A decision to increase fuel prices from next month may be made following discussions at a cabinet meeting, the energy minister told parliament Tuesday, reassuring that Bangladesh holds adequate stock of fuels despite global crisis.Bangladesh stock alerts

Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmud Tuku made the statement in the House during question hour on the tenth day of the first session of the 13th National Parliament.

The session was chaired by Speaker Hafiz Uddin Ahmad.

The minister explains that there is a structured mechanism for adjusting fuel prices, which is reviewed on a monthly basis. "The final decision for the coming month will be determined at the cabinet level."

Economists and energy experts are of the view that a hike in fuel prices would have domino effect on people's living and the economy at large.

Highlighting global challenges, Tuku pointed to geopolitical instability over the Middle East and restrictions imposed by Iran on shipping through the Strait of Hormuz, which have disrupted global energy-supply chains.

"Despite these challenges," he emphasizes, "the government has ensured a steady supply of fuel from multiple sources."

Providing an update on current reserves, the minister said Bangladesh has 164,644 metric tonnes of diesel in stock, with an additional 138,000 tonnes expected to arrive by April 30. The country also holds 10,500 tons of octane and 16,000 tons of petrol, with further large shipments expected within this month.

Comparing regional trends, he notes that Pakistan has increased fuel prices by 50 percent, while Sri Lanka has introduced fuel rationing. India, Afghanistan and Nepal have also raised fuel prices. "In contrast, Bangladesh has so far kept prices stable to reduce the burden on citizens."

To support farmers during the irrigation season, the government has instructed district administrators to issue "agriculture cards" to ensure uninterrupted diesel supply.

On enforcement, the minister reaffirms government's 'zero-tolerance' policy against illegal hoarding and smuggling of fuels.

Between March 3 and April 4, authorities had conducted 342 operations nationwide, filing 2,456 cases. These drives resulted in 31 jail sentences, fines totaling Tk 12.539 million, and the recovery of approximately 4.048 million litres of fuels.

The minister also assures parliament that monitoring has been strengthened through the appointment of "tag officers" at filling stations and regular virtual meetings with district administrations.

Economists are, however, divided over the government plan to raise fuel prices from next month, arguing about a difficult tradeoff between fiscal constraints and the cost of living.

One group says the increase will disproportionately hit low- and lower-middle-income households, as higher fuel costs are likely to feed through into the prices of essential goods and services.

Rising transport and production costs could amplify inflationary pressures already felt by consumers, they alert.

Dr M. Masrur Reaz, chairman and chief executive Officer of Policy Exchange Bangladesh, says the impact would be broad-based.Bangladesh stock alerts

Higher fuel prices would raise labour and freight costs, feeding into the wider economy.

"Power and electricity costs will increase as a result of the adjustment, with multiple knock-on effects," he told The Financial Express.

He adds that irrigation and transport costs would rise sharply, placing an additional pressure on lower-income groups. Others argue that an adjustment is unavoidable, as such.

The taka edged lower against the dollar yesterday, with the weighted average interbank rate marginally rising to Tk 122.85 from Tk 122.75, at which the dollar had held steady since late March, Bangladesh Bank data showed.

The dollar rate stood at Tk 122.55 on March 9.

Trading in the interbank foreign exchange market was also thin at the start of the week, suggesting importers are not rushing to buy dollars in large quantities. Just three transactions were recorded on Sunday, totalling $4.03 million, down from $62.50 million on April 2.

The devaluation of the taka comes against a volatile global backdrop. The US-Israeli war on Iran has kept oil prices elevated above $110 a barrel, stoking inflation concerns across import-dependent economies, according to a Reuters report.

The dollar softened slightly yesterday, down 0.2 percent on the DXY index, as investors watched for any signs of progress toward a ceasefire.

Even so, the dollar remains broadly strong, underpinned by expectations that the US Federal Reserve will hold rates high through the year, according to the CME FedWatch tool cited by Reuters.

Bankers say the main concern is behaviour driven by panic.

Mirza Elias Uddin Ahmed, managing director of Jamuna Bank, said the immediate risk is panic-driven demand amid the uncertainty caused by the US-Israel war on Iran rather than any fundamental deterioration in Bangladesh’s external position.

“Fuel prices and food prices are increasing,” he noted, pointing to the potential for cost-push inflation to ripple through the economy.

“A rise in fuel prices will eventually lead to an increase in food prices.”

But he stressed that Bangladesh’s underlying trade fundamentals remain sound. While the country has recorded a dip in exports to the United States recently, the broader trajectory of remittances and export growth over the last fiscal year offered a degree of cushion.

Remittance inflows for fiscal year 2024-25 (FY25) reached $30.32 billion, up 26.81 percent year-on-year, and exports grew by 8.58 percent, reaching $48.28 billion.

Ahmed flagged a particular concern around import behaviour during periods of uncertainty. Past episodes have shown that importers tend to accelerate letter of credit (LC) payments, booking early to lock in rates, which amplifies pressure on the dollar at precisely the wrong moment.

On the structural dynamics of the exchange rate, Ahmed also said the forex reserves are under slight pressure, driven in large part by the need to import oil at elevated prices.

“The volatility is mainly stemming from the war. We have to be patient to avoid panicking. This will not last long,” he added.

Bangladesh Bank has so far maintained a buffer. Gross foreign exchange reserves stood at $34.43 billion in the latest available figures, while usable reserves under the IMF’s BPM6 methodology were $29.81 billion. Since the start of FY26, the central bank has purchased over $5 billion from the interbank market to rebuild reserves, reversing a years-long trend of dollar sales.

Oil prices dived, bonds rallied and stocks surged on Wednesday after a two-week ceasefire in the Middle East spurred a relief rally as investors cheered the possible resumption of oil and gas flowing through the Strait of Hormuz.

