Gold prices in Bangladesh have surged past the Tk250,000 mark per bhori yesterday (21 January), hitting an all-time high in the domestic market.

The Bangladesh Jewellers Association (Bajus) raised the price of 22-carat gold by Tk8,339 per bhori (11.664 grams), setting the new rate at Tk252,467, the highest ever recorded in the country.

In a notification issued at night, Bajus said the price adjustment was made in view of a rise in the local market price of pure gold (tejabi gold).

The new prices will come into effect from Thursday.

According to the revised rates, the price of 21-carat gold has been fixed at Tk240,978 per bhori, 18-carat gold at Tk206,569 per bhori, while gold under the traditional method will sell at Tk169,653 per bhori.

In addition to the selling price, buyers will have to pay a mandatory 5% VAT set by the government and a minimum 6% making charge fixed by Bajus.

However, making charges may vary depending on the design and quality of jewellery.

Bajus last revised gold prices on 20 January, when it increased the rate of 22-carat gold by Tk5,249 per bhori to Tk244,128 – then the highest price in Bangladesh's history.

With the latest adjustment, gold prices have been revised 10 times in the domestic market so far in 2026. Of these, prices were increased on eight occasions and reduced twice.

Silver prices also rise

Alongside gold, silver prices have also been increased. BAJUS raised the price of 22-carat silver by Tk292 per bhori to Tk6,882, marking the highest silver price ever in the country.

Under the new rates, 21-carat silver will sell at Tk6,532 per bhori, 18-carat silver at Tk5,599 per bhori, while silver under the traditional method has been fixed at Tk4,199 per bhori.

So far this year, silver prices have been adjusted seven times in the local market, with prices increased five times and reduced twice.

Bangladesh's Summit Group is stepping into the country's data centre market while continuing to pursue its growing LNG projects, as the nation's demand for liquefied natural gas is expected to remain strong.

In interviews with Platts, part of S&P Global Energy, Summit Group Chairman Muhammed Aziz Khan discussed the company's plans to leverage its existing power capacity and infrastructure to expand into data centres and LNG.

"Bangladesh and Summit are uniquely positioned with excess electricity capacity for the next few years. We would like to be a pioneer in this global AI race," Khan said.

He noted that the country's recently enacted Personal Data Protection Ordinance, 2025, is also expected to stimulate demand for domestic data centres.

The group intends to utilise its subsidiary, Summit Technopolis Hi Tech Park, or vacant land alongside its power plants and the river, to build its first large-scale facility in Dhaka, Khan said.

"Data centres are challenged primarily by the lack of electricity. We can, with the requisite government permissions, give electricity quickly," he added.

Summit currently has approximately 350 megawatts of capacity that could be dedicated to data centres, positioning it as a hyperscaler, according to Khan. The company is also laying optical fibres from Bangladesh to Singapore, although the work has experienced slight delays due to regulatory hurdles.

"However, we are hopeful of overcoming those challenges. Subject to government permissions, Summit can build its first data centre in about 18 months," Khan said.

He expressed openness to strategic partners who bring marketing expertise for its data centres. The company is also exploring opportunities to import green electricity from countries such as Indonesia and Malaysia.

LNG impetus

"I continue to believe that LNG and its related infrastructure are essential for the country's growth," Khan said.

He added that the newly elected government, following the upcoming national elections expected in February, will likely implement more structural reforms for Bangladesh's infrastructure and development over a longer time horizon.

Bangladesh's LNG imports are projected to reach 7.2 million metric tons per annum in 2026, up from an estimated 6.8 million mt/year in 2025, according to Khan. The country's LNG imports could climb to 15 million mt/year in the coming years alongside 6%-7% GDP growth, he said.

Khan highlighted Bangladesh's trade advantages despite international challenges. "The US imposed a 20% reciprocal tariff on many Bangladeshi goods last year. However, Bangladesh's lower tariffs compared to some neighbouring countries give it an edge over other competitors."

He added that the foreign currency situation is expected to continue improving with the country's economic growth.

Domestic gas production in Bangladesh peaked at 2.6 Bcf/d in 2018 but has steadily declined, averaging a 5% annual reduction to 2 Bcf/d by 2024, according to S&P Global Energy CERA analysts in a December 2025 report. In H1 2025, production fell further to 1.8 Bcf/d, a 7% decrease from the total for 2024. The analysts noted that limited exploration and production contributed to the decline, partially driving the anticipated growth in LNG imports.

Khan also commented on international LNG prices, saying they are expected to be volatile in the coming months.

"Prices are set to rise substantially in the short-medium run if tensions escalate in Iran. However, in the longer term, prices will be pressured by supply waves from the US and Qatar as well as by optimism about global geopolitics," he said.

Platts assessed the March JKM, the benchmark price for LNG cargoes delivered to Northeast Asia, at $10.334/MMBtu on 16 January, up 3.5% from 15 January.

Growth pathway

Summit Group had planned to build Bangladesh's first onshore LNG terminal at Matarbari Island in the Bay of Bengal on a build, own, operate, and transfer basis. However, the project has been delayed due to the abolition of the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010, which was repealed by the government in 2024, Khan said.

The onshore terminal could proceed either through an international tender or a government-to-government contract.

"So, if an international tender is launched, we will participate in it. But if it is a G2G contract, then we will only be able to receive services from the terminal owned by the government of Bangladesh," Khan said.

Bangladesh is also considering converting around 30,000 Mcf/d of unutilised natural gas from the gas-rich Bhola island into LNG and delivering it to gas-starved industries on the mainland. When asked whether Summit would participate, Khan said that doing so would require a transportation facility rather than infrastructure for gas use, and that Summit was not keen to pursue it.

Retail broiler sellers in Bangladesh earn more than Tk7 per kg after covering operating costs, significantly higher than the profit margins earned by wholesalers, according to a Bangladesh Bank survey published today (21 January).

The survey found that retail sellers make an average profit of Tk12 per kg on broiler chicken, with a selling price of Tk137 per kg. In comparison, wholesalers earn an average profit of only Tk5 per kg at the same selling price.

The survey team visited 61 upazilas across 18 districts to examine five key agricultural commodities—rice, potatoes, onions, broiler chicken, and eggs between 15 June and 7 July 2025. Later, data was collected from large corporate companies, including Paragon, Nourish, ACI, and Akij, at their head offices in July and early August 2025.

The report details the cost and price dynamics, seasonal factors, and underlying reasons behind price changes. For example, the retail price of coarse rice rose to Tk61 per kg during the surveyed period, up from Tk55 last year, reflecting a 10.9% increase. The cost of production increased by 35%, driven by higher labor wages and greater use of fertilisers and pesticides.

Cultivated paddy land decreased by 0.31%, as some farmers shifted to more profitable crops such as potatoes, onions, maize, and mustard. Late paddy varieties, coupled with monsoon-related disruptions, also contributed to a 1.91% reduction in yield and higher labor costs.

