Bangladesh could face a potential loss of $17.5 billion in exports after graduating from the least developed country category due to the loss of preferential market access in developed economies, Commerce Minister Khandakar Abdul Muktadir told parliament today (8 June).

Replying to a question from Chattogram-11 lawmaker Jasim Uddin Ahmed during the second day of the second session and first budget session of the 13th Jatiya Sangsad, the minister said the government had already launched a series of trade and market diversification initiatives to address the challenges arising from the country's transition to developing nation status.

"Bangladesh will soon graduate from the LDC category. As a result, the country will lose preferential market facilities currently available under various trading schemes offered by developed countries, which may adversely affect exports worth around $17.5 billion," he said.

To mitigate the impact, Bangladesh has already concluded an Economic Partnership Agreement with Japan, while negotiations for a Comprehensive Economic Partnership Agreement with South Korea are underway, the minister said.

He said that the government has also initiated efforts to sign EPA, CEPA or Free Trade Agreements with the European Union, the Regional Comprehensive Economic Partnership, the United Arab Emirates, Singapore, Indonesia, China and other potential export destinations.

The minister attributed the country's widening trade deficit partly to policy failures of the previous government and partly to global economic factors, including the energy crisis, the Russia-Ukraine war, rising commodity prices, dollar shortages and adverse international market conditions.

He said that higher import costs for fuel, food and industrial raw materials, coupled with slower export growth, had contributed significantly to the trade imbalance.

According to data presented in the JS, Bangladesh's trade deficit widened to $24.16 billion in the financial year 2024-25 from $21.50 billion in FY2023-24.

Exports stood at $55.19 billion against imports worth $79.35 billion during the period.

The minister said that despite exporting goods to 202 countries and territories in FY2024-25, the readymade garment sector still accounted for 84 per cent of the country's export earnings.

He said that to reduce dependence on a single sector, the government has undertaken initiatives to extend facilities similar to those enjoyed by the garment industry to other promising export sectors.

Partial exporters in eight sectors, leather and leather goods, jute and jute products, agricultural products, pharmaceuticals, ICT and software services, light engineering products, frozen foods and fish, and plastic products, have already been granted bonded warehouse facilities against bank guarantees, the minister said.

Muktadir said that the government was also supporting entrepreneurs in eight priority sectors through the Business Promotion Council and had formulated the Export Policy 2024-2027 to strengthen Bangladesh's position in global trade through sustainable export growth.

To expand market access and remove trade barriers, Bangladesh is continuing engagement through various bilateral platforms, including trade and investment arrangements with Australia, the United Kingdom, Vietnam, Thailand, Uzbekistan, Belarus and Canada, he said.

The minister said that efforts were also underway to explore new export markets in Latin America, Africa and the Commonwealth of Independent States through trade missions comprising government and private sector representatives.

Other measures include strengthening economic diplomacy through Bangladesh missions abroad, providing foreign currency loans from the Export Development Fund for raw material imports, and creating a Tk5,000 crore low-interest pre-shipment loan fund for export-oriented industries through Bangladesh Bank.

commerce minister said that the government had declared paper and packaging products as the Product of the Year 2026 in a bid to diversify exports, create employment and promote women's economic empowerment, he added.

Replying to a separate question from Bagerhat-4 lawmaker Abdul Alim, the minister outlined Bangladesh's ongoing efforts to strengthen trade ties within South Asia.

He said Bangladesh and Bhutan signed a PTA in December 2020, under which 100 Bangladeshi products and 34 Bhutanese products enjoy duty-free market access.

Negotiations on PTAs with Nepal and Sri Lanka are progressing, while Bangladesh is also preparing for further negotiations with India on a proposed Comprehensive Economic Partnership Agreement.

Muktadir said Bangladesh was prioritising bilateral, regional and multilateral trade agreements with key economic blocs and countries in Asia, Europe, Africa and the Middle East to strengthen export competitiveness and attract investment after LDC graduation.

In response to another question from reserved-seat lawmaker Selina Sultana, the minister said that Bangladesh continued to face trade deficits with several SAARC countries, particularly India.

In the FY2024-25, Bangladesh recorded a trade deficit of $7.86 billion with India, the largest among SAARC member states.

The country also posted trade deficits with Afghanistan, Bhutan and Sri Lanka.

The benchmark index of the Dhaka Stock Exchange (DSE) ended its impressive 10-session winning streak today (8 June) as investors moved to lock in gains following the market's recent rally.

The DSEX shed 33 points, or 0.61%, to close at 5,482, as market participants adopted a cautious stance ahead of the upcoming national budget, market insiders said.

The market remained under pressure from the opening bell, extending the corrective trend that emerged during the latter part of the previous session. Persistent selling across a wide range of stocks kept all major indices in negative territory throughout the day.

The blue-chip DS30 index also declined, losing 18 points to settle at 2,069.

Market breadth strongly favoured the bears, with 247 issues declining against 102 gainers, while 44 stocks remained unchanged on the DSE trading floor.

The broad-based sell-off wiped out nearly Tk1,600 crore from the market capitalisation of the country's premier bourse in a single session.

Investor participation also weakened significantly. Turnover on the DSE fell by 30% to Tk1,072 crore, suggesting that many investors preferred to stay on the sidelines while awaiting potential policy signals from the national budget.

According to EBL Securities' daily market review, concerns surrounding the upcoming budget played a key role in cooling the market's recent bullish momentum.

Several heavyweight stocks exerted downward pressure on the benchmark index, including Square Pharmaceuticals, Beximco Pharmaceuticals, BRAC Bank, LafargeHolcim Bangladesh and British American Tobacco Bangladesh.

Sector-wise, general insurance led trading activity, accounting for 19.2% of total turnover, followed by engineering and pharmaceutical stocks.

Most sectors closed lower, with services, cement and financial institutions posting notable declines. However, general insurance, paper and tannery shares bucked the trend and recorded modest gains.

Among individual stocks, Anwar Galvanizing emerged as the day's top gainer, advancing nearly 10%. Shyampur Sugar Mills and Zeal Bangla Sugar Mills also hit their upper circuit limits.

On the losing side, Nahee Aluminum topped the decliners' list, falling more than 6%, followed by Fareast Finance and SS Steel.

Dominage Steel, Genex Infosys and NCC Bank featured among the most actively traded stocks during the session.

The bearish sentiment was also reflected at the Chittagong Stock Exchange (CSE), where the CASPI index dropped 84 points to close at 15,314. Turnover at the port-city bourse declined 24% to Tk43 crore.

Russian Foreign Minister Sergey Lavrov yesterday (8 June) said Russia will welcome Bangladesh as a candidate for the BRICS membership once the process resumes, stressing that advantages from the BRICS membership are obvious.

