Stocks edged out a gain last week as renewed buying interest in beaten-down shares, improved expectations for industrial gas supplies and regulatory engagement with leading brokers helped the Dhaka Stock Exchange (DSE) recover from a prolonged downturn.

The DSEX, the benchmark index of the DSE, gained 16 points over the week to close at 5,532, while the blue-chip DS30 rose nearly five points to 2,101.

Despite the modest gains in the indices, market breadth remained weak, with 213 issues declining against 147 advancing, while 26 remained unchanged.

Daily average turnover edged up 0.11% to Tk554 crore, indicating little change in overall trading activity.

Meanwhile, the market capitalisation fell by around Tk700 crore during the week.

EBL Securities said the market started the week on a weak note as persistent concerns over the nationwide energy crisis and renewed geopolitical tensions in the Gulf region kept investors cautious. The DSEX briefly fell below the 5,400-point threshold as investors focused on limiting portfolio losses amid heightened uncertainty.

However, investor sentiment improved in the latter half of the week following government assurances to address industrial gas supply constraints and regulatory engagement with leading brokers. The developments encouraged investors to accumulate beaten-down stocks, helping the benchmark index advance for three consecutive session.

"Broader investors' perspective improved" following the policy-level developments, EBL Securities said in its weekly assessment, while cautioning that domestic challenges and geopolitical uncertainties continued to weigh on investor confidence and could limit the scope for a sustained recovery.

Sheltech Brokerage also attributed the market rebound to renewed buying interest and improving investor sentiment. The brokerage said expectations surrounding the regulator's engagement with leading brokerage firms, reports of improving gas supply conditions and Moody's revision of Bangladesh's economic outlook from negative to stable contributed to the recovery.

The market had remained under strong selling pressure early in the week amid heightened tensions in the Middle East and concerns over energy supplies. However, buying interest strengthened from the middle of the week following the regulatory meeting and reports of better gas availability, extending the recovery for three consecutive sessions.

The banking sector played a notable role in supporting the benchmark, with BRAC Bank, Pubali Bank, IFIC Bank and Dutch-Bangla Bank among the major index contributors. LafargeHolcim Bangladesh also helped lift the index.

Investors were most active in textile stocks, which accounted for 25.7% of total turnover, followed by general insurance at 15.6% and banks at 11.1%. Sectoral performance was mixed. Cement led the gainers with a 1.7% rise, followed by general insurance at 1.5% and banking stocks at 1.1%.

On the other hand, life insurance declined 1.3%, while miscellaneous and mutual fund sectors each fell 1.2%.

Envoy Textile topped the weekly turnover chart, followed by Sharp Industries, Saiham Textile, Eastern Bank and Paramount Textile, reflecting strong trading interest in textile and banking counters.

Al-Haj Textile emerged as the biggest gainer, soaring 20.6% over the week. Bangladesh National Insurance gained 18.4%, Information Services Network 17.5%, Meghna PET 16.4% and Apex Spinning 10%.

BD Thai Food was the biggest loser, falling 15.9%, followed by Saif Powertec with a 10.3% decline, Fareast Life Insurance 10.1%, CAPM BDBL Mutual Fund 8.9% and Midas Finance 7.8%.

The government is considering issuing licences for digital banks soon, as digital banking is expected to become part of Bangladesh's digital economy and financial inclusion agenda, Finance Minister Amir Khosru Mahmud Chowdhury said today (19 September).

"Digital banking is going to happen very soon. I have no doubt about it because this is very much part of our digital economy and financial inclusion," he said while speaking at a dialogue titled "Financial Inclusion: Policy Goals, Transactions Ecology and Sustainable Roadmap", organised by the Power and Participation Research Centre (PPRC) at a hotel in the capital.

The minister said digital banking should be rolled out gradually, with particular attention to cybersecurity, digital infrastructure and the integration of credit information.

He also said digital banking should not be treated as a standalone service but as part of a wider financial ecosystem covering reliable internet connectivity, digital payments, financial services and access to formal banking.

He further said strong digital infrastructure was needed before expanding digital financial services.

Digital banking could widen access

Amir Khosru said the new system could bring people currently outside the formal financial system into banking, particularly low-income households, farmers and other underserved groups.

He cited government-backed payment programmes as an example, saying regular digital transactions could encourage people without bank accounts to enter the formal financial system.

Many Family Card beneficiaries, particularly housewives, do not have bank accounts, he said. Regular payments through formal channels could encourage them to open accounts.

A similar process was taking place among farmers receiving payments through the Farmer Card, he added.

"Once people receive payments through a formal system, they have an incentive to enter the banking system," he said.

Stakeholders flag Bangla QR misuse

Participants at the dialogue raised concerns over the removal of the minimum merchant discount rate (MDR) and interchange reimbursement fee (IRF), saying the move had disrupted the business model of mobile financial service (MFS) providers.

They called for stronger regulatory monitoring of Bangla QR, alleging that some agents were diverting MFS funds into bank accounts to take advantage of the zero-fee payment facility.

MDR is a fee paid by merchants to banks and payment service providers for processing digital transactions.

IRF is an interbank service charge paid by the institution providing Bangla QR to the institution whose app is used to complete a payment.

Industry experts warned that if MDR and IRF remain at zero, MFS providers may eventually seek to recover their costs through other charges, including cash-in fees, which could undermine financial inclusion.

'Bangla QR must be embraced, but abuse prevented'

Former Bangladesh Bank governor Ahsan H Mansur said Bangla QR was an important initiative but required safeguards to prevent misuse.

"Bangla QR is something we have to embrace, but at the same time we have to prevent its abuse," he said.

He said addressing the challenges would require several measures rather than a single solution.

"There's no single solution to this issue. It has to be addressed piece by piece," he said.

Mansur said that during his tenure, local governments had been instructed to require businesses seeking new or renewed trade licences to have a Bangla QR facility.

He also highlighted the importance of maintaining a single national QR standard accessible to all institutions and customers.

However, he said this raised the question of whether customers should be required to have smartphones to use the system.

Mansur also said the digital bank initiative had stalled.

"Everything was done during my time. The list was prepared, the criteria were identified, and the process was laid out. But since then, it has never moved forward," he added.

PPRC seeks sustainable roadmap

PPRC Executive Chairman Hossain Zillur Rahman said Bangladesh needed a sustainable roadmap for implementing Bangla QR, incorporating the views of all relevant stakeholders.

He said building a functional digital financial ecosystem required coordinated action across multiple areas and that stakeholders were prepared to contribute to the process.

"The system has to match through a sustainable roadmap approach. It requires a much, much bigger discussion," he added.

Around 5,000 workers at Chattogram Port's General Cargo Berth (GCB) are facing sharp income losses as container traffic allocated to six private berth operators has remained about 40% below indicative tender volumes, the operators said.

They have sought an urgent review of cargo allocation, saying the prolonged decline in workload has left many workers idle while operators continue to bear fixed costs for wages, equipment and maintenance.

The six operators are FQ Khan and Brothers at Jetty 6, Fazlisons at Jetty 9, Bashir Ahmed and Company at Jetty 10, A & J Traders at Jetty 11, Everest Port Services at Jetty 12 and MH Chowdhury at Jetty 13.

In separate letters to the Chittagong Port Authority (CPA) on 14 September, the operators said actual container allocation remained substantially below the indicative volumes used to assess their five-year contracts, making operations financially difficult to sustain.

"Only 800 workers are permanent in GCB berths. More than 5,000 workers are productivity-based. Here, no vessel means no work and no pay," Taslim Uddin Selim, general secretary of Chattogram Dock Jatiyatabadi Sramik Dal, told The Business Standard.

"As a result, most of the workers remain idle when there is no vessel to handle at the berths. It becomes very difficult for them to earn bread and butter for their families when the number of vessels falls," he said.

Fazle Ekram Chowdhury, managing director of Fazlisons and president of the Bangladesh Berth Operator Association, said the decline in vessel allocation had directly affected workers whose earnings depend on port operations.

"Almost half of the people remain idle when the number of ships falls. Their income has fallen completely," he told TBS.

He said operators continued to retain some workers and pay minimum wages even when there was insufficient work.
Infographics: TBS
Infographics: TBS

Tk25,000 welfare payment

Fazle Ekram questioned whether the Tk25,000 welfare payment provided to registered port workers could compensate for income losses caused by reduced workload.

He said workers could have earned that amount in a month or two if vessel handling had remained at normal levels, while the welfare payment is made only once a year.

"If a worker's duty had increased, they could have earned Tk25,000 more in a month or two months. Giving Tk25,000 once a year cannot compensate for that loss," he said.

He also warned that continued pressure on workers could lead to dissatisfaction.

"If the port authority thinks Tk25,000 can suppress workers' dissatisfaction, that would be a wrong expectation. If the situation explodes, it will not remain within my control," he said.

40% gap in cargo allocation

The operators said their financial commitments were based on the indicative container volumes included in the tender documents.

Fazlisons said it handled 437,596 boxes between October 2022 and August 2026 against an indicative benchmark of 721,356 boxes for the same period, leaving a shortfall of 283,760 boxes.

