Bangladesh Bank has abolished the Telegraphic Transfer (TT) discounting facility for scheduled banks, under which banks were allowed to obtain short-term liquidity by placing liens on their current accounts maintained with the central bank.

The Banking Regulation and Policy Department issued a circular in this regard today (3 August).

TT discounting is a special facility that enabled commercial banks to borrow short-term funds from the central bank during urgent liquidity needs by placing a lien on their current accounts or without providing additional securities.

According to the circular, banks now have access to a range of effective sources for day-to-day liquidity management, including the call money market, repo, the Standing Lending Facility (SLF) and interbank borrowing.

"Therefore, there is no longer any need to continue the TT discounting facility against liens on current accounts," the central bank said.

The circular also noted that the facility had seen very limited use in recent years.

Against this backdrop, Bangladesh Bank said the TT discounting facility for scheduled banks would be deemed withdrawn with effect from 1 July.

The directive was issued under Section 45 of the Bank Company Act, 1991, and all managing directors and chief executive officers of scheduled banks have been instructed to implement the decision.

A chronic energy shortage, coupled with rising costs, a shortage of finance and global economic headwinds, has forced many factories to shut down in recent years, taking the steam out of the country’s economic engine.

Factories across key industrial belts are operating well below capacity because of the gas shortage, while many newly built plants remain idle with no clear timeline for starting production.

As machinery sits unused, businessmen continue to repay mounting bank loans. Besides, thousands of jobs that these factories were expected to create have never appeared.

Workers affected by factory closures move from one mill to another in search of work, while shuttered businesses are adding to the country’s growing burden of non-performing loans (NPLs).

At the centre of this cycle is the prolonged energy crisis, which continues to feed wider economic problems even as the government tries to revive growth through investment.

Although the government is seeking fresh investment, especially from overseas, local manufacturers say they are not receiving fair treatment when it comes to energy supply.

“Bangladesh seeks foreign investment, but those of us who have already invested are treated like beggars,” said Mostafa Kamal, chairman of Meghna Group of Industries (MGI), one of the country’s largest industrial conglomerates.

Industries have faced gas shortages for years, but business leaders say the situation deteriorated after the US-Israel war on Iran triggered fresh shocks in global energy markets.

The crisis worsened further after an accident at a floating liquefied natural gas terminal in Cox’s Bazar cut the country’s pipeline gas supply by more than 17 percent.

GROWTH SLOWS AS NEW INDUSTRIES SIT IDLE

The prolonged energy crisis, combined with the disruption that followed the political changeover in August 2024, has left clear marks on the industrial sector.

Industrial growth slowed to 2.86 percent in fiscal year 2025-26 from 3.71 percent a year earlier, according to provisional estimates by the Bangladesh Bureau of Statistics (BBS).

Fazlee Shamim Ehsan, president of the Bangladesh Employers Federation, said their dying units managed to operate at about 78 percent of capacity before the latest round of gas crisis. Now many are running at roughly half of their normal capacity.

“Still, we are in a much better situation in comparison with other factories. Factories in Kanchpur to Narsingdi industrial belt are facing the worst,” he said.

Amid these constraints, business leaders describe the energy crisis as the “biggest obstacle” to achieving Bangladesh’s target of $100 billion in exports by 2030.

As of mid-July, more than 1,850 applications for industrial gas connections were awaiting approval after the government instructed Petrobangla to suspend all new gas connections.

The decision has dealt another blow to large industrial groups and garment manufacturers that have spent years seeking gas connections for completed factories.

MGI, for example, has invested Tk 7,320 crore in glass and steel rod factories at the Comilla Economic Zone. Construction finished between one-and-a-half and two-and-a-half years ago.

The factories were financed largely through domestic and foreign loans, but they cannot begin production without gas. As a result, the group is paying about Tk 45 crore a month in interest.

MGI Chairman Mostafa said, “In the Comilla Economic Zone, seven factories in total were supposed to create jobs for 15,000 people. But now everything is stalled due to the lack of gas.”

“If we had been told from the beginning that gas would not be available, we would not have made such massive investments,” he commented. “The government now seeks foreign investment, but if investors face this situation, given Bangladesh’s poor rating, the risk will only worsen.”

City Group faces a similar problem. It has invested about Tk 14,000 crore in six factories, including sugar, salt and cement plants, at Hoshendi Economic Zone at Gajaria of Munshiganj.

City Group even spent about Tk 110 crore to build its own gas pipeline, yet it has still not received a gas connection. The factories have been ready since 2022 but cannot begin operations because of the lack of gas.

The company is paying nearly Tk 5 crore a day in bank interest.

According to a City Group official, who requested anonymity, the six factories would directly employ around 10,000 people if they were operational.

DWINDLING SUPPLY FUELS RISING NPLS

An entrepreneur in Narsingdi, who requested anonymity, said he invested Tk 600 crore in a spinning mill after being promised a gas connection by 2024. Following the fall of the Awami League government that year, the connection never came.

He said he has had to seek additional bank loans while continuing to pay interest on expensive machinery that remains idle inside the factory.

The entrepreneur has also been hit by the depreciation of the taka, which has lost about 40 percent of its value against the US dollar over the past three years. He opened letters of credit (LCs) when the exchange rate stood at Tk 85 to the dollar. By the time payments were due, it had climbed to more than Tk 123, leaving him with heavy losses and a shortage of working capital.

Many big businesses with political links also ran into trouble after the Awami League government fell in August 2024.

Large groups including S Alam Group, Beximco Group and Nassa Group defaulted on their loans after their businesses shut down and production stopped as owners fled, became fugitives or were arrested.

Other major industrial groups faced difficulties because of delayed gas connections, exchange rate volatility and supply chain disruptions linked to the global economy.

As these companies failed to repay their loans, bad debt in the banking sector rose sharply. At the end of 2024, NPLs stood at Tk 345,765 crore, up from Tk 211,392 crore six months earlier.

By the end of March this year, total NPLs climbed to Tk 588,704 crore, equal to 32.26 percent of the Tk 1,824,668 crore in outstanding loans, according to the Bangladesh Bank.

To ease the pressure, the central bank under the interim government introduced more flexible loan restructuring and rescheduling facilities for businesses affected by factors beyond their control.