"As for BRICS, the ten members currently comprising the group have agreed to put the admission of new members on hold for the time being, because just two years ago the number of BRICS members doubled overnight, and we need a little time to adjust to the new lineup," he said after his bilateral talks with Foreign Minister Khalilur Rahman in Moscow.

"But our stance on Bangladesh's candidature when this pause is over is as follows: we will welcome the candidature of this large and important Asian nation," Lavrov added.

BRICS brings together eleven major emerging markets and developing countries of the world: Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, Saudi Arabia, South Africa and United Arab Emirates.

It serves as a useful platform for consultation and cooperation on contemporary issues having global as well as regional significance and issues of global political and economic governance.

According to the top Russian diplomat, advantages from the BRICS membership are obvious.

That is why "a big number of countries, more than the current number of BRICS members, want to join for these advantages," he said.

"We fully understand the aspirations of the applicants, including our friends from Bangladesh, who are already members and shareholders of the New Development Bank and are very pleased with such participation," said the Russian Foreign Minister.

Bangladesh and Russia have broad opportunities to scale up bilateral trade volumes, Foreign Minister Khalilur Rahman said at a joint press conference with Russian Foreign Minister Sergey Lavrov.

He said they discussed the need for further expanding our ties in different fields; there is ample scope for substantially increasing our trade volumes in both ways.

"We discussed the ways in which we could accomplish this and will continue to have some of the ideas on the table, like the possibility of granting duty-and quota-free treatment, and to assist us to complete a preferential agreement with Eurasian Economic Union," Khalilur said.

The vast potential for cooperation exists also in the labor resources sphere, he added.

A delegation from the Export-Import Bank of China (China Exim Bank) is scheduled to meet Bangladesh Bank today to discuss the possibility of Bangladesh joining China's Cross-Border Interbank Payment System (CIPS) and issuing Panda Bonds, according to central bank officials.

The discussions come as China seeks to expand the use of its financial infrastructure and currency in cross-border transactions, while Bangladesh explores options to diversify payment channels and financing sources.

A senior Bangladesh Bank official told The Business Standard that the Chinese delegation would present proposals on the two initiatives before the central bank assesses their feasibility and potential implementation.

"The China Exim Bank delegation is expected to arrive today. They want to discuss Panda Bonds and the Cross-Border Interbank Payment System (CIPS). They will present their ideas, and the central bank will then consider whether these can be implemented," the official said.

The delegation is also expected to hold meetings with the Finance Division, the Bangladesh Investment Development Authority (Bida) and the Bangladesh Economic Zones Authority (Beza).

China has previously proposed that Bangladesh join its payment network, particularly amid growing complexities in international financial transactions following Western sanctions on Russian banks and broader shifts in the global economic landscape.

In March 2024, Yao Wen discussed the CIPS initiative with the then-governor of Bangladesh Bank.

According to Bangladesh Bank sources, CIPS could become the second major international payment network used by Bangladesh after the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system, which dominates global financial messaging.

Sources said Bangladesh Bank has already opened a nostro account with China's central bank. A nostro account is a bank account held by a domestic bank in a foreign bank in the currency of the country where the account is maintained.

Although some Bangladeshi banks maintain nostro accounts in China, their use remains limited because most international trade transactions are still conducted in US dollars.

What is a Panda Bond?

Panda Bonds are yuan-denominated bonds issued in China's domestic bond market by foreign governments, international financial institutions or multinational corporations.

The instruments allow foreign issuers to raise funds directly from Chinese investors. The bonds are denominated in Chinese yuan (RMB), while investors are primarily Chinese institutions, although foreign investors may also participate in certain cases.

Bida meeting to focus on investment issues

Nahian Rahman Rochi, executive member and head of business development at Bida, said the Chinese delegation has a scheduled meeting with the investment promotion agency.

"Various investment-related issues will be discussed during the meeting. However, CIPS and Panda Bonds are primarily on the agenda for discussions with Bangladesh Bank and are not directly under Bida's purview," he said.

Economists view China's CIPS initiative as a potentially strategic alternative payment channel for Bangladesh, although they caution that its practical benefits will depend largely on bilateral trade and financial flows.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), said alternative payment systems could serve as an important long-term strategic option for Bangladesh.

"These initiatives can be positive for Bangladesh, but their actual benefits will depend on the volume and direction of trade and financial transactions between the two countries," he told TBS.

Razzaque noted that Bangladesh imports significantly more from China than it exports, meaning that introducing yuan-based transactions alone would not automatically generate substantial benefits.

He argued that greater Chinese investment, loans and project financing would be necessary to make cross-border settlements under CIPS more effective.

"If China increases investment in economic zones, infrastructure projects and industrial sectors, or extends financing in yuan, those inflows could facilitate cross-border settlements. Otherwise, Bangladesh may still need to rely on the US dollar for a large share of its transactions," he said.

"It opens up a new possibility, but the extent of the real benefits will depend on the future trajectory of economic relations and transaction flows between the two countries," he added.

এ সময় দেশের পুঁজিবাজারের নিয়ন্ত্রক সংস্থাটির নতুন প্রধানের হাতে ফুলের তোড়া তুলে দেয়া হয়। লংকাবাংলা ক্যাপিটাল মার্কেটের এক সংবাদ বিজ্ঞপ্তি গতকাল এ তথ্য জানানো হয়।
সাক্ষাৎকালে আরো উপস্থিত ছিলেন লংকাবাংলা সিকিউরিটিজ পিএলসির প্রধান নির্বাহী কর্মকর্তা (সিইও) ও পরিচালক খন্দকার সাফ্ফাত রেজা এবং প্রধান আর্থিক কর্মকর্তা (সিএফও) ও কোম্পানি সচিব খাইরুন্নেছা; লংকাবাংলা ইনভেস্টমেন্ট লিমিটেডের সিইও ইফতেখার আলম ও লংকাবাংলা অ্যাসেট ম্যানেজমেন্ট লিমিটেডের সিইও মো. সায়মন ইবনে মুজিবসহ ঊর্ধ্বতন কর্মকর্তারা।

The government is set to make it mandatory for businesses to have a Business Identification Number (BIN) to open merchant accounts with mobile financial services (MFS) providers in the fiscal year 2026-27 national budget.

Under the proposed measure, businesses seeking to open merchant accounts with any MFS provider will be required to submit either a valid BIN or proof of enrolment.

Merchant accounts allow businesses to receive digital payments from customers through platforms such as bKash, Nagad, Rocket and Upay.

“A provision will be incorporated into the Finance Bill 2026 to expandthe value-added tax (VAT) base,” said a finance ministry official familiar with the matter, requesting anonymity.

The proposal is part of a broader set of provisions that would make BINs or enrolment certificates mandatory for a range of business-related services, as an effort to strengthen VAT compliance, expand the formal tax net and improve monitoring of business transactions conducted through digital financial platforms.