US President Donald Trump said he agreed to suspend bombing and attacks on Iran for two weeks and that a long-term peace agreement was in progress.

Global markets have been rattled since the US and Israel attacked Iran at the end of February, leading Tehran to effectively close the Strait of Hormuz, a key waterway used to transit one-fifth of the world's oil and gas.

US crude futures CLc1 fell around 16.5% to $94 a barrel, S&P 500 futures ESc1 leapt over 2% and the dollar fell broadly, having been the haven of choice for investors during the tumult.

"Markets have been predicting that Trump was looking for an off-ramp in Iran," said Jamie Cox, managing partner at Harris Financial Group. "Today, he got one and took it."

Futures pointed to broad gains for Asia's stock markets, which have been beaten down by war and soaring energy prices, and 10-year US Treasury futures jumped about 15 ticks.

The risk-sensitive Australian dollar AUD= rose 1.3% to above $0.7070 and the euro EUR=gained 0.76% to $1.1683. Cryptocurrencies also rose.

Trump had set a late Tuesday deadline for a deal with Iran to be reached, threatening to destroy every bridge and power plant in the country if Iran did not reopen the Strait of Hormuz. Iran had said it would retaliate against US allies in the Gulf.

The six-week conflict has sent oil prices surging, stoked worries of inflation and upended the global rates outlook with countries and companies scrambling to adjust to the energy shock.

In commodities, gold prices XAU= rose over 2% to $4,812 per ounce. GOL/

Bangladesh Bank Governor Md Mostaqur Rahman has promised full protection to the members of the country’s shariah boards and urged them to work independently.

Recently, the BB governor met members of the newly formed Bangladesh Bank Shariah Advisory Board, representatives from almost all Islamic banks, prominent scholars, and academics to discuss the current state, challenges, and future reforms of Islamic banking in Bangladesh.

“You, the members of shariah boards, shall work independently; the central bank will provide you with full protection,” he said, referring to members of the shariah boards of Islamic banks of the country.

Rahman chaired the meeting at the central bank’s headquarters, which was also attended by the deputy governor responsible for Islamic banking regulation, executive directors, directors, and senior officials.

At the event, the governor acknowledged past money laundering incidents in Islamic banking, attributing them to weak oversight. He emphasised that Islamic banking, being asset-backed, should prevent such losses if shariah principles are properly applied.

Scholars at the meeting proposed several measures to strengthen shariah governance
He underscored that Islamic banks must operate free from political influence and focus solely on service.

Scholars at the meeting proposed several measures to strengthen shariah governance, including empowering shariah supervisory committees and secretariats to operate independently of banks’ boards.

Major investments would require approval from at least a three-member shariah subcommittee. They also recommended enacting a dedicated Islamic Banking Act, appointing a deputy governor and executive director for Islamic banking supervision, and setting mandatory shariah knowledge standards for bank executives.

To enhance transparency, proposals included annual external shariah audits, separate Core Banking Systems (CBS) for shariah-compliant operations, and a shariah governance framework with a compliance rating system modelled on Malaysia.

Scholars also suggested establishing a research centre and library on Islamic economics to position Bangladesh as a regional hub for Islamic finance studies.

Additional measures included providing liquidity support, introducing shariah-compliant money market instruments, and treating major money laundering and corruption cases as acts of treason with strict penalties.

Notable attendees included Prof Abu Bakr Rafique, Mufti Shahed Rahmani, Mohammad Manjure Elahi, and shariah representatives from Islami Bank Bangladesh, Al-Arafah Islami Bank, Standard Islami Bank, UCB, ICB Islamic Bank, Jamuna Bank, and ONE Bank.

Bangladesh saw a significant decline in foreign investment in the last quarter of 2025, with net foreign direct investment (FDI) falling by 18.42% compared to the same period last year.

According to Bangladesh Bank data, net FDI inflows for the October-December 2025 quarter amounted to $108 million, down from $132.81 million in the October-December 2024 quarter.

Economists attribute the slowdown to multiple factors, particularly the overall political situation and election-related uncertainty.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said, "There was no conducive environment for investment because there was uncertainty over the political settlement. At that time, it was unrealistic to expect foreign capital to flow into the country."

He noted that interim government initiatives to attract foreign investment faced resistance, further discouraging potential investors. "At that time, investors knew the interim government would not last, and there was no clear roadmap for elections. This uncertainty naturally reduced investment."

Decline in reinvested earnings

Bangladesh Bank data also shows that reinvested earnings, a key component of FDI, have decreased sharply. Over the past year, reinvested earnings dropped by 35.31%, falling to $210.74 million in the October-December 2025 quarter from $325.75 million in the same period of 2024.

Reinvested earnings refer to profits generated by foreign subsidiaries or associates that are retained and reinvested in the host country rather than repatriated as dividends. While reinvested profits create the appearance of rising investment, true FDI growth depends on new equity investment, which has remained weak.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said, "Considering the state of the economy and political environment, foreign firms have reduced reinvested earnings. At the time, there was uncertainty over whether elections would be held. Although elections were held in February, concerns remained during this quarter."

Policy and infrastructural hurdles

Economists say that, beyond political uncertainty, structural and policy-related factors have significantly hindered foreign investment in Bangladesh. Policy inconsistencies, inefficiencies in transport and logistics, and limited port cargo and container-handling capacity discourage investors, leaving the country behind its South Asian peers.

Mustafizur Rahman of the Centre for Policy Dialogue noted, "Challenges such as the single window system and high cost of doing business continue to block FDI inflows. Even if the political environment improves, investment will remain difficult unless these barriers are addressed. Investors evaluate facilities and opportunities, not just which government is in power."