Potato production increased due to expanded cultivation, but limited storage forced farmers to sell early at lower prices. Onions were surveyed in Pabna, Faridpur, Rajbari, and Rajshahi districts producing 55.1% of the country's onions. Among 115 respondents, including 66 farmers, 22 beparis, 16 aratdars, and 11 retailers in Dhaka, the average production cost was Tk33 per kg, with a selling price of Tk43 per kg, yielding a gross margin of roughly 30%.

Egg production was surveyed in Gazipur, Narshingdi, Cox's Bazar, and Chattogram, covering farmers, wholesalers, retailers, and consumers.

The survey findings were presented at a briefing at the Bangladesh Bank headquarters on Wednesday, attended by Chief Economist Akhtar Hossain, Spokesperson Arief Hossain Khan, and other senior officials. The report also offers an outlook on these commodities in the near future and provides policy recommendations based on the survey's findings.

The Bangladesh Bank plans to merge all nine state-owned banks into two large banks, citing the size of Bangladesh's economy and the need to improve governance and address long-standing mismanagement in the sector, Governor Ahsan H Mansur said on Tuesday.

Speaking at a discussion at Jagannath University in Dhaka, the governor said Bangladesh currently has 61 banks—far more than the economy requires.

"In Bangladesh's context, 10 to 15 banks are sufficient," he said, adding that the country needs a smaller number of large banks rather than many small ones. "Reducing the number of banks would make it easier to ensure good governance."

Later, speaking to The Business Standard, Mansur cited India as an example, noting that the neighbouring country has decided to reduce the number of state-owned banks to four despite having an economy more than 10 times larger than Bangladesh's.

He also pointed to Singapore-based DBS Bank, which has assets of around $1.2 trillion—equivalent to nearly Tk130 lakh crore—while the combined size of Bangladesh's entire banking sector stands at about Tk20 lakh crore.

"Although Singapore's economy is similar in size to Bangladesh's, its financial sector is 20 times larger," he said. "Despite that, Singapore has only a few banks, but all of them are very large."

State-owned banks to be consolidated

Bangladesh currently has nine state-owned banks: four commercial banks—Sonali, Agrani, Rupali and Janata; two development banks—BASIC and Bangladesh Development Bank; and three specialised banks—Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and Probashi Kallyan Bank.

The governor revealed the state-bank merger plan as the central bank moves ahead with wider restructuring of the financial sector, following the merger of five private Islamic banks and the initiation of liquidation proceedings against nine non-bank financial institutions (NBFIs).

Mansur said mismanagement, irregularities, nepotism and weak governance had severely weakened the banking sector, resulting in losses of nearly Tk3 lakh crore, a significant portion of which may have been laundered abroad.

He alleged that $20–25 billion may have been siphoned off through nepotistic channels while speaking at the event titled "Banking Sector: Current Challenges and Future Prospects."

Economists back consolidation

Commenting on the plan, Zahid Hussain, former lead economist at the World Bank's Dhaka office, said the merger of state-owned banks was long overdue.

"There is no question about the desirability of consolidation," he said, adding that the Bangladesh Bank now needs a clear roadmap on how the mergers will be carried out.

Hussain, who is also a member of the banking sector reform task force formed after the regime change, said state-owned banks have failed to move away from a bureaucratic model and remain vulnerable to political influence.

"All the large loan scams we know of during the previous regime occurred in state-owned banks," he said.

Repeated government recapitalisation has placed a heavy burden on taxpayers, and bringing the banks under one umbrella is the right decision, he added.

He noted that Sonali Bank, the largest state-owned lender, plays a key role in treasury operations and social welfare programmes through its extensive branch network. "However, nine state-owned banks are unnecessary for delivering such programmes," he said.

Recent restructuring

The Bangladesh Bank has already merged five troubled Islamic banks – First Security Islami, Global Islami, Social Islami, Exim, and Bank – and formed a new bank named Sammilito Islami Bank.

The government is required to provide Tk20,000 crore for the five merged banks, of which Tk10,000 crore has already been disbursed.
The Bangladesh Bank also started to liquidate nine non-bank financial institutions for which the government will provide Tk5,000 crore to pay back individual depositors' money.

The nine NBFIs slated for liquidation are FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People's Leasing, and International Leasing.

Meanwhile, the central bank also plans to create a dedicated "resolution fund" of up to Tk40,000 crore to rescue and restructure failing banks without relying on taxpayer-funded government bailouts.

Overbanking and weak balance sheets

World Bank data show that Bangladesh's GDP in 2023 stood at $323.28 billion (at constant 2015 prices), supported by 61 banks. By comparison, Pakistan—with a GDP of $400.17 billion—had 41 banks, while India, with a $3.2 trillion economy, operated with just 33 banks.

The data underline concerns that Bangladesh is significantly overbanked, while peer countries have expanded branch networks of large banks rather than multiplying the number of institutions.

Despite years of government support, the financial health of state-owned banks remains fragile. Between 2009 and 2024, more than Tk25,000 crore was injected into these banks to keep them afloat.

BASIC Bank's default loan ratio now exceeds 70%, while Janata Bank's stands at over 73%. As of December 2024, Agrani, Janata, BASIC and Rupali banks reported a combined capital shortfall of Tk31,000 crore, with the Bangladesh Bank rejecting their five-year recovery plans as "unrealistic".

Sonali Bank and Bangladesh Development Bank also faced a provisioning shortfall of Tk4,763 crore, although regulatory forbearance allowed them to report a modest capital surplus.

Bangladesh Bank has revised its earlier decision on profit payments by Sammilito Islami Bank, allowing only individual depositors to receive a 4% return on their deposits for 2024 and 2025.

However, the benefit will not apply to institutional depositors. The decision was conveyed by the Bank Resolution Department in a letter sent yesterday to the administrators of five Islamic banks.

Depositors of 5 Islamic banks won't receive profit for 2024–2025: Governor

The letter instructs that profit at an annual rate of 4%, based on the bank rate, be paid on term and scheme-based deposits from 1 January 2024 to 28 December 2025.

The move reverses Bangladesh Bank's earlier position taken this month, when it ruled that depositors of the troubled banks would receive no profit for the two years due to weak financial conditions.

Last year, Bangladesh Bank finalised the Bank Resolution Scheme 2025 for the newly formed Sammilito Islami Bank PLC, created by merging the five crisis-hit Shariah-based banks. The scheme outlines specific steps and timelines for repaying depositors' funds as part of the resolution process.

The commerce ministry may backtrack on a plan to withdraw bonded facilities and impose duties on yarn imports amid a standoff between the government and garment exporters over the issue, industry insiders say.

After industry leaders flagged the potential blow to export competitiveness, officials are signalling a possible rethink, suggesting that the matter may now be examined by independent economists rather than enforced immediately.

This came after a meeting yesterday between top representatives of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) with Commerce Adviser SK Bashir Uddin.

"The adviser has understood our concerns. He will review all the data and re-evaluate the issue," said Faisal Samad, a BGMEA director.