Finance Minister Amir Khosru Mahmud Chowdhury is expected to formally propose the measure while presenting the national budget in parliament on June 11.

Officials said the proposal has already received in-principle approval from Prime Minister Tarique Rahman at a high-level meeting.

However, industry insiders criticised the move, warning that it could discourage small businesses from adopting digital payments and slow the country’s transition towards a cashless economy.

“This move may set back the journey towards a cashless society. Many small vendors and marginal merchants are reluctant to enter the formal sector because they fear additional compliance requirements and administrative hassles,” said a market insider, requesting anonymity.

The insider added that making BINs mandatory for merchant accounts could discourage some businesses from using digital payment platforms altogether.

There are currently nearly 10 lakh merchant account holders across the country, according to industry sources.

The finance ministry official said the government may also make BIN registration mandatory in several other areas, including opening and operating current or short-term deposit accounts with banks and non-bank financial institutions, obtaining loans, renewing trade licences, securing memberships in trade bodies, obtaining electricity and gas connections, and registering vehicles in the name of a business.

Officials familiar with the proposal said the requirement is intended to bring more businesses into the formal economy and improve the government’s ability to track commercial activities that currently take place outside the tax system.

OPEC+ agreed on Sunday a fourth increase in its oil output targets in as many months, even though the US war with Iran is still preventing several of the group's members from pumping more.

The war has cut oil flows via the Strait of Hormuz, creating the world's biggest-ever supply crisis as key OPEC+ members including Saudi Arabia have been unable to supply customers in full since the end of February. The crisis for OPEC+ deepened when the United Arab Emirates left the Organization of the Petroleum Exporting Countries after almost 60 years.

Seven core members of OPEC+, which groups OPEC and allied producers including Russia, have increased their output quotas from April to June by almost 600,000 barrels per day.

In reality, the group's production has collapsed due to export cuts by Gulf members, averaging 33.19 million bpd in April compared with 42.77 million in February, according to OPEC figures.

Impact of production target increase

On Sunday, the seven members decided to increase targets by 188,000 bpd from July, OPEC said in a statement. This is the same as the June hike, which was adjusted down from monthly increases of 206,000 bpd in May and April to take into account the UAE exit.

Iraq's oil output quota will increase by 26,000 bpd from July under the agreement, an oil ministry spokesperson told Iraq's state news agency.

"An OPEC+ production increase means very little while the Strait of Hormuz remains closed," said Jorge Leon, an analyst at Rystad and a former OPEC official.

"When the Strait of Hormuz reopens, the market could move very quickly from fear of shortage to fear of surplus."

On Friday, oil prices fell to around $93 a barrel as traders gained confidence that renewed conflict between the US and Iran was growing less likely. Prices were close to $72 before the war began.

OPEC+ almost done with unwinding 2023 output cut

The seven countries are increasing production as part of the gradual unwinding of a 1.65 million bpd production cut that the group, which at the time included UAE, agreed in 2023.

From July, the seven have about 567,000 bpd of the original cut to return to the market, taking into account the UAE exit from 1 May, according to Reuters calculations.

That would mean the rest of the cut will be unwound by the end of September should OPEC+ stick to monthly hikes of about 188,000 bpd for August and September.

The seven of 21 OPEC+ members who met on Sunday are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman. In recent years, only the seven plus the UAE - when it was a member - have been involved in the group's output policy decisions.

In a separate meeting on Sunday of all OPEC+ members, the ministers made no change to group-wide output policy that is in place until the end of 2026, OPEC+ said in another statement.

OPEC+ is carrying out a review of its members' oil production capacity to be used as a reference for 2027 production baselines, from which quotas are set. The group on Sunday affirmed the importance of completing the assessment, the statement said.

Asian stocks plunged on Monday as investors rushed out of the hottest AI-linked shares on fears the bull run has gone too far, too fast and as fresh hostilities in Iran pushed up oil prices.

The twin triggers for a rout that is highlighting a fragile market mood were last week's disappointing outlook at chipmaker Broadcom and a surprisingly strong US jobs report on Friday that has traders pricing a rate hike this year.

Korea's chip-heavy KOSPI, the world's best-performing market this year, led losses in Asia with a 5% slide that has the benchmark down 13% from last week's record high.

Japan's Nikkei fell almost 4% with market darlings across the computer-chip production supply chain falling furthest, while Taiwan's benchmark sank 3.9%.

Nasdaq futures were attempting a recovery following a sharp selloff on Friday and European futures fell 1%.

The Nasdaq dropped 4.2% on Friday.

"The move looks more like a positioning and momentum unwind than a reassessment of the long-term AI story," said Marc Velan, head of investments at Lucerne Asset Management in Singapore.

"Korean technology names have been among the strongest performers globally and were heavily owned, so when rate expectations shifted after the jobs report, they became a natural source of liquidity."

In bonds, 2-year Treasury yields rose more than 11 basis points on Friday and were up 1.6 bps on Monday to 4.1782%.

"The AI-drives-everything narrative frayed last week," said Bob Savage, head of markets macro strategy at BNY.

"Whether this is a healthy pause in the nine-week equity rally or a top remains the key question. The IPO focus on SpaceX and Anthropic is part of the pause – whether to make room for the new market cap or to rethink value."

Inflation and ECB ahead

The Middle East situation also remains delicate and Brent crude futures were up about 3.5% to $96.45 a barrel on Monday after Israel said it struck military targets in western and central Iran.

The week ahead is headlined by the giant SpaceX listing, expected to price on Thursday and trade on Friday, but inflation will also be in focus with US consumer price data due on Wednesday and central bank meetings in Canada and Europe.

Last week, bitcoin notched its heaviest weekly drop since the collapse of crypto exchange FTX in late 2022, falling about 16%. It was hovering just shy of $63,000 on Monday.

SpaceX's debut is expected to be followed by other major IPOs in the coming months from Anthropic and OpenAI, raising so much money that brokers are nervous it could draw down other assets.

"The market regime has potentially shifted from moderate inflation and rate cuts to potential 'overheating' contributing to higher Treasury yields, a higher path of short-term interest rates and tighter liquidity," said Nick Ferres, CIO of Vantage Point Asset Management in Singapore.

OPEC+ on Sunday agreed to the fourth increase in its oil output targets in as many months.

In currency trading, the dollar was firm and holding above 160 yen and it pushed the Australian dollar to $0.7055. The euro hovered at $1.1531.

China's e-commerce export engine is faltering as surging jet fuel costs and weak demand from lower-income consumers in the West linked to the Iran war threaten profits for big online platforms like Temu, Shein and AliExpress.

The business models, based on flying $5 dresses from Chinese factories to shoppers around the world, were already under pressure after US President Donald Trump introduced tariffs and axed customs waivers on low-value parcels last year.

Soaring logistics costs stemming from the Middle East conflict are adding to the strain, data shows and industry insiders say, with shippers like DHL Express imposing hefty fuel surcharges.