A senior Bangladesh Bank official observed that private-sector investment has also slowed, signalling hesitation among local entrepreneurs alongside foreign investors. "Unless policy challenges are resolved, attracting foreign investment will remain extremely difficult," he said.

According to Bangladesh Bank data, total foreign investment – including equity, reinvested earnings, and intra-company loans – stood at $363.82 million in October-December 2025, down from $490.40 million a year earlier, underscoring persistent structural and political constraints.

The Bangladesh Securities and Exchange Commission has fined asset management company Bangladesh RACE Management PCL Tk55 lakh for failing to comply with regulatory requirements on investments in listed bonds and government treasury bonds.

The penalty follows findings of irregularities in 11 out of the 12 mutual funds managed by the company, with Tk5 lakh imposed on each non-compliant fund, according to a recent order issued by the BSEC and published on its website.

The regulator also directed the firm to deposit the fine within 30 days of the order, warning that failure to do so would trigger further action under securities laws.

The commission, in its order, noted that the penalty was imposed mainly for failing to invest at least 3% of fund portfolios in listed debt securities and at least 1% in government treasury bonds, as required by regulations.

According to the order, "as per the Commission's directive dated 23 May 2021, a mutual fund shall invest at least 3% of its portfolio value in listed debt securities within 30 June 2022 and shall at all times maintain such investment ratio in the listed debt securities."

The deadline was later extended to 30 June 2023. However, the commission found that, as of 30 June 2025, 11 of the 12 funds under RACE had less than the required 3% exposure to listed debt securities.

In a separate directive issued on 19 February 2023, the regulator mandated that market intermediaries – including asset managers, merchant bankers, portfolio managers, stock dealers and mutual funds – must invest at least 1% of their own portfolios in listed treasury bonds by 30 June 2023 to diversify risk.

The commission found that funds managed by RACE had no investment in listed treasury bonds as of 30 June 2025.

Trustees flagged repeated non-compliance

The Investment Corporation of Bangladesh, trustee of six mutual funds, repeatedly instructed RACE during trustee committee meetings in the 2024-25 financial year to comply with the 3% investment requirement in listed debt securities.

Similarly, Bangladesh General Insurance Company Limited, trustee of four other funds, flagged the issue as non-compliance on several occasions.

The regulator noted that RACE did not act on these instructions.

It is also worth noting that, following observations from the ICB, the Commission sent a letter to RACE on 28 May 2025, seeking an explanation on the matter.

As all the funds had similar observations, the Commission's relevant department issued the letter only in the name of "Exim Bank First Mutual Fund". However, RACE has yet to respond to the Commission's letter.

RACE disputes findings

In a statement issued today (6 April) on the enforcement action, RACE said it had never made any investment in Agni Systems, for which the penalties were imposed.

It added that RACE-managed funds had neither invested in nor traded shares of the company, terming the BSEC order illegal and saying it had immediately informed the regulator.

RACE also addressed the requirement to invest 3% in listed debt securities and 1% in listed treasury bonds, stating that during the relevant period its mutual funds were subject to trading restrictions, bank account freezes, and BO account suspensions, creating what it described as an "impossibility of performance".

It said, as a result, the funds were unable to execute trades, settle transactions, or rebalance portfolios, and therefore could not comply with the investment requirements.

"During this period, the Funds, being incapacitated from executing any trades, settling transactions, or undertaking portfolio rebalancing, were unable to maintain the newly introduced requirement of investing 3% in listed debt securities and 1% in listed treasury bonds," the company said in the statement.

"Accordingly, the alleged non-compliance, if any, concerning investment in debt securities and treasury bonds arises solely from regulatory actions, and not from any negligence or failure on the part of RACE or the mutual funds," it added.

The company further alleged that the regulator had repeatedly targeted RACE by imposing operational suspensions that led to such constraints.

RACE said, "It further appears from the record that BSEC has continuously been targeting RACE and imposing suspensions on its operations, which in turn created an 'impossibility of performance' situation. Thereafter, BSEC's highlighting of such non-performance and imposing penalties as justification for alleged violations of securities laws is tainted with malafide and shares arbitrariness on the part of the regulator."

At an earlier hearing on the matter, before the fines were imposed, RACE highlighted similar points to defend its position.

The company said certain measures – including restrictions and directives – had harmed both the company and the funds it manages. "We have found instances where the restrictive actions are not taken directly by BSEC, but rather BSEC instructs trustee/custodian to take the restrictive action," the company said.

RACE further argued that such continual actions were "against fundamental principles of equity and constitutional fairness in Bangladesh" and detrimental to unitholders. "These unlawful and restrictive actions, arbitrarily imposed, are exacting a heavy price on the wellbeing of the funds, especially eroding their asset value."

The company added that restrictions under trust deeds, particularly sectoral exposure limits, had affected its ability to comply with the investment requirements.

"The Trust Deed as approved by BSEC restriction had a direct and material impact on the ability to comply with the 3% listed debt and treasury bond securities requirement," it said, noting that most such securities in Bangladesh are issued by banks.

"As long as sectoral exposure remained above the 25% limit, the trust deeds prevented the funds from purchasing many of the listed debt and treasury bond securities that would have counted toward satisfying the Commission's requirement."

RACE noted it could only move towards compliance by first reducing bank-sector holdings and rebalancing portfolios within the allowed timeframe.

Listed company MK Footwear has signed a finished shoes OEM manufacturing deal with Hong Kong-based Fundrich Global Co, Limited and a separate export agreement with China's Jinjiang Akia Sports Co Ltd, marking a strong push into global markets.

According to stock exchange disclosures, the board approved the OEM deal on 6 April, though it was signed earlier on 25 March.

