over the past two years, particularly on the movement of goods through land ports.

Bangladeshi businesses say Indian yarn, cotton, fabrics and other industrial raw materials remain in demand because of their competitive rates, and because some international buyers specify particular fabrics or yarn from India.

After China, India is Bangladesh’s second-largest trading partner and the country’s largest trading partner in South Asia.

The trade gap between the two countries, however, remains wide, with Bangladesh importing more than six times as much from India as it exports to the country.

Businesses and economists say Bangladesh has scope to raise exports to India, but the country’s export basket remains heavily concentrated in apparel.

India granted Bangladesh duty-free market access in 2010, with one year of retrospective effect, for all products except 25 alcoholic and beverage items under the South Asian Free Trade Area’s (SAFTA) least developed country category.

Although exports have increased since then, the growth has not been enough to narrow the trade gap.

M Masrur Reaz, chairman of the Policy Exchange Bangladesh, said three factors are limiting Bangladesh’s exports to India.

“Firstly, India has its own import-substitute goods such as garments; secondly, India has a long list of standard requirements, and thirdly, both Bangladesh and India could not establish a regional value chain yet,” he said.

He suggested signing the Comprehensive Economic Partnership Agreement (CEPA) between the two countries to expand bilateral trade.

The two countries have introduced a series of trade restrictions since the political changeover in Bangladesh in 2024.

In March 2025, Bangladesh’s commerce ministry asked the National Board of Revenue to take steps to restrict yarn imports through land ports to protect the local textile and spinning sector. In early April, India suspended a transhipment facility used by Bangladesh to send garments to third countries through Indian airports.

The NBR restricted yarn imports from India through land ports. Yarn imports from India are now allowed only through Chattogram port.

India later imposed restrictions on the import of garments, agro-processed food, jute goods, furniture and some other Bangladeshi goods through land ports.

Despite the restrictions, imports of Indian goods continued to rise.

Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, said yarn imports from India doubled to around Tk 30,000 crore in FY26 from Tk 14,000 crore a year earlier.

“The higher import of yarn through the seaport is the real reflection of yarn imports from India. Because when yarn was allowed to be imported through the land ports, a lot of yarn used to be imported through informal channels, meaning it was smuggled in,” he said.

Russell said restrictions on yarn imports through land ports should not be lifted. He argued that local textile mills are facing higher production costs and competition from imported yarn.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said businesses have raised trade-related issues in different forums to increase exports to India.

He said Bangladesh should be able to export more goods through land ports and gain greater access to the Indian market.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the recent trade disputes have commercial implications but require a political solution.

“It needs a political solution from the top-level leaders of both countries,” Hatem said.

MA Razzaque, chairman of Research and Policy Integration for Development, said the issue of land ports is part of a wider bilateral relationship.

“The land port is not an issue alone; it is a matter of a warm relationship between Bangladesh and India,” he said.

He said better bilateral relations could support stronger trade because both countries stood to gain from greater commercial engagement.

Md Abdul Wahed, former honorary joint secretary general of the India-Bangladesh Chamber of Commerce and Industry, said trade could increase if the movement of major goods through land ports resumes.

Md Fazlul Hoque, administrator of the Federation of Bangladesh Chambers of Commerce and Industry, called for discussions between the two countries to ease trade rules.

British businesses turned the most confident since March this month, bolstered by a ​rosier view of the economy, according to ‌a survey that echoes other signs of an improving outlook.

Lloyds, a bank, said on Friday that its monthly business ​confidence index had risen by 4 points ​in August to +53 percent, above its average +47 percent over the past 12 months.

“Overall, businesses are reporting stronger ​customer demand, greater optimism about the wider economy ​and growing confidence in their own trading outlook, all of which will be helping to support investment and ​growth plans,” Amanda Murphy, chief executive of ​Lloyds Business and Commercial Banking, said.

The National Board of Revenue has instructed customs authorities across the country to stop unnecessary harassment in the name of examining import and export consignments and avoid delays in releasing goods, responding to a long-standing demand from businesses.

The revenue board issued the directive to officials of all customs houses yesterday (30 August), outlining 13 specific instructions to simplify customs procedures.

Business leaders have welcomed the move, saying effective implementation at the field level could bring significant improvements in the ease of doing business.