After taking office, the BNP-led government made economic growth and employment its priorities. As part of that effort, it sought to reopen closed factories and industries, while the central bank introduced a series of support measures, including a Tk 60,000 crore stimulus package.

Anis A Khan, former chairman of the Association of Bankers Bangladesh (ABB), told The Daily Star that many industrial groups had fallen into distress because of circumstances beyond their control rather than poor business decisions.

“Take City Group, for example. If it had received a gas connection for its economic zone on time, it would have been able to repay its bank loans on schedule.”

Anis, also the former managing director of Mutual Trust Bank, said the company would not have ended up in its current situation. “To keep the economy on track, these businesses need to be supported.”

Bangladesh and South Korea are set to formally sign a Comprehensive Economic Partnership Agreement (Cepa) today (4 August), having recently wrapped up negotiations on the bilateral trade deal.

Commerce Ministry Public Relations Officer Md Kamal Hossain confirmed the development to The Business Standard yesterday (3 August).

Once signed, the agreement will become Bangladesh's second bilateral free trade agreement after its Economic Partnership Agreement (EPA) with Japan, bringing the country closer to strengthening trade and investment ties with one of Asia's fastest-growing economies.

The agreement comes as the country steps up efforts to preserve preferential market access and expand bilateral trade and investment ahead of its LDC graduation. Bangladesh will gradually lose preferential access in many export markets after graduating, making bilateral trade agreements increasingly important to maintaining its competitiveness.

The breakthrough followed five days of negotiations involving around 60 representatives during the fifth and final round of bilateral talks, held in Seoul from 27 to 31 July.

Commerce Minister Khandaker Abdul Muktadir is scheduled to brief the media today following a Cepa Negotiation Conclusion Ceremony at the Ministry of Commerce.

Meanwhile, South Korea's Trade Minister Yeo Han-koo, who arrived in Bangladesh yesterday to attend the ceremony, paid a courtesy call on Prime Minister Tarique Rahman at his office in the Cabinet Division of the Secretariat, according to the Prime Minister's Deputy Press Secretary Shahadat Hossain Shadhin.

During the meeting, the South Korean minister briefed the prime minister on the proposed Cepa, saying the agreement would significantly expand bilateral trade and economic cooperation while encouraging greater South Korean investment in Bangladesh.

Tarique urged South Korean companies to invest in Bangladesh's toy manufacturing, electronics, telecommunications, automobile, semiconductor and shipbuilding sectors. He also assured them that the Bangladesh government would provide the necessary support for investment in the shipbuilding sector.

During the meeting, Tarique also invited the South Korean president to visit Bangladesh.

Broader market access

Under the proposed agreement, South Korea has agreed to open 111 specialised services sub-sectors to Bangladesh.

According to officials, this is the first time in the history of the World Trade Organization (WTO) that a graduating or least developed country has been granted market access across such a large number of services sub-sectors.

In return, Bangladesh has agreed to open 95 services sectors to South Korean investors while protecting sensitive domestic industries and small and medium-sized enterprises (SMEs).

Commerce ministry officials said the proposed agreement could secure duty-free access for Bangladeshi RMG, leather and leather goods, pharmaceuticals, jute and jute products in the South Korean market. Some trade preferences may also continue after Bangladesh graduates from LDC status.

The agreement is also expected to include provisions on rules of origin for selected products, improve market access for information technology, engineering, financial services and education, simplify customs procedures through digital customs systems, strengthen intellectual property protection, promote technical cooperation, skills development, industrialisation and infrastructure development, and establish an effective dispute settlement mechanism.

Officials said the Cepa would also make it easier for Bangladeshi IT professionals, civil, mechanical and shipbuilding engineers, and marine technicians to obtain temporary visas and work permits in South Korea.

Bangladeshi software firms would also be able to provide data processing and cloud services directly.

The agreement is also expected to create employment opportunities for Bangladeshi nurses, physiotherapists and skilled caregivers in South Korea under the country's legal employment framework.

Trade, investment opportunities

On the investment front, globally recognised South Korean engineering and technology companies are expected to gain greater opportunities to participate in Bangladesh's mega power plant projects, metro rail schemes, operations at the Matarbari deep-sea port and the expansion of 5G technology.

Bangladesh currently enjoys duty-free and quota-free (DFQF) market access for about 95% of its products in South Korea under the Asia-Pacific Trade Agreement (APTA) and WTO arrangements introduced in 2008, according to the Embassy of Bangladesh in Seoul.

Bilateral trade between the two countries currently stands at $1.39 billion, with Bangladesh exporting goods worth $491 million and importing $902 million from South Korea.

Bangladesh's major exports to South Korea include woven garments, knitwear, home textiles, leather and leather products, including footwear, frozen food, ceramic products, pharmaceuticals, jute and jute goods, tents and synthetic ropes.

Its main imports from South Korea include iron and steel, plastics and plastic products, machinery, mechanical appliances and boilers, paper and paperboard, and tanning and dyeing extracts.

Bangladesh is set to launch a National Rating System (NRS) that will, for the first time, give every government and private institution a standardised score based on how well it manages IT, information and cybersecurity.

Built on a four-pillar framework called the National ICT and Cybersecurity Maturity Rating, the system is expected to provide the country’s first evidence-based benchmark for measuring institutional cyber readiness. It comes as Bangladesh’s rapidly expanding digital landscape continues to face cyber breaches, fraud and financial theft.
The system will be unveiled today at the ICT Division, according to documents obtained by The Daily Star.The first pillar, IT and Information Security Governance, carries a weight of 20 percent and will assess leadership, policies, organisational structure and administrative accountability.

The second pillar, Infrastructure and Operations, accounts for 30 percent of the score. It will evaluate IT infrastructure, data centres, networks, servers, backup and disaster recovery systems, and change management.The system comes as Bangladesh’s rapidly expanding digital landscape continues to face cyber breaches, fraud and financial theftThe third pillar, Cybersecurity and Data Protection, also carries 30 percent. It covers security controls, data protection, risk management, incident response, vulnerability management and audit compliance.