Trial production under the Fundrich deal will begin on 3 May, with a target of 200,000 pairs during the April–June phase as the company prepares for full-scale operations. Subject to successful completion, both parties plan to sign a five-year agreement by 1 July to secure a steady export pipeline.

For 2026-27, MK Footwear targets sales of 2.7 million pairs and export earnings of $21.6 million – up 343% from 2024-25. It aims to raise annual capacity to 5 million pairs by March 2029, with projected export turnover of $40 million, or about Tk500 crore.

The board said the partnerships would improve capacity utilisation, strengthen exports, and create shareholder value, subject to execution and compliance with contract terms. The Dhaka Stock Exchange has sought a copy of the Fundrich agreement, which the company has yet to submit, drawing investor attention.

Separately, MK Footwear signed an export deal on 24 March with Jinjiang Akia Sports, which will place a minimum annual order of 1 million pairs, subject to agreed designs and specifications, with expected export revenue of $8-10 million a year. Dedicated production capacity will be allocated, with standard terms on quality, delivery, and payment.

The expansion comes amid improved financials. In FY2024-25, revenue stood at Tk78.79 crore, while net profit rose 116% to Tk8.76 crore, partly driven by Tk6.37 crore in gains from selling shares of Legacy Footwear acquired at a lower cost.

The company earlier declared a 12% cash dividend for shareholders other than sponsors and directors for the year ended 30 June 2025.

The Dhaka stock market continued its upward momentum today, buoyed by a sharp rise in turnover and improving investor sentiment.

The benchmark index of the Dhaka Stock Exchange, DSEX, advanced by 34 points to close at 5,156, extending gains from the previous session. The blue-chip DS30 index also rose, adding 16 points to settle at 1,971, reflecting strong buying interest in fundamentally sound stocks.

Market activity saw a significant boost, with turnover surging by 27% to Tk597 crore, signalling a return of liquidity and growing investor confidence. The majority of listed securities posted gains, with 275 issues closing higher, compared to 70 decliners and 48 remaining unchanged, underscoring the strength of the rally.

According to EBL Securities, the market maintained its upward trajectory as investors showed renewed interest in beaten-down stocks, taking advantage of attractive valuations following recent corrections.

The brokerage noted that sentiment was further supported by ongoing ceasefire discussions related to the Middle East war, which helped ease global uncertainties and encouraged investors to re-enter the market.

The session began on a cautious note, with investors engaging in selective buying amid lingering concerns. However, as the trading day progressed, buying interest intensified, driven by supportive domestic cues and improving confidence. This shift in sentiment led to more decisive accumulation of stocks, ultimately pushing the indices higher by the close of trading.

Sector-wise, the pharmaceutical sector dominated trading activity, accounting for 16.8% of the total turnover, followed by the engineering sector with 13.9% and the general insurance sector with 10.8%. The strong participation across sectors suggests that the rally was broad-based rather than concentrated in a few stocks.

Among the most actively traded stocks were Lovello Ice-cream, Acme Pesticides, Khan Brothers PP Woven Bag, Techno Drugs, and Asiatic Laboratories, reflecting heightened investor interest in both large and mid-cap companies.

Most sectors ended the day in positive territory, with notable gains seen in ceramic, paper, and textile stocks, which rose 2.7%, 2.1%, and 1.8%, respectively. The food sector was the only segment to close in negative territory, albeit marginally, indicating limited profit-taking in an otherwise bullish market.

Top-performing stocks of the day included Regent Textile and Familytex, both of which gained the maximum allowable limit, followed by Lovello Ice-cream, Atlas Bangladesh, and BD Autocars, all posting strong price appreciation. On the losing side, Al-Arafah Islami Bank led the declines, followed by Uttara Finance, Sunlife Insurance, Asiatic Laboratories, and Unilever Consumer Care.

Meanwhile, the port city bourse also ended the session in positive territory, although with minor adjustments. The Selective Categories' Index and the All Share Price Index of the Chittagong Stock Exchange saw slight declines, suggesting a mixed but stable performance outside the main Dhaka market.

The dollar was steady on Monday, while the yen flirted with the crucial 160 per dollar level, ​as nervous investors took stock of the escalating Iran war, with all eyes on the latest deadline from US President Donald Trump ‌to reopen the Strait of Hormuz.

In an expletive-laden Easter Sunday social media post, Trump threatened to target Iran's power plants and bridges on Tuesday if the strategic waterway is not reopened, setting a precise deadline of 8 p.m. Tuesday Eastern Time (0000 GMT).

With most of Asia and Europe closed for holiday on Monday, liquidity is likely to be thin, with investor focus on the possibility ​of a ceasefire after a media report suggested a last-ditch push from negotiators was underway.

"Trump's latest deadline itself is bearish not because ​investors think war is guaranteed tomorrow if Iran does not open the strait, but because every new ultimatum makes ⁠the disruption look longer, stickier and more macro-negative," said Charu Chanana, chief investment strategist at Saxo in Singapore.

The euro was at $1.1523, while sterling last fetched $1.3211. The dollar ​index , which measures the US currency against six rivals, was slightly lower at 100.12.

The Australian dollar was 0.3 percent higher at $0.69045, wobbling near the two-month low that it hit last ​week.

In the kind of mixed messaging that has baffled supporters, foes and financial markets alike, Trump told Fox News on Sunday that Iran was negotiating, with a deal possible by Monday.

Axios reported the US , Iran and regional mediators are discussing terms of a potential 45-day ceasefire that could lead to a permanent end to the war.

Global markets have been rattled ​since the US -Israel war on Iran broke out at the end of February, with Tehran effectively closing the Strait of Hormuz, a key waterway that is a ​thoroughfare through which about a fifth of the world's total oil and liquefied natural gas passes.