BKMEA President Mohammad Hatem added, "We are more or less confident that the initiative will not go ahead. The issue will be analysed by three independent economists before a final decision is taken."

The dialogue, however, has not bridged all divides. Textile millers, represented by the Bangladesh Textile Mills Association (BTMA), met separately with the finance adviser without success.

"Despite understanding the situation, they are choosing not to acknowledge it," said BTMA President Showkat Aziz Russell.

Bangladesh imports around $2.4 billion of yarn annually, mostly from India, where incentives allow a cheaper supply than local mills can match. Spinning mill owners have struggled with underused capacity and mounting stockpiles, with nearly 100 mills partially or fully shut down.

Entrepreneurs in the sector – representing investments of about $23 billion – have sought urgent government intervention to survive.

Garment exporters warn that duties could increase knitwear production costs by 8-10%, translating into $2.4 billion in annual extra expenses, threatening the country's $28 billion knitwear export sector. Textile mill owners argue that open-costing agreements with buyers could absorb some of the increase, but exporters contend that higher prices risk lost contracts and market share

The government's proposed ban on importing day-old broiler and layer chicks under the Poultry Development Policy 2026 has triggered growing concern among poultry producers, who fear the move could disrupt supply chains and push up prices if implemented without transitional safeguards.

The final draft of the policy has already been published on the government website for public feedback and is expected to be placed before the cabinet for approval soon, according to officials familiar with the process.

The policy marks a significant shift in how the state intends to manage the poultry sector, formally recognising it as a strategic food security industry.

While policymakers argue that the move will strengthen domestic capacity and reduce import dependence in the long run, industry stakeholders caution that the proposed import ban, if implemented abruptly, could destabilise supply chains and create fresh volatility in prices.

Bangladesh Poultry Industries Association President Mosharraf Hossain Chowdhury stressed that policy decisions must prioritise farmers. "Poultry is not just a business; it is central to food security. Any decision must ensure that farmers receive chicks on time and at fair prices," he told TBS.

Self-reliance and regulation

According to the draft, the Poultry Development Policy 2026 prioritises expanding local production capacity, improving disease control, strengthening biosecurity, ensuring quality feed and hatchery management, and gradually reducing reliance on imports. The policy also aims to bring greater discipline to the sector through stronger monitoring and enforcement.

One of its most debated provisions proposes a total ban on importing day-old broiler and layer chicks, a move the government says is intended to encourage investment in domestic breeder farms and hatcheries.

The policy also outlines plans to introduce a centralised database and traceability system for poultry disease control, allowing authorities to track production, movement, and biosecurity compliance across the supply chain.

In addition, the draft mandates strict action against low-quality hatcheries and farms, arguing that inconsistent quality and weak compliance have contributed to production inefficiencies, disease outbreaks, and farmer losses.

As the Poultry Development Policy 2026 moves towards cabinet approval, it reflects the government's ambition to build a self-reliant poultry sector through regulation, quality control, and domestic investment. Yet industry stakeholders argue that without careful sequencing and transitional safeguards, the policy risks undermining short-term supply stability.

The challenge now lies in aligning long-term policy goals with current market constraints, a balance that will ultimately determine whether the new framework strengthens food security or introduces new volatility into one of Bangladesh's most critical protein sectors

Government officials maintain that these measures are essential for building a more resilient and organised poultry industry. "The draft has been prepared to ensure overall sectoral development, while also protecting investors," said ABM Khaleduzzaman, director (production) at the Department of Livestock Services. "Once implemented, the policy will help the poultry sector become stronger and more sustainable."

Industry concerns over timing and capacity

Despite these assurances, poultry entrepreneurs argue that the policy underestimates current market realities. Bangladesh currently requires around 700-800 crore broiler and layer chicks annually, of which domestic hatcheries supply approximately 75-80%. The remaining 20-25 percent is met through imports, which industry players describe as a critical buffer during supply disruptions.

Stakeholders say they raised these concerns during multiple consultations held before finalising the draft, including meetings attended by the fisheries and livestock adviser. While participants reportedly urged caution in imposing an outright ban, citing food security and consumer interest, the provision remained in the final draft, prompting frustration among industry bodies.

A senior leader of the Bangladesh Poultry Industries Central Council warned that domestic capacity, though expanding, is not yet sufficient to absorb a sudden ban.

"If imports are stopped now, shortages will emerge. That will push up chick prices, reduce production, and eventually raise chicken and egg prices for consumers," he said.

Day-old chick production in Bangladesh is heavily concentrated among a handful of large corporate groups, including Kazi Farms Group, Aftab Group, Navana Group, Paragon Group, CP Bangladesh, Beximco Agro, and Diamond Hatchery. Industry estimates suggest these players collectively control around 70-80% of total domestic production.

However, much of this output is consumed internally through vertically integrated operations, contract farming arrangements, or group-linked farms. As a result, effective buffer capacity for the open market remains limited, leaving independent and small farmers vulnerable during supply shocks.

Price volatility and policy trade-offs

Data from poultry associations show that Bangladesh produces roughly 20 lakh broiler chicks per day, with production costs ranging between Tk28 and Tk30 per chick. Yet during shortages, farmers report paying Tk48-Tk50, eroding profitability and forcing many marginal producers out of the market.

Critics argue that maintaining limited import flexibility during crisis periods helps prevent price manipulation and protects competition. They also point to risks associated with breeder and grandparent stock imports, approvals for which can take six to eight months, potentially creating supply gaps if planning assumptions fail.

Experts have echoed calls for a phased or conditional approach. Professor Md Bahanur Rahman, dean of the Faculty of Veterinary Science at Bangladesh Agricultural University, said policymakers must realistically assess domestic capacity before enforcing a ban.

"We need to ensure not only production capability, but also a consistent, affordable supply to farmers," he noted.

The Bangladesh Bank (BB) began hearings yesterday with the top executives of nine non-bank financial institutions (NBFIs) to determine whether there are grounds to oppose their planned liquidation.

The central bank had earlier sent letters asking the NBFIs to attend hearings scheduled yesterday and today at its Dhaka headquarters. Representatives from five finance companies attended yesterday’s session.

At the hearings, NBFIs are required to explain why they should not be liquidated, while BB officials present the case for winding them up, according to central bank officials familiar with the matter.

The nine NBFIs facing liquidation are FAS Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing and International Leasing.

In November last year, the BB board approved the liquidation of the institutions under the newly framed Bank Resolution Ordinance 2025, the country’s first comprehensive framework for resolving failing banks and NBFIs.

The ordinance outlines procedures for merging, restructuring or closing distressed institutions and sets out the hierarchy for repaying creditors after assets are sold.

Together, the nine institutions account for 52 percent, or Tk 25,089 crore, of total defaulted loans in the NBFI sector as of the end of 2024.

BB data show that as of September 2025, the country’s 35 NBFIs held Tk 29,408.66 crore in non-performing loans (NPLs), equivalent to 37.11 percent of their total disbursed loans of Tk 79,251.11 crore. The sector’s NPL ratio was 35.52 percent a year earlier.

Industry insiders attribute the surge in defaults to large-scale irregularities and scams during the previous government.

For instance, according to a BB probe, PK Halder, former managing director of NRB Global Bank (later Global Islami Bank), allegedly embezzled at least Tk 3,500 crore from four NBFIs – People’s Leasing, International Leasing, FAS Finance, and BIFC.

These institutions are now severely distressed, with more than 90 percent of their loan portfolios non-performing.

BB Governor Ahsan H Mansur recently said individual depositors of the nine NBFIs slated for liquidation may get back their principal amounts before Ramadan in February.

Officials said the government has verbally approved around Tk 5,000 crore to repay non-bank depositors.

Central bank data show the nine NBFIs hold Tk 15,370 crore in deposits, of which Tk 3,525 crore belongs to individual depositors and Tk 11,845 crore to banks and corporate clients.

In May last year, BB warned 20 NBFIs with high levels of defaulted loans after they failed to repay depositors.

Tax compliance among the public will not improve unless transparency is ensured in how tax revenues collected from people are spent, economists said at a seminar in Dhaka today (21 January).

"As long as people can't see where the money collected from them is being spent, tax compliance will not develop," said Rashed Al Mahmud Titumir, professor at the Department of Development Studies of the University of Dhaka, at the seminar held at the Bangladesh Development Bank Limited (BDBL) building.

Titumir said taxpayers want to know whether their money is being spent for their benefit. Stating that people have lost trust in the revenue system, he said, "This is because there is no fairness in it."

Masud Khan, chairman of Unilever Consumer Care, raised similar concerns. "What do I receive in return for the tax I pay? In other countries, taxpayers receive many services for free," he said.

"If people could understand that paying tax brings them benefits, they would be more willing to pay," he added.

He said only 20% of tax-eligible people in the country currently pay taxes, while the burden created by the remaining 80% who do not pay falls on that 20%.

Participants said corruption and mismanagement in previous governments led to the wastage of taxpayers' money. They also criticised the National Board of Revenue's policy of collecting minimum tax, arguing it undermines fairness. It was noted that Bangladesh is the only country where minimum tax is collected in this way.

Minimum tax refers to tax deducted at source at a fixed rate. Even if a company makes less profit than the tax deducted – or incurs a loss – the deducted amount is not refunded. Speakers said this goes against the basic principle that tax should be paid on income, and that companies often face an effective tax rate higher than the official corporate tax rate.

Online returns

Masud Khan, also described the current online tax return filing system as difficult and confusing, contradicting repeated claims by National Board of Revenue Chairman Abdur Rahman Khan that it is easy.

After the event, Khan told The Business Standard, "My son lives in the US, where tax returns can be filed very easily."

"I asked for his help after failing to complete it myself. He said it was very complicated, and eventually even he could not do it," he added.

The NBR chairman has said at different programmes that "Anyone who can click the 'Like' button on Facebook can fill out an online tax return."

Khan said even after submitting a return, individuals and companies often do not know whether it has been finally accepted.

"After submission, the return may still be selected for audit by the commissionerate, tax intelligence, or the Central Intelligence Cell. Even after that, it may again be audited. As an assessee, I do not know when my return will finally be accepted," he said.

During the event, he highlighted various concerns and objections raised by businesspeople regarding Bangladesh's tax, customs, and VAT systems.

The government has allowed the Bangladesh Petroleum Corporation (BPC) to import liquefied petroleum gas through government-to-government deals amid a nationwide shortage of cooking gas cylinders and a sharp rise in prices.

The situation is being attributed to supply shortages and the authorities believe this move by the government would ease the crisis.

But a number of BPC officials said this would unlikely to bring relief anytime soon. Because, the corporation currently lacks the specialised lighterage vessels and dedicated jetties needed to transport the liquefied petroleum gas (LPG).

Because of these logistical constraints, imports cannot begin immediately, according to a number of BPC officials.

Until now, LPG imports have been handled mainly by the private sector.

According to the current arrangement, BPC is allowed to import only bulk LPG -- gas brought in large tanks or vessels -- which private operators later bottle at their own terminals before selling it in the market.

BPC will supply LPG only to approved private operators and will not be involved in bottling or retail sales.

Market insiders say weak market management and poor oversight have also contributed to the current gas cylinder crisis, but these issues are being overlooked as the authorities rush to boost supply.

“We have several infrastructural limitations, as we have never imported this type of LPG before,” a BPC official said on condition of anonymity.

“Even if we import LPG, we will not sell it directly to consumers. The same private players who currently dominate the market will handle distribution, meaning they can still influence supply and prices,” he added.

PERMISSION GRANTED, BUT CONDITIONS APPLY

According to BPC sources, the corporation first sought permission to import LPG on January 10. The energy ministry gave verbal consent on January 18, followed by written approval on Tuesday.

The approval letter, addressed to BPC Chairman Md Amin Ul Ahsan and signed by Shahina Akhter, senior assistant secretary of the Energy and Mineral Resources Division, allows LPG imports under specific conditions.

These require BPC to consult the LPG Operators Association of Bangladesh (LOAB) to finalise operators, import volumes, payment arrangements, and plans for unloading and distribution, with the ministry granting final approval.

On Tuesday, Energy Adviser Muhammad Fouzul Kabir Khan told The Daily Star that imports must be increased if the government wants to keep the country’s LPG market under control.

“The government’s involvement in the sector would make market monitoring easier, as we would be able to regularly oversee sales and ensure fair pricing,” he said.

He added that BPC officials are already reviewing potential sources for government-to-government imports and expressed hope that the crisis would be resolved soon.

Mani Lal Das, general manager (commercial and operations) at BPC, told The Daily Star that initial discussions would focus on suppliers in Indonesia, Qatar and the United Arab Emirates, countries from which Bangladesh already imports other petroleum products.

“We are preparing to send emails to these companies and will move ahead with those that can offer competitive prices, flexible terms and quick delivery,” he said.

Acknowledging logistical challenges for BPC’s first LPG imports, he said LPG cargoes usually arrive at the outer anchorage near Kutubdia and must be transferred to specialised lighterage vessels for unloading.

“However, we do not have such vessels or jetties,” he added.

To address the issue, Das said BPC is considering importing LPG in smaller consignments of 5,000 to 7,000 tonnes or working with suppliers that can provide three specialised lighterage vessels.

“One vessel would serve the Khulna-Daulatdia route, while two would be used in the Chattogram zone,” he added.

He expressed hope, saying discussions with potential suppliers are ongoing and that a final decision is expected within days.

However, a member of BPC’s procurement committee, speaking on condition of anonymity, said the entire process could take at least two months.

SUPPLY NOT THE MAIN ISSUE

Meanwhile, market data suggest that supply constraints are not caused by imports.

Over the past three years, LPG imports steadily increased: 12.23 lakh tonnes in 2023, 14.42 lakh tonnes in 2024, and 14.65 lakh tonnes in 2025, totalling 41.3 lakh tonnes.