China's low-cost e-commerce exports, which have surged over the past six years, fell 10.9% in April to $9.81 billion, the fifth consecutive month of declines compared to a year ago, according to an analysis of Chinese customs data by Luxembourg-based consultancy Trade and Transport Group.

Passing on costs to consumers

Diana Qiao, a Shenzhen-based seller of women's clothing on Temu, said she had raised her selling prices by $2 because her shipping cost per garment had increased on average by $1.

"The final burden is ultimately borne by consumers," said Qiao, adding that the increase was needed to protect her profit margins, and sales have declined slightly but she does not so far see a need to change her shipping arrangements.

Falling export values are an indication not just of the cost squeeze, but also that the era of hyper-growth for the large low-cost shopping platforms may be over, analysts and industry insiders say.

They are likely moving more products in bulk into warehouses to dispatch locally rather than flying everything direct from China, said Frederic Horst, Trade and Transport Group's managing director.

"It would make sense given the air freight cost relative to the value of the product," he said. "If you're buying a top that is 300-400 grams you're getting to the stage where air freight is 60% of the cost."

Shein has been expanding its warehouse capacity in Europe, last month opening its third warehouse in Cannock, near Birmingham in Britain.

A spokesperson at AliExpress owner Alibaba told Reuters it remained focused on "maintaining value-for-money pricing for consumers and providing a stable environment for sellers and consumers despite the volatility in global transportation costs".

Shein and Temu did not respond to questions about the effect of air freight costs on their businesses.

Platforms face weaker demand as business matures

To be sure, exports are still much higher than they were two years ago, and the start of 2025 was marked by significant frontloading ahead of US tariffs.

But returning to the growth of the past few years will be harder as Shein and Temu have already gained significant market share and surging petrol prices are hurting household budgets in the US and Europe. The European Union is also set to impose a €3 fee on low-value e-commerce parcels from 1 July.

Air freight costs have an impact but the platforms are also in a slower-growth phase and consumption overseas is decreasing because of inflation, said a China-based freight forwarding executive who declined to be named because he is not authorised to speak to the media.

Air freight rates are likely to stay high because of jet fuel prices and will take time to fall even if the Iran conflict ends, said Judah Levine, freight platform Freightos' head of research.

"If the costs stay very high, or even increase further, companies may switch to other modes of transport or hold back some of their shipments," said Martin Habisreitinger, Hellmann Worldwide Logistics' chief operating officer of airfreight.

Bangladesh’s overall inflation climbed to a 16-month high of 9.42 percent in May, driven largely by a sharp rise in food prices that is squeezing household budgets, particularly for low- and middle-income families.

According to data released by the Bangladesh Bureau of Statistics (BBS), food inflation rose to 9.06 percent in May from 8.39 percent in April, reflecting higher prices of essential commodities. Non-food inflation also increased, reaching 9.71 percent from 9.57 percent in April.

Rural areas bore the brunt of the rise, with inflation climbing to 9.48 percent from 9.05 percent the previous month. Urban inflation rose from 9.02 percent to 9.25 percent.

A BBS official, speaking on condition of anonymity, said the increase was spread across a range of commodities rather than concentrated in any single category of items.

“It increased in some places and decreased in others. For example, summer vegetable prices have been easing, but year-round and winter vegetables such as tomatoes and carrots are rising again. Egg prices have also gone up,” the official noted.

They added that the full effect of the recent fuel price adjustment had not yet been captured in the May figures, and that a further spike in inflation next month was likely as a result.

Analysts and policy researchers agree that the current trajectory is cause for concern, and that the risks ahead may be greater than the May figures alone suggest.

Ashikur Rahman, principal economist at the Policy Research Institute (PRI) of Bangladesh, said the government was compelled to adjust fuel and electricity prices to tackle the impacts of the US-Israel war on Iran.

It is natural that the impact will eventually spread across the entire supply chain and be reflected in higher prices, he noted.

“What is more concerning is that inflation may rise further in the coming days,” he said, arguing that the financial situation, combined with planned subsidy expansion in the budget, pointed in that direction.

Rahman said judging from the design of the budget, it could no longer be said that the country is pursuing a contractionary monetary policy, since such a policy required a tight fiscal stance alongside a high policy rate.

Instead, he said, the government was moving toward expansionary fiscal policy and a looser monetary environment simultaneously — a combination that carried significant inflation risk.

“If immediate attention is not given to this issue, inflation could rise sharply within a short period,” he cautioned, noting that similar situations have been observed in Pakistan and Sri Lanka.

“When an economy experiences a supply shock, some argue that there is no need for a contractionary monetary policy environment. This view is wrong,” he said. “To bring inflation under control, a tight monetary environment is necessary, accompanied by a correspondingly tight fiscal stance. Unfortunately, we are moving in the opposite direction on both fronts.”

The Centre for Policy Dialogue (CPD) has reached a similar conclusion about the underlying drivers.

In a recent report, the think-tank found that external shocks, including the Covid-19 outbreak, the Russia–Ukraine war, and the Middle East conflict, have exerted significant upward pressure on essential commodity prices in Bangladesh, exposing the economy’s growing vulnerability to international disruptions and their spillover effects on domestic inflation.

Both Rahman and CPD point to structural weaknesses in domestic markets as compounding the problem.

The CPD called for stronger monitoring and regulatory oversight of intermediaries, particularly those who trade in bulks, to curb collusive practices and artificial price manipulation in essential commodity markets.

It also recommended reducing excessive layers of intermediaries in supply chains to narrow the gap between farm-gate and retail prices.

The think-tank also urged the government to maintain strategic reserves of essential food items and release them during supply shocks to stabilise prices. It also recommended strengthening social protection schemes for low-income households in light of recent hikes in cooking gas and transportation costs.

PRI’s Ashikur, meanwhile, noted that with inflation approaching 10 percent, attempting to stimulate growth through expansionary policies was highly risky.

He recommended attracting investment through productivity-enhancing reforms instead, including privatisation of state-owned enterprises, easing of investment and business regulations, and prioritised spending in the energy and logistics sectors.

Experts, bankers, academics and policymakers yesterday called for the formation of a dedicated reform commission for the banking sector, warning that years of politically backed bank takeovers, weak oversight and regulatory failures have eroded public confidence in the financial system.

The call was made at a seminar titled “Good Governance in the Banking Sector and the Role of the Media”, organised by the Economic Reporters’ Forum (ERF) at its office in Paltan, Dhaka.

Speaking as the chief guest, Information and Broadcasting Minister Zahir Uddin Swapon said the government would bring banking sector reforms under a dedicated commission.

“When commissions have been formed for the media, anti-corruption efforts, and administrative reforms, why should such an important sector be left out? We will certainly do it,” he said.

He added that good governance in the banking sector cannot be achieved without broader reforms in the state and political system. He alleged that economic data had been manipulated in the past to hide the true condition of the economy.

“Without support from the state, it would not have been possible to alter performance-related statistics and information in this way,” he said.

Swapon also stressed the need to reduce the economy’s heavy reliance on bank financing and develop a stronger capital market.

At the seminar, Mohammad Mamdudur Rashid, managing director and CEO of United Commercial Bank (UCB), said the sector is facing multiple challenges due to governance failures, although some banks have continued to perform well.

He added that the industry had also been affected by the Covid-19 pandemic, the Russia-Ukraine war and developments after August 2024.

According to Rashid, accountability and transparency are the two foundations of good governance.

“The ratio of non-performing loans rose from 11 percent to 25 percent mainly because of greater transparency. In 2025, Bangladesh Bank instructed banks to disclose the actual figures, making the true picture visible,” he said.

He also said vested interests and weak ethics contributed to current problems, adding that the media had helped expose irregularities long before they became widely acknowledged. However, he warned that inaccurate reporting could weaken depositor confidence.

Shamsul Huq Zahid, editor of The Financial Express, said Bangladesh has too many banks.

“If the economy needed 15 banks, licenses were issued for around 60. Supervising such a large number of banks has become difficult,” he said, adding that comprehensive reforms are urgently needed.

DEPOSITORS’ HARDSHIP AND REGULATORY CONCERNS

Md Shahidul Islam Zahid, professor and chairman of the Department of Banking and Insurance at the University of Dhaka, said depositors are now being forced to queue up to access their own money, which shows the depth of the sector’s problems.

“We tried to build a strong economy while hiding enormous amounts of dirt under the carpet. The question is: where were the regulators?” he said.

He criticised regulators’ role during politically backed bank takeovers and questioned why Bangladesh Bank did not raise public concerns at the time.

Referring to audit irregularities, he said some banks reported profits that later turned into losses after independent audits.

“In one case, a bank reported a profit of Tk 450 crore in 2023, but an audit later found it had actually incurred a loss of Tk 250 crore. Such manipulation involved top-tier auditors and received regulatory approval,” he said, calling for accountability for all parties involved.

Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said shareholders provide only about 4 percent of funds in the banking sector, while depositors supply the remaining 96 percent.

“Yet those who own just 4 percent effectively control the banks, while depositors who provide most of the funds are struggling to access their money,” he said.

He called for greater autonomy, transparency and accountability at Bangladesh Bank, urging it to fully use its legal powers.

Sayema Haque Bidisha, professor in the Department of Economics at the University of Dhaka, stressed the need for objective analysis of financial data. She also urged the media to closely monitor how the newly announced Tk 60,000 crore stimulus package is used.

As a special guest, Nurun Nahar, deputy governor of Bangladesh Bank, said most bank funds belong to depositors, who keep their money in banks based on trust.

“When people cannot withdraw their money when needed, a crisis arises,” she said.

She said some borrowers take loans without any intention of repaying them and are identified as wilful defaulters. She stressed the need for regular inspections and effective implementation of inspection reports to prevent irregularities.

She also acknowledged that many banking sector scandals were first exposed through media reports, adding that misuse or embezzlement of public money can never be justified.

Masrur Riyaz, chairman of Policy Exchange Bangladesh, also spoke at the event.

The keynote paper was jointly presented by Obaidullah Rony, special correspondent of Samakal, and Sanaullah Sakib, senior reporter of Prothom Alo.

The seminar was chaired by ERF President Doulot Akter Mala and moderated by ERF General Secretary Abul Kashem.

Gold fell about 3 percent on Friday after a stronger-than-expected US jobs report reinforced expectations that ‌the Federal Reserve will keep interest rates higher for longer amid inflation concerns fuelled by the war in the Middle East.

Spot gold was down 2.96 percent at $4,341.52 per ounce at 1:44 p.m. EDT (1744 GMT), after falling ​to its lowest level since March 24 earlier in the session. Bullion was down ​about 4.3 percent this week.

US gold futures for August delivery settled 3.1 percent lower at $4,365.3.

Nonfarm ⁠payrolls increased by 172,000 jobs in May after rising by an upwardly revised 179,000 ​in April, the US Labor Department’s Bureau of Labor Statistics said in its report. A Reuters ​poll had forecast a gain of 85,000 jobs after a previously reported rise of 115,000 in April.

“We’ve got payrolls that came in fairly significantly over what was expected,” said Bart Melek, global head of commodity strategy ​at TD Securities.

“In light of the fact that we continue to have the war in ​Iran and very large energy prices and inflationary pressures, it makes it quite unlikely that the Fed is ‌in ⁠any mood whatsoever to lower rates. The implication for gold here is that the cost of carry is getting quite high.”

US Treasury yields jumped after the release of the jobs data, increasing the opportunity cost of holding non-yielding bullion.

The price of Brent crude oil was on track ​for a weekly gain. ​Bullion has fallen more ⁠than 17 percent since the US-backed war with Iran began in late February. The conflict has led to a surge in oil prices and stoked fears of ​inflation and higher interest rates.

Although gold is seen as an inflation hedge, ​higher rates tend ⁠to weigh on the metal. Markets are currently pricing about a 72 percent chance of a Fed rate hike in December, according to CME Group’s FedWatch tool, compared to about 50 percent before the jobs data.

Gold demand ⁠was ​subdued in India this week, while premiums in China ​eased.

Two decades of state investment have transformed Turkey into a major exporter of drones and other military equipment, and the NATO member is now looking to build on that momentum as the West rearms and security alliances are reshaped.

Turkey, once heavily reliant on foreign arms makers, now supplies nearly 40 countries mainly in the Gulf, Africa, Asia and parts of Europe with weapons that many buyers see as cheaper, faster to deliver and more adaptable than alternatives.

As European governments reassess security dependencies following Russia's invasion of Ukraine and question the durability of US guarantees, many NATO allies increasingly see Turkey not only as a military bulwark on the alliance's south-eastern flank but also as a potential industrial partner.

Ankara hopes hosting US President Donald Trump and other NATO leaders at a summit next month will help expand arms sales and joint production in Western markets, particularly the European Union. There, Turkish firms face structural barriers including members-only defence initiatives and political resistance tied to broader diplomatic disputes.

A Reuters review of trade figures shows Turkish defence exports - including the high-profile armed drones used by Ukrainian forces - have more than tripled since 2021 to $10 billion last year, accounting for about 3.7% of total exports from the major emerging market economy.

Exports to Europe and the US almost quadrupled over the same period to $5.6 billion.

That growth reflects a maturing domestic defence industry that includes drone-maker Baykar, Turkish Aerospace Industries, and smaller firms such as Arca Defense and Kale.

Analysts say sustained state backing, flexible supply chains and a willingness to customise systems for buyers have allowed such firms to move quickly into markets where Western suppliers face capacity constraints or lengthy procurement cycles.

War threats and opportunities

Turkey aims to double defence exports in two years, its defence agency says, potentially generating vital revenues as it looks to pay down debt and fund further development.

Sitting between two major conflicts - Ukraine to the north and Iran to the south-east - Turkey's own security is also at stake, given its gaps in air defences and jet and tank engines that could be addressed through trade and technology deals.

Can Kasapoglu, senior fellow at the Hudson Institute, said Turkey's defence industry had made a "major leap" by exporting advanced systems, especially aerial drones.

The war in Ukraine, he said, underscored that modern warfare depended not only on cutting-edge platforms but also on industrial depth and sustainability - areas where Turkey has gained credibility.

Nato summit showcase

Turkey supplies about 65% of armed drones used worldwide and is a major exporter of ammunition. It also produces, or plans to produce, frigates, an aircraft carrier, air defence systems and armoured vehicles. Indonesia said last year it would buy 48 Turkish fighter jets currently under development.

Turkey's ambitions also carry political and reputational risks. Last month, it unveiled a prototype domestic intercontinental ballistic missile at a defence show in Istanbul, prompting criticism from some experts over feasibility and messaging after a promotional video depicted a hypothetical launch that appeared to target North America.

Turkish officials say the defence sector will be a focal point at the NATO meeting in Ankara on 7–8 July. Alliance chief Mark Rutte has said a planned defence industry forum there would be NATO's most comprehensive yet.

Bangladesh Bank (BB) on Sunday launched a Tk 30 billion (Tk 3,000 crore) export diversification refinance scheme aimed at strengthening production capacity and expanding the country’s export base beyond the ready-made garments (RMG) sector.

The Sustainable Finance Department of the central bank issued a circular in this regard, saying the scheme has been introduced to address product and market concentration risks arising from Bangladesh’s heavy dependence on RMG exports and to support the development of high-potential export sectors.

According to the circular, the refinance fund will be formed from the excess liquidity of scheduled banks and will operate as a revolving fund.

Bangladesh Bank will provide refinancing to participating financial institutions (PFIs) at an interest rate of 4 percent, while exporters will receive financing at a maximum rate of 7 percent.

The tenure of the facility has been fixed at three years, including a grace period of up to six months, with interest calculated under the reducing balance method.

The central bank said the scheme is designed to enhance export competitiveness, increase foreign exchange earnings, improve the country’s trade balance and create employment opportunities through the expansion of non-traditional export sectors.

Financing under the scheme will be available to industries identified as “Highest Priority” and “Special Development” sectors under the Export Policy 2024-27.

Preference will be given to exporters using locally sourced raw materials, while sectors such as jute and leather have been highlighted as key areas for export diversification.

The circular stipulates that exporters classified as loan defaulters in Credit Information Bureau (CIB) reports, businesses with overdue export proceeds and entities with a history of loan write-offs will not be eligible for financing under the scheme.

Banks and financial institutions willing to participate must sign a Participation Agreement with Bangladesh Bank’s Sustainable Finance Department.

Islamic banks will also be eligible to provide financing through Shariah-compliant investment modes, subject to compliance with the scheme’s pricing and tenure requirements.

To obtain refinancing, PFIs will have to submit applications for each disbursement within 90 days along with required documents, including demand promissory notes, letters of continuity, debit authority letters and updated CIB reports.

A minimum debt-equity ratio of 70:30 will be maintained for all investments financed under the facility.

The central bank has also introduced strict monitoring and accountability measures. PFIs will be required to submit quarterly reports within 15 days of the end of each quarter, while Bangladesh Bank will conduct regular inspections to ensure proper utilization of funds.

Under the penalty provisions, PFIs found providing false information or allowing misuse of funds will be charged a five percent penalty interest in addition to the normal refinance rate.

The amount will be recovered directly from the institution’s current account maintained with Bangladesh Bank.

The circular further states that if a borrower becomes classified as a defaulter, the concerned PFI must immediately inform the central bank.

In such cases, Bangladesh Bank may recover the entire outstanding refinance amount from the institution’s current account through a one-time deduction.

The scheme has been introduced under the powers conferred by Section 45 of the Bank Company Act, 1991, as amended in 2023, and has come into effect immediately.

The global airline industry nearly halved its ​2026 profit forecast on Sunday, citing conflict in the Middle East that has driven up fuel costs, disrupted key air ‌corridors and exposed the fragility of a sector operating on thin margins.

The International Air Transport Association, which represents more than 370 airlines accounting for about 85 percent of global air traffic, said in its annual report that it now expects the industry to post a combined net profit of $23 billion in 2026, well below a previous projection of ​about $41 billion and down from $45 billion in 2025.

The downgrade underscores airlines’ exposure to geopolitical shocks and fuel volatility, even as passenger ​demand remains resilient, planes are flying fuller and revenues are set to rise to more than $1.1 trillion.

“There are two major factors: one is the significant increase in jet fuel prices, which has gone way higher than I think anybody would have expected, and ​then the disruption to the airlines in the Gulf region, so that combination has led us to reduce the forecast,” IATA Director General Willie Walsh ​told Reuters at the group’s annual meeting in Rio de Janeiro.

Walsh said he expects some smaller airlines to go bankrupt or be taken over by bigger carriers this year and next as higher fuel costs bite. US low-cost carrier Spirit Airlines shut down last month, the first airline casualty of the Iran war.

Airlines are also expected to cut ​unprofitable routes to protect margins, while fares - which have surged since the start of the Iran war - are unlikely to fall soon, Walsh said.

“In ​an environment where demand remains pretty robust, but capacity comes down, that will likely lead to a situation where fares will remain elevated,” Walsh said.

The Middle East conflict, triggered by US and Israeli airstrikes on Iran, has forced airlines to reroute flights around closed or restricted airspace, adding hours to some journeys, increasing fuel burn and straining already tight capacity.

At the same time, oil prices have surged on fears of supply disruption, pushing jet fuel prices sharply higher and widening refinery margins, leaving airlines facing a steep jump in their largest cost.

Gulf airlines such as Emirates, Qatar Airways ​and Etihad Airways face the greatest ​operational uncertainty after a near-complete shutdown of regional airspace at the start of the conflict.

Walsh said most regions should remain profitable, though at lower levels, while Middle East airlines are likely to slip into the red due to the conflict and weaker ​demand.

IATA expects airlines’ fuel bill to surge to about $350 billion this year from roughly $252 billion in 2025, with ​fuel accounting for ⁠nearly a third of operating costs.

That is eroding profitability per passenger, with airlines now expected to earn about $4.50 per passenger, roughly half last year’s level.

On the upside, IATA expects industry revenues to rise 9.4 percent to around $1.16 trillion this year, driven by steady travel demand, higher fares, and growing income from extras such ⁠as seat ​upgrades and onboard services.