"If the strait is reopened fully around that time (Trump's Tuesday deadline), oil will fall sharply ‌and risk ⁠will rally hard," said Prashant Newnaha, senior rates strategist at TD Securities.

"However, if the US escalates, expect global markets to reprice sharply. It's wait-and-watch in what's turning out to be a binary event."

The closure has caused oil prices to surge well above $100 per barrel, stoking fears of high inflation and upending rates outlooks across the world. Worries about the hit to economic growth have also weighed as stagflation risks swirl.

Traders are now no longer pricing a move from the Federal Reserve well into ​the second half of 2027, compared ​with expectations of two rate ⁠cuts in 2026 at the start of the year.

Data last week suggested US labour market conditions remained calm in March, though economists warned that a prolonged war in the Middle East posed a downside risk.

Two more Indian-flagged liquefied petroleum gas tankers, Green Asha and Green Sanvi, ​have exited the Gulf carrying the fuel for ‌the South Asian nation, according to ship tracking data on LSEG and Kpler.

A third vessel, Jag Vikram, is still ​in the west of the Strait of Hormuz, ​the data showed.

The US-Israeli war against Iran has all ⁠but halted shipping through the strait, but Iran ​says "non-hostile vessels" may transit the waterway if they coordinate with ​Iranian authorities.

Green Asha and Green Sanvi have crossed the Gulf area and are in the eastern Strait of Hormuz, the data ​showed, taking the total number of Indian-flagged LPG ​carriers that have traversed the Strait to eight.

India is gradually moving ‌its ⁠stranded LPG cargoes out from the strait, with Shivalik, Nanda Devi, Pine Gas, Jag Vasant, BW Elm and BW Tyr already reaching India.

India, the world's second-largest LPG importer, is ​battling its worst ​gas crisis ⁠in decades, with the government cutting supplies for industries to shield households from any ​shortage of cooking gas.

The country consumed 33.15 ​million ⁠metric tons of LPG, or cooking gas, last year, with imports accounting for about 60 percent of demand. About ⁠90 percent ​of those imports came from ​the Middle East.

India is also loading LPG onto its empty vessels stranded in ​the Gulf.

Opec+ agreed on Sunday to raise its oil output quotas by 206,000 barrels per day for May, a modest rise that will largely exist on paper as its key members are unable to raise production due to the US-Israeli war with Iran.

The war has effectively shut the Strait of Hormuz - the world's most important oil route - since the end of February and cut exports from Opec+ members Saudi Arabia, the UAE, Kuwait and Iraq, the only countries in the group which were able to significantly raise production even before the conflict began.

Crude prices have surged to a four-year high close to $120 a barrel, translating into soaring prices for transport fuels which are pressuring consumers and businesses across the globe, and triggering government action to conserve supplies.

The Opec+ quota increase of 206,000 bpd represents less than 2% of the supply disrupted by the Hormuz closure, but it signals readiness to raise output once the waterway reopens, Opec+ sources have said. Consultancy Energy Aspects called the increase "academic" as long as disruptions in the strait persist.

"In reality it adds very few barrels to the market," said Jorge Leon, a former Opec official who now works as head of geopolitical analysis at Rystad Energy.

"When the Strait of Hormuz is closed additional barrels from Opec+ become largely irrelevant."

Opec+ concerned about attacks on energy assets

Eight members of Opec+ agreed to the increase in May quotas at a virtual meeting on Sunday, Opec+ said in a statement.

Besides the disruptions affecting Gulf members, others such as Russia are unable to increase output - in Moscow's case due to Western sanctions and damage to infrastructure inflicted during the war with Ukraine.

Inside the Gulf, damage to infrastructure from missile and drone attacks has also been severe. Several Gulf officials have said it would take months to resume normal operations and reach production targets even if the war stopped and Hormuz reopened immediately.

A separate Opec+ panel that also met on Sunday, called the Joint Ministerial Monitoring Committee, expressed concern about attacks on energy assets, saying they were expensive and time-consuming to repair and so have an impact on supply, Opec+ said in a statement.

Iran said on Saturday Iraq was exempt from any restrictions to transit Hormuz, and shipping data on Sunday showed a tanker loaded with Iraqi crude passing through the strait. Still, it remains to be seen if more vessels will take the risk involved, a source close to the issue said.

War causes world's worst oil supply disruption

May's Opec+ increase is the same as the eight members had agreed for April at their last meeting held on 1 March, just as the war began to disrupt oil flows.

A month later, the largest oil supply disruption on record is estimated to have removed as many as 12 to 15 million bpd or up to 15% of global supply.

Oil prices could spike above $150 - an all-time high - if flows via Hormuz remain disrupted into mid-May, JPMorgan said on Thursday.

Opec+ groups 22 members including Iran. In recent years only the eight countries meeting on Sunday have been involved in monthly production decisions, and they started in 2025 to unwind previously agreed output cuts to regain market share.

The eight raised production quotas by about 2.9 million bpd from April 2025 through December 2025, before pausing increases for January to March 2026.

The eight hold their next meeting on 3 May.

The overall capital position of the country's banking sector has slipped into the negative as the shortfall surged to Tk2.82 lakh crore within just three months, driven by a sharp rise in defaulted loans and long-standing weaknesses in governance and lending practices.

A report by the Bangladesh Bank, based on data up to September 2025 and seen by The Business Standard, shows that the capital shortfall of 23 state-owned and private banks almost doubled over the July-September period.

The sharp deterioration has raised fresh concerns about the stability of the financial system.

Bankers and economists say the situation stems from years of aggressive lending, poor oversight and politically influenced loan approvals. The growing capital gap is also limiting banks' ability to lend and putting pressure on international financing, signalling broader risks for the economy.