The operator handled 60.7% of the indicative volume and estimated that the shortfall had left around Tk8.61 crore in fixed operational costs unrecovered.

Fazlisons was awarded the contract in September 2022 after quoting Tk76.91 crore. The agreement for operating Lot 2, Berth 9 at GCB was signed on 25 September that year.

The tender estimated a five-year volume of 920,875 boxes, or around 15,348 boxes a month, according to the company.

Fazlisons said it did not consider the tender volume a guaranteed minimum, but argued that the projection was a key basis for determining manpower, equipment, investment and pricing when it submitted its bid.

The company currently incurs around Tk46.36 lakh in fixed monthly expenses for manpower, equipment, maintenance, insurance and other operational costs, it said.

NCT, CCT handle more containers

The operators have also questioned the distribution of container vessels among GCB, New Mooring Container Terminal (NCT) and Chattogram Container Terminal (CCT).

They cited July 2026 data showing NCT handled 126,722 boxes and CCT 46,029, while Fazlisons handled 7,963 boxes at its GCB berth.

Fazlisons acknowledged that the contractual scopes of the three terminals are different, but said the disparity warrants a transparent review of vessel and cargo allocation.

The company referred to a CPA board decision of 28 March 2023 that called for reasonable allocation of vessels among CCT, NCT and GCB if the number of container vessels calling at Chattogram Port was insufficient.

The operators said their association had repeatedly raised the issue with the CPA through representations submitted in February 2023, February and December 2024, December 2025 and January 2026.

Operators seek review, not rate hike

The operators said they would prefer increased vessel and cargo allocation over a higher handling rate.

"If sufficient container vessels can reasonably and safely be allocated to GCB, we would much prefer to earn our revenue by performing the work rather than seeking any financial adjustment," Fazle Ekram said.

He claimed turnaround times at NCT, CCT and GCB were broadly comparable and alleged that GCB had not received what operators consider a reasonable share of container traffic.

The operators have asked the CPA to provide or jointly review vessel-wise and operator-wise allocation data and sought a contractual review under the General Conditions of Contract and relevant provisions of the Public Procurement Act and Rules.

They said they were not seeking automatic compensation or a rate increase because of lower traffic, instead proposing measures including contractual variation, adjustment of operational obligations, or rationalisation of fixed manpower and equipment requirements if the CPA cannot ensure a reasonable workload.

Fazlisons proposed a review involving the CPA's traffic, terminal, procurement, finance and legal departments and said it was ready to submit records of operational costs, manpower, equipment, insurance and bank liabilities.

Fazle Ekram also said local operators had proposed an investment plan worth around Tk700 crore to improve GCB facilities but had received no response from the CPA or the Ministry of Shipping.

He alleged that foreign companies were receiving faster responses from the authorities while local investors were being ignored.

The operators have urged the CPA to take an early decision, saying the continued decline in workload is putting their businesses and thousands of workers' livelihoods under pressure.

No response from CPA

The Business Standard contacted CPA Director (Traffic) Golam Md Sarwarul Islam by phone for comments, but he did not answer.

The CPA secretary was later contacted and sent specific questions on the issues raised by the berth operators. Although he assured TBS that he would respond, he neither provided answers nor returned the call.

The US and China are discussing a plan to reduce or eliminate China's tariffs on American LNG as part of a broader package of energy and agriculture agreements that could be announced when Chinese President Xi Jinping visits Washington next week, according to two people briefed on the discussions.

The potential relief on US exports of liquefied natural gas is being discussed alongside a broader framework under which the US and China would each cut tariffs on about $30 billion of goods, the people said.

China imposed a 15 percent tariff on US LNG in February 2025 in retaliation for President Donald Trump's duties on Chinese goods. That effectively halted the US-China LNG trade, with the last significant cargoes arriving early that year.

American LNG producers are seeking new markets to absorb a wave of new export capacity being built along the US Gulf Coast, with years of trade tensions with China having made one of the world's biggest LNG markets less accessible.

The discussions are part of efforts to stabilize trade ties ahead of a September 24 meeting between Trump and Xi and are not final, the people said. Neither the White House nor the Chinese embassy in Washington responded to requests for comment.

The American LNG industry is entering a major expansion phase, with export capacity set to grow by roughly 10 billion cubic feet per day through 2027 as new and expanded facilities ramp up, with projects involving Cheniere Energy, Venture Global, Sempra, NextDecade and Exxon Mobil among those adding capacity.

The return of Chinese buyers would give US producers another major destination for their gas just as geopolitical upheaval is reshaping global energy flows, potentially helping underpin demand for projects now under construction and those seeking financing and long-term customers.

Of the almost 100 million metric tons of LNG capacity under construction in the US, 24.5 million metric tons have not yet been contracted to long-term customers, according to industry estimates and Reuters analysis.

GLOBAL LNG FLOWS

After Russia's 2022 invasion of Ukraine disrupted Europe's access to Russian pipeline gas, US LNG cargoes that might otherwise have gone to Asia were increasingly drawn to Europe.

The ongoing conflict in the Middle East between the US and Iran, meanwhile, has created another shift in global energy flows, with disruptions to supplies increasing competition for LNG cargoes in Asia.

China is the world's largest LNG importer and the US is the world's largest LNG exporter, giving the two countries an economic incentive to restore a trade relationship that was rapidly expanding before the tariff dispute.

US LNG exports to China fell from 64 vessels in 2024 to effectively zero in 2025 after Beijing imposed the tariff, according to US government data.

In 2021, the number had reached a record 131 vessels, reflecting the rapid growth of the US LNG trade with China after large-scale exports from the Lower 48 states began in 2016.

US LNG shipments to China fell to just two vessels in 2019 during Trump's first-term trade dispute with Beijing, before rebounding sharply in 2020 and 2021.

In recent months, several US cargoes that left Gulf Coast export terminals have arrived in China or are headed there, according to LSEG shipping data, suggesting Chinese buyers had started to return to the US market even as the tariff remained in place.

US LNG exports averaged 17.4 bcf/d in the first half of 2026, up 23 percent from a year earlier, according to the Energy Information Administration.

Implementation of international best practice of accounting, IFRS 9, in the banking sector would be challenging amid the huge non-performing loans and the sector’s current state, according to investment experts.

Although countries like Pakistan, Nepal and Sri Lanka have already implemented IFRS 9 — a move from provisioning based on incurred losses to forward-looking expected credit losses before default — it is difficult for Bangladesh as many banks are already struggling, according to the CFA Society Bangladesh.

The association of chartered financial analysts (CFAs) presented the findings at an event on financial analysis of the banking sector organised by the CFA Society Bangladesh and the Capital Market Journalists’ Forum (CMJF) today at the CMJF auditorium in the capital.

Syed Mahbubur Rahman, a former chairman of the Association of Bankers, Bangladesh (ABB), said it is essential to assess the actual risk of bank loans and maintain adequate provisions in line with international standards.

However, implementing IFRS 9 could pose “a major challenge” for banks under pressure from high non-performing loans and capital shortages.

Therefore, while adhering to international standards, IFRS 9 should be implemented gradually, taking into account the current realities of the country’s banking sector, he said while speaking at the event as the chief guest.

Bangladesh is going to follow IFRS 9 in banking accounts partly on a pilot basis in the current year. Full application for credit will be implemented from 2028.

Referring to the fact that non-performing loans in the banking sector have exceeded 32 percent, Rahman, also managing director and CEO of Mutual Trust Bank, said such a high level of bad loans is putting pressure on banks’ earnings, provisioning and capital.

To restore the capacity of banks, liquidity, capital, lending and non-performing loans must all be considered together. Banks need to be made effective not merely as deposit-taking institutions but as the primary channel for financing productive sectors of the economy.

He said reforms in the banking sector should be undertaken gradually, taking into account the realities on the ground. A sudden major change could put pressure not only on banks but also on depositors and businesses.

Minhaz Zia, chairman of North Star Investments, proposed that at least 50 percent of the boards of commercial banks should comprise independent directors to improve the banking sector. He also said that no member of a bank’s board of directors should be allowed to sit on its credit committee.

Loan approvals should be handled by a completely independent credit team, while an internal control committee comprising only independent directors should oversee internal controls.

He also stressed the need to modernise the bankruptcy law, or Bankruptcy Act.

At the event, Mahtab Osmani, president of the CFA Society, and Md Munir Hossain, president of the CMJF, also spoke.

Md Iqbal Hossain, chief financial officer of Sonali Bank PLC; Sakib Chowdhury, head of research at UCB Stock Brokerage, and S M Galibur Rahman, head of research at Shanta Securities, gave presentations.

In the presentations, they said banks in Bangladesh will need at least Tk 2,000 crore in paid-up capital to be eligible to pay cash dividends, although this is an uncommon practice in any neighbouring country.

A comparison with other South Asian and Asian banking systems also shows that many jurisdictions principally use risk-based capital, asset quality, distributable earnings and regulatory compliance when determining whether banks can distribute dividends.

The analysis illustrates the distinction by comparing BRAC Bank and National Bank. As of June 30, 2026, National Bank had about 41 percent more paid-up capital than BRAC Bank. Yet National Bank’s shareholders’ equity, excluding non-controlling interests, was negative Tk 46.7 billion, while BRAC Bank’s stood at positive Tk 113.1 billion.

The securities regulator will adopt the pure Dutch Auction Method for market-based valuation of primary shares, replacing the existing mechanism under the book-building method.

Under the current system, 40 per cent of shares are allotted to eligible investors (EIs) at the cut-off price, even if many of them have bid above that price. The new valuation mechanism will require EIs to receive shares at their respective bidding prices.

"The existing method of share allotment does not reflect fair valuation of shares. That's why the provision will be scrapped to help facilitate careful bidding by EIs," said Masud Khan, chairman of the securities regulator.

Under the book-building method presently followed, bids are opened with a 25 per cent price band on the indicative price of the shares of a company that is in the process of going public.

That means institutional bidders can quote prices within 25 per cent below or above the indicative price approved by the regulator.

Take, for example, Tk 100 as the indicative price. Bidders would then be allowed to bid between Tk 75 and Tk 125 for the shares of the company seeking to get listed. During the bidding process, if the 40 per cent quota for EIs gets exhausted at Tk 75, all EIs will receive shares at the cut-off price of Tk 75, even if many bidders have quoted prices above the cut-off price, up to Tk 125.

According to the changed rules that the securities regulator seeks to put in place, EIs will receive shares based on their own valuation of the company that is going to be listed.

The present system is also called the Dutch Auction Method, but it will be replaced by the pure Dutch Auction Method, said Mahmud-Ur-Rashid, chief business officer at Shanta Equity.

"The provision of receiving shares at their own bidding prices will compel eligible investors to think 10 times before quoting a price in the bidding," Mr Mahmud said. The existing system has allowed EIs to overvalue shares.

EIs will bid responsibly to avoid losses under the revised share valuation mechanism, which will rule out the possibility of unjustified prices.

Currently, a company is required to offload at least 10 per cent of shares compared to its paid-up capital. It has to hold a roadshow and receive valuations from at least 45 EIs — 15 from portfolio managers, 15 from stock dealers and 15 from asset managers — which proves to be a challenging task before fixing the indicative price.

The Bangladesh Securities and Exchange Commission (BSEC) has considered scrapping the mandatory provision of collecting valuations from EIs.

A new provision will be incorporated, allowing the issue manager and the issuer company to set an indicative price, supported by absolute and relative valuation as mentioned in the public issue rules. The indicative price will be verified by the stock exchanges and the securities regulator. If the price is accepted by the regulator, bidding will occur within a 25 per cent price band on the approved price.

The company will need to hold roadshows to present its financial position and projections. EIs will receive shares at the prices they have bid, while general investors will get shares at the cut-off price.

Another major change to be brought to the public issue rules is a mandatory "extended audit" for companies seeking to go public. This audit will have to be conducted by independent auditors based on terms of reference (ToR) set by the securities regulator.

BSEC officials said such an audit would significantly reduce IPO processing time.

The stock exchanges and the securities regulator will no longer verify the authenticity of the submitted papers after an extended audit of the issuer. They will simply focus on checking whether the company's valuation and overall condition are appropriate for listing.

The Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025 came into effect in December last year after an amendment to the Public Issue Rules, 2015. The amendment was executed by the previous securities commission.

However, no company has been listed under the 2025 rules.

In fact, the market has seen no issue since the approval of the IPO proposal of Techno Drugs in March 2024.

The securities regulator has allowed Central Depository Bangladesh Ltd. (CDBL) to work as the custodian of mutual funds (MFs).

To this effect, the depository authority this week received a consent letter from the Bangladesh Securities and Exchange Commission (BSEC). CDBL's Managing Director Md. Abdul Mutaleb confirmed this to the FE.

To expand its portfolio, the depository authority, which so far has provided only depository services, applied for a licence to work as the custodian of MFs.

The development comes at a time when MF custodians are facing heavy criticism for their failure to prevent scams in fund management.

Mr Mutaleb said they would exercise professionalism in securing the interests of unitholders of pooled funds.

"Some asset management companies have talked to us to engage us as the custodian of their funds," he said.

As per the latest rules for MFs, an organisation will not be allowed to play more than one role in the management of MFs.

Some organisations, including the Investment Corporation of Bangladesh (ICB), are working both as trustee and custodian. They will have to reduce their responsibility in those funds. CDBL is expecting to take over the charge.

Meanwhile, CDBL's operating profit has endured a sharp decline, a reason why the company seeks to expand its portfolio through custodianship of MFs.

The company receives Tk 25 for every settlement of listed securities worth Tk 0.1 million. The lower the daily transactions in the capital market, the lower CDBL's earnings from securities settlements.

Moreover, income from the maintenance of each BO (beneficiary owner's) account has been reduced to Tk 50 from Tk 100. As a result, the company's annual income from BO account maintenance fell to Tk 70 million in FY25 from more than Tk 130 million the previous year.

Consequently, CDBL's operating profit eroded by more than 17 per cent year-on-year to Tk 522 million in FY25, prompting the company to explore a new line of operation to recover lost income.

Under the revised rules, a custodian's role includes safekeeping funds' assets, maintaining accounts of unitholders and funds, and managing bank transactions.

CDBL was incorporated in August 2000, sponsored by the country's nationalised commercial banks, the Investment Corporation of Bangladesh (ICB), private commercial banks (PCBs), and the Dhaka and Chittagong stock exchanges, among others, in collaboration with the Asian Development Bank (ADB).

CDBL officials said the securities regulator wanted them to take on the new role due to a lack of efficient custodians.

Custodians' efficiency has been questioned after funds worth Tk 2.07 billion were embezzled from three open-ended funds managed by Universal Financial Solutions (UFS) without any resistance from the custodian, the Investment Corporation of Bangladesh (ICB).

UFS Managing Director Syed Hamza Alamgir left for Dubai in October 2022 with the money.

Custodians have said that the previous rules defining their role did not enable them to secure investors' interests in pooled funds.

At the end of last year, BRAC Bank, which serves as custodian for more than 60 MFs, expressed its intention to withdraw its custodianship from a large number of funds, saying the role lacked adequate authority in fund management.

At the time, a custodian's role was limited to ensuring the protection of assets purchased by asset management companies (AMCs), while cash funds and transactions remained under the control of asset managers.

The revised MF rules, which came into effect in November last year, empowered custodians to oversee bank transactions.

The MF industry comprises 68 licensed AMCs, 136 mutual funds, nine trustees, and nine custodians. The number of custodians will now rise to 10 following the regulatory approval granted to CDBL.

The National Board of Revenue (NBR) has moved to subscribe to internationally -recognised commodity databases to reduce long-standing disputes between importers and customs officials over the valuation of imported goods.

The customs authority is considering subscriptions to databases such as S&P Global Platts, the London Metal Exchange (LME), Shanghai Metals Market (SMM) and Independent Commodity Intelligence Services (ICIS).

At a recent meeting at Chattogram Customs House, chaired by Finance Minister Amir Khosru Mahmud Chowdhury, the authorities decided to subscribe to at least one international database by this month, according to the meeting minutes obtained by the Financial Express.

A committee of the NBR's customs wing was formed to assess the pros and cons of subscribing to such databases. The committee has recommended subscribing to the S&P Global Platts in the first phase.

S&P Global Platts is a leading independent provider of information and benchmark prices for commodity and energy markets. Since 1909, Platts has provided information and insights to help clients make sound trading and business decisions and enable markets to operate with transparency and efficiency.

Trade economist Dr Zaidi Sattar, chairman of the Policy Research Institute (PRI), said arbitrary valuation should be stopped immediately by incorporating artificial intelligence into the ASYCUDA World system.

Subscription to global databases would also help minimise the hassles faced by importers, he said.

The databases could be linked to the existing ASYCUDA system, developed under the United Nations Conference on Trade and Development (UNCTAD), to improve automated valuation, Dr Sattar added.

He said Bangladesh is currently utilising only around 25 per cent of the system's capacity.

The complex tariff regime has been allowed to continue, creating scope for underhand dealings at the import stage, Dr Sattar said, stressing the need for greater automation.

Officials said customs would accept the valuation data submitted by importers until the database system becomes fully operational. The decision was also taken at the meeting chaired by the finance minister.

Currently, the NBR does not subscribe to international databases that can be used to cross-check the declared values of imported goods.

Md Fazlul Huq, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said subscribing to one or two databases would not be sufficient unless the NBR also ensures access to databases covering major import markets.

Products bought from different markets can have different prices and varying quality, he argued.

Citing a recent import for a new production unit, Fazlul Huq said 100 per cent polyester fabric was imported at $2.35 per unit, while customs assessed its value at $4.0.

The same product, however, may be priced at $4.0 in some countries, he said, adding that country-specific sources and databases should therefore also be included to reduce disputes over valuation.

Importers have long complained that customs officials often question the values declared in invoices and other documents and impose higher assessed or preset values for calculating duties and taxes.

Despite several assurances and directives from senior NBR officials, importers say the practice of disputed or arbitrary valuation persists at customs houses.

Chittagong Chamber of Commerce and Industry (CCCI) President Amirul Huq told the meeting that customs officials often assess imported goods at values higher than their purchase or invoice prices.

"For plastic chips imports, the actual purchase value and invoice value was $8,000-9,000 per tonne, but customs assess it at $12,000 to fix payable duties and taxes," he said, sharing his experience.

At the meeting, Chattogram Customs Commissioner Md Mahbubur Rahman said importers who submit purchase data from global platforms along with their invoice values are considered to have provided correct information.

For some imported goods, however, customs needs to verify the values against international databases, but it currently does not subscribe to those platforms, he said.

Bangladesh is set to join the global nuclear-power community with the first unit of the Rooppur Nuclear Power Plant now moving into commissioning. The Russian-built VVER-1200 reactor is designed to produce 1,200MW of gross capacity, while the two-unit plant will eventually have 2,400MW.

Where does Bangladesh rank? It does not yet have a meaningful ranking among nuclear-power producers because Rooppur has only just entered commissioning and has not established a record of commercial electricity generation. Once operational, Bangladesh will join the group of 31 countries that currently operate nuclear power reactors.

The latest IAEA (International Atomic Energy Agency) statistics list 417 reactors operating in those 31 countries, with total net capacity of about 380GW, according to pris-stats.iaea.org.

The leading nuclear-power countries are very different in scale. The United States has more than 90 operating reactors, France more than 50, China more than 50, Russia more than 30, South Korea more than 25 and India more than 20, according to the IAEA's reactor database. Bangladesh will begin with two reactors.

The nuclear map is nevertheless expanding. According to the World Nuclear Association, about 35 countries are considering, planning or starting nuclear power programmes, and a further 20 or so countries have at some point expressed an interest in doing so.

The World Nuclear Association currently counts about 80 reactors under construction and another 120 planned worldwide.
Is nuclear power expensive?

Yes — but the answer depends on which cost is being discussed. Nuclear power requires exceptionally high upfront investment. The IEA says nuclear projects are difficult to finance because of their scale, capital intensity, long construction periods and technical complexity. Delays and cost overruns can substantially increase financing costs.

Rooppur's original contract with Russia was worth $12.65 billion, including the first few years' nuclear fuel, with Russia financing 90% through a state loan. Bangladesh was responsible for the remaining 10%.

But the project's cost has since increased. In January 2026, the government approved an additional Tk255.92 billion, taking the project's approved cost from about Tk1.14 trillion to Tk1.39 trillion. The increase is being financed through additional project loans.

Nuclear projects require sophisticated safety systems, specialised buildings and equipment, emergency-response arrangements, trained personnel, security systems, regulatory institutions, radioactive-waste management and, eventually, decommissioning. The World Nuclear Association says these costs should be included when assessing the lifetime cost of nuclear electricity.

Some safety expenditure is visible separately in Bangladesh. For example, the physical-protection system for Rooppur was contracted at about $287.5 million, and TBS reported that this was outside the main project expenditure.

Safety, therefore, is not simply an additional "cost" that can be minimised. It is a fundamental part of a nuclear programme. The World Bank says a credible nuclear programme requires a strong legal and regulatory framework, an independent regulator, skilled personnel, emergency preparedness, long-term waste-management arrangements and robust safety and security systems.

The IAEA's 2025 safety review of Rooppur found good practices, including simulator-based staff training, but also recommended improvements in fire safety, operational supervision and equipment preservation before operation.

The economic attraction of nuclear power comes later: once the plant is built, fuel and other variable operating costs are relatively low and stable. Thus, nuclear is essentially a trade-off between very high upfront capital and financing costs and potentially decades of relatively stable, large-scale electricity generation.

For Bangladesh, the real test therefore begins after the inauguration: whether Rooppur can operate safely, reliably and at high utilisation for decades, while the country manages its debt obligations, nuclear regulation, waste, decommissioning and the substantial institutional infrastructure that a nuclear-power programme requires.

Merging weak banks with other lenders alone will not resolve the ongoing crisis in the banking sector, said Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank.

The full extent of this sector's financial distress has yet to emerge, as non-performing loans, capital shortages, provisioning requirements, liquidity pressures and governance weaknesses need to be addressed simultaneously, he said.

"Giving fresh capital or merging a bank does not automatically make a weak bank sustainable," he said at a discussion, "Financial Condition of the Banking Sector", jointly organised by the Capital Market Journalists Forum and CFA Society Bangladesh in Dhaka today (19 September).

Mahbubur, former chairman of the Association of Bankers, Bangladesh (ABB), said the volume of non-performing loans in the banking sector was around Tk28,000 crore in 2008 but has now exceeded Tk600,000 crore, accounting for more than 32% of total loans.

Many rescheduled loans could also become classified again in the future, he warned.

According to a CFA Society Bangladesh analysis based on Bangladesh Bank data, the banking sector's NPL ratio stood at 32.8% in June 2026. As of December 2025, the top five banks accounted for 51.87% of total NPLs, while the top 10 accounted for 73.63%.

Mahbubur said implementing International Financial Reporting Standard (IFRS) 9 could provide a clearer picture of banks' credit risks and provisioning requirements, potentially putting additional pressure on the capital positions of some banks.

"There is no such thing as giving Tk50,000 crore today and fixing a bank tomorrow," he said.

On the government's initiative to merge five weak banks, he said a merger between a strong bank and a weak or specialised bank could create operational synergies, but merging one weak bank with another weak bank may not deliver the expected benefits.

After a merger, overlapping branches, employees and management structures need to be reduced to lower operating costs and improve efficiency, he said, adding that simply changing ownership or the name of a bank while retaining the existing structure would not deliver the real benefits of consolidation.

The CFA Society analysis showed that deposits grew 10.74% in June 2026, while private-sector credit increased only 4.47%. Meanwhile, banks' investments increased 30.3%. In 2025, investment in government securities reached 14.1% of total banking-sector assets.

Mahbubur said the rise in investment in government securities while loans and advances were declining at many banks could generate income in the short term, but could not replace banks' core business.

"The core business of a bank is to lend and take deposits. Therefore, a decline in net interest income is a bad sign for banks and the banking industry as a whole," he said.

The sector's net operating profit increased 116% to Tk32,108 crore in 2025, but provisioning against bad loans rose to Tk249,600 crore.

The sector's overall capital adequacy ratio also fell to negative 2.64% at the end of 2025, against the regulatory minimum of 10%. However, 42 banks met the requirement, representing 60.51% of total sector assets.

Mahbubur said banks need to increase low-cost deposits, particularly CASA, and use technology to reduce operating costs. Rather than indiscriminate layoffs, banks should improve productivity through technology and efficiency.

He said stronger governance, accurate assessment of banks' financial condition, adequate provisioning and compliance with international accounting standards are essential for restoring stability.

"To make the banking sector sustainable, we need more than mergers. We need targeted restructuring where necessary and structural reforms across the sector," he said.

Over the last couple of years, businesses have raised concerns over high interest rates on loans and urged the Bangladesh Bank (BB) to cut its policy rates to reduce the cost of funds.

The central bank cut its policy rate by 0.5 percentage points to 9.5 percent, effective from August.

Offering the rationale for the cut, BB said tight monetary policy, in place since the first half of fiscal year 2023-24, was doing more harm than good to Bangladesh’s economic recovery while controlling prices.

The impact of the policy rate cut is yet to become clearly visible. However, overall interest rates had begun to decline months before the move.

Data show the weighted average interest rates on deposits and advances rose to 6.42 percent and 12.16 percent respectively in September 2025, the highest levels in at least three years.

Since then, interest rates have gradually fallen. In July, the weighted average deposit and lending rates were 6.21 percent and 11.81 percent respectively.

Yields on treasury bills and bonds, as well as call money rates, also declined in June 2026 from a year earlier, reflecting easing liquidity in the banking sector, the key source of finance in Bangladesh.

Nevertheless, the private sector appears to remain indifferent.

Credit growth to the private sector has remained sluggish, growing by 4.47 percent in June this year, the lowest in 33 years. In July, credit growth picked up slightly to 4.62 percent, still well below BB’s target of 6.8 percent by December this year.

But why is the private sector not borrowing money?

Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI), said falling interest rates alone cannot revive private-sector borrowing without restoring investor confidence and operational viability.

“The reason behind lower interest rates is to encourage borrowing, but businesses will invest only when they see sufficient demand, stable conditions, and a reasonable return on investment,” he said.

Taskeen, who has been vocal about bringing down the high cost of borrowing, said cheaper credit looks attractive on paper, but entrepreneurs cannot commit capital when high operating costs and weak consumer demand are squeezing profit margins.

“In addition to this, persistent gas and electricity shortages continue to idle factory capacity, while banking sector turmoil, high NPLs, political transition anxieties, and global geopolitical conflicts have severely shaken business sentiment. As a consequence, businesses have shifted into cash-preservation mode,” he said.

Asif Ibrahim, vice-chairman of Newage Group and treasury chief of a private bank, echoed the view.

Beyond interest rates, he said, businesses are concerned about energy shortages, geopolitical turmoil, rising fuel costs and the risk of supply-chain disruptions.

“Many businesses are reluctant to take fresh loans because they are uncertain about future demand, energy supplies and the overall economic outlook. Businesses are not confident that they will be able to generate enough returns from new investment to cover the cost of borrowing,” he said.

At the same time, banks are becoming more cautious about extending fresh credit as non-performing loans rise and vulnerabilities in the financial sector deepen.

The decline in interest rates may itself partly reflect subdued credit demand, according to Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh. When businesses are reluctant to borrow, banks have less incentive to compete aggressively for deposits.

“Falling interest rates should therefore not automatically be interpreted as evidence of improving economic conditions. Although lower rates can ease financing costs for existing borrowers, persistently weak investment risks slowing job creation, productivity growth and economic recovery,” said the economist.

“Cheaper loans cannot compensate for uncertainty about reliable energy supplies, market access and future returns. This is fundamentally a problem of business confidence and structural weaknesses in the investment climate,” he added.

Reviving investment requires reliable energy, greater political and policy predictability, and credible reforms to improve the business environment, not simply cheaper credit, he said.

Deen Islam, professor of economics at Dhaka University, said the bigger concern is what the low credit growth says about investment sentiment.

“If businesses continue to hold back, lower interest rates by themselves will not generate much new investment. Weak borrowing will eventually mean slower expansion of productive capacity, fewer new jobs and weaker productivity growth,” he said.

So, he said, the policy challenge is not simply to make credit cheaper. Businesses also need to feel confident that demand will recover, energy will be available, the exchange rate and regulatory environment will be reasonably predictable, and the banking system will remain stable.

“In that sense, the current situation seems to be less about the price of money and more about whether firms believe that investing now will actually pay off,” added the professor.

Birupaksha Paul, professor of economics at the State University of New York at Cortland, said businesses are reluctant to borrow because borrowing costs remain high while economic growth is weak, making new investment less attractive.

He said many mills and factories are also concerned about political exclusion, which is undermining business and investment confidence.

Unlike the ruling BNP’s previous terms in office in 1991 and 2001, when businesses had greater clarity about the political environment, the current government’s political strategy appears less clear, he added.

Without greater political inclusivity and clarity, he said, businesses are unlikely to regain the confidence needed to increase investment.

DCCI’s Taskeen, meanwhile, said the biggest concern is that delayed investment can weaken productive capacity, reducing future exports and job creation. In addition to cheaper loans, sustained reductions in business costs are needed.

“We believe the bigger challenge over the next one to two years will be how to sustain the private-sector investments already in the country, rather than attracting new investment,” he said.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank PLC, said private sector credit demand has weakened as weaker exports, high inflation and an energy crisis continue to constrain businesses.

Speaking at a discussion titled “Business and Beyond” at The Daily Star on September 10, he said Bangladesh was facing a “double whammy” from global and domestic economic shocks.

Global disruptions, including tariff impositions, the Covid-19 pandemic, the Ukraine war and the Middle East crisis, have hurt exports, particularly to the US and European markets, he said.

He said inflation, although easing from double-digit levels, remained high at around 8.26 percent and had reduced consumers’ purchasing power. As a result, many manufacturing plants that once operated at 80 percent capacity were now running at 40 percent or even 30 percent.

“This naturally has an impact. So, the demand for credit lines has also declined,” he said.

Mahbub identified the energy crisis as a bigger constraint on investment than borrowing costs.

The Insurance Development and Regulatory Authority (IDRA) will take stricter measures against non-complying distressed insurance companies, its chairman has said.

“We are prepared to go much further if necessary,” said Mir Nadia Nivin, chairman of IDRA, referring to insurers currently under financial distress.

Its regulatory tools include suspending first-year premium collection, cancelling licences, appointing administrators and, ultimately, liquidating companies, she shared in a recent interview with The Daily Star.

“Sixty percent of the time, I will work as a partner to support the companies, but 40 percent of the time I will act as a regulator,” she said. “If they do not comply with the regulator’s instructions, they cannot be allowed to continue doing business.”
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Fareast Islami Life Insurance Company Limited illustrates the scale of the challenge. The company has outstanding claims of around Tk 3,000 crore, while its recoverable assets could amount to roughly Tk 1,200-Tk 1,300 crore, according to Nadia.

The company’s first-year premium collection has been suspended, preventing it from expanding its business while its existing obligations remain unresolved.

“If you sell a policy knowing that you will not be able to pay the claim, that can amount to fraud,” she said.

Nadia said the regulator’s immediate objective is to use available assets to pay as much as possible, rebuild confidence and then assess whether the company can be turned around.

But resolving the sector’s immediate crisis is only one part of her reform agenda. Her longer-term goal is to transform insurers into a significant institutional investor class.

In developed economies, she said, life insurers invest over long periods because their liabilities themselves are long term. Bangladesh could use the same model to finance infrastructure.

The government appointed Nadia as the chairman of the IDRA for a three-year term in June this year.

A Bangladeshi governance and institutional reform specialist, she served as a member of the Electoral System Reform Commission, established by the interim government in October 2024.

She said Bangladesh’s insurance sector needs deep institutional reform, stronger financial discipline and a fundamental shift in governance if it is to regain public confidence and emerge as a major source of long-term investment.

Nadia said she took charge of IDRA because she believed her reform experience could be applied to a sector facing entrenched irregularities and a severe trust deficit.

Her immediate priority, however, is ensuring that policyholders receive the money they are owed.

Insurance penetration in Bangladesh is only around 0.3 percent and has been declining, she said, reflecting a growing loss of confidence among customers who often do not receive claims on time.

“When I came into this position, I realised that the biggest reason for the sector’s trust deficit is that people are not getting their claims on time,” Nadia said.

IDRA has therefore begun with the most distressed insurers, particularly seven or eight companies with large volumes of unsettled claims. Their owners and management have been brought into governance review meetings, while the regulator has begun examining their assets, liquidity and ability to pay.

Nadia said companies cannot use past management failures as an excuse for avoiding their obligations.

“Under Bangladeshi law, a company is a separate entity. Whatever the previous board did is a different issue. The company remains responsible to its policyholders,” she said.

IDRA has collected information on the assets of the distressed companies, including government bonds, fixed deposits, bank balances and land.

It is also working with Bangladesh Bank to release funds trapped in financially vulnerable banks so that the money can be used for claim settlement.

Land assets are being identified, valued and prepared for sale where necessary.

To prevent funds raised through asset sales, bond liquidation or fixed deposits from being diverted elsewhere, the companies have been instructed to maintain separate bank accounts for claim payments. Auditors have been assigned to monitor those accounts, with regular statements being submitted to IDRA.

Payments are being made on a first-in, first-out basis, with claims verified by auditors.

As part of this, a total of Tk 37.54 crore in insurance claims has been paid to 8,417 policyholders of seven troubled life insurers in two phases under an initiative of IDRA.

In the first phase, Tk 14.51 crore was paid to 2,549 policyholders of BAIRA Life Insurance, Fareast Islami Life Insurance, Golden Life Insurance, Homeland Life Insurance, Padma Islami Life Insurance, Progressive Life Insurance and Sunflower Life Insurance.

In the second phase, Tk 23.03 crore was paid to 5,868 policyholders of Padma Islami Life Insurance, Homeland Life Insurance, Fareast Islami Life Insurance, Sunflower Life Insurance and Sunlife Insurance.

Strengthening the industry will require reforms inside individual companies as well. IDRA is examining life funds, actuarial valuations, paid-up capital, special audits, investment practices and compliance with previous audit recommendations, she said.

One concern is that actuarial valuations may sometimes rely on assumptions that make a company’s financial position appear stronger than it actually is, she added.

Because the actuarial market in Bangladesh is small and potential conflicts of interest exist, IDRA plans to retain an independent third-party actuary, potentially from overseas, to review the basis used by insurers for their valuations, she mentioned.

The authority has also tightened controls over paid-up capital. In coordination with Bangladesh Bank, insurers will no longer be able to withdraw, pledge or otherwise transact against paid-up capital without IDRA’s authority.

Investment practices are another area of scrutiny.

Nadia said insurers need to reduce their exposure to land, with the regulator seeking to bring land investment within the permitted 20 percent threshold. Companies with excess land holdings may be required to liquidate those assets and place the proceeds into appropriate investments.

At the same time, IDRA is trying to improve the quality of company leadership. Several insurers still have interim or acting chief executives and managing directors. The regulator plans to create a broader, pre-vetted pool of candidates rather than limiting recruitment to people with insurance-sector experience, she said.

“We do not believe they necessarily have to come from the insurance sector,” Nadia said. “They can come from banking or other parts of the financial sector.”

Climate risk is another area where she sees scope for innovation.

IDRA is working on parametric insurance products, where payouts are triggered automatically by predefined events rather than requiring conventional claims assessment.

A flood insurance pilot linked to the Jamuna River project has already made payouts of around Tk 14 crore across five districts through mobile financial services, she said.

Crop insurance is also being developed with the Ministry of Agriculture, while a small heat-insurance pilot is being considered with support from the Asian Development Bank.

The regulator plans to use its regulatory sandbox to test innovative products before wider rollout. Ultimately, however, Nadia believes the sector cannot be transformed without better data and stronger supervision.

IDRA’s public dashboard, which previously provided information on claims, lapsed policies and other indicators, has not been regularly updated in recent years.

The authority now plans to restore the dashboard as part of a broader shift towards risk-based supervision, she added. Once the system is fully operational, IDRA should be able to monitor insurers in near real time, including how many claims they are settling.

“Claim settlement will be one of our indicators,” Nadia said. “If claim settlement keeps increasing, we will know that our initiatives are working.”

For her, the broader challenge is to move insurance away from being viewed primarily as a product sold to customers and towards becoming a financially disciplined institution capable of protecting policyholders, supporting the capital market and mobilising long-term funds for the economy.

That will require stricter regulation, but also cooperation from insurers, she added.

Nearly Tk 33 out of every Tk 100 in loans disbursed by the country’s banking sector are now classified as non-performing, meaning that 33 per cent of loans are in default. By the end of June, non-performing loans (NPLs) had risen to more than Tk 600,000 crore (Tk 6 trillion). Even amid such a crisis, 13 private banks stand out as exceptions, with each reporting an NPL ratio of below 5 per cent.

Senior officials of these banks say that disciplined and independent loan approval processes, careful assessment of borrowers’ repayment capacity, and a focus not only on large corporate loans but also on small and medium-sized enterprises (SMEs) and consumer lending have helped keep NPLs under control.

According to the central bank’s latest data as of June, all 13 banks with NPL ratios below 5 per cent are from the private sector. The group includes both newer-generation banks and first-generation banks. The banks are Community Bank, BRAC Bank, Pubali Bank, Citizens Bank, Prime Bank, City Bank, Eastern Bank, Jamuna Bank, Bengal Commercial Bank, NCC Bank, Uttara Bank, Shahjalal Islami Bank, and Shimanto Bank.

According to the International Monetary Fund’s (IMF) Financial Soundness Indicators and the World Bank’s non-performing loan indicators, Bangladesh currently has the highest level of NPLs in the world. Banking-sector stakeholders say that despite Bangladesh having one of the highest levels of loan defaults globally, some banks in the sector continue to maintain good corporate-governance practices. As a result, these banks have strengthened their financial foundations and have also performed better in terms of profitability.

Banks that are ahead on various financial indicators are also seeing their deposits grow at higher rates than those of other banks. At the same time, these banks have relatively lower levels of non-performing loans.

13 banks with low non-performing loans

According to Bangladesh Bank data, Community Bank has the lowest rate of non-performing loans (NPLs) in terms of percentage. The total amount of loans disbursed by this new-generation bank is also relatively low. As of the end of last June, out of the bank's total disbursed loans of Tk 1,633 crore (Tk 16.33 billion), Tk 5 crore (Tk 50 million) was non-performing. This puts the bank's NPL ratio at 0.33 per cent.

BRAC Bank holds the second position, with an NPL ratio of 2.05 per cent. As of last June, the bank's total disbursed loans stood at Tk 75,621 crore (Tk. 756.21 billion) of which Tk 1,548 crore (Tk 15.48 billion) was classified as non-performing. BRAC Bank is currently the top profit-earning institution among locally-owned banks. Recently, BRAC Bank was featured in US magazine Forbes’ list of the world''s top 500 best-performing banks.

When asked, Tareq Refat Ullah Khan, Managing Director (MD) of BRAC Bank, said: "In credit risk management and loan approval, good governance and proper risk assessment are the main tasks. This is the key to maintaining the quality of BRAC Bank's loans. Loans have been extended by assessing borrowers'' repayment capacity in a completely neutral manner without any unethical pressure. As a result, we have been able to keep non-performing loans under control."

Pubali Bank ranks third on the list of banks with the lowest level of non-performing loans (NPLs) in the country. At the end of last June, the bank’s NPL ratio stood at 2.46 per cent. By then, out of the bank’s total outstanding loans of Tk 72,576 crore (Tk 725.76 billion), Tk 1,789 crore (17.89 billion) was classified as non-performing.

Speaking to Prothom Alo, Pubali Bank Managing Director Mohammad Ali said, “No loan at this bank has been granted based on the sole advice or personal recommendation of me or any senior official. Loans are approved through a fully institutional and systematic assessment process. The borrower’s personal or political identity is also not taken into consideration when granting loans.”

Mohammad Ali further said, “Most of the bank’s large loans have been provided to essential business sectors such as food and food products, education, healthcare, housing, and garments. As a result, a relatively small proportion of our loans have become non-performing. We are now increasing our focus on consumer lending.”

Citizens Bank, a new-generation bank that ranks fourth on the list, had an NPL ratio of 2.65 per cent at the end of last June.

Prime Bank ranks fifth. At the end of last June, the bank’s NPLs amounted to Tk 948 crore (Tk9.48 billion), equivalent to 2.74 per cent of its total loans.
Prime Bank is followed by City Bank in sixth place. At the end of last June, City Bank’s non-performing loans (NPLs) amounted to Tk 1,514 crore (Tk 115.14 billion), equivalent to 2.79 per cent of the bank’s total outstanding loans.

Speaking to Prothom Alo, City Bank Managing Director Masrur Arefin said, “City Bank’s independent loan approval process and diversified lending portfolio have enabled us to keep the NPL ratio under control. SME and consumer lending are providing us with significant comfort. Banks that are placing greater emphasis on SME and consumer lending are performing well.”

Eastern Bank ranks seventh in terms of the lowest NPL ratio. At the end of last June, the bank’s NPLs stood at Tk 1,520 crore (Tk 15.20 billion), representing 3.28 per cent of its total outstanding loans.

From eighth to 13th place are, respectively, Jamuna Bank, Bengal Commercial Bank, NCC Bank, Uttara Bank, Shahjalal Islami Bank, and Shimanto Bank. Among them, the NPL ratio was 3.35 per cent at Jamuna Bank, 4.07 percent at Bengal Commercial Bank, 4.19 per cent at NCC Bank, 4.36 per cent at Uttara Bank, 4.82 per cent at Shahjalal Islami Bank, and 4.88 per cent at Shimanto Bank.
72pc of non-performing loans concentrated in 10 banks

According to Bangladesh Bank data, the total amount of non-performing loans (NPLs) in the country’s banking sector stood at Tk 606,555 crore last June. This represented 32.78 per cent of the banks’ total outstanding loans. Of this amount, Tk 439,526 crore in NPLs was concentrated in 10 banks, accounting for 72 per cent of the total non-performing loans.

Islami Bank, a private-sector bank, had the highest amount of NPLs. The bank had NPLs of Tk 98,914 crore, (Tk 989.14 billion) equivalent to 52.15 per cent of its total loans. Janata Bank, a state-owned bank, had the second-highest amount of NPLs, at Tk 75,728 crore (Tk 757.28), representing 75.05 per cent of its total outstanding loans.

The merged banks have the highest NPL ratios. Among them, 97.08 per cent of First Security Islami Bank’s loans, 96.78 per cent of union Bank’s loans, 78.15 per cent of Social Islami Bank’s loans, and 70.81 per cent of EXIM Bank’s loans are currently classified as non-performing.

At National Bank, 65.74 percent of loans are classified as non-performing, compared with 63.38 per cent at IFIC Bank and 56.4 percent at AB Bank. In addition, 43.98 per cent of the loans at state-owned Agrani Bank are now classified as non-performing.

Anis A Khan, former chairman of the Association of Bankers, Bangladesh (ABB) and former managing director of Mutual Trust Bank (MTB), spoke to Prothom Alo about the overall situation regarding non-performing loans in the country’s banking sector. In his view, “Despite the high level of NPLs in the banking sector, the banks that are performing well continue to follow good corporate-governance practices. Even a look at the composition of the boards of directors of these banks shows what they are like.

"Customers now take such factors into consideration when deciding where to deposit their money. At the same time, these banks have skilled bankers working with them. This is why their levels of non-performing loans are lower.”

Bangladesh Bank has removed the term "large industry" from its Tk20,000 crore pre-financing scheme for reopening closed industrial and service-sector businesses, potentially expanding the pool of businesses eligible for the facility.

The central bank's Banking Regulation and Policy Department-1 issued a circular letter today (17 September), amending several provisions of the original circular issued on 4 June and a subsequent circular letter issued on 7 July.

Under the revised directive, references to "large industry" in the earlier circulars will be replaced with "industry", removing the previous qualification from the relevant provisions.

Bangladesh Bank launched the Tk20,000 crore "Closed Industry and Service Sector Support Pre-financing Scheme" in June to help restart businesses that have shut down. Under the scheme, banks can obtain funds from the central bank at 4% interest and lend to customers at a maximum rate of 7%.

The latest circular also clarifies the application window. Subject to the availability of funds, eligible businesses can apply for pre-financing at any time during the scheme's three-year tenure.

Banks receiving funds under the scheme will pay Bangladesh Bank interest at 4%. However, interest payments will begin six months after the pre-financing is received, with the outstanding interest for the first two quarters payable at that point.

For borrowers, the interest rate is capped at 7%. Banks will also start collecting interest six months after disbursing the loan, including the interest accrued during the first two quarters.

The Bangladesh Bank said the revised directive would take effect immediately, allowing eligible businesses to seek the facility throughout the three-year tenure, subject to fund availability.

Current financial year's opening two month's borrowing of Tk 128.72 billion takes government's bank debt to a worrying total of Tk 6.98 trillion, as it turns increasingly to commercial lenders to meet financing needs.

A good sum of the money it borrowed at the outset of the fiscal year 2026-27, however, went for repaying back loans taken from the central bank of Bangladesh.

The government borrowed Tk 128.72 billion from the banking system during July-August while repaid Tk 37.28 billion to the central bank during the same period, according to Bangladesh Bank (BB) data.

The borrowing came from scheduled commercial banks as the government sought to meet development expenditure, social programmes, salaries and other recurrent expenses amid sluggish revenue collection.

Government's debt buildup to Tk 6.98 trillion raises concerns over its growing reliance on domestic bank financing and the potential implications for private-sector credit and investment.

For the current fiscal year, the government has set a target of borrowing Tk 1.12 trillion from the banking system. At the same time, revenue collection has failed to keep pace with the government's expending needs, increasing pressure on its cash position.

People familiar with the developments have said the government demand for cash has increased recently as revenue collection has not achieved the desired growth. At the same time, the government has had to borrow more from the banking sector to meet development expenditure, salaries and allowances, and other operational expenses.

Its excessive dependence on banks for funds could also create a crowding-out effect on credit flow into the private sector. If the government borrows more, a large portion of banks' funds goes to the public sector, potentially reducing the availability of loans for private entrepreneurs seeking to make fresh investment or expand commercial operations.

To reduce pressure from bank borrowing, analysts say, it is necessary to increase revenue collection, improve efficiency in tax administration and ensure greater discipline in government expenditure.

At the same time, strengthening domestic resource mobilisation could reduce dependence on bank borrowing, they add.

Meanwhile, the government is paying down its central bank loans.

Government debt to the central bank dropped by Tk 37.29 billion in the first two months of the fiscal year following recent payback

Excluding this repayment, the government's bank borrowing during the first two months of the current fiscal year stood at Tk 128.72 billion.

The government borrowed this amount through the Ways and Means Advance facility.

Ways and Means Advance is a short-term lending facility provided by the central bank to the government. This facility is used to meet temporary shortfalls or mismatches between the government's daily income and expenditure.

It is not a long-term loan but a temporary mechanism to maintain cash flow. Under the facility, the central bank provides funds to meet government's temporary cash shortage, and the loan generally has to be repaid within 90 days or three months.

When the government borrows from the central bank, it is considered financing through the creation of new money.

Syed Mahbubur Rahman , Managing Director & CEO of Mutual Trust Bank PLC, says government borrowing is a normal part of fiscal financing, but the key concern is its sustainability.

"Bangladesh's tax-to-GDP ratio remains one of the lowest among comparable economies, so strengthening revenue mobilisation has to be a priority. A broader and more efficient tax base would reduce the government's dependence on borrowing and create greater fiscal space for productive investment."

At the same time, the government needs to be very prudent in selecting projects, with greater emphasis on projects that generate economic returns and, where appropriate, sustainable revenue streams, rather than creating long-term fiscal burdens, he has stated.

In the fiscal year 2026, the government's bank borrowing exceeded the revised target by around Tk 220.00 billion, which indicates the extent of the trend. Bangladesh Bank data and recent reports also show that the government's FY26 borrowing exceeded its revised target amid weaker-than-expected revenue collection and higher financing requirements.

According to the latest report of Bangladesh Bank, the government's total outstanding borrowing from the banking system stood at Tk 6.98 trillion as of August. Of this, the government's total outstanding borrowing from the central bank stood at Tk 903.23 billion.

The government's total outstanding borrowing from commercial banks stood at more than Tk 6.08 trillion.

According to the data, the government borrowed over Tk 10.32 billion from non-bank financial institutions during the first two months of the current fiscal year.

At the end of the previous 2025-26 fiscal year, the government's outstanding bank borrowing stood at Tk 6.85 billion. At the end of the preceding 2024-25 fiscal year, the government's bank borrowing stood at over Tk 5.51 billion.

In the previous 2025-26 fiscal year, the government borrowed more than the target.

The government's net borrowing target from the banking sector was Tk 1.04 trillion in fiscal year 2025-26. However, by the end of the fiscal year, the government borrowing from banks stood at Tk 1.35 trillion. Mr Rahman said, "This is particularly important looking ahead. As the investment environment improves and private-sector credit demand recovers, continued heavy government borrowing from the banking system could put pressure on the availability and cost of funds for businesses, creating the potential for crowding out."

External borrowing also needs careful management, given the future foreign-currency repayment obligations. Ultimately, stronger revenue mobilisation, prudent borrowing and disciplined selection of productive projects will be essential to maintain fiscal sustainability while ensuring adequate financing remains available for private-sector growth, the MTB MD added.

Dr Masrur Reaz, chairman of Policy Exchange Bangladesh, says the government's growing reliance on bank borrowing reflects the pressure created by weak revenue mobilisation and a widening financing requirement.

"Borrowing from commercial banks may help the government manage its immediate cash-flow and financing needs, but sustained dependence on bank financing can gradually increase the government's interest burden and put pressure on the availability of funds for the private sector," he has said.

He suggests that the government should place greater emphasis on strengthening revenue collection, broadening the tax base and improving tax administration rather than relying increasingly on domestic borrowing.

"Unless revenue mobilisation improves significantly, higher government borrowing could crowd out private investment over time, particularly if credit demand from the private sector recovers.

"Fiscal discipline and stronger domestic resource mobilisation are, therefore, critical to reducing the government's dependence on bank borrowing," Dr Reaz concludes.

Bangladesh has paused in borrowing from Japan as its interest rate on development finance has been steeply hiked and Dhaka's request for reconsidering the tightened terms went unheeded, officials say.

The rate of interest on Japanese development assistance has been raised for a six-month spell to 3.05 per cent, and it could go up to 3.55 per cent from next month, they have said.

Bangladesh used to enjoy an interest rate as low as 1.0 per cent in borrowing from the Japanese development-financing agency-- the Japan International Cooperation Agency (JICA)-until a few years ago.

In response to the steeper borrowing costs, Bangladesh has refrained from signing any new loan packages with its largest bilateral lender, they have said.

"Japan has recently informed us that the new rate is revised on global funding dynamics. This is not only for Bangladesh. This is for all borrowing countries of the Japanese ODA," a senior Ministry of Finance (MoF) official told The Financial Express.

"After the interest-rate hike in April, we requested Japanese lender - the Japan International Cooperation Agency--to reduce the rate for Bangladesh in view of global and local shocks."

For the current six-month window spanning from April to September, Tokyo ramped up interest rates for funding Bangladesh to a steep 3.05 per cent in April last.

The rate rise marks a drastic shift from historical agreements. Even as recently as 2022, Japanese Official Development Assistance (ODA) carried highly concessional rates below 1.0 per cent.

Once-most-concessional loan has become costlier as Japan has proposed to raise its interest rate by 30-percentage points to 3.05 per cent for lending to Bangladesh.

Earlier, the JICA used to charge 2.35 per cent on its loans against different development projects in Bangladesh.

Even three years ago, the interest rate for the Japanese loan was less than 1.0 per cent, the officials point out.

The Japanese development financier also charges a 0.02 per cent front-end fee for almost all the loans extended to Bangladesh, officials have said.

Bangladesh needs to repay the loans taken from Japan in 30 years wherein it will get 10 years as grace period for the payback.

As a least-developed country (LDC) with low income, Bangladesh had enjoyed Japanese loans with only 0.1 per cent interest until 2015.

Not only the rate for the infrastructure-related project loans has already gone up, the rate for the consultancy credit has also been raised to 1.0 per cent from the earlier rate of nearly 0.85 per cent, according to the Economic Relations Division (ERD) officials.

"The lending rate will be effective for six months up to this September as the JICA changes its lending terms and conditions for Bangladesh half-yearly," says one official.

A senior ERD official has said a fresh lending rate would be set from next month, October, with the indicative rate jacked up to 3.55 per cent.

Alarmed by the compounding strain on the national treasury, the Ministry of Finance and the ERD had formally lobbied Japanese authorities for a rate reduction, citing internal macroeconomic vulnerabilities and external economic shocks.

However, Japanese officials have maintained that the pricing adjustment stands firm, attributing it to shifts in global funding costs, inflation dynamics, and the broader normalisation of Japan's monetary policy.

Faced with a 3.05-percent price tag alongside a standard 0.02-percent front-end fee, Bangladeshi policymakers have quietly frozen new commitments with the lending agency JICA.

Official sources confirm that no fresh credit tranches have been finalised since the implementation of the hike in April.

Analysts note that at more than 3.0 per cent, Japanese funding has lost its long-held competitive advantage, now tracking higher than foundational lending rates from multilateral institutions like the World Bank and the Asian Development Bank, and even from China.

While legacy infrastructure megaprojects like Dhaka Metro Rail and Matarbari deep-sea port continue under previously secured funding tranches, new or pipeline development projects remain in limbo.

The ongoing stalemate highlights a critical turning point in the bilateral economic relationship, as Bangladesh balances its aggressive infrastructure ambitions against the tightening realities of increasingly expensive global debts.

Bangladesh currently is repaying loans from the World Bank at 1.75-percent interest, that from the ADB at 2.0 to 4.5 per cent, China at 2.0 per cent and IDB 2.0-4.0 per cent.

Japan is the single-largest bilateral development partner of Bangladesh-a position it has held consistently since 2012.

Since Bangladesh's independence in 1971, Japan has provided the country with approximately $33.62 billion in cumulative official development assistance, or ODA.

A new well at the Titas Gas Field in Brahmanbaria has started supplying 12.5 million cubic feet (mmcfd) of gas per day to the national grid, offering a modest boost to domestic production amid an ongoing supply shortage.

Bangladesh Gas Fields Company Limited (BGFCL) began supplying gas from the Titas-28 well following its formal inauguration today (19 September) by State Minister for Power, Energy and Mineral Resources Aninda Islam Amit.

Speaking at the inauguration, the state minister said the addition of 12.5mmcfd from the well was encouraging at a time when the country was facing an energy crisis.

"We have taken an initiative to drill 150 wells by 2030 to become self-sufficient in energy. Drilling of 27 wells is already underway. Titas-28 is one of them," he said.

He said three more wells are planned at the Titas field. If drilling is successful, they are expected to add another 45mmcfd of gas to the national grid.

The state minister said the government is working to increase domestic gas production as imported LNG has become increasingly expensive.

"We are buying LNG at two to three times the price we used to pay. We do not have the capacity to bear this cost," he said.

He also said domestic gas companies had remained neglected for around one and a half decades, limiting their ability to contribute to the country's energy supply.

"We have now created opportunities for these institutions to work. That is why they are being able to demonstrate their capabilities," Amit said.

The government is also working to strengthen state-owned Bangladesh Petroleum Exploration and Production Company Limited (Bapex) to increase domestic gas production, he said. Two drilling rigs are currently being procured, while another is also planned.

Local officials are also being trained so they can undertake exploration and drilling activities based on their skills and competence, he said.

Abdul Jalil Pramanik, managing director of BGFCL, said increasing local gas production is a priority as the country faces a major gas supply problem.

"Titas-28 is one of our initiatives to increase domestic gas supply. It is a shallow well. Our target is to increase gas supply through drilling deeper wells," he said.

He said drilling of the Titas-31 well is currently underway and described it as the country's deepest well drilling project.

The Bangladesh Freight Forwarders Association (BAFFA) has urged the government not to expand 100 percent foreign ownership in the country’s freight forwarding sector without assessing its economic impact on local entrepreneurs, employment and foreign exchange flows.

The association said freight forwarding is predominantly a service-based industry rather than a capital-intensive sector and raised the question of whether allowing unrestricted foreign ownership would bring substantial fresh foreign direct investment, technology transfer or new employment to Bangladesh.

BAFFA’s concerns came amid renewed regulatory attention to foreign-owned freight forwarding companies. On September 8, the National Board of Revenue (NBR) issued a clarification regarding the renewal of licences of fully foreign-owned companies that had received licences before July 1, 2015, under the Freight Forwarding Agents Licensing and Operations Rules, 2008.

BAFFA recently sent a letter to the NBR and the Prime Minister’s Office arguing against allowing 100 percent foreign ownership in the freight forwarding sector.

In the letters, BAFFA said any broader policy change should therefore be preceded by a comprehensive economic impact assessment and meaningful consultation with local industry stakeholders.

Local freight forwarders have spent more than three decades developing expertise, international agency networks and logistics capabilities that support Bangladesh’s import and export trade, BAFFA said in the letters.

The sector includes a large number of locally owned small and medium enterprises that coordinate international transportation, cargo consolidation, documentation, customs-related processes, supply chain management and other trade facilitation services.

BAFFA warned that allowing financially stronger multinational operators unrestricted access without appropriate regulatory safeguards could create an uneven competitive environment for domestic SMEs and potentially shift a greater share of locally generated logistics income abroad.

The association stressed, however, that its position should not be interpreted as opposition to foreign investment.

BAFFA said Bangladesh needs substantial foreign investment in logistics, but such investment should preferably be directed towards areas where fresh capital, infrastructure, technology and capacity are genuinely required.

These include ports and terminals, inland container depots, multimodal logistics hubs, modern warehousing, cold chain facilities, air cargo infrastructure, automation and digital logistics systems, the letters also read.

The Dhaka Stock Exchange (DSE) extended its recovery for a third consecutive session today (17 September), with the benchmark DSEX rising above the 5,500-point mark amid broad-based buying across major sectors.

Investors remained active despite ongoing geopolitical tensions in the Gulf region, while assurances of improved gas supplies to industrial hubs appeared to boost market sentiment.

The DSEX gained 38.1 points, or 0.69%, to close at 5,532 compared with 5,494 in the previous session, according to DSE data. The other two major indices also advanced. The Shariah-based DSES rose 7 points, while the blue-chip DS30 gained 8 points.

Meanwhile, market turnover surged nearly 18% to Tk655 crore, while market capitalisation increased by more than Tk3,257 crores to Tk6.92 lakh crore, according to DSE data.

Market breadth was positive, with 67% of the traded stocks advancing. A total of 80 issues declined, while 47 remained unchanged.

Driven by rising indices and positive market breadth, stocks advanced in three of the five trading sessions during the week.

The DSEX posted a net gain of 17 points over the week, gaining 153 points in three sessions against a cumulative loss of 136 points in the other two.

EBL Securities in its daily market commentary said, the benchmark index of the capital bourse closed the week with sustained recovery momentum for a third consecutive session, as investors' strong buying appetite defied concerns over the market's near-term trajectory stemming from geopolitical tensions in the Gulf region, while signs of improving domestic gas supply to industrial areas provided some relief to investor sentiment.

"Market momentum remained firmly positive throughout the session despite mild pullbacks in the first hour from sellers, while a sustained broad based buying interest continued to reinforce the prevailing upward trend, it said.

On the sectoral front, Textile sector stocks accounted for the highest share by 26.3% of turnover, followed by General Insurance by 14.9% and Bank 12.4%.

Sectors mostly displayed positive returns, where Mutual Fund by 3.6%, General Insurance by 3% and Cement 1.9% exhibited the most gains, while only Travel exhibited the marginal corrections on the bourse today.

Annual demand for animal feed is expected to rise to 10 million tonnes by 2030 from 7.5 million tonnes now, driven by growing domestic demand for poultry and meat, according to a study by Bangladesh Agricultural University (BAU).

Of the projected demand, 65 percent will be used for poultry, 20 percent for fish farming and 15 percent for cattle, the study said.

It was released yesterday at a seminar titled “Feed Growth Supporting Bangladesh’s Protein Demand”, jointly organised by the Feed Industries Association of Bangladesh (FIAB) and the US Soybean Export Council (USSEC) at Dhaka Regency Hotel & Resort in the capital.

Bangladesh’s fish and poultry feed industry supplies nutrient-rich feed to support animal growth and productivity. It uses ingredients such as rice bran, maize, soybean meal, fish meal and other locally available materials.

However, if the national goal is protein security, the industry should be assessed based on how efficiently it produces edible protein, said Md Safiqur Rahaman Shishir, head and associate professor of the Department of Animal Nutrition at BAU.

“The cheapest feed does not necessarily result in the lowest cost of producing animal protein,” he said while presenting a paper on improving feed efficiency at the seminar.

Khabibur Rahman, Bangladesh market lead of the USSEC, said the country has a soybean complex, or value chain.

It includes whole soybeans, which are crushed to produce soybean meal for animal feed and soybean oil, he added.

The USSEC provides technical support, conducts workshops and seminars, shares knowledge and builds partnerships with industry players to strengthen the sector.

“Improving animal health will also improve the quality of food for human consumption and give people access to healthier food,” Khabibur said.

About 60 percent of the animal protein consumed in Bangladesh comes from fish and aquatic animals. To help ensure this protein supply, the USSEC provides technical support to fish farmers and aquaculturists in Bangladesh, he added.

Md Delwar Hossain, secretary of the Ministry of Fisheries and Livestock, said animal protein plays an essential role in building a healthy and well-nourished nation.

“Quality feed is the foundation for producing safe and high-quality protein,” he said.

Md Shah Alam Khan, director general of the Department of Livestock Services, said feed accounts for around 70 to 75 percent of total production costs in the poultry and livestock sectors.