The remaining 20 percent comes from Digital Service and User Maturity, which assesses the quality of digital services, user-centricity, IT service management, software governance and continuous improvement.Each of the 131 indicators under the four pillars will be scored on a five-point maturity scale, ranging from 0 (not implemented) to 4 (fully implemented or optimised). The intermediate levels are initial/ad hoc, partially implemented and largely implemented.

The weighted scores will then be combined into a total score out of 100 and converted into a letter grade from A (excellent) to E (poor).

Officials said the indicators were developed in line with internationally recognised standards and frameworks, allowing an institution’s overall ICT and cybersecurity readiness to be assessed through a single integrated system.

Bangladesh has long lacked a unified system to assess how well operators of critical information infrastructure, government agencies and private institutions are prepared to deal with cyber-attacks, data theft, ransomware and service disruptions, an ICT Division official said.He added that institutions currently differ widely in their policies, technical safeguards, staffing, infrastructure and digital service management, making it difficult to compare their cyber readiness or identify areas that need improvement.

The government expects the rating system to identify institutional weaknesses and risks, help prioritise IT audits and vulnerability assessment and penetration testing (VAPT), and support planning for budgets, staffing and infrastructure.

According to the documents, the system will also create a national maturity baseline by producing an annual ranking of public and private institutions. Officials said this would support evidence-based policymaking and strengthen the country’s cyber resilience and interoperability.

Future phases of the system will include an AI-based automated assessment engine, automated validation of submitted documents, sector-wise benchmarking, comparative analytics dashboards, and automated, risk-based recommendations and improvement roadmaps for individual institutions.

The framework is being introduced as Bangladesh faces growing cyber risks. As of June, the country had 13.60 crore internet users.

Several major cyber incidents have highlighted these risks.

In 2016, hackers stole millions of dollars from Bangladesh Bank in one of the world’s largest cyber-enabled bank thefts.

In 2023, a breach of a government birth and death registration website exposed the personal data, including national ID numbers, of more than 50 million Bangladeshis.
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In July 2025, Bangladesh Bank warned banks and financial institutions to strengthen their systems against possible cyber-attacks targeting critical information infrastructure, including the banking, healthcare and public service sectors.

According to the Bangladesh Cyber Threat Landscape 2024 report, published by an ICT Division unit, 188 cybersecurity incidents were reported in 2024.

The government should speed up domestic gas exploration to expand supply and reduce the country’s reliance on costly imports, according to economists, as the prolonged shortage hurts private investment, industrial output and export competitiveness.

The gas crisis has persisted for years, leaving industries to operate with inadequate supplies, said Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD).

He said the recent disruption to gas supply from a floating liquefied natural gas (LNG) terminal had made the situation worse. After the floating storage and regasification unit (FSRU) resumes, it will only restore the previous level of shortages rather than solve the underlying problem.

Moazzem said higher LNG imports alone could not close the supply gap. Bangladesh must recognise gas shortages as a structural challenge in the near term while accelerating domestic gas exploration and diversifying its energy sources.

He said the business environment is already under pressure from weak global demand, sluggish exports and high inflation. In this context, protecting existing investment is more important than attracting new investment.

“The immediate priority should be ensuring that existing factories continue operating,” said Moazzem.

He also urged the government to prioritise financially distressed but operational factories when providing incentives, arguing that supporting struggling businesses would generate greater economic benefits than focusing on factories that have already closed.

He added that industries should gradually reduce their dependence on natural gas by investing in energy-efficient machinery, electricity-based production systems, renewable energy and other technologies that could cut energy use by 15 to 20 percent.

M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, said years of inadequate onshore and offshore gas exploration have left Bangladesh heavily dependent on imported LNG, making the country vulnerable to global supply disruptions and price volatility.

He said limited LNG import infrastructure has further constrained gas supply, forcing many industries to operate below capacity.

According to him, gas shortages have reduced production by 30 to 50 percent in sectors such as garments, textiles, steel and ceramics, while power disruptions caused by fuel shortages have also affected small and service-oriented businesses. The resulting uncertainty has discouraged both local and foreign investors from expanding operations or making new investments.

Masrur said Bangladesh should urgently secure additional long-term LNG supply agreements to stabilise gas availability and prices while ensuring adequate foreign exchange support for imports.

Over the medium term, he called for faster onshore and offshore gas exploration and quicker progress on renewable energy projects to reduce dependence on imported fuel.

Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said Bangladesh is facing more than a temporary industrial slowdown.

“The country is confronting a deepening investment and production crisis, where the energy shortage, banking-sector weaknesses, high financing costs, policy uncertainty and weak business confidence reinforce one another,” he said.

He said the gas shortage had become a major burden on industry. Factories operating below capacity faced higher unit costs, delayed deliveries and weaker competitiveness. The impact was even greater on new investment.

Razzaque said Bangladesh continues to pursue industrial growth despite declining domestic gas production, costly LNG imports that are vulnerable to external shocks, and inadequate transmission and distribution infrastructure, raising questions about the credibility of its policy approach.

“There has been no shortage of recommendations. The priority now is implementation,” he added.

Bangladesh should position itself to attract manufacturing relocating from China as the country moves towards advanced technology industries, while also pursuing broader zero-tariff access to the Chinese market, Prime Minister's Adviser Humaiun Kobir said today.

Speaking at the inauguration of the four-day Comparative Governance Forum 2026 in Dhaka, Humaiun said Bangladesh has a "tremendous opportunity" to strengthen economic growth and trade by deepening cooperation with China as global supply chains continue to evolve.

"As global supply chains shift and China moves from standard manufacturing into advanced technology, we can absorb some of those manufacturing lines through close collaboration with China," he said.

He said such cooperation would create jobs and help diversify Bangladesh's exports beyond textiles and light engineering. He also highlighted the potential for negotiating wider zero-tariff market access for Bangladeshi products in China.

The forum, jointly organised by the Bangladesh Institute of International and Strategic Studies (BIISS) and the School of International Relations and Public Affairs of Fudan University, is being held from 3 to 6 August.

The programme includes expert lectures, a panel discussion and field visits to the Padma Bridge and the Dasherkandi Sewage Treatment Plant.

Humaiun said Bangladesh and China have developed a comprehensive strategic cooperative partnership covering trade, investment, infrastructure, connectivity, education and people-to-people exchanges.