At the end of June 2025, 24 banks had a combined capital deficit of Tk1.55 lakh crore, according to the central bank's latest report.

The report also shows that the sector's capital-to-risk weighted assets ratio (CRAR) – a key measure of financial strength – fell to negative 2.90% at the end of September last year. Under international regulatory standards, banks are required to maintain a minimum CRAR of 12.5%.

What does the capital shortfall mean for banking sector?

By comparison, the sector's overall CRAR stood at 4.47% at the end of June 2025.

The ratio measures a bank's capital relative to its risk-weighted assets, with asset values adjusted according to their level of risk.

Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank, said uncontrolled lending – particularly aggressive loan disbursement and director-influenced lending – has played the biggest role in creating the crisis.

"Long-hidden defaulted loans are now coming to the surface, which has further worsened the situation," he said.

According to the latest data, defaulted loans have climbed to Tk6.44 lakh crore as of September 2025, further worsening the sector's financial position.

Deficits across banks

Among banks facing capital shortages, four state-owned lenders together account for a deficit of Tk37,698 crore, according to the central bank report.

Janata Bank has the largest shortfall at Tk19,973 crore, followed by Agrani Bank with Tk8,125 crore, Rupali Bank with Tk5,655 crore and BASIC Bank with Tk3,945 crore.

Meanwhile, nine private commercial banks recorded a combined capital deficit of Tk36,607 crore as of last September.

National Bank Limited has the largest shortfall among them at Tk10,651 crore. Other banks with significant deficits include AB Bank (Tk7,205 crore), Padma Bank (Tk5,837 crore), Premier Bank (Tk4,733 crore), and IFIC Bank (Tk4,455 crore).

Islamic banks account for the largest share of the sector's capital deficit. Eight Shariah-based banks together recorded a shortfall of Tk1.75 lakh crore by the end of September.

Banks with capital or provision shortfall can't pay incentive bonuses: BB

The largest deficit was reported by First Security Islami Bank at Tk65,090 crore, followed by Union Bank Limited with Tk27,103 crore.

Other banks with significant capital gaps include Islami Bank Bangladesh Limited (Tk22,982 crore), EXIM Bank Limited (Tk22,625 crore), Social Islami Bank Limited (Tk22,114 crore), Global Islami Bank (Tk13,758 crore), ICB Islamic Bank (Tk2,012 crore) and Al-Arafah Islami Bank (Tk138 crore).

Two specialised banks also reported a combined deficit of more than Tk32,000 crore.

The largest shortfall was recorded by Bangladesh Krishi Bank at Tk29,804 crore, while Rajshahi Krishi Unnayan Bank reported a deficit of Tk2,673 crore.

'Structural crisis' in banking

Bankers and economists warn that the capital shortage reflects deeper structural problems in the sector.

MTB Managing Director Mahbubur Rahman described the situation as a fundamental and structural crisis. "Capital is the backbone of a bank. If it becomes weak, the bank cannot operate normally," he said.

He noted that weak capital limits banks' ability to extend large loans to single borrowers and reduces their capacity to secure international financing, as foreign banks closely assess the financial strength of local partners before providing funds.

He added that in many cases, bank sponsors and directors have little understanding of the importance of capital. "Some believe that having deposits or liquidity is enough. But strong capital is essential for long-term stability," he said.

Banks with better governance and professional management remain in relatively stronger positions, maintaining capital ratios of around 13–14%, he added.

To address the crisis, he emphasised the need for fresh capital injections, either through retained earnings or new share issuance. However, he noted that raising capital remains challenging in the current economic climate due to weak business profits and low investor confidence.

Meanwhile, Zahid Hussain, former lead economist at the World Bank's Dhaka office, described the situation as a "systemic risk".

According to him, the capital shortage has made banks increasingly risk-averse, leading to a noticeable slowdown in private sector credit growth. Many banks are now surviving on liquidity support from the central bank.

He also warned that rising credit risk in Bangladesh is discouraging foreign banks from doing business with local institutions, which is increasing the country's cost of financing.

To tackle the crisis, Zahid suggested swift legal resolution of so-called "zombie" institutions, the introduction of an effective bank resolution framework and stronger risk-based supervision.

He also stressed the importance of publicly identifying major defaulters and ensuring strict punishment to restore discipline in the market.

Analysts say the deepening capital crisis in the banking sector is no longer confined to financial institutions alone. Without urgent structural reforms, improved governance and effective regulatory enforcement, the risks could spread to the wider economy.

Bangladesh's banking sector is bearing a burden of non-performing loans (NPLs) having ballooned to some Tk 5.45 trillion as of December 31, 2025, underlining deep-rooted weaknesses in credit discipline and financial oversight.Bangladesh economic report

The figure was disclosed Monday in the Jatiya Sangsad by Finance Minister Amir Khasru Mahmud Chowdhury, along with a list of top defaulters placed in the House.

He came up with the disclosure in response to a written question from lawmaker Md. Abul Hasnat of Comilla-4. The session was presided over by Deputy Speaker Kaiser Kamal.

In a move that sheds light on the concentration of financial risks, the minister tabled a list of the country's top 20 loan defaulters-dominated by large industrial and trading groups, many of which have longstanding ties to the banking system.

Multiple entities linked to S Alam Group feature prominently, alongside firms associated with Beximco and other major business houses.

Analysts say the clustering of defaults within a handful of conglomerates reflects "systemic governance failures and persistent concerns over connected lending".