In the last six months of 2025, imports rose 18 percent compared with the first half of the year, while average import costs fell 14 percent -- from Tk 87 per kg to about Tk 75 per kg, according to National Board of Revenue data. Most of the 14.65 lakh tonnes imported in 2025 arrived during this period.

Despite stable imports and lower costs, LPG prices remain high, raising concerns about artificial shortages. Retail prices are still much higher than government-set rates. In January, the government raised the price of a 12kg LPG cylinder by Tk 53 to Tk 1,306, but in Dhaka and Chattogram, it is selling for Tk 1,750 to Tk 2,100 -- Tk 400 to Tk 750 above the official rate.

Nazer Hossain, vice-president of the Consumers Association of Bangladesh, said the issue is not the volume of imports but poor market management.

“Over the past six months, LPG imports have risen, and average import costs have fallen, yet prices have increased, creating an artificial shortage,” he said.

“If the government imports LPG only to hand it over to the same suppliers, the crisis will not end. Alongside imports, distribution and market monitoring must be strengthened,” he added.

BPC officials also said that 98-99 percent of the LPG market is controlled by the private sector, limiting the government’s ability to intervene effectively. While 25 companies import LPG, just four dominate, accounting for 57 percent of total imports.

According to NBR data, Omera Petroleum Limited has the largest share at 17.96 percent, followed by Meghna Fresh LPG Ltd at 16.24 percent. Jamuna Spacetech Joint Venture and United Aygaz LPG Ltd control 12.38 percent and 9.11 percent, respectively.

In the first half of the current 2025-26 fiscal year – from July to December – revenue collection by the National Board of Revenue (NBR) increased by 14% compared with the same period of the previous fiscal year.

However, collection fell Tk45,976 crore short of the target. NBR officials and experts attribute the large deficit primarily to the ambitious targets set for the current year. They also cite the lack of the expected momentum in the economy and insufficient enthusiasm among field-level officials to boost revenue by preventing evasion.

According to the latest data released by the NBR, revenue collection in December rose by just over 10% compared with the same month of the previous fiscal year. Growth rates in earlier months had been higher. In December alone, the shortfall against the target amounted to Tk15,181 crore.

Statistics show that against a target of Tk2,31,205 crore for the first six months, actual revenue collection stood at Tk1,85,229 crore. During this period, collection increased by over 14% compared with the same period last fiscal year.

However, to meet the overall target set for the NBR, revenue collection would need to grow by 53% compared with last year.

Experts say there is no precedent in Bangladesh's history for revenue growth at such a high rate.

Towfiqul Islam Khan, additional research director at the Centre for Policy Dialogue (CPD), told The Business Standard, "At the time of the last budget, we had already said that this target was unattainable. Later, another Tk55,000 crore was added to the target. As a result, the total target has become quite ambitious."

"As a result, there could be a large shortfall at the end of the year," he said.

He added, "There is no explanation as to what basis the government added an additional Tk55,000 crore to the NBR's target. It may have been done to align with IMF targets, but this is nothing more than 'eye-wash'."

Md Farid Uddin, a former member of the NBR, said, "There is no likelihood of such momentum in the economy over the next six months that would make it possible to achieve such a large target. This means the institution is heading towards a massive shortfall compared with the target."

He said that since the 2016–17 fiscal year, the government has been presenting large expenditure budgets, which led to correspondingly high revenue targets, resulting in deficits every year.

However, he noted that given the size of Bangladesh's economy, achieving this level of revenue collection is not impossible. But the necessary reforms have not been undertaken. As a result, it will not be possible to formalise the largely informal economy – accounting for more than half of economic activity – and revenue will not be collected in line with the targets.

A tax zone commissioner at the NBR, speaking on condition of anonymity, said that even the target set at the beginning of the year would have been difficult to achieve under the current circumstances. With the target later increased further, achieving it has become practically impossible.

At the start of the fiscal year, the NBR's revenue target was set at Tk4,99,000 crore. Last month, it was raised to Tk5,54,000 crore.

The official added that with an election scheduled for February, there are no signs of a sudden acceleration in the economy thereafter. Even if momentum does pick up, revenue collection will not increase at such a high rate in practical terms.

According to NBR data, in the first half of the fiscal year, income tax collection increased by 14.67%, VAT by nearly 20%, and import tax growth remained below 7%.

In the first half of the current 2025-26 fiscal year – from July to December – revenue collection by the National Board of Revenue (NBR) increased by 14% compared with the same period of the previous fiscal year.

However, collection fell Tk68,995 crore short of the target. In the same period last fiscal year, the shortfall stood at Tk57,891 crore. NBR officials and experts attribute the large deficit primarily to the ambitious targets set for the current year. They also cite the lack of the expected momentum in the economy and insufficient enthusiasm among field-level officials to boost revenue by preventing evasion.

According to the latest data released by the NBR, revenue collection in December rose by just over 10% compared with the same month of the previous fiscal year. Growth rates in earlier months had been higher. In December alone, the shortfall against the target amounted to Tk12,536 crore.

Statistics show that against a target of Tk2,31,205 crore for the first six months, actual revenue collection stood at Tk162,210 crore. During this period, collection increased by over 14% compared with the same period last fiscal year.

However, to meet the overall target set for the NBR, revenue collection would need to grow by 53% compared with last year.

Experts say there is no precedent in Bangladesh's history for revenue growth at such a high rate.

Towfiqul Islam Khan, additional research director at the Centre for Policy Dialogue (CPD), told The Business Standard, "At the time of the last budget, we had already said that this target was unattainable. Later, another Tk55,000 crore was added to the target. As a result, the total target has become quite ambitious."

"As a result, there could be a large shortfall at the end of the year," he said.

He added, "There is no explanation as to what basis the government added an additional Tk55,000 crore to the NBR's target. It may have been done to align with IMF targets, but this is nothing more than 'eye-wash'."

Md Farid Uddin, a former member of the NBR, said, "There is no likelihood of such momentum in the economy over the next six months that would make it possible to achieve such a large target. This means the institution is heading towards a massive shortfall compared with the target."

He said that since the 2016–17 fiscal year, the government has been presenting large expenditure budgets, which led to correspondingly high revenue targets, resulting in deficits every year.

However, he noted that given the size of Bangladesh's economy, achieving this level of revenue collection is not impossible. But the necessary reforms have not been undertaken. As a result, it will not be possible to formalise the largely informal economy – accounting for more than half of economic activity – and revenue will not be collected in line with the targets.

A tax zone commissioner at the NBR, speaking on condition of anonymity, said that even the target set at the beginning of the year would have been difficult to achieve under the current circumstances. With the target later increased further, achieving it has become practically impossible.

At the start of the fiscal year, the NBR's revenue target was set at Tk4,99,000 crore. Last month, it was raised to Tk5,54,000 crore.

The official added that with an election scheduled for February, there are no signs of a sudden acceleration in the economy thereafter. Even if momentum does pick up, revenue collection will not increase at such a high rate in practical terms.

According to NBR data, in the first half of the fiscal year, income tax collection increased by 14.67%, VAT by nearly 20%, and import tax growth remained below 7%.

President Donald Trump's return to office has triggered an escalating transatlantic trade dispute, centred on new US tariffs linked to Greenland and Washington's proposal to take control of the territory, according to the sources.

After resuming the presidency, Trump imposed a 10% "Greenland tariff" on imports from several European countries, including the Nordic states, Germany, France, the Netherlands and Britain. The move was framed as retaliation for the deployment of small numbers of European troops to Greenland, says the Economist.

The new levy comes on top of existing US tariffs of 15% on European Union goods and 10% on British products. Trump has also threatened to raise the Greenland-related tariffs to 25% by the summer of 2026 if European governments do not agree to a US takeover of Greenland, the sources said.

Economists estimate that the immediate macroeconomic impact of the 10% tariffs would be limited, reducing EU output by around 0.04% and US output by about 0.02%. Research cited by the sources indicates that American importers and consumers have borne roughly 96% of the cost of existing tariffs, with prices charged by European firms largely unchanged.

The effects have been uneven across sectors. Imports of industrial equipment from Europe fell by 4% in late 2025, while imports of vehicles, including cars, boats and aircraft, dropped by 32%. Luxury carmakers have been among the hardest hit, with Porsche's operating profits falling by 90% in 2025. Pharmaceutical and healthcare groups such as GSK and Novo Nordisk are also considered highly exposed, as they generate about half of their revenues in the US while maintaining a relatively smaller cost base there.

In response, the EU has prepared a range of potential countermeasures. These include more than €90 billion in retaliatory tariffs on US goods, targeting products made in Republican-leaning districts or items with readily available European substitutes.

European officials have also discussed the use of strategic export controls, such as restricting scrap metal sales to US smelters or limiting exports of products where Europe holds a near-monopoly. These include advanced lithography machines used in chipmaking, produced by ASML, as well as Airbus aircraft and certain military helicopters.

Additional options under consideration include tighter regulation of US technology companies operating in Europe, potentially excluding them from government procurement, and measures that could limit access for American financial firms to European markets.

Despite these tools, the sources suggest the United States would retain greater leverage in a prolonged economic confrontation. Washington could restrict European access to US-based cloud services, use the dominance of the dollar and the US financial system as pressure points, or impose export controls on military equipment and intelligence sharing, including support related to Ukraine.

The sources also point to a potential soft-power dimension. The United States is set to co-host the 2026 FIFA World Cup, where European and South American teams are expected to be among the tournament's main attractions. A European boycott, while unlikely, would carry limited economic cost for Europe but could deal a symbolic blow to the US administration, the sources said.

The National Board of Revenue (NBR) posted a 14 percent growth in revenue collection in the first half of the current fiscal year (FY), yet missed the target for the period by a staggering Tk 46,000 crore or nearly 10 percent.

The development raises questions whether the board would be able to meet its hiked target for the year as experts and officials point out the latest growth is not remarkable, rather a recovery from last year’s turbulence amid a more stable political and business climate.

The revenue board has failed to meet its annual target for at least a decade as of last year.

In the July-December period of FY2025-26, NBR logged Tk 185,229 crore, according to the board’s provisional data.

All three main revenue streams contributed to the rise. Local level value-added tax (VAT) collection reached Tk 70,493 crore, up from Tk 58,759 crore a year earlier, marking around a 20 percent increase.

Income and travel taxes rose to Tk 61,875 crore, a 14.67 percent rise on the same period last year. Customs duties from international trade increased by 6.81 percent to Tk 52,860 crore, due to higher imports following the easing of restrictions.

However, speaking on condition of anonymity, an NBR official said the half-yearly growth was “usual”, largely reflecting a low base caused by last year’s political turbulence.

He also blamed the subdued government development spending and weak private investment for missing the target.

“Slow public-sector projects have weighed on VAT and customs revenue, while cautious investment has constrained corporate tax growth,” the official said, adding that revenue gains are likely to remain modest until economic activity strengthens further.

Experts also caution that the growth is not enough to celebrate.

“A 14 percent growth sounds encouraging, but in reality, it is not a major achievement. It largely reflects a shift from negative to positive territory,” said Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD).

She said the recovery is welcome, but warned against overstating it, pointing out that last year’s revenue collection had been depressed for a prolonged period due to political unrest and broader instability.

Khatun added that the growth rate is not particularly high when compared with earlier periods of sustained positive expansion. “It shows that collections can improve with effort, but it is not something to celebrate excessively.”

Going against the usual practice and history, the interim government raised the revenue collection target for the fiscal year by 5 percent, taking the goal to Tk 588,000 crore from the original Tk 564,000 crore.

The upward adjustment followed stronger-than-expected performance in the July-September period, when revenue rose by 17.6 percent, far higher than the 4.94 percent recorded in the same period a year ago.

On the higher target, Khatun said setting ambitious goals without matching capacity has become a recurring pattern.

“This has turned into a tradition – setting ambitious targets and then failing to meet them. Repeating this only exposes institutional weaknesses,” she said.

“If the capacity to collect does not align with the target, it points to gaps in manpower, institutional strength and systems,” she added.

While revenue mobilisation must increase and the tax-to-GDP ratio improve, Khatun said achieving that would require deeper reforms, including stronger institutions, improved human resources and technological upgrades. “Without these reforms, revenue shortfalls will persist.”

A recent study by the Office of the United Nations High Commissioner for Human Rights said Bangladesh could collect taxes equal to 14 percent of its GDP, almost double the present rate of 6.6 percent.

Instead, the tax-to-GDP ratio has fallen, reflecting the country’s heavy dependence on indirect taxes and limiting funds for essential services such as education and healthcare.

Bangladesh Bank (BB) has allowed a special loan rescheduling and restructuring facility for distressed export-oriented and domestic shipbuilding companies in a bid to keep the sector operational and improve loan recovery by banks.

As per a BB circular issued yesterday, borrowers will have to make a 3 percent down payment on their outstanding loan balance to qualify for the facility. They must pay 1.5 percent at the time of application and the rest within the next six months.

Defaulters will be able to reschedule or restructure their loans for up to 10 years, including a maximum two-year grace period, depending on the borrower’s repayment capacity and business prospects.

During the grace period, interest must be paid on a monthly or quarterly basis. Blocked interest will have to be repaid in instalments after the grace period ends without additional interest.

Borrowers must submit applications to their banks by June 30, 2026, along with the required down payment. On the other hand, banks have been instructed to decide on applications within 60 days of receipt.

BB has also instructed all scheduled banks to consider case-by-case applications from genuinely affected shipbuilders for special rescheduling of their classified loans as of December 31, 2025.

For loans which were rescheduled under an earlier 2023 circular, banks may grant an additional two-year extension, subject to a further 2 percent down payment.

The central bank said the move became necessary due to disruptions in global supply chains, geopolitical instability in Europe, and a global economic slowdown that hurt the cash flows of shipbuilders beyond their control.

Firms found guilty of fraud, willful default, or loan manipulation will not be eligible for the facility, BB clarified. Before approving any rescheduling, banks must conduct a special inspection to verify whether the borrower was genuinely affected by circumstances beyond their control. Islamic banks have been asked to apply the same policy in line with Shariah principles.

The circular takes immediate effect under Section 45 of the Bank Company Act, 1991.

Bankers say the move could provide breathing space to the struggling shipbuilding sector, which has significant export potential but has faced financial stress in recent years due to global market volatility.

At the end of 2024, total outstanding loans in the shipbuilding and ship-breaking industry stood at Tk 20,506 crore, of which Tk 8,031 crore had become defaulted, according to BB data.

The Bangladesh Bank (BB) is going to unveil its monetary policy statement for January to June of the current fiscal year on January 29, at a time when inflation remains elevated despite a high policy rate.

The central bank monetary policy committee is scheduled to meet this week to finalise the policy stance for the six-month period. The proposal will then be placed before the board of directors of the banking regulator for approval on January 25.

BB Governor Ahsan H Mansur will announce the policy at a press conference at the central bank headquarters.

The monetary authority, tasked with managing currency, money supply, and interest rates to maintain price stability, will unveil the policy amid renewed price pressures.

In December, Inflation rose to 8.49 percent from 8.29 percent a month earlier, according to the Bangladesh Bureau of Statistics (BBS).

Industry insiders said inflation is showing signs of heating up again despite the central bank’s tight monetary stance, pointing to supply-side constraints rather than excess demand as the primary driver of rising prices.

The central bank has kept the policy rate unchanged at 10 percent since October 2024, resisting calls from business groups for a rate cut.

Zahid Hussain, a former lead economist at the World Bank’s Dhaka office, said the central bank has little room to ease policy while inflation is high.

Cutting the policy rate at this stage could add to inflationary pressures rather than stabilise prices, he said, adding that the central bank is likely to keep the rate at 10 percent in the near term.

“Inflation is not being driven only by excess demand; supply-side bottlenecks and global supply chain disruptions are also playing a major role in keeping prices elevated,” said the economist.

On exchange rate management, Hussain said Bangladesh Bank is prioritising stability rather than allowing the taka to strengthen against the US dollar.

“Despite steady remittance inflows and improved dollar availability, the central bank is avoiding taka appreciation. While a stronger taka could have reduced import costs, it could also hurt exporters’ earnings and discourage remittance inflows, prompting the central bank to keep the exchange rate stable,” he added.

Private sector credit growth remains subdued, while short-term foreign borrowing has declined, he said. Although lower interest rates could support investment, persistently high inflation limits the scope for such moves.

“Meanwhile, Bangladesh Bank’s dollar purchases have injected liquidity into the banking system, but sluggish credit demand has contained inflationary risks for now,” he noted.

Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said the central bank should maintain its tight monetary stance for at least the next six months, or at least three months, to rein in inflation.

With an election schedule approaching, demand for credit is likely to rise, he said, commenting that any rate cut at this stage could add to inflationary pressure.

The growing threat of a renewed trade war between the United States and the European Union is stoking fears among Bangladeshi garment exporters that retaliatory tariffs could trigger global supply chain volatility and suppress consumer demand in their most vital markets.

Industry insiders say any escalation of tariff measures between the two economic blocs could trigger fresh inflation in the US and Europe, reducing consumer spending and, in turn, demand for Bangladeshi apparel. Such a scenario could further strain exports.

Data show that Bangladesh's overall exports, including readymade garments, have been declining for five consecutive months, while prices in the European market have also softened during the period.

Representatives of foreign buyers sourcing from Bangladesh, however, believe the immediate impact of any new tariff measures would be limited, although prolonged trade tensions could create uncertainty over the longer term.

According to a report by The Guardian, the EU's top diplomats met for crisis talks on Sunday (18 January) and discussed reviving a plan to levy tariffs on €93 billion ($108 billion) of US goods, which was suspended after last year's trade deal with Trump.

In a post on Saturday on Truth Social, US President Donald Trump said he would impose a 10% tariff on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland beginning 1 February.

Media reports also said Trump threatens a 25% tariff on European allies until Denmark sells Greenland to the US.

Experts warn that such tariff disputes could destabilise not only transatlantic trade but the wider global trading system.

MA Rahim Feroz, vice-chairman of DBL Group – one of Bangladesh's largest apparel exporters with annual turnover exceeding $1 billion – told TBS that higher tariffs in Europe or the US would inevitably lead to inflation.

"If inflation rises, consumers will buy less, which will put significant pressure on us and negatively affect Bangladesh's exports to those markets," he said.

Echoing Feroz, Md Shehab Udduza Chowdhury, vice president of the Bangladesh Garment Manufacturers and Exporters Association, warned that imports could be affected if trade tensions intensify.

In 2025, Bangladesh exported garments worth $38.82 billion globally, with nearly 80% destined for the European Union, the US and the UK.

Exporters say Bangladesh has already felt the impact of reciprocal tariffs imposed by the Trump administration, with shipments to both the US and Europe coming under strain. They add that garment prices in the European market have declined as a result.

Feroz noted that after the US imposed higher tariffs on China and India than on Bangladesh, the two larger exporters stepped up efforts to sell more in Europe, intensifying competition and forcing Bangladeshi exporters to offer price discounts.

An analysis of Eurostat data by the Bangladesh Apparel Exchange shows that the average price of Bangladeshi apparel exported to Europe fell by 2.06% between January and September 2025. Prices of apparel from other major exporting countries also declined during the same period.

Trade experts see little upside for Bangladesh if a trade war erupts between Europe and the US.

Mostafa Abid Khan, an international trade expert and former member of the Bangladesh Trade and Tariff Commission, said he does not foresee any major short-term disruption to Bangladesh's exports or imports.

Before the latest tariff announcements, US tariffs on EU goods ranged from zero to 15%, while UK exports to the US faced a 10% tariff. US goods entering the UK are subject to a 6% tariff, and EU data show that a significant number of US products have enjoyed duty-free access to the EU since August.

Buyers remain unconcerned

Despite exporters' worries, foreign buyers say their sourcing from Bangladesh remains unaffected.

A senior official at the Dhaka office of a Sweden-based brand, speaking on condition of anonymity, said potential EU-US tariffs are unlikely to hurt Bangladeshi exports.

"We source around $250 million worth of products from Bangladesh each year, and our order flow remains normal – if anything, it may increase in the future," he said.

Similarly, the country manager of a Germany-based sportswear brand said the tariffs under discussion are selective and unlikely to affect Bangladesh directly. "However, it is still too early to say what the long-term consequences might be if such a situation persists."

In its continued effort to stabilize the foreign exchange market and build up national reserves, Bangladesh Bank (BB) purchased an additional $45 million from two commercial banks on Tuesday (January 20).

The dollars were bought at a fixed exchange rate of Tk 122.30, with the cut-off rate also set at Tk 122.30, according to a press release issued by the central bank.

This latest transaction follows a series of significant dollar purchases by the central bank this month.

On January 12, purchased $81 million from 10 commercial banks.

On January 8, purchased $206 million from 15 commercial banks.

On January 6, purchased $223.5 million from 14 commercial banks.

All these transactions were conducted at the uniform rate of Tk 122.30 per dollar. With the latest purchase on Tuesday, the total dollar procurement for the month of January 2026 alone has reached $743 million.

Arif Hossain Khan, Executive Director and Spokesperson of Bangladesh Bank, confirmed the details of Tuesday’s transaction.

He noted that the aggressive buying strategy has significantly bolstered the country’s holdings during the current fiscal year.

Data reveals that during the first six months and twenty days of FY 2025-26 (from July 1 to January 20), the central bank has purchased a total of $3.87 billion (3,878.50 million) from the interbank market.

Market analysts suggest that the central bank is taking advantage of increased dollar inflows—likely from remittances and export earnings—to replenish the foreign exchange reserves, which had faced pressure in previous years. By maintaining a steady “cut-off” rate of Tk 122.30, the regulator is also signaling a desire for exchange rate stability, preventing abrupt fluctuations that could impact inflation and import costs.

The Bangladesh Bank purchased $743 million from commercial banks through auctions during the first 20 days of January, as part of its ongoing efforts to stabilise the exchange rate.

Confirming the matter, BB Executive Director and Spokesperson Arif Hossain Khan said the central bank bought $45 million from two commercial banks today (20 January) alone.

With the latest purchase, Bangladesh Bank's total dollar buying from commercial banks through auctions in the current fiscal year 2025-2026 has reached $3.88 billion.

Speaking to reporters at a seminar yesterday, BB Governor Ahsan H Mansur said commercial banks are voluntarily selling dollars to the central bank, which has increased liquidity in the market.

He added that the rise in dollar inflows has been a key factor behind the growth in bank deposits.

The governor also noted that higher dollar inflows have helped turn Bangladesh's balance of payments financial account into a surplus. As foreign currency supply increases, deposit growth in the banking sector is also expected to accelerate, he said.

The central bank began purchasing dollars through auctions from July last year as part of its foreign exchange market intervention strategy. Under the market-based exchange rate regime, the central bank aims to maintain balance in the foreign exchange market – allowing the dollar price to fall when supply exceeds demand, while letting it rise when demand increases.

Bankers say the recent decline in dollar demand is driven by several factors. The government's large external payment obligations have eased, reducing pressure on foreign currency demand.

At the same time, sluggish business activity and weak investment have led to lower imports of capital machinery, further easing demand for dollars, they said.

The Bangladesh Bank plans to create a dedicated "resolution fund" of up to Tk40,000 crore to rescue and restructure failing banks without relying on taxpayer-funded government bailouts.

Banks will have to contribute an annual premium of up to 0.25% or 25 paisa per Tk100 of their deposits, compared to the current 0.07% charged for the deposit insurance protection fund. Over time, the fund is expected to accumulate between Tk30,000 crore and Tk40,000 crore, enabling the central bank to intervene independently when banks face serious financial trouble.

In an interview with The Business Standard, Bangladesh Bank Governor Ahsan H Mansur said the initiative is inspired by the European Central Bank's resolution framework, under which banks deposit a portion of their deposits (approximately 1%) into a separate fund specifically for bank resolution.

"Bank resolution is a continuous process. That is why we have created a separate Bank Resolution Department," he said, explaining that the department continuously monitors banks and financial institutions, flags early signs of weakness, and intervenes when necessary through restructuring, mergers, or orderly liquidation.

The governor noted that five banks are currently under resolution, a process made possible only because the government provided around Tk20,000 crore in support.

Alongside the move, the Bangladesh Bank has decided to liquidate nine non-bank financial institutions (NBFIs), the governor said. As these entities are not covered by the deposit insurance protection fund, the government will provide Tk5,000 crore to repay individual depositors, he said.

The governor explained how the resolution fund will be built gradually. "If we raise the premium from 7 paisa per Tk100 of deposits to around 25 paisa, we can mobilise nearly Tk30,000 crore within five years. Once the fund becomes strong, provisioning requirements can be reduced."

Under the amended deposit insurance ordinance 2025, insured banks are required to deposit a premium of 0.07% per annum on their deposits. The new law states that the Bangladesh Bank will set the premium from time to time based on the bank's risk level and the size of deposits.

At the same time, banks and financial institutions will face penalty interest at the bank rate if they fail to pay the premium on time. The Bangladesh Bank will prevent the banks and financial institutions from accepting deposits that fail to pay the premium twice in a row.

How resolution fund to be operated

According to the Bank Resolution Ordinance, 2025, a bank restructuring and resolution fund will be established in order to achieve the objective of the resolution and effective implementation of the resolution measures.

It states that the Bank Restructuring and Resolution Fund will have a prudent and safe investment strategy and will invest the amounts held in the fund in obligations of the government.

The ordinance mentions that the Bangladesh Bank shall prescribe the rules governing such fund, including the power to manage, administer, and supervise the Bank Restructuring and Resolution Fund; formulate policies in relation to the general administration of the Bank Restructuring and Resolution Fund; and contribute to the financing of resolutions of scheduled banks from the Bank Restructuring and Resolution Fund.

What experts say

Experts have expressed mixed reactions to its long-term impact on banking discipline.

Muhammad A (Rumee) Ali, former deputy governor of Bangladesh Bank, cautioned that the fund could end up subsidising poor governance and weak risk management, as well-run banks would effectively support weaker ones.

However, Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, welcomed the move, saying it would reduce pressure on taxpayers. He noted that similar mechanisms were introduced in Europe and the United States after the 2007 global financial crisis.

"Such a fund discourages risky lending and encourages responsible behaviour, even though some cost may be passed on to depositors," Mustafizur said.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, described the plan as aligned with global norms but warned that its success would depend on broader reforms. "With high non-performing loans, weak enforcement and political interference, the fund risks becoming symbolic unless governance, transparency and supervision are strengthened," he said.

Mahbubur added that the proposed levy is far lower than the ECB's 1% benchmark, raising concerns about its adequacy in a crisis. "Still, if transparently managed and scaled over time, it could be a solid starting point for building financial resilience."

Sohail RK Hussain, managing director of Bank Asia, also termed the initiative a positive and necessary step. "A resolution fund based on global best practices will strengthen financial stability and reduce reliance on taxpayer support," he said, stressing the need for gradual, transparent and risk-based implementation alongside deeper banking sector reforms.

"The proposed 0.25% annual cap, including insurance premium, is reasonable, especially considering the challenges the industry is facing," Sohail said.

He emphasised that the fund will be established on a transparent and risk-based basis.

"However, this should go hand in hand with the banking sector reform proposal, addressing governance failures of the past," the Bank Asia MD added.