He said comparative governance is not about copying another country's model but about understanding how different countries address common challenges and adapting relevant lessons to national circumstances.

He also stressed that good governance is essential for sustainable development, saying institutions must remain transparent, accountable and responsive while embracing digital transformation and innovation to improve public services.

Chinese Ambassador to Bangladesh Yao Wen said Bangladesh-China relations have entered a new strategic phase under the vision of building a community with a shared future.

He said cooperation between the two countries is expanding in both scale and scope, including efforts to align development strategies and advance projects such as comprehensive management of the Teesta River, modernisation of Mongla Port and the China-Myanmar-Bangladesh Economic Corridor.

The ambassador said the forum would focus on practical governance issues, including poverty alleviation, digital governance, artificial intelligence and the digital economy, allowing participants to exchange experiences and explore policy solutions suited to Bangladesh's development needs.

Following the inaugural session, BIISS and Fudan University signed a memorandum of understanding to strengthen cooperation in research, academic exchanges, capacity building, joint publications and policy dialogue.

According to BIISS, the forum has brought together academics, researchers, policymakers and practitioners from Bangladesh and China to exchange views on governance, public policy and international affairs.

Discussions will cover China's governance model, targeted poverty alleviation, digital governance and artificial intelligence, industrialisation, the Global Development Initiative, and future Bangladesh-China cooperation.

The National Board of Revenue (NBR) has requested all businesses to complete the transition from their old business identification number (BIN) to the newly assigned BIN by November 30 of this year, following the restructuring of VAT Commissionerates aimed at strengthening tax administration and improving taxpayer services.

In a press release issued yesterday, the NBR said it has reorganised the jurisdiction of existing VAT commissionerates and established new commissionerates to expand the tax net, enhance revenue collection and ensure a more business-friendly environment through improved taxpayer services.
The move is part of the government’s broader administrative reform initiative to make the indirect tax system more dynamic, efficient and modern, it said. As part of the restructuring, the BINs of businesses have been transferred to the newly designated jurisdictions.

The NBR said only the last four digits of the BIN have been changed to reflect the respective VAT commissionerate and division, while all other business information associated with the BIN remains unchanged.

To ensure that import and export operations continue without disruption, both the old and new BINs of the affected businesses have been kept temporarily active in the customs’ ASYCUDA World system.

As a result, importers and exporters will be able to complete ongoing customs procedures-including letters of credit (L/Cs), bills of entry, customs declarations and other existing transactions-using their previous BINs during the transition period. The NBR urged all concerned businesses to complete all pending activities under their old BINs and ensure the use of the new BINs by the set deadline.

It warned that after the deadline, the old BINs will be automatically deactivated in the ASYCUDA World system. Thereafter, all customs-related import and export activities must be carried out exclusively using the new BINs.

The revenue board sought the cooperation of all stakeholders in ensuring uninterrupted economic activities and supporting its efforts to build a more dynamic, efficient and modern revenue administration

Price pressures spread across a wider range of goods and services in Bangladesh in June this year, signalling that inflation became more broad-based even as price trends varied across different categories.A larger share of items in the Consumer Price Index (CPI) basket recorded month-on-month price increases, indicating that inflationary pressures were affecting more products.
Out of the 382 CPI items, 261 recorded price increases compared with the previous month, while 22 registered price declines and 99 remained unchanged, Bangladesh Bank said in its quarterly Inflation Dynamics in Bangladesh report for the fourth quarter (April-June) of fiscal year 2025-26.

Month-on-month headline and food inflation accelerated in June, although non-food inflation edged down slightly. The food diffusion index also increased, with 82 of the 126 food items posting price gains, suggesting that food price pressures became more widespread.Meanwhile, steep hikes in gas tariffs and fuel and lubricant costs, along with solid fuel inflation, pushed energy inflation sharply higher in the last quarter of FY26, widening the gap between wage growth and consumer prices.

Out of the 382 CPI items, 261 recorded price increases compared with the previous month, while 22 registered price declines

ENERGY EMERGES AS BIGGEST DRIVER

Energy inflation remained elevated throughout the quarter, driven by strong positive momentum effects that reinforced upward pressure on energy prices, the report noted. The energy shock fed through to the CPI, lifting average headline inflation to 9.21 percent in Q4 from 8.8 percent in Q3 (January-March).

Energy inflation rose to 17 percent from 14.9 percent in the previous quarter, driven primarily by fuels and lubricants as well as a gas price hike.

Gas inflation surged to 24.0 percent year-on-year in Q4 from 11.3 percent in the previous quarter, while inflation for fuels and lubricants climbed to 13.8 percent from just 1.7 percent.

Solid fuels -- specifically firewood, agricultural by-products, cow dung and jute sticks -- remained the primary drivers of energy inflation, with their own inflation edging up to 21.8 percent from 21.5 percent.

This points to a “hidden” cost of living for households, particularly in rural areas, that rely on these traditional energy sources.

INFLATION OUTPACES WAGE GROWTH

Core inflation edged up to 8.4 percent in June from 8.0 percent a month earlier, driven in part by a surge in transportation and communication costs, particularly internet services.

Food inflation also rose to 8.7 percent, with vegetables emerging as the biggest contributor. Their share of overall food inflation jumped to 37 percent from 22.7 percent a month earlier.

However, protein-rich items -- including fish, meat and pulses -- remained the single largest driver, accounting for 46.0 percent of food inflation.

Retail and wholesale prices of most essential commodities increased during the quarter, with only a few exceptions. Farm-gate egg prices and marketing margins rose sharply in May, while energy-related price pressures continued to squeeze household budgets.

The wage-price gap widened in April-June compared with the previous quarter, although it narrowed marginally towards the end of the period, according to the Bangladesh Bank.

The central bank said the slight improvement stemmed mainly from a moderation in headline inflation rather than any meaningful acceleration in wage growth.

Wage growth stood at 8.2 percent in June, remaining below headline inflation of 9.2 percent. Among all divisions, Dhaka recorded the highest wage growth.
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The Asian Development Bank’s July 2026 outlook, cited in the report, projected that Bangladesh’s headline inflation would remain high at 9 percent in FY26 amid elevated global energy prices linked to the Middle East conflict.