Following is the list of top 20 defaulters presented in the House:

(1) S Alam Super Edible Oil Limited (2) S Alam Vegetable Oil Limited (3)S Alam Refined Sugar Industries Limited (4) S Alam Cold Rolled Steels Limited (5) Sonali Traders (6) Bangladesh Export Import Company Limited (Beximco) (7) Global Trading Corporation Limited (8) Chattogram Ispat Limited (9) S Alam Trading Company Private Limited (10) Infinite CR Strips Industries Limited (11) Keya Cosmetics Limited (12) Deshbandhu Sugar Mills Limited (13) PowerPac Mutiyara Keraniganj Power Plant Limited (14) PowerPac Mutiyara Jamalpur Power Plant Limited (15) Pacific Bangladesh Telecom Limited (16) Karnaphuli Foods Private Limited (17) Murad Enterprise (18) CLC Power Company Limited (19) Beximco Communications Limited (20) Rongdhonu Builders Private Limited.

The finance minister told parliament that the government, in coordination with Bangladesh Bank, is pursuing a range of measures to recover default loans. The steps include legal action under existing frameworks.

"However, recovery efforts continue to be hampered by lengthy judicial processes and court-imposed stays, which in some cases allow defaulted loans to be temporarily reclassified as regular."

Also disclosed in parliament that loans taken from banks and financial institutions under the names of current Members of Parliament (MPs) and their affiliated businesses total over Tk 111.17 billion or Tk 11,117 crore 31 lakh and more than Tk 33.3 billion of it is classified as defaulted loans.

The Finance Minister disclosed this in parliament on a question about the loan portfolios of the lawmakers in the newly elected Jatiya Sangsad.

The minister came up with the information during the question-and-answer session on the ninth day of the first session of the 13th National Parliament.

In response to another written question from Md. Abul Hasnat, the Finance Minister stated that the current outstanding loans taken from banks and financial institutions by MPs and enterprises owned by them amount to such a figure.Personal finance consulting

"A significant portion of these loans has already been classified as defaulted," the minister informed the House.

However, he added on a special note that "due to court orders or stay directives, a portion of these default loans may have been reported as regular loans".

Ballooning default loans from banks and nonbanks happen to be a big problem in Bangladesh's financial sector.

On this score, the minister said the government was preparing to take a tougher stance on mounting non-performing loans, with plans to publish a list of "willful defaulters" and introduce sweeping legal and institutional reforms to bolster loan recovery.

He was responding to a written question from Md. Abul Hasnat.

The proposed measures signal a more assertive policy approach aimed at addressing structural weaknesses in Bangladesh's banking sector, where loan defaults have accumulated to record levels.

A key element of the plan is the publication of separate lists identifying both general defaulters and "willful defaulters"-borrowers deemed capable of repayment but unwilling to do so.

Authorities also intend to introduce a cap on the total amount any private enterprise can borrow across the entire banking system, in an effort to limit excessive credit concentration.

The government is simultaneously working on establishing a legal framework to enable private-sector Asset Management Companies (AMCs), which would take over and manage distressed assets, thereby facilitating faster resolution of bad loans.

The finance minister outlined a series of legal reforms currently under way, including amendments to the Bank Company Act, the Negotiable Instruments Act, the Artha Rin Adalat Act, and bankruptcy laws, with the aim of expediting loan-recovery processes and strengthening enforcement mechanisms.

Officials are also seeking to address a persistent impediment to recovery efforts-court injunctions.

"Many defaulters file writ petitions that delay or suspend recovery proceedings. The government plans to consult the Attorney-General to devise measures that would limit such legal bottlenecks."

To improve adjudication, the authorities are considering incorporating experienced bankers into panels or jury boards in Artha Rin Adalats (loan courts), allowing complex financial disputes to be resolved more efficiently.Personal finance consulting

At the same time, policymakers are looking to introduce incentives for compliant borrowers. Existing policies will be updated to reward "good borrowers" who regularly service their loans, potentially improving credit discipline across the system.

The minister also indicates that some of the tough punitive measures currently reserved for willful defaulters could be extended to general defaulters through legal reforms, further tightening accountability.

In addition, the government is revising rescheduling policies for short-term agricultural loans to better support farmers.

Eight years ago on 22 March, Dhaka erupted in celebration. A colourful procession rolled out from Doyel Chattar, festooned with banners and buoyed by orchestra music. Balloons were released at Dhaka University.

Back then, LDC graduation was framed as a national triumph, a validation of governance, and, crucially, a legacy project of the now-ousted Prime Minister Sheikh Hasina.

Today, that narrative is unravelling.

A newly released UN Graduation Readiness Assessment tells a far more sobering story: Bangladesh may have met the formal thresholds to graduate from the Least Developed Country category, but it remains structurally unprepared for what comes next.

And that distinction between eligibility and readiness is now at the heart of a critical policy reversal as the current government is looking to defer the graduation.

The illusion of readiness

The United Nations has long emphasised a simple but often ignored principle that graduating from LDC status is not just about crossing statistical thresholds. It is about ensuring that development gains are not reversed once international support mechanisms are withdrawn.

By that standard, Bangladesh's preparedness is deeply questionable.

The assessment identifies four core vulnerabilities that continue to define the economy: dependence on international support measures, weak trade diversification, limited domestic resource mobilisation, and acute exposure to climate risks.

Take domestic resource mobilisation for instance. Bangladesh's tax-to-GDP ratio remains among the lowest globally, severely limiting fiscal space. Even medium-term targets fall short of what is required for a lower-middle-income economy.

In practical terms, this means the state lacks the capacity to absorb shocks — whether from the loss of trade preferences, reduced concessional financing, or external volatility. And the economy is yet to recover from the turbulence it faced from 2022 to 2025.

The report states that weak revenue mobilisation is "one of the most binding preparedness gaps" in Bangladesh's transition.

A narrow economy in a changing world

If fiscal weakness is one pillar of vulnerability, export concentration is another.