Aircraft shortages are also squeezing the sector. Delivery delays at Boeing and ​Airbus are forcing airlines to keep older, less fuel-efficient planes in service for longer, raising maintenance bills and blunting efforts to improve margins, Walsh said.

Masud Khan, the newly appointed chairman of the Bangladesh Securities and Exchange Commission, has announced an aggressive strategy to bring high-quality companies to the stock market through direct listing, describing the move as essential for building stronger institutions and ensuring the long-term sustainability of the private sector.

Speaking as the chief guest at the 10th Anniversary Gala Night of the CFA Society Bangladesh yesterday (6 June), Masud said the regulator would actively encourage state-owned enterprises, multinational companies and fundamentally strong local corporates to join the capital market.

"Once you create a listed company, you bring in more professionals, and ultimately, you solve the issues of succession and sustainability," he said.

"Private sector companies often collapse when ownership changes, but listing turns a company into a lasting institution. I personally think we are going to be very aggressive in a direct listing. We will identify good companies and tell them: go for it."

The BSEC chairman pointed out that many well-governed entities, such as banks and MNCs, already maintain transparent accounts and do not necessarily need to raise fresh capital through an Initial Public Offering (IPO). For such firms, he suggested that direct listing is the most logical route to enter the capital market.

"For banks, MNCs, and good local corporates that are already capital-sufficient, I will say: I don't want your capital; just go for direct listing to allow public participation and enhance your institutional status," he added.

Simplification over complication

Masud, who brings decades of experience from the corporate sector, laid out a regulatory philosophy based on the mantra: "Regulate where necessary and simplify where possible." He expressed a firm commitment to overhauling the existing rulebooks for IPOs, margin loans, and mutual funds, which he believes have become unnecessarily cumbersome.

"The rules have to be simplified significantly. If we want the market to deepen, we cannot work in isolation; market intermediaries must be part of this process," he said.

The BSEC chairman lamented the lack of meaningful dialogue between the regulator and market participants in recent years, noting that many constructive suggestions from reform committees previously failed to "see the light of day" because regulators believed they knew better than the market.

While advocating for simplification, he issued a stern warning against malpractice. Referring to a finance minister's stance, he said, "Please self-govern, but if you are caught violating the rules, your 'chips will fry.' Be very sure that whatever you are doing is absolutely right, because once caught, there is no easy entry back."

Science of valuation and 'horror' of paper

A key priority for the new BSEC leadership is the digitisation of the entire capital market ecosystem. Masud described the current state of reporting as a "horror story," pointing out that merchant banks and mutual funds are still required to submit applications for IPOs and rights issues on physical paper. "How are we still living in the Stone Age? This has to stop immediately," he asserted.

Addressing market volatility, he characterised the share market as a "science" involving the intricate study of valuation - a skill he noted is severely lacking among the general investing public. "We are in a situation with many uninformed investors. As a result, most trading today takes place in junk shares - small-cap companies or firms that have been closed for years. This is not efficient."

To combat manipulation in these "previous" or junk shares, the chairman announced plans for a robust, integrated surveillance system. This system will align the BSEC, the Dhaka Stock Exchange, Chittagong Stock Exchange and the Central Depository Bangladesh Limited with automated triggers to halt or release trading instantly based on suspicious activity.

CFA Society's milestone

The event also served as a platform for the CFA Society Bangladesh to celebrate a decade of promoting professional excellence. The Society recognised the top employers of CFA Charterholders in the country, including Bangladesh Bank, BRAC Bank, City Bank, IDLC Finance, EDGE AMC, IDLC Finance, Prime Bank Securities, Shanta Asset Management, Shanta Securities, Standard Chartered Bank, HSBC Bangladesh, United Commercial Bank. It also honoured top universities such as the University of Dhaka, BUP, BRAC University, and North South University for their high registration rates in the CFA Program.

M Masrur Reaz, chairman of Policy Exchange Bangladesh, delivered the keynote address, focusing on the need for a conducive fiscal policy to improve the investment climate.

Asif Khan, president of the CFA Society Bangladesh, highlighted the society's growth, noting that it now boasts over 131 Charterholders and 80 Associate Members working across the nation's most reputed financial institutions.

The government is set to announce corporate tax rates for the next five years, offering the long-term policy certainty businesses and investors have long sought for.

Tax rates, however, are unlikely to increase. Finance ministry officials familiar with the matter say the government plans to keep rates unchanged until fiscal year 2030-31.

Finance Minister Amir Khosru Mahmud Chowdhury is expected to go further in his first national budget, due on June 11, by introducing a broader three-year predictable tax framework, extending beyond the two years already announced by the interim government.

Prime Minister Tarique Rahman approved the proposal in principle on May 14 during a high-level meeting at the Secretariat, according to finance ministry officials who attended.

Under the proposed roadmap, listed companies would pay a corporate tax rate of 22.5 percent, while non-listed firms would be taxed at 27.5 percent. Both categories could qualify for reduced rates of 20 percent and 25 percent, respectively, if all income is channelled through banking transactions.

One Person Companies (OPCs) are likely to face a tax rate of 27.5 percent. Banks, insurance companies and other financial institutions would pay 37.5 percent if listed and 40 percent if non-listed.

Mobile operators are likely to be taxed at a flat 45 percent, while private universities and colleges could benefit from a reduced rate of 10 percent. Tobacco products and cigarettes would remain subject to a 45 percent tax plus a 2.5 percent surcharge.

“There will be an indication in the budget to reduce corporate tax gradually as the government looks to expand its coverage,” a senior finance ministry official said, requesting anonymity.

The official added that companies currently paying the highest rates are likely to see gradual reductions in the coming years.

In fiscal year 2021-22, the corporate tax rate for non-listed companies was reduced to 30 percent from 32.5 percent, while the rate for listed firms was cut to 22.5 percent from 25 percent.

Rupali Chowdhury, president of the Foreign Investors’ Chamber of Commerce and Industry (FICCI), welcomed the move, saying policy predictability is essential for business planning and investment decisions.

“We like predictability very much. Predictability is good. Businesses need certainty to make long-term investment decisions,” said Chowdhury.

She argued that recent increases in supplementary duties have offset the benefits of lower corporate tax rates.

“Corporate tax is imposed on profits, but supplementary duty is imposed on revenue. On one hand, the tax rate is being reduced, but on the other hand, the government is taking back more through higher supplementary duties,” she said.

Chowdhury said businesses often have little choice but to pass the additional costs on to consumers, contributing to inflation and raising operating costs.

She also expressed concern that compliant companies bear a disproportionate share of the tax burden while non-compliant firms continue to evade taxes, undermining fair competition and reducing government revenue.

Snehasish Barua, managing director of SMAC Advisory Services, said the roadmap would provide much-needed certainty but warned against locking in tax rates for an extended period.

“Globally, corporate tax rates are falling. Locking Bangladesh’s private company tax rate at 27.5 percent until assessment year 2030-31 risks severely damaging our competitiveness against regional peers such as Vietnam and Indonesia,” he said.

He noted that international practice usually limits such policy commitments to two or three years.

Barua said maintaining relatively high corporate tax rates over the long term could discourage private investment at a time when Bangladesh needs stronger economic growth and job creation.

“If the government’s ultimate goal is to create employment, it must rethink locking in uncompetitive long-term rates and instead design an agile fiscal strategy that stimulates domestic investment and robust job growth,” he added.

Masrur Reaz, chairman of Policy Exchange Bangladesh, also welcomed the proposal, saying it addresses longstanding concerns about policy inconsistency. However, he said Bangladesh’s corporate tax rates and overall tax burden are high compared with regional competitors such as Vietnam, Indonesia, Thailand and India.

“This is the first positive step, but the next important step should be rationalising the corporate tax rate, which is still quite high compared to comparable economies,” he said.

He added that advance income tax and other mechanisms increase the effective tax burden beyond the headline rate. “While predictability is welcome, the next step must be rationalisation of tax rates to improve competitiveness,” he said.

The country's private sector credit growth stood at a historic low of 4.75% in April this year, reflecting weak business confidence, slowing investment, and mounting global economic challenges.

Private sector credit growth stood at 4.72% in March, indicating a slight increase. Central bank data shows that growth remained below 5% for two consecutive months.

Economists and bankers said that following the February national election, the overall political environment has improved comparatively. However, the global economic situation and fuel crisis have disrupted demand and supply chains. As a result, investment has remained subdued.Mohammad Ali, Managing Director of Pubali Bank, believes there are several reasons behind the record-low private sector credit growth. He said that while there are many barriers to doing business in the country, the global fuel crisis significantly affected economic activity in March and April. The situation created concern among businesspeople and disrupted the private sector as well.

"Businessmen consider fuel costs when starting a new business or expanding an existing one. The country's businesspeople were reluctant to expand their operations due to the fuel crisis stemming from the Middle East war," he said.

He further said the export situation is not encouraging either. Exporters are not receiving more orders from abroad, while production costs have increased. As a result, costs are rising but even minimum profit margins are not being ensured.Ezazul Islam, Director of BIBM, said there are many challenges to making new investments in the country, and the fuel crisis has become an additional obstacle. Currently, growth remains slow due to weak demand.Private sector credit growth had been declining steadily in recent months, falling from 6.58% in November 2025 to 6.20% in December, and then to 6.03% in both January and February 2026, before dropping sharply in March, according to central bank sources.Bangladesh Bank has been publishing private sector credit growth data since 2003. A review of the data shows that March recorded the second-lowest growth rate in the past 24 years.

A deputy managing director of a private bank told TBS that many businesses shut down after the fall of the Awami League government, while others are operating far below capacity.

He said several factories owned by large business groups, including Nassa Group, Beximco Group and Gazi Group, had closed, reducing demand for bank borrowing.

"When the factories were operational, they imported capital machinery. But even the firms that are still running have reduced production by 60-70%," he said.

The National Board of Revenue (NBR) has extended the deadline for businesses to enter previously submitted paper-based VAT returns into the electronic VAT (e-VAT) system until June 30, 2026, ahead of the planned introduction of mandatory online VAT return filing from July.

According to an NBR press release issued on Sunday, a new sub-module titled "Hard Copy Return Entry" has been incorporated into the e-VAT system to facilitate the digital entry and preservation of all monthly VAT returns that had earlier been submitted in hard copy form.

The revenue authority said it had issued a circular on January 5, 2026 outlining the procedures for using the sub-module and had initially set March 31, 2026 as the deadline for entering all paper returns into the online system.

However, data from the e-VAT platform indicate that a significant number of hard-copy returns have yet to be entered electronically.

As part of its preparations to make online VAT return submission compulsory from July 2026, the NBR has decided to grant businesses additional time until June 30 to complete the process.

The NBR warned that businesses failing to enter their paper returns into the e-VAT system within the revised deadline would face restrictions.

In such cases, their closing balances as of May 2026 would be frozen, meaning no adjustments could be made against those balances in the future.

The revenue authority also noted that all VAT returns must be available in the online system for refund applications to be processed. As a result, businesses that do not enter all their previous VAT returns into the e-VAT platform will not be eligible to submit refund claims.

The NBR urged taxpayers to cooperate fully with its ongoing efforts to digitise all revenue-related activities, saying the initiative is aimed at enhancing transparency and accountability in the country's tax administration system.

To expand the tax base, the government is set to make Taxpayer Identification Number (TIN) mandatory for opening bank accounts. Existing account holders will also need a TIN to keep their accounts active.

However, exemptions may apply only to students, recipients of government allowances, and individuals or entities officially exempted through gazette notifications, according to sources at the National Board of Revenue (NBR).

Finance Minister Amir Khosru Mahmud Chowdhury is expected to propose the measure in the upcoming budget.Currently, a large number of bank account holders do not have TINs. In such cases, higher source tax is applied on interest income, although obtaining a TIN has never been mandatory for banking access.Bankers warned that the requirements could reduce the number of bank accounts and slow transactions through formal channels. However, experts argue that linking banking activities with tax compliance would improve monitoring and reduce tax evasion.The NBR is also planning wider data integration with banks. Beyond banking data, it aims to link its systems with National ID (NID), utility services, sub-registry offices, and other government databases through an online platform.

In addition, the tax authority is considering several new measures to widen the tax net, including making TIN mandatory for registering motorcycles with engine capacity of 150cc or above, introducing a Withholders Registration Number (WIN) for entities deducting source tax, and imposing a 0.20% tax on retailers.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, told TBS that previous moves to make TIN mandatory for credit card holders had reduced uptake. A similar impact could be seen in banking transactions if account opening is tied to TIN requirements.

"There is already a degree of fear about the banking sector. The NBR should address these concerns before introducing further mandatory requirements," he said.

Bangladesh currently has around 17 crore bank accounts, although many individuals or institutions hold multiple accounts. The exact number of account holders remains unclear.

Tax expert and Managing Director of SMAC Advisory Limited Snehasish Barua said mandatory electronic TIN (e-TIN) requirements risk reversing financial inclusion in Bangladesh's cash-heavy economy.

He said such a barrier could push entrepreneurs away from formal banking, increase reliance on cash, ultimately affecting bank deposit growth and liquidity.

He added that instead of strict mandates, the state should first move towards a cashless ecosystem, allow digital disclosure of bank accounts in tax returns, and gradually integrate tax and banking systems within a defined timeframe.

"Full integration of national asset databases with tax returns would help curb evasion and expand the tax base," he added.