Under the directive, businesses will not be required to submit documents beyond those stipulated under NBR rules. Documents submitted online will also not have to be submitted manually again.

Customs officials have been instructed not to send documents of low-risk consignments to senior officials unnecessarily unless there is a specific instruction from the authority.

A consignment should not undergo multiple physical examinations unless there is concrete information indicating duty evasion. Consignments should instead be selected for examination based on revenue risks, while the results of physical inspections should be used to determine whether further examination is necessary.

The directive also calls for avoiding unnecessary steps in customs assessment and coordinating with intelligence agencies to prevent repeated examinations.

Customs authorities have additionally been instructed to strengthen monitoring to prevent congestion at ports, expedite auction procedures and protect government revenue.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said effective implementation of the instructions could significantly improve the business environment and reduce costs.

"We have been raising these issues for a long time. If the NBR's decision is implemented at customs houses, genuine importers and exporters will benefit," he told TBS.

However, he cautioned that there is often a significant gap between decisions taken at the NBR's top level and their implementation by field officials.

"Many good initiatives fail to be properly implemented because of non-cooperation and bribe-seeking by field-level officials, particularly those at lower levels," Hatem said.

He said compliant businesses often face difficulties over minor mistakes, while unscrupulous traders manage to evade scrutiny. "Strict action must be taken against those who engage in irregularities."

However, NBR officials said implementing the new instructions with existing capacity could be difficult and might create risks for revenue collection.

A senior Chattogram Customs House official, speaking to TBS on condition of anonymity, said the directive appeared to be based on an overly simplified view of the situation.

"The field reality is not that simple," he said.

He said the ASYCUDA World software used to identify risk criteria for consignments is not properly implemented at customs houses other than Chattogram Custom House.

"This needs to be ensured at all customs houses first. But the directive has overlooked this issue," he said.

Customs intelligence units are asked to coordinate examinations of import consignments to avert cumbersome crosscheck and thus reduce port clearance time and cost of business for importers.
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The National Board of Revenue (NBR) has issued the order for customs intelligence units to coordinate with the Customs Intelligence and Investigation Directorate (CIID) and the Central Intelligence Cell (CIC) in such work, as businesses often resent overlapping of trade scrutiny.

Customs officials have also been instructed not to seek documents beyond those specified in the Goods Declaration, Assessment and Re-assessment Rules 2024. They cannot demand manual copies of documents already submitted electronically.

The directives are part of 12 urgent instructions issued by the NBR to customs houses and stations across Bangladesh to ensure revenue security while expediting the clearance of imported goods.

It was a long-pressed demand from the business community to simply customs process and coordinate investigation processes rather than separately seeking documents from them.

The government's revenue authority has also instructed customs authorities to strengthen risk-based examination, eliminate unnecessary procedures and avoid multiple physical examinations of the same consignment unless a confirmed risk does exist.

The directions on dos and don'ts, issued on August 30, call for regular updating of the ASYCUDA World System selectivity criteria so that consignments can be selected for examination based on revenue risks.

"Findings from physical examinations should also be used to improve future risk-selection criteria," says the latest order on external-trade front.

The NBR has also directed officials to avoid unnecessary manual registers and data recording and not to forward files of non-risky consignments to higher authorities unless there are specific instructions from the revenue board.

Responsible officers must regularly monitor unstuffing activities and gate verification at sea, land and air ports, it says.

All unnecessary steps in the assessment and clearance process should be eliminated, according to the directives.

To expedite the release of imported goods, customs authorities have been asked to issue notices to importers and clearing and forwarding (C&F) agents and take legal action where necessary.

The NBR has also ordered customs authorities to complete auction procedures for stuck-up goods swiftly.

The notification, signed by Second Secretary (Customs: Policy) Rezaul Karim, was circulated to major Customs, Excise and VAT Commissionerates for immediate implementation.

Hailing the instructions, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Fazlul Haque said proper implementation of the instructions with close monitoring is important.

"There are plenty of laws and orders but compliance with those must be ensured through motivation," he said, adding that punishment of officials often not help to inspire others to work with full motivation.

Foreign-debt servicing by Bangladesh more than doubled compared to loans disbursed to the country in the first month of this fiscal year in a mismatch on the external finance front. Bangladesh Trade Data
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The amount it received in foreign loans in July shows a fall in disbursements by 13.38 per cent year on year.

Foreign-aid disbursement came down to US$180.18 million in July from $208.04 million in the same period of the FY26, according to Economic Relations Division (ERD) data released Sunday.

During the month, Bangladesh repaid a total of $453.23 million in principal and interest on medium- to long-term (MLT) loans taken from development partners. It was $446.68 million in the same month a year before.

On the other hand, commitment of foreign assistance dropped by more than 83 per cent to a peanut $14.05 million during the period under review from $83.46 million in the first month of the FY26.Financial Express archive

Bangladesh's foreign-debt repayments are projected to "aggressively outpace fresh foreign-fund receipts within the next three fiscal years", according to government projection.

As per the projection, it may need to repay a total of $5.61 billion as principal and interest for the total external outstanding in the current FY2027, while $6.89 billion in FY2028 and $7.565 billion in FY2029.

A UNB report adds: However, grants disbursement increased by $0.20 million, or nearly 64.5 percent, during the month.

No foreign assistance was disbursed under the food-assistance category in either July 2026 or July 2025.

Foreign assistance remains an important source of financing for Bangladesh's development projects, particularly infrastructure, energy, transport, health and other priority sectors.

The disbursement of loans and grants depends largely on project- implementation progress and compliance with conditions attached to development assistance.

The US government plans to take a 35% passive stake in Venezuelan businessman Alejandro Betancourt's North American Blue Energy Partners, the Wall Street Journal reported ‌on Saturday, citing people involved in negotiating the deal.

The US also plans to secure preferential rights to purchase 20% of the company's production at cost, the WSJ reported.

The Pentagon's Office of Strategic Capital plans to structure the investment ⁠through penny warrants that would yield the US an equity ownership in the business without significant capital investment, the WSJ reported.

The report comes only a day after US President Donald Trump said on Friday that the US would take control of a fifth of Venezuela's vast oil reserves.

Trump provided few details about the arrangement, saying only that the US had secured majority ‌control ⁠of more than 65 billion barrels of Venezuela's proven oil reserves through a partnership with private business.

Responding to a Reuters request for comment, chief Pentagon spokesperson Sean Parnell said: "The Office of Strategic Capital (OSC) ⁠does not take equity stakes in private companies. Under its statutory authority, OSC's role is strictly limited to providing capital assistance in the ⁠form of a loan, loan guarantee, or technical assistance (including transaction structuring for developing and financing investments)."

The White House and ⁠North American Blue Energy Partners did not respond to requests for comments outside regular business hours.

Bangladesh Bank posted a net profit of Tk25,977 crore in the 2025-26 financial year, up Tk3,357 crore from the previous fiscal year.

The central bank's net profit stood at Tk22,620 crore in FY25, according to its financial statements approved by the board of directors today (30 August).

The board meeting was held at Bangladesh Bank headquarters with Governor Mostaqur Rahman in the chair. The directors also approved an incentive bonus equivalent to six times the basic salary for central bank officials.

A senior Bangladesh Bank official told The Business Standard that generating profit is not the central bank's primary objective. Its core responsibilities include supervising the banking sector, controlling inflation, increasing private-sector investment and creating employment.

"The difficulties in the economy and banking sector are the reasons why Bangladesh Bank's profit has increased so much," the official said.

The official also cautioned that the central bank must ensure that its pursuit of profit does not divert it from its core responsibilities.

Despite a slowdown in the economy, Bangladesh Bank's lending and liquidity management activities remained strong during the fiscal year.

As banks faced liquidity shortages, several lenders borrowed more funds from Bangladesh Bank than in previous years, increasing the central bank's interest income, according to the official.

The central bank also earned substantial returns from investing its reserve funds in various countries, contributing to the rise in overall profit.

In FY24, Bangladesh Bank recorded a total profit of around Tk40,000 crore, including a net profit of Tk15,300 crore.

APM Terminals, a subsidiary of Danish shipping group AP Møller-Maersk, yesterday began construction of Laldia Container Terminal in Chattogram, a project expected to increase the capacity of Chattogram port and improve its efficiency of cargo handling.

The $550 million terminal, being built at Laldia Char near the mouth of the Karnaphuli river, is expected to open in 2030 and handle one million twenty-foot equivalent units (TEUs) a year.
That would add nearly one-third to the country’s current container-handling capacity.“This would open a new horizon in logistics and trade facilities and support the country’s development,” Finance and Planning Minister Amir Khosru Mahmud Chowdhury said at the inauguration of the construction.

The minister said the project would be a significant milestone in the country’s journey towards a trillion-dollar economy by 2034.

Khosru said the government is also taking steps to develop other modern terminals, export processing zones and logistics facilities, including free trade zones, as part of efforts to turn Chattogram into a regional logistics hub.

Under a public-private partnership (PPP), APM Terminals will develop and operate the terminal under a design, build, finance, operate and transfer model.

It will run the facility for 30 years, with an option to extend the concession by a further 15 years.

The terminal will occupy 49.15 acres along the Karnaphuli river, APM Terminals Chief Executive Officer Romesh David said.

It will have a 616-metre jetty, seven ship-to-shore cranes, 32 electric rubber-tyred gantry cranes and 41 electric terminal tractors, he said.

Romesh said the terminal would be a carbon-neutral, zero-emission port. It would also employ female crane operators for the first time in Bangladesh. “Young women from the Chittagong area will operate huge cranes remotely to move containers while sitting in an air-conditioned office.”

The project has been in the pipeline for several years. Bangladesh and Denmark signed a memorandum of understanding in June 2021 to facilitate co-operation on the project under the PPP framework.

The Chittagong Port Authority (CPA) and APM Terminals BV signed the final agreement on November 17 last year, paving the way for the terminal to be developed with 100 percent foreign investment.

The new facility will be able to handle vessels carrying up to 6,000 TEUs, roughly twice the capacity of ships that currently berth directly at Chattogram port, CPA Chairman Rear Admiral SM Moniruzzaman said.

He said the port’s existing capacity had already been exceeded. Container handling in Bangladesh roughly doubles every 10 years, underscoring the need for terminals closer to the sea.

The Laldia terminal will operate around the clock, making it the first terminal of its kind at the port, the CPA chairman said. It will be able to handle vessels up to 230 metres long with a draft of 10.5 metres.

Electric equipment and modern cargo-handling technology will support greener port operations. The ability to handle larger vessels directly is also expected to reduce waiting times for ships and speed up cargo movement at Bangladesh’s main seaport, he said.

Road Transport and Bridges, Railways, and Shipping Minister Sheikh Rabiul Alam said the project would usher Bangladesh into a new era of investment, technology and modern terminal operations.

The terminal would also help Bangladesh develop expertise in modern container-terminal operations and advanced port technologies, Rabiul said.

Local company QNS Container Services Ltd is the local partner of APM Terminals in Laldia project.
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Jack Craig, global head (Business Administration) of APM Terminals BV, Danish Ambassador to Bangladesh Christian Brix Moller and Shipping Secretary Zakaria also spoke at the event.

Bangladesh repaid 2.5 times the amount of foreign loans it received in July, the first month of the current fiscal year, as repayment pressure is gradually increasing with the grace periods on loans taken for mega projects expiring.

According to data released by the Economic Relations Division (ERD) yesterday, Bangladesh received $180.18 million in foreign loans in July. During the same month, it repaid $453.23 million to development partners in principal and interest on previous loans.

ERD data show that foreign loan disbursements stood at $208.04 million in July last year and disbursements this year were 13.39% lower.

Bangladesh repaid $446.68 million in foreign loans in July last year. Loan repayments this July, therefore, increased by nearly 4% year-on-year.

ERD officials said ministries and divisions remain busy at the beginning of a fiscal year determining implementation strategies and work plans for development projects. As a result, spending remains very low, which contributes to lower loan disbursements in July.

Officials also said development partners use this period to prepare their plans for the entire year. As a result, there is limited scope for large-scale disbursements from development partners during the first month of the fiscal year.

At the same time, as the grace periods on loans taken for mega projects expire, Bangladesh has to make substantial payments towards both principal and interest from the very beginning of the fiscal year.

According to ERD data, Bangladesh repaid $341.72 million in principal to development partners in July this year, compared with $327.72 million in July last year. However, interest payments declined slightly. The country paid $111.51 million in interest in July this year, compared with $118.96 million in the same month last year.

Meanwhile, commitments from development partners also declined sharply in July. Bangladesh received commitments worth only $14.05 million, down 83% from $83.46 million in the same month last year. However, the entire amount committed this July was in the form of grants.

ERD officials said the new government has introduced some changes in how foreign loans will be used for development projects. Projects that are considered to offer better value for money or economic returns will be prioritised for foreign financing.

The government is currently identifying such projects and preparing to begin negotiations with development partners. As a result, Bangladesh received relatively few commitments from development partners at the beginning of the fiscal year.

'It is too early to judge the full-year trend'

Dr Mustafa K Mujeri, Executive Director of the Institute for Inclusive Finance and Development (InM), said the current situation should be viewed in context.

"A new government has come in and it has been six months. The new fiscal year also began in July. It would not be realistic to expect everything to stabilise immediately or for the flow of funds to remain uniform throughout the year," he said.

He said negotiations with various development partners are time-consuming.

"In reality, these negotiations move forward gradually. Discussions with different donor agencies continue. Once individual agreements are finalised, large amounts of funding can come in at once. There are already several initiatives underway. If these are successfully completed and both sides reach an agreement, substantial funding could come in," he added.

Mujeri said Bangladesh is negotiating with not only the World Bank and the Asian Development Bank (ADB), but also a number of bilateral and multilateral development partners.

"We may see many of these negotiations being finalised over the next six to nine months, with the terms and conditions agreed upon. Once the agreements are signed, the flow of funds could increase," he said.

Debt repayment pressure set to rise

Mujeri said the increase in debt repayments was both normal and expected.

"The amount of debt repayment is increasing. This is normal and expected because we borrowed a huge amount of money in the past, particularly to implement various mega projects. Those liabilities now have to be repaid, as many loans are now reaching maturity" he said.

He stressed that Bangladesh must therefore become more cautious about taking on new foreign debt.

"The burden has already increased, and it will rise further. So this is the time to set priorities for borrowing and invest in sectors that generate economic returns, so that the debt repayment burden remains manageable."

ADB largest source of July disbursements

According to ERD data, the Asian Development Bank was the largest source of foreign loan disbursements in July, providing $65.45 million.

Japan disbursed $38.66 million, the World Bank $47.53 million, and India $26.69 million during the month.

Bangladesh and China prepare to launch a new two-tier diplomacy and defence dialogue that signals a further deepening of ties between Dhaka and Beijing following Prime Minister Tarique Rahman's recent visit.
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The proposed model of dialogue was discussed Sunday during a meeting between Bangladesh state minister for foreign affairs Humaiun Kabir and Chinese ambassador in Bangladesh Yao Wen at the foreign ministry in Dhaka.

The two sides also agreed to work towards launching a foreign minister-level strategic dialogue, as Bangladesh seeks to give greater institutional depth to its relationship with its largest trading partner and a major development and infrastructure partner.

Kabir described China as a "trusted friend and valued strategic partner" and reaffirmed Bangladesh's commitment to the one-China principle. He said Dhaka was pleased with the renewed momentum in bilateral relations and the elevation of ties to what the two governments describe as a "China-Bangladesh Community with a Shared Future".

The developments follow Rahman's recent visit to China, during which the two countries advanced cooperation on infrastructure, trade and investment.

Yao briefed Kabir on the outcomes of the prime minister's China visit, including the groundbreaking of the China Economic and Industrial Zone (CEIZ), the signing of a commercial contract for the modernisation of Mongla seaport and possible Chinese cooperation in establishing a Mongla export-processing zone.

According to the Chinese side, the CEIZ is expected to attract about 30 Chinese companies and investment of roughly $500m, with the potential to create an estimated 100,000 jobs for Bangladeshis.

The proposed diplomacy and defence dialogue could add a new dimension to a relationship that has traditionally been driven by trade, infrastructure and development cooperation. Bangladesh has increasingly sought to diversify its economic and strategic partnerships while maintaining its longstanding diplomatic principle of balancing relations among major powers.

The two sides also discussed the long-running issue of the Teesta river, with cooperation on the comprehensive management and restoration of the river again featuring in their talks.

For Dhaka, the Teesta remains one of the most politically sensitive issues in its relationship with India. Bangladesh has for years sought a comprehensive agreement on the sharing and management of the river, while China has previously offered to participate in a major water-management project in the Teesta basin.

The meeting also covered the possible export of Bangladeshi jackfruit and guava to the Chinese market, the proposed China-Bangladesh-Myanmar economic corridor and cooperation over the Rohingya crisis.

The Rohingya issue remains a major concern for Bangladesh, which hosts more than a million refugees who fled violence and persecution in Myanmar. Dhaka has repeatedly sought greater international pressure on Myanmar to create conditions for a safe, voluntary and sustainable repatriation of the refugees.

China has played a significant diplomatic role in efforts to facilitate Rohingya repatriation, although repeated attempts to begin large-scale returns have so far failed.

The meeting comes as Bangladesh and China prepare for a series of high-level exchanges.

Yao has said senior Chinese officials are expected to visit Bangladesh, including the vice-president of China International Development Cooperation Agency, the minister of the International Department of the Central Committee of the Communist Party of China and the executive vice-governor of Yunnan province.

The Chinese ambassador also invited Kabir to visit China in October.

The flurry of planned exchanges suggests that Rahman's China visit could mark the beginning of a more structured phase in Bangladesh-China relations, extending cooperation beyond major infrastructure projects into diplomacy, defence, investment and regional connectivity.

For Beijing, Bangladesh occupies an important position in its broader economic and strategic engagement with South Asia and the Bay of Bengal. For Dhaka, closer engagement with China offers access to investment, infrastructure financing and a vast export market at a time when Bangladesh is seeking new sources of trade and economic growth.

The proposed strategic and defence dialogues will, therefore, be closely watched in the region, particularly as Bangladesh seeks to deepen relations with China while navigating its longstanding ties with India and growing engagement with other major powers.

Nepal may need $4 billion to $5 billion to rebuild after this week’s devastating floods, Finance Minister Swarnim Wagle told Reuters on Saturday, a bill equal to nearly a tenth of the economy.

“The initial estimate is between $4-$5 billion. Just an estimate,” Wagle said. “We will require much less than what we needed for the 2015 earthquake. Loss and damage is being assessed.”
A glacier collapse on Wednesday unleashed a huge torrent of rock, ice, mud and debris through Himalayan mountain river systems, killing more than 600 people in Nepal and China’s Tibet, with more than 2,000 still unaccounted for.

The flood levelled towns in the border area, sweeping away bridges and roads and damaging major hydropower stations.

Wagle did not elaborate on why the reconstruction bill was expected to be less than the $9 billion spent after the 2015 magnitude-7.8 quake, Nepal’s worst recorded disaster.

It killed nearly 9,000 people, destroyed more than half a million homes and caused losses estimated at around a third of Nepal’s economy.

Wednesday’s floods will nevertheless be a major blow to an economy reliant on remittances, tourism and hydropower, damaging power projects that account for more than 12 percent of national generating capacity.

The Bangladesh Bank has set the terms for two refinancing schemes worth Tk13,000 crore to boost agricultural production, ensure food security, and increase economic activity and employment in rural areas.

Under the schemes, the interest rate on loans at the farmer and customer level will be capped at 7%.

In two separate circulars issued today (30 August), the central bank announced the terms of a Tk10,000 crore Agricultural Refinance Scheme and a Tk3,000 crore refinancing fund for establishing an agriculture-based special economic hub in northern Bangladesh.

Tk10,000cr scheme

Under the Tk10,000 crore refinancing scheme, participating banks will receive refinancing from Bangladesh Bank at an interest rate of 3%. At the farmer or customer level, however, the interest rate on loans will be capped at 7%.

For Shariah-based financing, the profit rate must be determined in accordance with Shariah-approved principles. However, the rate cannot exceed 7%. The same interest or profit rate will apply to all customers.

Banks will have to repay the refinancing received from Bangladesh Bank, along with 3% interest, within a maximum of 18 months.

Tk3,000 crore for northern Bangladesh

The customer-level interest rate will also be capped at 7% under the Tk3,000 crore refinancing fund for establishing an agriculture-based special economic hub in northern Bangladesh. Under the fund, banks will receive refinancing from Bangladesh Bank at an interest rate of 3%.

Depending on the sector, the loan tenure will range from a maximum of 18 to 36 months. In certain sectors, loans may be provided for up to 18 months, including a three-month grace period.

For other sectors, the maximum loan tenure will be 36 months, including a grace period of three to six months. Banks will have to repay the funds received from Bangladesh Bank, along with 3% interest, within the stipulated repayment period.

If the funds are not used properly or a bank charges more than 7% interest, Bangladesh Bank will impose an additional 2% interest on the amount concerned and recover it in a lump-sum payment.

Banks will also have to promote the loan facility at 7% interest through campaigns inside and outside their branches.

Padma Islami Life Insurance's life fund deficit widened to Tk327.20 crore as of 30 June 2026, highlighting the insurer's fragile financial position and keeping its stock in the "Z" category.

According to a price-sensitive statement filed with the Dhaka Stock Exchange today (30 August), the insurer posted a deficit of Tk8.51 crore in its life revenue account during January-June 2026, a significant improvement from the Tk15 crore deficit recorded in the same period a year earlier.

Despite the narrower six-month deficit, the insurer's cumulative losses continued to erode its life fund, pushing the balance further into negative territory. The life fund deficit stood at Tk327.20 crore at the end of June 2026, compared with Tk307 crore a year earlier.

The insurer's financial performance also remained under pressure in the April-June quarter. During the three months, expenses and claims exceeded income by Tk3.56 crore, although this was lower than the Tk6.53 crore deficit recorded in the same quarter of the previous year.

The continued deterioration in the insurer's financial position also weighed on investor sentiment. Padma Life's share price fell 2.35% to Tk16.60 on Sunday.

The company's weak financial position has also kept shareholders from receiving returns. Its board has recommended no dividend for 2025, meaning the insurer will make no distribution to shareholders for the year.

Padma Life has not paid any dividend since 2021, when it declared a 2% cash dividend.

The insurer, which was listed on the Dhaka Stock Exchange in 2012, saw its financial position deteriorate sharply after S Alam Group took over the company in 2018. Since then, mounting deficits, persistent financial weakness and governance concerns have pushed the insurer into the "Z" category.

The company is scheduled to hold its Annual General Meeting on 17 September at Padma Life Tower in Dhaka, where shareholders will consider the company's financial performance and the board's dividend recommendation.

The government repaid nearly three times more in foreign loans than it received in July, mainly due to lower loan disbursements.

According to data from the Economic Relations Division (ERD), the government repaid $453 million in principal and interest on foreign loans in July, compared with $446 million in the same month last year.

Meanwhile, it received $180 million in foreign loans in the seventh month of the year, down from $208 million in the same month the previous year.

Fresh loan disbursements also fell a massive 83 percent year-on-year to $14 million in July. Of the total disbursement, the Asian Development Bank provided $65 million, the World Bank $47 million, Japan $39 million and India $27 million.

MIDAS Financing, a non-bank financial institution (NBFI), plans to sell three commercial properties at prevailing market prices, subject to approval from shareholders and regulators.

According to a disclosure to the Dhaka Stock Exchange (DSE) yesterday, the decision was taken at a board meeting on August 27. The properties include commercial floor space on the second floor, along with eight car parking spaces, at Nahar Green Summit in Dhanmondi.

Another property comprises commercial floor space on the first floor, along with one car parking space, at Excel SM Tower in East Nasirabad, Chattogram.

The third property comprises commercial floor space on the third floor, along with one car parking space, at Jamil Shopping Center in Bogura.

The asset sale comes as the company faces a liquidity crunch amid a rise in classified and non-performing loans, said Tanvir Hasan, company secretary of MIDAS Financing PLC.

“Some of our good borrowers also failed to repay their loans,” he said.

There has also been some demand from depositors to withdraw their deposits, he said, adding that the company has a large fixed-asset base and the board wants to revive its financial position by selling some of its assets. Shares of MIDAS Financing rose 1.79 percent to Tk 5.70 on the DSE yesterday.

The NBFI reported a loss of Tk 89.30 crore in the first six months of 2026, sharply higher than the Tk 46.88 crore loss recorded in the same period a year earlier, according to its financial statements.