The central bank said maintaining policy vigilance remained imperative to anchor inflation expectations, mitigate persistent inflationary pressures and safeguard households’ purchasing power going forward.

Bangladesh recorded its highest monthly exports in the past 12 months in July, with shipments totalling $4.72 billion. Despite the strong performance, exports declined 0.9% year-on-year, and exporters caution growth is likely to improve in the months ahead.

Data from the Export Promotion Bureau (EPB), however, show exports rose by more than 12% from June.

Exporters said July is typically the strongest export month as shipments of goods for the upcoming winter season peak during this period, making the higher export value expected.

They, however, cautioned that export growth is unlikely to improve in the coming months. They cited stagnant global demand for Bangladesh's main export item, ready-made garments (RMG), the country's ongoing energy crisis, and fresh payment-related complications involving leading Polish buyer LPP as major concerns.

An analysis of EPB data shows that Bangladesh exceeded $4 billion in monthly exports four times over the past year. Exports totaled $4.77 billion in July last year.

According to EPB data, most major export sectors outside garments recorded growth in July compared with the same month of the previous fiscal year.

Exports of plastic products rose 1.98%, leather and leather products 2.81%, jute and jute goods 54%, home textiles 14.37%, other footwear 5.52%, and specialised textiles 3%.

Ready-made garments account for more than 80% of Bangladesh's total exports.

Shovon Islam, managing director of Sparrow Group, one of Bangladesh's leading garment exporters with annual exports of around $350 million, told The Business Standard, "Exports are usually higher in July because shipments for the next winter season peak during this period. Large volumes of sweaters, along with woven garments, are exported at this time."

He said this seasonal trend explains the higher export volume in July.

Some exporters said the year-on-year decline, despite record monthly exports, was mainly due to an exceptionally high base last year, when many exporters accelerated shipments to the United States ahead of the implementation of new US tariffs from 7 August. As a result, export growth appears weaker this July despite the strong performance.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) echoed this view in a statement.

According to the BGMEA, Bangladesh's RMG exports fell 1.92% year-on-year to $3.89 billion in July, down from $3.96 billion in July 2025.

"However, it is important to note that July 2025 was an exceptionally strong month, marking the highest single-month export performance in Bangladesh's RMG history. Against that extraordinary base, the current figure of $3.89 billion represents a welcome start to the new fiscal year," the statement said.

BGMEA also noted that the industry is operating amid a severe gas crisis that is limiting production capacity, as well as ongoing geopolitical uncertainties disrupting global trade and supply chains.

Despite these challenges, it said, Bangladesh's RMG sector has remained resilient.

Exporters see little growth before January

Inamul Haq Khan Bablu, senior vice-president of BGMEA and managing director of Ananta Garments, said garment exports are unlikely to grow significantly before December despite July's strong performance.

He attributed this to weak global demand, buyers' concerns over Bangladesh's ability to meet delivery schedules because of the gas shortage, and uncertainty surrounding Polish retailer LPP, which may reduce orders from Bangladesh.

Bangladeshi exporters have alleged that LPP has withheld payment of around $40 million for exports made to Russian buyers through the company. Industry sources said the dispute prompted LPP to suspend new purchase orders from Bangladesh.

"We expect exports to recover from January," Bablu said.

He added that buyers have expressed concern over whether Bangladeshi manufacturers will be able to complete orders on time because of the ongoing gas crisis.

Another exporter, requesting anonymity, said orders could decline further if the energy crisis is not resolved quickly.

Shovon Islam also warned that Bangladesh could lose orders if the gas supply situation does not improve.

"Under the current circumstances, Bangladesh's garment exports are unlikely to grow at least until November," he said.

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.

Merchandise exports from Bangladesh declined 1 percent year-on-year to $4.72 billion in July because of the sluggish trend in garment shipments.

However, the figure is 12.49 percent higher than June's $4.2 billion, according to data released today by the Export Promotion Bureau (EPB).

The EPB said Bangladesh's flagship readymade garment (RMG) sector posted remarkable growth, raising hopes of achieving the export targets set for the 2026-27 fiscal year.

In July 2026, garment exports totalled $3.88 billion, marking an impressive 14.73 percent month-on-month growth from June's $3.38 billion, the EPB data said.

Year-on-year, the sector experienced a 1.92 percent contraction, aligning with the overall merchandise trend as global buyers adjusted their post-pandemic inventory levels.

In terms of export destinations, the United States retained the top position, reaffirming the strong commercial ties between the two nations.

Exports to the United States in July 2026 reached $918.74 million, recording 0.25 percent growth over the same month last year—a bright spot amid the mixed indicators.

Germany secured the second position with exports worth $495.30 million, while the United Kingdom ranked third with $478.42 million.

Notably, Bangladesh's exports to India and Saudi Arabia registered the highest growth rates among major markets, surging by 15.30 percent and 10.64 percent, respectively, according to the EPB data.

With the United States leading demand and the RMG sector regaining strong monthly momentum, Bangladesh is well-positioned to capitalise on upcoming autumn and festive-season orders, the Export Promotion Bureau said in a statement.

Exporters are actively working to bridge the year-on-year decline through new product lines and non-traditional markets, ensuring the export trajectory remains firmly upward, the statement added.

Bangladesh has expressed interest in importing natural gas from Myanmar through a cross-border pipeline to help meet its growing domestic energy demand.

Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood conveyed the interest during a meeting with Myanmar Ambassador to Bangladesh UKyaw Soe Moe at the Secretariat in the capital today (2 August).

During the meeting, the minister said strengthening energy cooperation with neighbouring countries remains a priority under the government's "Neighbours First" foreign policy.

The Myanmar ambassador welcomed the proposal and suggested exploring LNG supplies alongside the pipeline option, a suggestion the minister welcomed.

The discussion revived a long-standing proposal to build a gas pipeline from Myanmar to Chattogram to supply energy to industrial areas in southeastern Bangladesh.

To advance the proposal, Mahmood suggested holding ministerial-level discussions and said he would invite Myanmar's energy minister to Dhaka. He also expressed his willingness to visit Myanmar if necessary.

The minister also referred to broader regional connectivity initiatives, including the proposed China-Myanmar-Bangladesh economic corridor, during discussions of energy cooperation.

He said a cross-border gas pipeline could complement regional infrastructure development and strengthen long-term trade ties between the two countries.

The Myanmar ambassador suggested holding a meeting of the Bangladesh-Myanmar Joint Technical Committee to assess the feasibility of the proposal.

State Minister Aninda Islam Amit, Energy Secretary Mohammad Saiful Islam, among others, were also present at the meeting.

The initiative comes as Bangladesh looks for additional sources of gas amid ongoing supply challenges. On 28 July, Malaysian Prime Minister Anwar Ibrahim expressed his country's willingness to explore supplying LNG to Bangladesh during a telephone conversation with Prime Minister Tarique Rahman.

While developed and developing nations are building digital economies on gigabit-speed internet, Bangladesh remains held back by sluggish connectivity. Despite expanding 4G networks, 47 percent of the population remains offline. Connection speeds and service quality lag behind rising user numbers. The country ranks 91st out of 103 countries for mobile internet speed and 93rd out of 141 for fixed broadband, according to a World Bank report.

Officials and experts warn this fragile connectivity is throttling economic growth. The shortfall weighs on investment, exports, technology-driven trade, freelancing, startups, education, healthcare and the expansion of digital public services. It also threatens the government’s plan to build a cashless society. Experts argue a comprehensive digital overhaul is now vital to navigate future economic headwinds and maintain global competitiveness.

A World Bank report titled “The Unfinished Digital Revolution: Expanding Internet Access” stresses that high-speed internet is no longer just a communications tool, but a primary driver of productivity, investment, employment and innovation. Yet in Bangladesh, where network coverage spans the entire country, individual adoption remains low. The Bangladesh Bureau of Statistics puts the personal internet usage rate at 58.6 percent — up five percentage points in a year — alongside a mobile phone ownership rate of nearly 89.5 percent.

Using Bangladesh as an example, the World Bank notes that although 4G networks covered 100 percent of the population in 2024, only 53 percent actually used the internet. One in three people stayed offline despite living within range of a signal. High handset prices, costly data packages and low digital literacy drive the disconnect, proving that infrastructure alone does not guarantee inclusion. Identifying and removing these barriers through effective policy remains critical if connectivity is to deliver real economic value.

Highlighting the scale of the divide, World Bank data shows that in 27 countries, including Bangladesh, more than half the population has never sent a text message through a mobile phone.

Sluggish internet speeds are frustrating government efforts to curb cash dependency and build a digital economy. Mobile financial services, online banking, point-of-sale terminals and QR code transactions depend on seamless connectivity. Low speeds cause dropped connections, transaction failures and duplicate charges — friction that steadily erodes confidence among merchants and consumers.

Transitioning to a cashless model without reliable, high-speed infrastructure is unworkable, said Muhit Rahman, managing director of One Bank. He told Bonik Barta: “Whatever digital activity we carry out, reliable internet is essential. If speeds are low, the whole system won’t work properly and people won’t develop confidence.”

The Bangladesh Bank governor echoed those concerns recently, Rahman noted, urging the industry to build alternative technologies capable of processing payments when internet connections fail.

Across low- and lower-middle-income nations like Bangladesh, coverage is expanding far faster than speeds, widening the gap with rapidly growing economies. World Bank data on median download speeds puts the United Arab Emirates atop the mobile rankings at 681 megabits per second (Mbps). Even Vietnam, a lower-middle-income country and Bangladesh’s regional peer, registers at 188 Mbps. Bangladesh, meanwhile, averages just 43 Mbps on mobile and 66 Mbps on fixed broadband. Singapore leads fixed broadband globally at 421 Mbps, with Vietnam, Malaysia and Thailand all outperforming Bangladesh by wide margins.

Network specialist Sumon Ahmed Sabir attributed the weak mobile performance to a seven- or eight-year investment drought in infrastructure. “We have nationwide 4G coverage, but service quality has stagnated,” Sabir told Bonik Barta. “Meanwhile, our neighbours have transitioned to 5G. We remain far behind on mobile internet, while broadband speeds fluctuate wildly across regions. So an economic challenge remains.”

The World Bank said internet adoption tracks national economic development closely. In high-income nations, 94 percent of the population is online, rendering access nearly universal. In low-income countries, that figure drops to 23 percent — leaving fewer than one in four connected.

A persistent rural-urban divide explains why lower-middle-income countries lag in both usage and speed. Infrastructure deficits and lower incomes lead to rural connectivity trailing urban centres across all economies. In rural Bangladesh, erratic connections and slow speeds cut residents off from market prices, agricultural support, digital payments, telehealth and public services.

Zahirul Islam, managing director of Smart Technologies, told Bonik Barta: “High-speed, reliable internet is no longer a luxury — it is foundational infrastructure. Internal operations, ERP systems, cloud-based applications, customer support and digital services all depend on web platforms. The world’s leading software solutions rely on stable internet connectivity. When speeds drop or connections fail, delivery slows and productivity falls.”

Building a tech-driven economy requires Bangladesh to upgrade network speed, stability and international bandwidth quality alongside basic coverage, Islam added.

Across low-income nations, weak connectivity and slow speeds drag on economic growth, foreign investment and international trade. Sluggish mobile networks do more than frustrate users; they choke productivity, job creation and capital flows across every sector, the World Bank noted.

Bangladesh must fundamentally restructure its digital landscape, said Dr M Masrur Reaz, chairman of Policy Exchange Bangladesh. “The global economy is pivoting toward a digital framework powered by high-speed internet, allowing regional competitors to pull ahead,” Reaz told Bonik Barta. “Approximately 12 percent of Bangladesh’s exports depend on digital services. Sluggish internet speed directly handicaps them. Banking and financial services rely just as heavily on stable networks. Advanced economies prioritised this sector; Bangladesh must also engineer its own digital revolution now.”

Lutfunnisa Saudia Khan, president of the International Business Forum of Bangladesh, believes fast and reliable internet has become foundational infrastructure for modern enterprise.

“Nearly every activity worldwide now depends on the internet — global trade relies on it just as heavily as domestic commerce,” Khan told Bonik Barta. “Faster speeds and stronger connectivity would break existing monopolies, lower costs, spur competition and push service providers to raise quality. It would also give businesses a wider range of options. Submarine cables can play a critical role here.”

As the government launches fresh initiatives to attract foreign direct investment, digital infrastructure is taking centre stage. Internet connectivity plays a vital role in drawing both domestic and foreign capital, said Nahian Rahman Rochi, an executive member and head of Business Development at the Bangladesh Investment Development Authority.

Rochi told Bonik Barta. “Work is advancing on a third submarine cable, 5G deployment and Starlink’s satellite internet service. Major international telecoms operators are also showing keen interest in expanding their operations into Bangladesh.”

According to the data published by the central bank, the amount of cash outside the banks was Tk 3,49,374 crore at the end of May this year. The amount of such cash increased further in June and July. The balance of cash outside the banks has now exceeded Tk 3,80,000 crore, Bangladesh Bank sources said.

The prevalence of cash is increasing at a time when the payment system in the country's banking sector is much more modern and technology-based. Customers can transact any amount of money in the bank from home if they want. They can use the bank's apps or mobile financial services (MFS) to make purchases, pay utility bills, and receive almost all types of banking services whenever they want.

While searching for an answer to the question of why cash is growing so rapidly despite the expansion of digital payment infrastructure and networks, the country's large informal sector, cash-based businesses, high inflation, limited financial inclusion, and a crisis of trust in the banking sector come to the fore. In many cases, digital transactions have not been an alternative to cash; rather, they are being used in parallel with cash. As a result, the inability to reduce cash dependence despite the spread of modern payment technologies highlights the structural weaknesses of Bangladesh's financial system.

Economists, bankers and all concerned parties say that if a large portion of cash is outside the banks, it is not added to the effective flow of the financial system. This reduces the ability of banks to collect deposits. The supply of money for loans and investments is reduced. The flow of money to the productive sector is also hampered. At the same time, huge amounts of cash increase the risk of the expansion of the informal economy, tax evasion, undisclosed income and illegal transactions. The transparency and accountability of the economy are also weakened.

Dr. Fahmida Khatun, executive director of the private research organization Center for Policy Dialogue (CPD), believes that it is necessary to investigate why the flow of cash has increased so much. She told Banik Barta, "As a result of the modernization of the payment system, the size of the informal economy is supposed to shrink. But we are not seeing that. Rather, the amount of cash going out of banks is increasing. Deposits in banks are also growing. On the one hand, the increase in the flow of cash out of banks, and on the other hand, the growth in deposits are contradictory. These two trends in the economy are contradictory. Why this is happening, the Ministry of Finance and Bangladesh Bank need to investigate."

Dr. Fahmida Khatun herself is now on the board of directors of Bangladesh Bank. She said, 'The growth of the informal economy means that money is coming from some source. Whether that money is from a legitimate source, whether taxes have been paid against that money, these are the questions that need to be answered. Generally, when distrust of banks, bribery and corruption, and black money violence increase in an economy, the demand for cash increases.'

According to Bangladesh Bank data, a decade and a half ago, in 2011, the amount of cash outside banks in the country was only Tk 58,417 crore. In the following years, the demand for cash continued to increase rapidly. Increasing continuously, the amount of cash outside banks stood at Tk 2,9517 crore in June 2021. A year later, in June 2022, this amount increased to Tk 2,364,488 crore. And in June 2023, the amount of cash in the market stood at Tk 2,919,133 crore. However, although the amount of cash outside banks fluctuated in 2024 and 2025, it did not increase much. In June last year, the amount of cash in the market was Tk 2,964,511 crore. But in just one year, in May this year, this amount increased to Tk 3,493,744 crore. Then, in June, the resignation of the chairman of Islami Bank and the appointment of a new chairman by the central bank spread unrest in the bank. As a result, deposits worth about Tk 25,000 crore were withdrawn from the country's largest bank. As the crisis intensified, the central bank had to lend Tk 13,000 crore.

Officials of the Currency Management Department of Bangladesh Bank said that when the instability arose in Islami Bank, a part of the customers withdrew their deposits from many other banks in the country. Due to this, the amount of cash outside the banks exceeded 3.7 trillion taka in June. Then in July, this figure reached 3.8 trillion taka. However, at the moment, the demand for cash is somewhat stable. The situation may normalize if a new board of directors is formed in Islami Bank.

When asked about this, Mohammad Zahir Hossain, administrator of Islami Bank Bangladesh PLC and executive director of Bangladesh Bank, told Banik Barta, "The daily transaction situation of Islami Bank is now normal. We will repay the money that was lent from the central bank in installments. Many of the customers who had withdrawn money from the bank in panic have returned."

According to Bangladesh Bank data, the growth in deposits in the banking sector this year is better than in the past few years. In the first 11 months of the 2025-26 fiscal year (July-May), deposits in the country's banks increased by Tk 1,63,522 crore. Although earlier, deposits increased by Tk 89,774 crore in the same period of the 2024-25 fiscal year. Accordingly, the growth in deposits in the banking sector is almost double compared to the previous year. At the end of May this year, the balance of deposits deposited by customers in banks was Tk 2,041,692 crore. In this case, the growth in deposits was 11.41 percent.

City Bank Managing Director and CEO Masrur Arefin is blaming high inflation for the large amount of cash flowing out of banks. The top executive, who is also the chairman of the Association of Bankers, Bangladesh (ABB), an organization of bank executives, told Business Daily, "The main reason for the large amount of cash flowing into the market is inflation. As the prices of goods and services increase, it now costs more to buy the same amount of money. This money is changing hands in the retail market and circulating as cash. If inflation drops to 5 percent, the amount of cash outside banks will be reduced by half."

However, Masrur Arefin believes that the infrastructure for digital transactions is still inadequate compared to the demand. He said, 'The spread of QR codes, POS machines, cards and internet banking is very limited compared to millions of shops in the country. The crisis of confidence in the banking sector has also increased cash dependence. The presence of good banks is low in many areas. As a result, people are withdrawing money from weak banks and keeping it at home. So much noise in the media about irregularities or looting in the banking sector has pushed even our mid-level banking brands into a challenge. In this situation, our good banks will either have to expand like "Bikash", or we will need a few more "Bikash" for this huge economy.'

In the last few years, there has been a huge expansion of technology-based payment systems in the country's banking sector. Every month, transactions worth 2.5 lakh crore taka are being made in Mobile Financial Services (MFS) alone. Most banks have launched debit, credit and prepaid cards. And the monthly transaction volume of the banks' mobile apps and internet banking has also reached about 2.5 lakh crore taka. In the last few months, the central bank has taken various steps to popularize 'Bangla QR'. Despite this, the central bank is also concerned about the increasing amount of cash leaving the banks.

In this context, Bangladesh Bank's Executive Director and Spokesperson Arif Hossain Khan told Banik Barta, "We have brought all the merchants in the country under the Bangla QR. All digital payment mediums including RTGS, NPSB, MFS are now more popular and faster than ever before. Despite that, the increase in the amount of cash outside the banks is a concern. In the current situation, whether people are turning away from banks has become a big question. However, we are trying our best to restore good governance, discipline and trust in the banking sector."

However, Arif Hossain Khan also blames high inflation for the increase in the amount of cash outside banks. He said, "The country has been experiencing high inflation since 2022. People are having to spend more money to pay for goods and services. In the last three years, weak banks have been given a huge amount of liquidity support from the central bank. Most of the money provided has been withdrawn by depositors. These are also responsible for the increase in cash outside banks."

Individual taxpayers can now enjoy a tax rebate of up to 5 percent, capped at Tk 25,000, if they file their income tax returns by September 30.

The incentive was introduced through the Finance Act 2026.

Taxpayers filing their returns between July 1 and September 30 will qualify for a tax rebate of 5 percent of the tax payable, up to a maximum of Tk 25,000, the National Board of Revenue (NBR) said in a press release yesterday.

No rebate will be available for returns filed between October 1 and December 31. Moreover, taxpayers who submit their returns after December will have to pay additional tax.

Those filing returns between January 1 and March 31, 2027, will have to pay an additional tax equal to 2 percent of the tax payable or Tk 3,000, whichever is higher.

For returns filed between April 1 and June 30, 2027, the additional tax will rise to 5 percent of the tax payable or Tk 5,000, whichever is higher.

The NBR said the new incentive is intended to encourage early filing, strengthen voluntary tax compliance and make tax administration more efficient and orderly.

The move comes as the tax authority seeks to broaden the country’s narrow tax base and improve compliance amid persistent revenue collection challenges.

The NBR launched its e-Return service for individual taxpayers for the 2026-27 tax year on July 22.

Taxpayers can file their returns online through the etaxnbr.gov.bd portal and pay taxes digitally using bank transfers, debit and credit cards, mobile financial services and other digital payment methods.

After successfully submitting an accurate return, taxpayers can instantly download an acknowledgement receipt and an income tax certificate.

The revenue authority said its officials would provide assistance through the NBR call centre and other electronic channels during office hours on working days if taxpayers encounter any difficulties while filing returns online.

Individual taxpayers can now enjoy a tax rebate of up to 5 percent, capped at Tk 25,000, if they file their income tax returns by September 30.

The incentive was introduced through the Finance Act 2026.

Taxpayers filing their returns between July 1 and September 30 will qualify for a tax rebate of 5 percent of the tax payable, up to a maximum of Tk 25,000, the National Board of Revenue (NBR) said in a press release today.

No rebate will be available for returns filed between October 1 and December 31. Moreover, taxpayers who submit their returns after December will have to pay additional tax.

Those filing returns between January 1 and March 31, 2027, will have to pay an additional tax equal to 2 percent of the tax payable or Tk 3,000, whichever is higher.

For returns filed between April 1 and June 30, 2027, the additional tax will rise to 5 percent of the tax payable or Tk 5,000, whichever is higher.

The NBR said the new incentive is intended to encourage early filing, strengthen voluntary tax compliance and make tax administration more efficient and orderly.

The move comes as the tax authority seeks to broaden the country’s narrow tax base and improve compliance amid persistent revenue collection challenges.

The NBR launched its e-Return service for individual taxpayers for the 2026-27 tax year on July 22.

Taxpayers can file their returns online through the etaxnbr.gov.bd portal and pay taxes digitally using bank transfers, debit and credit cards, mobile financial services and other digital payment methods.

After successfully submitting an accurate return, taxpayers can instantly download an acknowledgement receipt and an income tax certificate.

The revenue authority said its officials would provide assistance through the NBR call centre and other electronic channels during office hours on working days if taxpayers encounter any difficulties while filing returns online.

Bangladesh Bank (BB) has decided to issue its Monetary Policy Statement (MPS) on a quarterly basis, replacing the current six-month cycle, in an effort to make monetary policy more responsive to rapidly changing domestic and global economic conditions.

The central bank is expected to implement the new system from September. Officials said the move is intended to make the MPS more realistic, timely, and inclusive, as macroeconomic developments have become increasingly volatile.

Bangladesh Bank had introduced an annual MPS during the tenure of former Governor Fazle Kabir. The frequency was later revised to a half-yearly schedule under former Governor Abdur Rouf Talukder.

The International Monetary Fund (IMF) had also recommended more than a year ago that Bangladesh Bank adopt a quarterly MPS framework to improve policy responsiveness and strengthen monetary management.

The proposal was recently discussed at a meeting of the relevant parliamentary standing committee, which endorsed the initiative, paving the way for the central bank to formally introduce quarterly monetary policy statements from September next.

A monetary policy statement is an official document released by a central bank that outlines its economic stance, inflation targets, and key interest rates to manage the money supply.

Seeking anonymity, a BB official said they decided to issue MPS on a quarterly basis probably from September next. "We are planning to issue a press release very soon to update our stakeholders," he said.

The central banker said the monetary policy committee normally meets in every three months to assess global and domestic macroeconomic indicators before making any adjustment for betterment of the money market.

He said the IMF earlier as part of its 4.70 billion US dollar lending package recommended the banking regulator to go for quarterly issuance of MPS replacing the existing six-month ones.

It is known that the BB has already been analysing MPS of its peer countries to make it a better one.