Bangladesh's export success has been built overwhelmingly on a single sector — ready-made garments. Apparel accounts for over 80% of merchandise exports, with limited diversification even within the sector itself.

This model worked under LDC conditions, where preferential market access and policy flexibilities provided a cushion. But post-graduation, that cushion disappears.

The UN assessment warns that Bangladesh remains "anchored in a narrow export base and limited industrial upgrading", with low value addition and constrained pathways for diversification.

Upon graduation, preference erosion could translate into billions in lost exports, eroding competitiveness at a time when global markets are already tightening.

Economic growth specialist and COO of Rancon Infrastructure and Engineering Subail Bin Alam's assessment captures this risk with precision.

"For too long, the RMG sector has been our safety net, accounting for over 80% of our exports. However, the 'LDC Graduation' means we are about to lose Generalised System of Preferences (GSP) benefits, which could result in an estimated $8 billion in annual export losses. Beyond apparel, the export basket is dominated by low-complexity products, reflecting a pronounced capability gap and limited scope for adjacent diversification," he explained.

In other words, Bangladesh is attempting to graduate with an economic structure that still resembles that of an LDC.

A preparatory period lost to crisis

If the structural weaknesses are longstanding, the failure of preparation is more recent — and more damning.

The five-year preparatory period, granted by the UN to ensure a smooth transition, was meant to be a time of reform, coordination, and strategic planning. Instead, it became a period of crisis management.

The UN report notes that the past five years were "largely consumed by crisis management, economic stabilisation and political survival," rather than long-term preparation.

This is consistent with the government's own admission. In its letter to the UN Committee for Development Policy, Bangladesh acknowledged that the preparatory period "has not functioned as intended".

Global shocks played a role — the Covid-19 pandemic, the Ukraine war, tightening financial conditions. But domestic factors were equally significant: financial sector irregularities, policy rigidity, and ultimately, the political upheaval of August 2024.

The result is an economy entering 2026 with depleted reserves, high inflation, weak investment, and limited fiscal space.

As applied macroeconomist and Director of Sydney Policy Analysis Centre Jyoti Rahman puts it, "The economic landscape has been severely battered. Honestly, from an external perspective, it is clear the economy is caught in a long-term entanglement. We saw a total stagnation of private investment throughout 2025 following the July Uprising. We have entered 2026 facing deep economic uncertainty, exacerbated by global conflicts and an acute energy crisis."

He adds a crucial point, "The transition from LDC status is an inevitable and necessary milestone. However, the true challenge lies in our preparation."

That preparation, by most accounts, has been inadequate.

The cost of policy hubris

In retrospect, the problem was not the ambition to graduate. It was the politicisation of that ambition.

Under the previous Awami regime, LDC graduation was framed less as a technical process and more as a symbolic victory. The 2018 celebrations were not an isolated event — they reflected a broader narrative that equated eligibility with readiness.

That narrative discouraged caution.

"For too long, the RMG sector has been our safety net, accounting for over 80% of our exports. However, the 'LDC Graduation' means we are about to lose Generalised System of Preferences (GSP) benefits, which could result in an estimated $8 billion in annual export losses. Beyond apparel, the export basket is dominated by low-complexity products, reflecting a pronounced capability gap and limited scope for adjacent diversification."
Subail Bin Alam, economic growth specialist and COO, Rancon Infrastructure and Engineering

Economists, business leaders, and development practitioners had, for years, urged a more measured approach. After the Covid-19 shock and the 2022 dollar crisis, calls for deferral grew louder.

Yet these concerns were largely ignored.

When Bangladesh government finally requested 3 years deferral for LDC graduation in February, 2026, Dr Fahmida Khatun, the Executive Director of Centre for Policy Dialogue (CPD) told TBS, "In the international arena, such decisions of time extensions are not driven by emotion or political rhetoric, but rather based strictly on data, statistics, and measurable indicators."

The data, it now appears, was pointing in a different direction all along.

Why deferral makes economic sense

Against this backdrop, the current government's decision to seek a three-year deferral is a necessary recalibration. Especially given the looming economic crisis due to the ongoing Iran War.

First, time is needed to negotiate post-LDC trade arrangements.

BGMEA President Mahmudul Hasan Khan said, "New trade opportunities — such as Free Trade Agreements, Preferential Trade Agreements or Economic Partnership Agreements — may open up. But these agreements do not materialise overnight. They require careful preparation, technical analysis, and lengthy negotiations. If rushed, there is a risk of securing unfavourable terms or overlooking key national interests."

At the same time, macroeconomic stability must be restored.

Jyoti Rahman explained, "In the immediate term, the government's primary duty is to maintain macroeconomic stability. It is about managed stability rather than just obsessing over the absolute reserve figure."

Moreover, structural reforms must be accelerated — particularly in taxation, banking, and the investment climate. As Subail Bin Alam cautioned, "When banks are burdened by bad debt, they stop lending to the 'missing middle', the SMEs. We cannot build a modern economy if our entrepreneurs are forced to borrow at 14–16% interest rates while competing against global players who have access to capital at 4–5%."

The consequences of proceeding without adequate preparation are not hypothetical.

Loss of trade preferences could erode export competitiveness. Reduced concessional financing could strain public finances. Withdrawal of policy flexibilities could limit industrial policy options.

The UN assessment points out that these risks are compounded by Bangladesh's continued reliance on LDC-specific support measures and limited institutional capacity to manage their withdrawal.

In short, the country risks losing the benefits of LDC status before it has built the resilience required to operate without them.

This is why the report warns that graduation, under current conditions, could "disrupt development gains".

That is not a risk any responsible government should take.

What must be done next

Deferral, however, is not a solution in itself. It is an opportunity — one that must be used wisely. