Bank Asia PLC has received regulatory clearance to double its authorised share capital to Tk3,000 crore, a strategic move that provides the lender with significant room for future capital expansion.

According to a disclosure filed with the Dhaka Stock Exchange (DSE) yesterday, the bank's authorised capital has been enhanced from Tk1,500 crore – comprising 150 crore ordinary shares – to Tk3,000 crore, divided into 300 crore ordinary shares with a face value of Tk10 each.

The enhancement has been duly approved and certified by the Registrar of Joint Stock Companies and Firms (RJSC). Consequently, the bank has amended the relevant clauses of its Memorandum and Articles of Association to reflect the new capital structure.

Currently, Bank Asia's paid-up capital stands at Tk1,391.50 crore, meaning the bank now has the flexibility to more than double its existing paid-up base through rights issues or bonus shares in the coming years, according to the market insiders.

The capital restructuring comes at a time when the bank is navigating a challenging earnings period. Bank Asia reported that its consolidated earnings per share (EPS) fell by 16% year-on-year during the first half (January-June) of 2026. The EPS settled at Tk1.77, down from Tk2.11 in the corresponding period of 2025.

The bank attributed the decline primarily to a surge in interest expenses which outpaced interest income, coupled with a contraction in investment income and reduced earnings from commission, exchange, and brokerage services.

Despite the drop in profitability, the bank's balance sheet showed resilience in other key metrics. On a consolidated basis, its Net Asset Value (NAV) per share rose to Tk26.92 at the end of June 2026, compared to Tk24.33 a year earlier.

This growth was driven by an increase in shareholders' equity, supported by higher statutory reserves and the transfer of startup funds from other liabilities.

Furthermore, the bank's net operating cash flow per share (NOCFPS) witnessed a healthy jump to Tk48.77 from Tk37.60, largely due to increased cash inflows from customer deposits and institutional borrowings.

Looking back at the previous calendar year, Bank Asia reported a total net profit of Tk407.25 crore for 2025, yielding an EPS of Tk3.18.

To reward its investors, the bank had disbursed a 17% dividend for the year, consisting of an equal split of 8.5% in cash and 8.5% in stock.

Following the announcement of the capital enhancement yesterday, investor reaction remained neutral on the bourse, with the bank's share price closing unchanged at Tk18 on the Dhaka Stock Exchange.

Bangladesh needs stronger collaboration between the government and the private sector to accelerate the transition to a circular economy and meet the European Union’s growing sustainability requirements, said Fahmida Khanam, secretary in charge of the Ministry of Environment, Forest and Climate Change.

She made the remarks at the “5th Sustainability & Green Growth Working Committee Meeting”, organised by Business Initiative Leading Development (BUILD) in collaboration with the Ministry of Environment, Forest and Climate Change at the ministry’s office in Dhaka recently.
Fahmida said the ministry has been assigned to implement circular economy initiatives as part of Bangladesh’s commitments under the United Nations Framework Convention on Climate Change and the United Nations Environment Programme to reduce environmental pollution.Bangladesh generates more than 821,000 tonnes of plastic waste annually, but only 36 percent of it is recycled

“Meeting the European Union’s circularity requirements is essential, while promoting green businesses remains a key government priority,” she added.

She thanked BUILD for highlighting the issue, saying the circular economy has become a priority for both the government and the private sector.

Fahmida said the government is gradually phasing out single-use plastics, beginning with plastic stick-based cotton buds, stirrers and straws. However, she stressed that industries need sufficient time to shift towards environmentally sustainable production before the policy is fully enforced.

She also called for further discussions with industry associations, saying the environment ministry and the commerce ministry have information on businesses operating in the sector.

At the meeting, Ferdaus Ara Begum, chief executive officer of BUILD, presented a policy paper on the opportunities and challenges of plastic-to-textile recycling. She said Bangladesh could increase garment exports by $4 billion to $5 billion by formalising and expanding the plastic recycling sector.

The study found that Bangladesh generates more than 821,000 tonnes of plastic waste annually, but only 36 percent of it is recycled. A large part of the value chain remains informal and lacks adequate investment.

The paper said expanding plastic-to-textile recycling would reduce dependence on imported man-made fibres and help Bangladesh comply with the European Union’s Green Deal and extended producer responsibility requirements. It recommended adopting a National Circular Economy Policy and forming a Circular Economy Council with representatives from relevant stakeholders to ensure coordinated governance.

The study also suggested government policies on waste collection, standards and traceability, along with quality checks and certification of polyethene terephthalate (PET) scrap before shipment and allowing its import.

SHM Mustafiz, director of the Bangladesh Garment Manufacturers and Exporters Association, stressed the need for proper waste collection points and fixed rates for waste collection.

He said trade licences should be mandatory to formalise the textile waste sector, build an organised collection system and ensure a steady supply of raw materials for recycling industries.

“The waste management system needs to be regularised to develop a blended financing model and attract foreign investment,” he added.

Officials from various government ministries, public agencies, the United Nations Industrial Development Organization and private sector trade bodies attended the meeting.

Bangladesh's overall external assistance confirmation dropped by 37 per cent in the 2025-26 fiscal year, with India not committing even a single penny, officials say.

The lowest-ever aid confirmation by two major development partners - the World Bank and Japan - also affected overall confirmation, they say.

According to the Economic Relations Division (ERD), the development partners made a combined aid commitment of $5.24 billion in the last fiscal year, 37 per cent down from $8.32 billion in FY25.

Bangladesh's largest multilateral donor -- the World Bank -- made the lowest commitment of $820.25 million between July 2025 and June 2026, while the largest bilateral one -- Japan -- committed $314 million.

Other key donors, including China and the Asian Infrastructure Investment Bank (AIIB), committed moderate amounts of $279.84 million and $250 million, respectively.

The second largest multilateral donor -- the Asian Development Bank (ADB) -- made an impressive commitment of $2.685 billion.

"Since aid commitment by key donors, including the World Bank, Japan, China, India, and AIIB, was poor, overall foreign assistance confirmation dropped," says a senior ERD official.

During the previous regime of Sheikh Hasina, India committed a total of approximately $7.36 billion of aid through multiple Lines of Credit (LoCs), grants, and defence loans to fund major infrastructure, connectivity, and security projects in Bangladesh.

It extended an initial $1.0 billion line of credit covering 21 development and transport projects in 2010.

A fresh commitment of $2.0 billion was added to bridge trade gap and improve connectivity infrastructure in FY16 under LoC-II and a massive $4.5 billion under LoC-III in 2017.

The ERD official says not only aid commitment dropped in FY26, but foreign assistance disbursement also decreased.

According to the ERD data, all development partners released $8.07 billion worth of loans and grants in FY26, $494.29 million down from $8.56 billion in FY25.

Of the disbursed aid, the World Bank provided the largest amount of $2.07 billion, ADB $1.91 billion, Russia $1.047 billion, Japan $795.32 million, AIIB $693.13 million, and China $532.88 million.

Meanwhile, Bangladesh had to repay the record highest $4.494 billion against its outstanding debts to the bilateral and multilateral lenders in FY26, the ERD data shows.

Of the amount, the government had to repay $1.54 billion in interest and $2.953 billion in principal.

Agricultural lending by Bangladesh’s banking sector rose nearly 15 percent in fiscal year 2025-26, exceeding the central bank’s annual target, driven by strong lending from specialised and private commercial banks.

Banks disbursed Tk 42,834.16 crore in agricultural and rural credit during the year, up 14.76 percent from Tk 37,326.52 crore a year earlier and equivalent to 109.83 percent of Bangladesh Bank’s Tk 39,000 crore lending target for the country’s 58 participating banks, according to the central bank’s latest agricultural and rural credit report.
Private commercial banks accounted for the largest share of total lending at 43.15 percent, followed by specialised banks, while Islamic banks contributed 14.15 percent.

Specialised banks posted the strongest performance against their targets, disbursing Tk 12,615.57 crore, or 123.4 percent of their allocation.

State-owned commercial banks achieved 109.89 percent of their target, private commercial banks 108.05 percent and foreign commercial banks 104.05 percent.

Islamic banks were the only category to miss their target, disbursing Tk 6,059.32 crore, or 94.37 percent of the planned amount.

The report also highlighted a mismatch between policy priorities and the distribution of credit across sectors. Crop production received 47.32 percent of total lending, below the policy target of 55 percent, while livestock and poultry accounted for 26.38 percent, exceeding the 20 percent target. Fisheries and non-farm rural activities also surpassed their respective allocations.

By contrast, lending for irrigation and agricultural machinery accounted for just 0.93 percent of total disbursement, less than half the policy target of 2 percent.

Agricultural loan recovery rose 19.99 percent year-on-year to Tk 45,626.93 crore. Recoveries increased across all bank categories except Islamic banks, the report said.

Asset quality also improved overall. Overdue agricultural loans fell 8.43 percent year-on-year to Tk 19,807.33 crore at the end of June, while classified loans declined 5.92 percent to Tk 18,578.47 crore.

Foreign commercial banks more than doubled their loan recoveries from the previous fiscal year and reported no overdue or classified agricultural loans for a second consecutive year.

Bangladesh Bank said the stronger lending performance signalled a positive outlook for agricultural finance. However, it warned that the large stock of overdue and classified loans remained a key challenge, underscoring the need to prioritise loan recovery and strengthen the management of defaulted loans.

India’s central bank kept interest rates unchanged on Wednesday as it waits to see whether volatile oil prices caused by the Iran war feed wider inflationary pressures.

The Reserve Bank of India (RBI) said the benchmark repurchase rate, the level at which it lends to commercial banks, would remain at 5.25 percent after a unanimous vote by a six-member panel.

Emerging and frontier market central banks from Indonesia to Sri Lanka have raised rates to curb price rises and boost their currencies since the outbreak of the Middle East crisis in February.

Limited and staggered fuel price hikes by the Indian government have so far shielded citizens from the worst of the war’s economic impact but there are signs that this may not hold.

Retail inflation rose to 4.4 percent in June -- breaching the central bank’s medium target of four percent for the first time in 17 months -- though it remains within RBI’s 2-6 percent tolerance band.

Retail inflation rose to 4.4 percent in June -- breaching the central bank’s medium target of four percent for the first time in 17 months
Bank governor Sanjay Malhotra said economic growth was supported by “resilient domestic demand” and inflation was not “broad-based” yet.

“The MPC (Monetary Policy Committee) noted that even though headline inflation is projected to increase, it is primarily on account of supply side pressures caused by food and fuel. It is not getting broad-based,” Malhotra said in a televised address from the financial capital Mumbai.

“There is a need for greater clarity to emerge, especially regarding inflation, its path and composition before taking any policy action.”

Analysts said Malhotra’s speech had a dovish tinge.

“What stood out just as much as the tone itself was what was missing from it,” Sneha Pandey of Quantum AMC said. With the war still unresolved and already influencing both oil markets and yields, there were ample reasons for the central bank to express greater concern, she said.

“It didn’t... and that comfort is a genuine positive for equities.” Adding to the central bank’s calculations is pressure on the Indian rupee, which slid to a record low before its June policy meeting.

Instead of raising rates, the RBI chose to announce a range of moves aimed at wooing dollar inflows, including a deposit scheme for the Indian diaspora.

These measures have brought in more than $40 billion since June, according to central bank data released last Saturday, boosting the RBI’s forex buffers.

While the steps have helped stop the rupee’s losses, the currency has faced fresh challenges.

India, the world’s third-largest buyer of oil, normally sources about half of its crude through the Strait of Hormuz, which has been effectively closed since the beginning of the war in February.

Analysts say this makes New Delhi among the most vulnerable economies to a global energy shock, as higher crude and fertiliser prices drive up India’s import bill.

The government has devised an ambitious five-year strategic plan to help revive Bangladesh's ailing jute sector after export earnings from jute and jute goods fell by nearly 29 per cent over the past five years despite rising domestic production.

The plan seeks to double the export earnings by 2031 through greater value addition, improved productivity, enhanced competitiveness and diversification of export markets, said a senior official at the Ministry of Textile and Jute.

The "Bangladesh Jute Sector Development Strategy and Action Plan (2026-2031)", prepared by the Department of Jute (DoJ), sets a target of raising annual export earnings from jute and jute products to US$1.64 billion by 2031 from the current level of about $820 million.

The action plan also aims to increase raw jute production to 11.5-12.0 million bales, achieve 85-90 per cent self-sufficiency in jute seed production, and raise the share of value-added products in total exports from the current 45 per cent to 70 percent, said the official.

The initiative comes at a time when global demand for the sustainable and environmentally friendly products are expanding rapidly as countries increasingly replace single-use plastics with natural fibres.

Despite being the world's second-largest producer of raw jute, Bangladesh has so far failed to fully capitalise on its growing market.

According to the strategy paper, export earnings from jute and jute products reached a record $1.16 billion in FY2020-21, but the amount continued to decline for four years to $820 million in FY25, representing a fall of nearly 29 percent.

The document says the decline was not caused by lower production. Instead, it attributes the weak export performance to inadequate value addition, limited market access, lack of product diversification and declining international competitiveness.

To reverse the downward trend, the government has planned to shift the industry's focus from exporting raw jute to the production and export of higher-value finished products.

The strategy paper has recommended expanding the production of geotextiles, biodegradable packaging materials, home furnishing products, composite materials, technical textiles, fashion items and automotive components made from jute.

Officials at DoJ said the strategic plan has also proposed establishing three to four internationally accredited testing laboratories to reduce exporters' dependence on overseas certification facilities.

At present, Bangladeshi exporters have to send samples abroad because the country lacks internationally recognised testing centres, it was leant.

As a result, testing a single product costs between $500 and $2,000 and takes 10 to 21 days, while similar testing in India costs only $60 to $150 and is completed within three to seven days.

China offers similar cost and time advantages.

According to the document, the higher testing costs significantly undermine the competitiveness of Bangladeshi exporters, particularly small and medium-sized enterprises.

The strategy paper further recommends preparing the industry to comply with the European Union's new environmental regulations, including the Digital Product Passport, strengthening collaboration between research institutions and manufacturers, and expanding the use of digital technologies throughout the jute value chain.

Syed Md Nurul Basir, Director General of DoJ, said implementation of the five-year programme is expected to require Tk 37 billion to Tk 47.5 billion worth of investment.

The government has planned to mobilise funds through public financing, private investment, development partners and public-private partnerships, the officials said.

Eight strategic pillars -- increasing farm productivity, ensuring the supply of quality seeds, modernising jute mills, promoting research and innovation, developing internationally accredited testing facilities, diversifying export markets, establishing digital information systems and undertaking policy reforms -- have identified for transforming the sector, he said.

The Ministry of Textiles and Jute will lead its implementation, while the Department of Jute will coordinate activities involving the Bangladesh Jute Research Institute, Bangladesh Agricultural Development Corporation, Export Promotion Bureau, Bangladesh Investment Development Authority and other public and private organizations, according to the strategy paper.

The plan also includes a regular monitoring and evaluation mechanism, it was leant.

The strategy paper identifies several structural challenges that have weakened the sector over the years.

They include India's anti-dumping duties on Bangladeshi jute products imposed since 2017, smuggling of raw jute across the border, rising production costs, weak links between research and industry, limited product diversification and inadequate quality assurance infrastructure.

It also said some 73 of the country's 266 jute mills are currently closed, affecting production capacity and skilled employment.

At the same time, the Department of Jute is operating with an extreme manpower shortage.

The strategy paper also calls for improving the domestic seed supply as Bangladesh currently imports a significant portion of its jute seed requirements.

Through expanded research, certified seed production and farmer support programmes, the government aims to meet 85-90 per cent of country's seeds demand from domestic production by 2031.

Bangladesh currently exports jute and jute products to 152 countries, but the strategy paper said about 63 per cent of total exports are concentrated in just three markets namely Turkey, China and India.

To reduce the dependence, it proposes expanding exports to Africa, Southeast Asia, the Middle East, Europe and North America through stronger trade promotion, participation in international fairs, buyer-seller matchmaking and partnerships with global brands.

The World Bank on Tuesday called on developing countries to embrace artificial intelligence technology tools to deliver better governance outcomes, warning that they risked being left behind if they failed to do so.

“AI has thrown developing economies a lifeline, and they should seize it,” Indermit Gill, chief economist of the World Bank Group, said as the organization launched its annual World Development Report.

“They do not need large models or big data centers to reap its benefits,” he added, advocating for the adaptation of lower-cost AI tools to local conditions to deliver results in the health, education, justice and agricultural sectors.

Advanced AI models -- largely developed in the United States and China -- offer the ability to quickly analyze data and automate many tasks that otherwise take skilled humans longer to do.

These AI models, however, require huge data centers and large amounts of complex computing power, using massive amounts of electricity and water -- with implications for climate change.

“Developing economies today are in the midst of their weakest average growth performance in three decades,” said a World Bank statement accompanying the report. “AI could significantly boost that performance before the end of the 2020s while delivering tangible benefits to people.”

The report calls for countries to use AI to “help extend otherwise costly medical, legal, educational, and agricultural services to underserved billions -- doing in a decade what might otherwise take a century.”

Lower-income countries have struggled through the 2020s, hit by a series of successive shocks that saw the World Bank earlier this year dub it a “lost decade” for their economic growth.

The Bank has lowered its 2026 global growth forecast to its lowest level since the pandemic, with the economic fallout of the Iran war battering countries around the world.

The shock has hit low-income and developing countries hardest, with Asia the worst-affected region.

The Bank’s new report advocates for developing countries to start working with localized AI tools and solutions now, and to invest in electricity generation and distribution; expand access to computing power; and improve the availability of local data.

“The window to get this right is narrow,” said Gaurav Nayyar, director of the report.

“AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations,” he added.

For the 6.8 billion people -- 83 percent of humanity -- who live in low-income and developing countries, AI tools will need to be adapted to meet their needs.

The report shares examples of AI applications in governance, such as to increase diabetes screening volumes in Bangladesh, or in reducing costs for Indian farmers through advanced weather forecasts.

The solutions, the report stresses, will need to meet people where they are.

“For example, AI solutions will need to be delivered through voice calls on basic mobile phones for those who cannot read or afford smartphones,” it says.

“Simply importing an AI model does not mean it will work well locally.”

The report calls for policymakers to also build public trust as they expand AI use.

“Improved public services and better learning outcomes in schools will reinforce trust -- but if AI embeds bias in government decisions or erodes data privacy, that trust will be difficult to recover,” said the statement.

The report delivers a stark warning, too: “AI could widen gaps between countries, increase inequality within them, concentrate market power, weaken trust in public institutions, and create new risks for safety, rights, and social cohesion.”

And while risks to employment in developing countries are low at the moment, it warns that in the long run AI tools could cut off economic mobility by eliminating many of the middle-class jobs that enable it.

The report was written with the aid of several of the world’s most advanced AI tools, including offerings from OpenAI, DeepSeek, Google and Anthropic, according to a disclosure.

US job openings dropped in June as vacancies in the healthcare and social assistance sector declined by the most in nearly a year, but an improvement in hiring and low layoffs suggested the labor market remained stable.

The report from the Labor Department on Tuesday also showed a marginal increase in people quitting their jobs, presumably in search of greener pastures, which should limit wage growth and strengthen economists’ views that the labor market was not a source of inflation.Still, most economists expected the Federal Reserve to raise interest rates this year to tame inflation fueled by the Middle East conflict.

“The picture is of a steady labor market,” said Carl Weinberg, chief economist at High Frequency Economics. “This picture of the labor market will change as the economy adjusts to $100 plus a barrel oil, higher inflation, possibly tighter monetary conditions and global recession starting in Asia, where many production supply chains are rooted.”

Job openings, a measure of labor demand, had decreased by 178,000 to 7.359 million by the last day of June, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report. Economists polled by Reuters had forecast 7.400 million unfilled positions in June.

Some have said the JOLTS report should be treated with caution, noting that the response rate to the survey had declined considerably.

Economists continue to view the labor market as remaining in a “slow-hire, slow-fire” mode, which they say should allow the US central bank to focus on inflation.

The Fed last week left its benchmark overnight interest rate in the 3.50 percent-3.75 percent range. Three members of the Fed’s policy-setting committee dissented in favor of a quarter-percentage-point hike.

Healthcare and social assistance job openings decreased by 147,000 in June, the largest decline since July 2025. This sector has been a key driver of job growth amid an aging population.

Temporary Protected Status for hundreds of thousands of immigrants from Haiti and six other countries has ended.

“With foreign-born labor force population driving the overall decline in civilian labor force, healthcare’s reliance on international recruitment may be exactly the sector to watch as limited labor supply increasingly shapes hiring in the labor market,” said Sneha Puri, economist at Indeed Hiring Lab.

There were 86,000 fewer open positions in the leisure and hospitality sector, mostly at hotels, restaurants and bars. There were more job openings at retailers as well as in the financial activities sector.

The job openings rate fell to 4.4 percent in June from 4.5 percent in May.

Hiring increased by 96,000 to 5.348 million, led by the healthcare and social assistance industry.

But hiring at hotels, restaurants and bars fell by 77,000, likely reflecting the fading boost from the recently ended FIFA World Cup tournament.

The hires rate rose to 3.4 percent from 3.3 percent in May.

Layoffs and discharges were little changed at 1.766 million, with the rate steady at 1.1 percent.

The number of people quitting their jobs increased by a modest 79,000 to 3.232 million.

The quits rate, viewed by policymakers as a gauge of labor market confidence, was unchanged at 2.0 percent.

A Reuters survey of economists estimates that nonfarm payrolls increased by 80,000 jobs in July after a rise of 57,000 in June.
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The BLS is scheduled to publish the July employment report on Friday. The unemployment rate is forecast to hold steady at 4.2 percent.

There is, however, a risk it could edge higher after a Conference Board survey last week showed the share of consumers viewing jobs as “plentiful” dropped in July to the lowest level since February 2021.

Bumper oil refining profits triggered by the Iran war are turbocharging Big Oil’s earnings, breathing new life into a business many investors had largely written off.

The sector looks poised to produce unusually strong returns for several years, but long-term structural changes in oil consumption mean refining’s star will likely fade quickly.

Despite occupying a critical position in the global energy supply chain, refining has long been the least glamorous corner of the oil business.

Western oil majors have steadily retreated from the sector over the past two decades, deterred by high operating costs, notoriously volatile margins, rising carbon costs and growing competition from state-backed refiners in the Middle East, Africa and Asia.

That retreat accelerated in the late 2010s, particularly in Europe, as governments and companies increasingly bet that rapid electric vehicle adoption would curb fuel demand by the 2030s, reducing the need for new refining investment.

As a result, Western oil giants’ refining capacity shrank dramatically.

Combined refining volumes for BP, Chevron, Exxon Mobil, Shell and TotalEnergies fell from 16.4 million barrels per day in 2005, representing around 22 percent of the global total, to 10.4 million bpd last year, or roughly 13 percent of worldwide crude processing, according to Reuters Open Interest calculations.

Shell has led the retreat, reducing its interests in refineries from 40 to just seven over the period.

But the refining environment has improved considerably in the past year, thanks to a spike in military conflict in several oil-rich regions.

First, there’s Iran.

The combination of the months-long effective closure of the Strait of Hormuz – which has limited refiners’ access to crude – and Tehran’s attacks on refineries throughout the Middle East have sent refining margins for gasoline, diesel and jet fuel to record highs.

The loss of Middle Eastern crude forced refineries, particularly in Asia, to cut operating rates.

While China has enormous crude stockpiles, it chose to scale back refining activity aggressively and halt fuel exports to offset its sharp reduction in crude imports.

Together, these disruptions removed roughly 5 million barrels per day, or around 6 percent, of pre-war global refining output in the second quarter.

Global refinery runs averaged around 78 million bpd, the lowest level since the depths of the COVID-19 pandemic in 2020, according to the International Energy Agency.

Meanwhile, months of relentless Ukrainian drone attacks on Russian energy infrastructure have sharply reduced Russia’s refining output, forcing Moscow to ban diesel exports.

That announcement sent diesel prices soaring.

PRICING SUPERPOWER

The combined impact of the two conflicts on refining profitability has been dramatic.

The refined product shortage has left Big Oil with enormous pricing power and encouraged operators to run plants at full capacity.

US refineries, which emerged as the world’s largest fuel suppliers during the conflict, operated at 97 percent of capacity in the week to July 24, well above their long-term average of around 90 percent.

BP’s refining-indicator margin, a gauge of global refining profits, climbed to $30 per barrel in the second quarter from $17 in the first quarter and $12 a year earlier.

The indicator has averaged $42 per barrel so far in the third quarter.

Exxon posted downstream profits of $5.5 billion in the second quarter, its strongest result since 2022, driven by record diesel production, while Chevron’s downstream earnings climbed to $4.9 billion, their highest level this decade.

Shell reported adjusted earnings of $2.5 billion for its products division, the highest this decade, as its refining network operated at a utilisation rate of 102 percent during the quarter.

TotalEnergies Chief Executive Patrick Pouyanne summed it up neatly when he told analysts late last month that the company’s refining segment had performed in “an exceptional way.”

BP reports earnings on Tuesday.

CAN IT LAST?

Most of the immediate pressures supporting these refining margins are likely to ease – the question is how quickly.

A sustainable resolution to the US-Iran conflict involving a full reopening of the Strait of Hormuz and the eventual recovery of Chinese refining activity would help loosen fuel markets meaningfully, but when that might occur is anyone’s guess.

What’s clear is that the industry’s problems cannot be repaired immediately. Fixing damage to dozens of refineries in the Middle East and Russia will take months, and in some cases years.

In the meantime, global spare refining capacity remains exceptionally thin.

There’s also reason to be positive on the demand side of the equation.

The Iran war has revived concerns about energy security.

Many governments are thus expanding strategic storage facilities for both crude oil and refined fuels to protect against future supply shocks.

Governments need to start by simply refilling inventories depleted during the conflict.

Global oil stocks fell by 5.1 million barrels per day in the second quarter and are forecast to decline by a further 2.2 million bpd in the third quarter, according to US Energy Information Administration estimates.

Rebuilding inventories of diesel, jet fuel and gasoline will likely take years, creating persistent demand.

Alan Gelder, senior vice president for refining at consultancy Wood Mackenzie, expects refining margins and utilisation rates to remain strong through the end of the decade, supported by continued growth in oil demand and a limited pipeline of new refining projects.

THE PARTY WON’T LAST

But the boom masks a deeper fragility.

Today’s windfall profits are being generated by war, damaged infrastructure and scarcity, not by a structural improvement in the industry’s underlying fundamentals.

Refiners are benefiting because the world has lost capacity faster than demand has disappeared.

But that might not be the case for long.

Several countries with limited domestic refining capability are now reassessing whether they need more local processing capacity.

Australia, for example, is already considering such plans.

Over time, those investments could create a new wave of capacity and eventually lead to oversupply.

The oil majors understand this reality.

A few years of exceptional margins may slow the decline of the refining sector.

But they are unlikely to reverse it.

Policymakers, economists, development practitioners and industry experts on Monday called for a fundamental overhaul of Bangladesh's skills-development ecosystem.

They also observed that a persistent mismatch between education and labour- market demand is preventing the country from fully capitalising on its demographic dividend.

Speaking at a discussion titled "Linking Skills with Employment: Challenges and Way Forward" at PKSF Bhaban in the capital, they stressed the need for closer collaboration among government, academia and industry to ensure that training programmes produce employable graduates and internationally competitive workers.

The Financial Express in association with Palli Karma-Sahayak Foundation (PKSF) organised the event.

Managing Director (MD) of Palli Karma-Sahayak Foundation Md Fazlul Kader said Bangladesh must change its social perception of vocational education, arguing that technical education continues to receive lower social recognition than conventional academic qualifications.

"For better employment opportunities and skills-based education, we must move towards vocational education in line with global practices," he said.

Mr. Fazlul Kader suggested that the government incentives should be redirected towards industries to encourage them to provide training, develop skilled workers and award recognitions, instead of focusing solely on subsidised loans.

He also highlighted the employment potential in Bangladesh's informal economy, particularly in agriculture, livestock and value-added micro-enterprises, stressing the need for stronger forward and backward linkages to unlock the growth potential.

Describing modern agriculture as a highly-skilled profession, he noted that an increasing number of educated young people are entering the sector.

Referring to overseas employment, he observed that Bangladeshi migrant workers remained vulnerable because many of them lack formal skills and certification.

"Providing training and producing skilled manpower is essential to protect migrant workers from job losses and exploitation," he said.

Quazi Moshrur-Ul-Alam, Senior Programme Manager of the PKSF's RAISE project, said Bangladesh has established a training system, but it is yet to build a complete ecosystem connecting skills with employment.

"The problem is not a lack of jobs, but the absence of an effective linkage between skills and employment," he said.

Highlighting the impact of practical skills training, a graduate apprentice Ashfakur Rahman shared how a RAISE-supported driving course enabled him to rebuild his family's livelihood after his father's death. He now works as a service engineer at Hyundai.

Director General of the Bangladesh Institute of Development Studies (BIDS) Dr A K Enamul Haque said Bangladesh faces a demand-side problem, as the economy fails to generate sufficient opportunities for science graduates and knowledge-based professionals.

"We continue to value clerical qualifications over practical knowledge, while industries lack incentives to innovate and absorb skilled graduates," he said.

Professor Sayema Haque Bidisha of the Department of Economics at the University of Dhaka said Bangladesh needs to address the persistent mismatch between the supply of graduates and industry demand.

She said both domestic and international labour market requirements should be carefully assessed so that skills development programmes reflect actual market demand.

"This requires coordinated efforts among academia, industries and policymakers," she added.

ATM Mahbubul Karim, Project Director and Joint Secretary of the Wage Earners' Welfare Board (WEWB), underscored the importance of strengthening the capacity of recruitment agencies to facilitate sustainable overseas employment.

The World Bank Task Team Leader Aneeka Rahman also called for an integrated skills ecosystem in which curricula and training delivery are directly aligned with labour market requirements.

The FE News Editor Anisur Rahman stressed the importance of strengthening foundational education, arguing that basic education and skills development should be linked to reduce school dropout rates and prepare students for vocational training.

Md Ashfaqur Rahman Khan of the International Organization for Migration (IOM) Bangladesh said the country lacks reliable labour market data to determine future demand for different occupations, calling for institutional reforms instead of fragmented project-based interventions.

Executive Director of UCEP Bangladesh Dr Md Abdul Karim said Bangladesh's education system remains heavily skewed towards general education, unlike developed countries where technical graduates dominate.

"This imbalance leaves many graduates unemployed while industries struggle to recruit skilled workers," he noted.

Executive Director of ESDO Dr Md Shahid Uz Zaman stressed the need for addressing the psychosocial challenges faced by marginalised youth alongside technical training, proposing the creation of "job banks" to better support employment transitions.

Dr Md Towfiqul Islam suggested introduction of foreign languages such as Japanese and Arabic from the primary level to improve overseas employment prospects, saying language proficiency could significantly enhance earning potential.

Joint Secretary of the Ministry of Finance Kamrul Hoque Maruf stressed the need for anticipating future labour market requirements in emerging fields such as machine learning and industrial automation, supported by tracer studies to evaluate employment outcomes.

Deputy Managing Director of PKSF Md Mashiar Rahman said successful training initiatives should be expanded through enterprise financing models, enabling experienced entrepreneurs to train additional workers and generate large-scale employment.

Towhidur Rahman of the International Labour Organization (ILO) warned that nearly 90 per cent of Bangladeshi migrant workers still lack internationally recognised skill certificates, weakening their bargaining power and exposing them to exploitation abroad.

Additional Secretary Mohammed Walid Hossain concluded the discussion by highlighting the need to embrace emerging technologies, including 3D printing and industrial automation, through a practical, industry-oriented approach to skills development.

Moderated by Shiabur Rahman Shihab, FE online head, the discussion was attended by representatives from government agencies, development partners, academia, international organisations and the private sector, who agreed that stronger industry participation and demand-driven training are essential to creating sustainable employment and enhancing Bangladesh's global competitiveness.

The Cabinet has approved a proposal to revoke the Essential Medicines List 2026 and the Drug Pricing Mechanism 2026, citing procedural irregularities in their formulation.

The decision was taken at a Cabinet meeting chaired by Prime Minister Tarique Rahman at the Secretariat yesterday (3 August).

According to a handout issued by the Press Information Department (PID), the government remains committed to ensuring the availability of safe, effective, quality and affordable medicines.

The 2026 Essential Medicines List and Drug Pricing Mechanism were formulated without seeking the advice of the National Drug Advisory Council, a requirement under the Drugs and Cosmetics Act, 2023.

The two policies were introduced in January 2026 during the tenure of the interim government. Their legality was later challenged before the High Court, where the matter remains under judicial consideration.

The cabinet noted that the National Drug Advisory Council was formally constituted on 29 June in accordance with the 2023 law. It also approved a proposal to include the director general of the Directorate General of Health Services (DGHS) as a member of the council.

Despite the cancellation of the 2026 policies, the 1994 Essential Medicines List and the government-approved pricing system for those medicines will remain in force.

The government also decided to update the essential medicines list and formulate a revised pricing mechanism to ensure medicines remain affordable for consumers while maintaining healthy competition in the pharmaceutical market.

Bangladesh is now confronting a "triple burden" of malnutrition, with undernutrition, micronutrient deficiencies, and a rapidly growing prevalence of obesity posing a major public health challenge, experts warned yesterday (3 August).

They said malnutrition is reducing economic growth by 8% annually, but every Tk1 invested in nutrition could generate more than Tk23 in long-term economic returns, underscoring the need for stronger public-private partnerships to improve nutrition services.

The observations came at a roundtable titled "Integration of Nutrition Action in Primary Healthcare System through Public-Private Platforms in Bangladesh," organised by Max Foundation Bangladesh. The Business Standard was the media partner of the event.

Poor diets, maternal malnutrition fuel crisis

Presenting the keynote paper, Saiqa Siraj, public health nutrition specialist, said nearly 70% of Bangladeshis still depend on cereal-based diets despite years of awareness campaigns, while nutrition services remain inadequate in marginalised areas, including chars, haor regions and urban slums.

She said the nutritional needs of child brides, garment workers, persons with disabilities and older people continue to receive insufficient attention, calling for stronger public-private partnerships and coordinated initiatives involving local entrepreneurs.

Dr Tahmeed Ahmed, executive director of icddr,b, said one in four Bangladeshi children under five remains stunted. New research shows stunting begins in the womb rather than after six months of age, with maternal malnutrition – particularly during adolescence – being a major contributor.

Unsafe water, poor sanitation and inadequate hygiene, which lead to environmental enteric damage, are also driving childhood stunting, he said, adding that increasing public health spending from the current 1% of GDP to 3-5% could reduce the stunting rate from 24% to 12%.

He also said around 4 lakh children are suffering from severe acute malnutrition, although only 6-7% require hospitalisation, with the remainder able to recover through community-based care.

Govt plans preventive healthcare overhaul

Professor Dr Pravath Chandra Biswas, director general of the DGHS, said Bangladesh has yet to achieve its nutrition goals despite launching the National Nutrition Programme in 1974.

He said 60-70% of Bangladeshis rely on private providers for primary healthcare, while child wasting stands at 13%. Anaemia affects 53% of pregnant women and 55.5% of women of reproductive age, and malnutrition and micronutrient deficiencies are contributing to the growing burden of non-communicable diseases, which now account for about 70% of all diseases in the country.

To strengthen preventive healthcare, the government plans to introduce artificial intelligence-based support into the healthcare system, Dr Pravath said.

Dr Mohammad Eunus Ali, director of the Institute of Public Health, said the institute continues to implement the Vitamin A Plus Campaign and enforce the Breast-milk Substitutes Act.

He also proposed integrating data on children suffering from severe acute malnutrition into the government's central database through NGOs and Upazila Health Complexes to eliminate duplicate records and improve service delivery.

Dr SM Ziauddin Hyder, special assistant to the prime minister on health affairs, said Bangladesh has never developed a sustained national commitment to nutrition despite multiple initiatives since the National Nutrition Council was established in 1974.

He said policy decisions have often been driven by development partners rather than strong government ownership, limiting long-term progress.

Dr Ziauddin said the government is shifting from a treatment-oriented healthcare model to preventive care by establishing Primary Healthcare Units in every union and urban ward.

The government will recruit an additional 100,000 health workers, expanding the existing workforce of 43,000. Every citizen will receive a digital health card to reduce unnecessary hospital visits and out-of-pocket healthcare costs.

He added that the government would propose establishing a National Nutrition Commission.

Dr ATM Tariqul Islam, country director of Max Foundation Bangladesh, said the organisation is working to bring together the government, private sector and civil society to scale up successful pilot initiatives.

Dr Rudaba Khondker, Country Director of GAIN Bangladesh, said Bangladesh's health and food systems continue to operate in parallel despite the country's heavy climate burden, with weak linkages between the two.

She said transforming the food system would be impossible without the private sector, which produces most of the country's food. Yet there is no reliable data on private sector investment, making effective public-private partnerships difficult to design.

Market-based solutions, she added, must be aligned with government systems and bring the private sector within a clear regulatory framework.

Iqbal Kabir, a public health nutrition specialist, said integrating nutrition into primary healthcare is not a new concept. However, achieving Universal Health Coverage now requires strengthening that integration through effective public-private partnerships.

Prof Kaosar Afsana, head of the Humanitarian Hub at the BRAC James P Grant School of Public Health, said nutrition, health, agriculture, the environment and food systems are closely interconnected, requiring a coordinated, multi-sectoral approach.

Improving nutrition cannot be left to the health sector alone, she said, stressing the need for coordinated action by ministries responsible for agriculture, food and related sectors. Ensuring healthy diets also depends on strengthening the entire food system.

Prof Afsana said policy alone is not enough. Effective action requires active participation from the private sector, development partners and community organisations. She also stressed the need to strengthen the science-policy interface so researchers can engage policymakers from the outset, helping translate evidence into effective policies and action.

Dr Rawshan Zahan Akhter Alo, deputy director of the Institute of Public Health Nutrition (IPHN); Dr Santhia Ireen, deputy director at the BRAC James P Grant School of Public Health; Prof Kaosar Afsana, head of the Humanitarian Hub at the BRAC James P Grant School of Public Health; Mohammad Solaiman Rasel, CTO and CBO of Grameen Health Tech Ltd (Shukhee); Dr Rudaba Khondker, country director of GAIN; and ASM Shahidul Alam attended from SMC, also spoke.

Bangladesh's listed banks came under mounting pressure in their core banking operations in the first half of 2026, as sluggish private sector credit growth and rising deposit costs squeezed earnings from traditional lending.

Although many lenders posted higher overall profits, the gains were largely driven by investment income from government securities rather than their core business of mobilising deposits and extending loans.

An analysis of the half-year financial statements of 27 listed banks shows a widening gap between core banking performance and bottom-line profitability. Eight banks posted negative net interest income (NII), 13 reported lower NII, and only six increased their core interest earnings during the January-June period.

AB Bank, SBAC Bank, Standard Bank and ICB Islamic Bank have yet to publish their half-year financial statements.

Net interest income, the key measure of a bank's core business, is the difference between interest earned on loans and interest paid on deposits. A decline in NII indicates lending income is failing to keep pace with funding costs.

National Bank posted the largest negative NII at Tk2,034 crore, followed by IFIC Bank (Tk1,542 crore) and Rupali Bank (Tk1,345 crore). Islami Bank reported a negative NII of Tk330 crore, while Premier Bank, Bank Asia, Southeast Bank and NRB Bank also slipped into negative territory.

Another 13 banks recorded sharp declines in NII. NRBC Bank saw the steepest fall, with NII plunging 95% year-on-year, followed by Trust Bank (90%), Prime Bank (82%), Mutual Trust Bank (72%) and Mercantile Bank (69%). United Commercial Bank, Eastern Bank, Dhaka Bank, Midland Bank, NCC Bank, One Bank, Dutch-Bangla Bank and Pubali Bank also reported lower NII.

Only six banks posted growth in core interest income. BRAC Bank led with a 29% rise in NII to Tk1,057 crore, followed by City Bank, Al-Arafah Islami Bank, Jamuna Bank, Shahjalal Islami Bank and Uttara Bank.

Treasury income cushions profits as banks turn cautious

Despite weaker lending income, many banks reported strong profit growth by capitalising on high-yield government securities.

Bangladesh Bank's tight monetary policy has pushed Treasury bill and bond yields into double digits over the past year, encouraging banks to park surplus liquidity in risk-free government instruments instead of expanding private sector lending.

BRAC Bank earned Tk2,656 crore from treasury investments in the first half, followed by Pubali Bank (Tk2,093 crore) and City Bank (Tk1,910 crore). Dutch-Bangla Bank, Rupali Bank, Bank Asia, Eastern Bank, Prime Bank, United Commercial Bank and Mutual Trust Bank also reported substantial income from government securities.

For several banks, treasury income exceeded earnings from traditional lending, highlighting their growing dependence on investment income to sustain profitability.

Industry insiders attribute the pressure on core banking to weak private sector credit demand amid slower economic activity, higher deposit costs, and banks' increasing caution in extending fresh loans because of rising credit risks and growing non-performing loans.

A chief financial officer (CFO) of a private commercial bank, requesting anonymity, said describing banks' core business as weakening could be misleading.

"The banking sector cannot lend out all deposits because of regulatory limits on the Advance Deposit Ratio (ADR). Any idle funds have to be invested somewhere, and government securities provide a safe avenue while still generating returns for depositors," he told The Business Standard.

Under Bangladesh Bank regulations, conventional banks can maintain an Advance Deposit Ratio of up to 87%, while Islamic banks operate under an Investment Deposit Ratio ceiling of 92%.

The CFO also said international accounting standards generally present lending and investment income together as interest income.

The Dhaka Stock Exchange (DSE) ended lower today (3 August), with the benchmark index slipping below the psychological 5,900-point mark as persistent gas supply shortages, escalating tensions in the Middle East and uncertainty over the draft margin loan rules dampened investor sentiment.

After moving in a narrow range for most of the session, the market came under renewed selling pressure in the second half of trading. Market analysts said that while Bangladesh Bank's accommodative monetary policy and the government's efforts to ease the energy crisis have offered some support, lingering uncertainties continue to keep investors cautious.

The benchmark DSEX index shed 10.62 points, or 0.18%, to close at 5,886. The blue-chip DS30 index fell 9.06 points to 2,204, while the DSES Shariah Index lost 6.18 points to finish at 1,186.

Turnover on the premier bourse also declined, dropping 3.74% from the previous session to Tk1,211 crore.

Among the 393 issues traded, 165 advanced, 169 declined and 59 remained unchanged. Although gainers and losers were nearly evenly matched, stronger selling pressure toward the close dragged the market into negative territory.

Market participants said uncertainty over the proposed margin loan rules has added to investors' concerns. With the deadline for public feedback approaching, investors remain uncertain whether the regulator will revise several contentious provisions before finalising the rules. As a result, many investors, particularly those relying on margin financing, are refraining from taking fresh positions.

In its daily market commentary, EBL Securities said the capital bourse slipped back into negative territory after witnessing day-long volatility, as selling pressure intensified near the psychological 5,900-point level. Despite supportive monetary easing and government initiatives to alleviate the energy crisis, persistent gas shortages and lingering Middle East tensions kept investors cautious, resulting in range-bound trading.

According to the brokerage, the benchmark index opened higher before selling pressure intensified across the board, pushing the market into negative territory by mid-session. A modest recovery attempt later in the day proved short-lived as profit-taking re-emerged, reflecting investors' continued caution amid an uncertain near-term market outlook.

On the sectoral front, textiles accounted for the largest share of turnover at 26.2%, followed by pharmaceuticals and chemicals at 11.8% and engineering at 10.6%.

Sector performance was mixed with mutual funds posting the strongest gain, rising 2.1%, followed by jute at 1.4% and information technology at 0.9%. On the downside, food and allied stocks fell 0.8%, general insurance declined 0.6%, and the miscellaneous sector lost 0.5%.

Fareast Finance topped the gainers' list with a 10% rise. Peoples Leasing and Financial Services and International Leasing and Financial Services followed, each advancing 9.52%.

Among the decliners, Meghna Pet Industries fell 5.15%, while SBAC Bank and Bangladesh Export Import Company (Beximco) lost 4.0% and 3.88%, respectively.

The most actively traded stocks of the day were Sharp Industries, Far East Knitting, and Monno Fabrics.

The Chittagong Stock Exchange (CSE) also closed lower, with the CSCX index shedding 14.2 points and the CASPI falling 30.2 points.

Shares of IT sector-listed Aamra Technologies have surged 65% over the past two months, but the company says there is no undisclosed price-sensitive information (PSI) behind the sharp rise.

Following the unusual increase in the share price and trading volume, the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) separately sought explanations from the company.

In replies to the DSE's query dated 12 July and the CSE's query dated 2 August, Aamra Technologies said it is not aware of any undisclosed price-sensitive information that could have influenced the recent movement in its share price or trading volume.

The company said there had been no significant changes in its business operations, financial position or future plans that could explain the rally.

The stock closed at Tk21.40 on the DSE today (3 August).

According to DSE data, the company's share price rose from Tk13 on 1 June to Tk21.50 on 2 August, a gain of 65.38% in two months.

Trading activity also increased sharply during the period, with turnover in several sessions well above the stock's usual average. Market observers say simultaneous spikes in price and trading volume in relatively small-cap stocks can sometimes indicate speculative trading, although determining the cause falls within the purview of the stock exchanges and the market regulator.

Aamra Technologies was listed on the stock market in 2012 and is currently in the 'Z' category. The company has a paid-up capital of Tk65.70 crore.

As of 30 June 2026, sponsor-directors held 30.01% of the company's shares, institutional investors owned 33.68%, while general investors held the remaining 36.31%.

Shares of loss-making Sharp Industries have surged 132.35% in just six weeks despite the company reporting a net loss of Tk65 crore in the first nine months of FY2025-26.

Trading in the stock has also increased sharply, although the company says there is no undisclosed price-sensitive information (PSI) behind the rally.

According to data from the Dhaka Stock Exchange (DSE), Sharp Industries' share price rose from Tk17 on 15 June to Tk39.50 on 3 August, gaining Tk22.50 during the period.

The unusual rise in both the share price and trading volume prompted the DSE to seek an explanation from the company on 13 July.

In its response, Sharp Industries said there had been no material developments, including changes in business operations, financial condition, new investments, asset sales, mergers, restructuring or any other corporate event, that could explain the recent surge in its share price.

The company also said it had no undisclosed price-sensitive information related to the movement.

Trading activity has risen significantly in recent weeks, with the stock featuring among the DSE's top-traded issues in several recent sessions.

Sharp Industries emerged from the merger of RN Spinning Mills Limited and Samin Food and Beverage Industries and Textile Mills Limited. RN Spinning had suspended operations following a fire in 2019 and had been incurring continuous losses since FY2018-19. As part of its revival plan, the company merged with Samin Food to resume operations.

The High Court approved the merger in December 2022, while the Bangladesh Securities and Exchange Commission granted its consent in October 2023.

Following the completion of the merger, the company began trading on the DSE under the name Sharp Industries PLC on 29 October 2024.

Despite the restructuring, the company's financial performance remains weak. During the first nine months of FY2025-26, Sharp Industries posted a Tk65 crore net loss on Tk257 crore in revenue.

In the January-March quarter alone, it incurred a Tk21 crore loss while generating Tk56 crore in revenue. As of March 2026, the company's accumulated retained losses stood at approximately Tk78 crore.

Market participants say the sharp rally in the shares of a company that continues to report substantial losses and has shown no visible improvement in its fundamentals is unusual.

They note that Bangladesh's textile sector is still facing significant challenges due to persistent gas shortages and rising production costs, making such a dramatic appreciation difficult to justify based on fundamentals alone.

Under DSE regulations, the exchange seeks explanations whenever a listed company's share price or trading volume shows unusual movements, with the objective of determining whether any undisclosed price-sensitive information exists.

Analysts advise investors to base investment decisions on a company's financial performance and fundamentals rather than short-term price momentum.

The National Board of Revenue (NBR) has allowed businesses to use both their old and newly reassigned Business Identification Numbers (BINs) for customs-related activities until November 30, 2026, aiming to ensure uninterrupted import and export operations following the restructuring of VAT commissionerates.

As part of an administrative reform to expand the tax net, improve revenue collection, and enhance taxpayer services, the NBR has reorganised the jurisdictions of the existing VAT commissionerates and created new ones.

Under the restructuring, the BINs of many businesses have been transferred to new VAT jurisdictions.

While the last four digits of the BIN -- indicating the relevant VAT commissionerate and division -- have changed, all other business information linked to the BIN remains unchanged.

To prevent disruptions to international trade, both the old and new BINs will remain temporarily active in the Customs ASYCUDA World system.

This will allow businesses to complete the ongoing customs procedures, including letters of credit (L/Cs), bills of entry, customs declarations, and other import-export formalities initiated under the previous BIN.

The NBR has requested all affected businesses to complete all pending transactions under the old BIN and switch to the new BIN by November 30, 2026.

After that date, the old BINs will be automatically deactivated in the ASYCUDA World system, and all customs-related import and export activities must be carried out using the new BIN only.

The revenue authority said the transitional arrangement was intended to ensure uninterrupted economic activities while supporting a more dynamic, efficient, and modern tax administration.

Most leading commercial banks have cut deposit interest rates by 50 to 100 basis points from the beginning of August, pushing returns further below inflation as excess liquidity and weak private-sector credit demand reduce the need to attract fresh deposits.

The rate adjustments follow broader policy shifts, including Bangladesh Bank's recent decision to cut the policy rate from 10% to 9.50% after nearly two years and enforce interest rate spread caps. Consequently, banks lowered lending rates as well.

The move comes at a severe cost to savers. With overall inflation standing at 9.16% in June, the fresh round of rate cuts will drag deposit yields down to 8.50-9%, down from the 9-10.15% range offered through July. As a result, depositors face negative real returns, as interest rates fail to keep pace with rising prices.

According to Bangladesh Bank's latest banking sector update, real deposit interest rates have remained persistently negative. Official data show deposit growth reached 11.41% in May, a performance bankers attribute to previously attractive deposit rates. However, industry leaders warn that reducing deposit rates while inflation remains elevated could eventually discourage savers.

"High deposit rates create massive future liabilities, which is why banks are moving to lower their cost of funds," said a senior executive at a private commercial bank. He added that yields on Treasury bills and government bonds had softened, squeezing banks' margins and reducing the incentive to offer 10% returns on one-year deposits.

Toufic Ahmad Choudhury, former director general of the Bangladesh Institute of Bank Management, questioned the central bank's policy decision.

"The question is why the central bank has decreased the policy rate? It is not a prudent decision anymore. Depositors are not getting real interest rates due to high inflation," he told The Business Standard.

Despite the continued erosion of purchasing power, bankers said depositors are still prioritising the safety of their funds over higher returns, helping deposits remain stable for the time being.

Excess liquidity weakens banks' appetite for deposits

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said lower yields on Treasury bills and bonds, combined with abundant liquidity and healthy deposit growth, had reduced banks' need to offer high deposit rates.

"Currently the interest rates on Treasury bills and bonds are lower than before. Banks have excess liquidity, and deposit growth is good. I think deposit interest rates will fall below the inflation rate," he said.

Mahbubur said the Bangladesh Bank had instructed banks to keep the interest rate spread within 4%, prompting lenders to reduce both deposit and lending rates, although deposit rates would be adjusted first.

Mohammad Ali, managing director of Pubali Bank, said higher deposit rates had previously helped banks attract savings.

"Depositors received attractive deposit rates earlier, and as a result deposit growth reached a satisfactory level. But leading commercial banks now have excess liquidity and weak credit demand. So banks have moved away from offering higher rates to depositors and have already reduced deposit rates," he said.

Another managing director of a commercial bank, speaking on condition of anonymity, said depositors are increasingly choosing financially credible banks rather than chasing higher interest rates. He added that if banks could reduce their funding costs, they would increase investment in Treasury bills and government bonds. However, he noted that weaker banks still needed to offer relatively high deposit rates to attract deposits.

Bangladesh Bank data show surplus liquidity rose to Tk3,27,877 crore in May from Tk2,35,500 crore in the same month of 2025.

Lending income weakens as investment demand slows

Banks' earnings from both lending and government securities have come under pressure as interest rates on Treasury instruments have eased and private-sector borrowing has weakened.

According to bankers, yields on Treasury bills are now below 9%, while Treasury bonds offer slightly above 10%, compared with around 12% previously. Lower returns from government securities have reduced their attractiveness compared with the period of higher yields.

Meanwhile, sluggish private investment has continued to suppress demand for bank credit. Bangladesh Bank data show private-sector credit growth remained below 5% in May 2026, reducing banks' income from lending over an extended period.

Banks' financial statements illustrate a significant shift in their income structure over the past four years. In 2021, the country's 52 major banks generated Tk40,793 crore in total income, with lending contributing 47%, investments 34% and commissions 19%.

By 2025, investment income had become banks' largest source of revenue, accounting for 73% of total income, while net interest income had fallen to 6.8%. Commission income remained broadly unchanged at around 20%.

Banks have increased their investment in Treasury bills and government bonds since late 2023, when yields on those instruments rose sharply, although returns have moderated more recently.

Chevron Bangladesh's fresh investment proposal to ramp up onshore gas exploration gets under processing, sources say, amid a thrust on energy search to meet shortages of fuels in the country.

The energy ministry has asked state-run Petrobangla to review the investment proposal from the US multinational.

Chevron Bangladesh, a part of the global energy company Chevron, submitted the investment proposal for further hydrocarbon exploration in block-11 and block-12 in the country's gas-rich northeastern region.

The American company is currently installing a compression station near Jalalbad gas field at a cost of around US$65 million to increase gas production from nearby producing gas fields.

The project is expected to be completed within 30 months, making additional gas available by 2028.

Chevron's investment proposal for these unexplored onshore areas in the Surma basin is long pending for approval by Bangladesh government.

The company has recently renewed interest in making further investment there to ramp up the country's overall natural-gas output against the backdrop of growing energy crisis since the beginning of the Middle East crisis late February, dwindling local gas reserves and mounting demand in industries, power plants and fertiliser factories.

Sources could not confirm how much investment Chevron will pour into these onshore blocks, but said that it would be no less than US$500 million.

"Chevron has planned to drill a good number of wells in new exploration areas and would be able to supply natural gas within the shortest possible time," said one source.

The US company is learnt to have sought to link the gas price to the price of Brent Crude on the international market and demanded that the price should be 10 per cent of the Brent Crude price, which will be variable.

Under the current international market rate, the price would be US$9.0 per cubic meter, considering the Brent Crude price at US$90 per barrel, which is around three times higher than the price at which it sells gas to Petrobangla from the currently operational gas fields.

Chevron placed the proposal after carrying out 'exploration study' in 11 onshore blocks, fully or partially, to delineate new hydrocarbon prospects over the past couple of years.

Among the blocks 1, 2A, 2B, 3A, 3B, 8, 9, 11, 12, 13 and 14, which were studied by Chevron, few are still vacant, or unexplored, some owned by state-run Bangladesh Gas Fields Company Ltd (BGFCL) and some owned by Sylhet Gas Fields Ltd (SGFL) and the remaining are Chevron's.

During the study, the company attained access to relevant data and carried out study in reservoir 'stratography', and unconventional reservoir 'farcies.'

Officials have said the US firm attained a 60-square-kilometer 'flank' area from Petrobangla outside its existing contract zone to the north of the Bibiyana gas field in the gas-rich region during the previous Awami League government.

It also invested around US$150 million in drilling a couple of new wells BY-27 and BY-28.

The onshore block-11 is one of the several blocks that were kept ring-fenced for development by BAPEX.

Chevron Bangladesh is currently the largest producer of natural gas in Bangladesh with its output of around 890 million cubic feet per day (mmcfd) from three of its onshore fields -- Bibiyana, Jalalabad and Moulavi Bazar, which are located in blocks 12, 13 and 14 respectively, according to official data of Petrobangla as on August 1, 2026.LPG supply solutions

The country's overall natural-gas output hover around 2,151mmcfd, including 500mmcfd regasified liquefied natural gas (LNG) and the remaining 1,651mmcfd from local gas fields that include the Chevron-operated ones.

Previously, the Bangladesh Oil, Gas and Mineral Corporation or Petrobangla had turned down a similar proposal from Chevron to develop onshore Rashidpur gas field, owned by the corporation's subsidiary Sylhet Gas Fields Ltd (SGFL).

Chevron then also had sought 10 per cent of the Brent Crude price for Rashidpur gas after development of the field and initiating production.

Instead of allowing it to develop Rashidpur gas field, Petrobangla has engaged its subsidiary Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) to drill extensively over there.

More than a decade back in 2015, Chevron also had proposed to invest around US$650 million in installing a new compression station at Bibiyana gas field and drilling three more wells in Jalalabad gas field, tagging condition of annual tariff hike by 3.0 per cent for Bibiyana gas.

The US firm later dropped the investment plan as Petrobangla rejected its plea for annual hike in gas tariffs. Chevron instead announced sellout of its Bangladesh stakes to Chinese joint-venture Himalaya Energy in April 2017.

The US firm reversed its decision in October 2017 when Petrobangla moved to acquire its assets. It decided not to sell off its Bangladesh stakes but to stay in Bangladesh.

Bangladesh’s low tax-to-GDP ratio highlights the need for greater revenue to fund infrastructure, social welfare and development. However, revenue measures must not undermine investment, employment or voluntary compliance.

The mandatory turnover tax on non-corporate businesses and professionals has therefore become a major concern among taxpayers. Under Section 163(6) of the Income Tax Act, 2023, as amended by the Finance Act, 2026, taxpayers must pay the prescribed turnover tax when their normal income-tax liability is lower.
The tax applies to gross receipts, even when losses are incurred. The general rate is 1 percent, with sector-specific variations and a 0.2 percent rate for newly established industrial undertakings during their first three years.The issue is not whether businesses should pay tax. The real question is whether gross sales or gross receipts (essentially, turnover) are an appropriate basis for determining tax liability, particularly for small and low-margin enterprises. Income tax is normally levied on net profit, the amount that remains after legitimate business expenses have been deducted.

A turnover tax, by contrast, is imposed on total sales, effectively treating sales volume as though it were income. However, a business may generate a high turnover while earning only a small profit. In such cases, taxing turnover rather than profit can impose a disproportionate burden, especially on businesses with thin profit margins.

Consider a small rice trader who starts with capital of only Tk 500,000 and repeatedly reinvests the same money throughout the year. Suppose the trader buys rice at Tk 75 per kilogram and sells it at Tk 80. With annual sales of Tk 12 million, the trader sells 150,000 kilograms and earns a gross profit of Tk 750,000. From this amount, the trader needs to pay Tk 150,000 for transportation, Tk 60,000 in rent, Tk 96,000 in salaries, Tk 12,000 for electricity and Tk 24,000 in other operating expenses. Total operating expenses come to Tk 342,000, leaving a net profit of Tk 408,000.

At a turnover-tax rate of 1 percent, the trader must pay Tk 120,000 in tax. But if tax were calculated on actual income, and Tk 408,000 were the trader’s only taxable income, the liability after the tax-free threshold would be around Tk 5,000 as minimum tax. The turnover tax would therefore be approximately 24 times higher. More strikingly, the Tk 120,000 tax would absorb almost 30 percent of the trader’s net profit. If the business made a loss in the following year, turnover tax could still be payable because the system does not consider profitability.

The turnover tax raises concerns under the ability-to-pay principle, which requires taxation to reflect a taxpayer’s real economic capacity. Gross sales are not the same as income. A trader may record crores of taka in sales yet retain only a small margin after paying suppliers, interest, transport, rent, wages, utilities and other expenses. This burden is especially severe for SMEs operating with limited capital and bank financing.

Rising borrowing costs, raw-material prices, transport expenses, electricity charges, digital banking fees and merchant discount rates have further reduced profitability, making turnover-based taxation increasingly disproportionate.

When small businesses are required to pay tax equal to 1 percent of gross sales, their working capital can decline rapidly. Working capital is the lifeblood of a small business; when it shrinks, the business may struggle to replenish inventory, pay employees, settle suppliers’ bills and service bank loans. This can lead to delayed payments, reduced employment, increased borrowing or even business closure. The consequences extend beyond the taxpayer, affecting employees, suppliers, lenders and consumers.

Turnover tax may be administratively simple where accounting records are weak, but simplicity should not undermine fairness. A disproportionate system can discourage formalisation, promote cash transactions and push businesses into the informal economy, ultimately reducing revenue. In countries such as the United Kingdom, Canada, Australia, Singapore and Japan, business income is generally taxed on net profit.

Simplified regimes in developing economies often consider business size, sector, profit margins and compliance capacity. Their purpose is to ease compliance, not penalise enterprises. Bangladesh should therefore adopt the following balanced measures that protect revenue while supporting sustainable SME growth:

First, the turnover tax rate for qualifying small and medium-sized businesses and professionals could be reduced from 1 percent to 0.2 percent.

Second, a tiered structure could be introduced, with tax rates varying according to annual turnover, business size and sectoral profit margins. A small grocery shop should not bear the same effective tax burden as a large, high-margin enterprise.

Third, businesses that consistently use formal banking channels and maintain basic digital records could receive targeted tax incentives.

Fourth, genuinely loss-making businesses below a defined threshold should be eligible for temporary relief. Appropriate documentation requirements and safeguards could be introduced to prevent abuse.

Fifth, the government should develop a phased roadmap for moving from turnover-based taxation towards profit-based taxation. This transition could be supported by expanding access to simple digital bookkeeping tools and affordable tax advisory services.

Finally, major tax policy changes should be preceded by structured consultations with business associations, professional bodies, tax experts and research institutions. Tax policy is more effective when those affected understand it, consider it reasonable and have the practical ability to comply.

Small and medium-sized enterprises are vital to employment, entrepreneurship and social stability in Bangladesh. Their tax contribution should be assessed not only in terms of immediate revenue but also by its impact on investment, jobs, business survival, access to finance and the future tax base.

Economic growth and revenue growth are mutually reinforcing. Reconsidering the 1 percent turnover tax therefore supports better, not lower, taxation. A tiered rate, relief for genuine losses and gradual movement toward profit-based assessment could protect revenue while allowing small businesses to grow, formalise and contribute more sustainably.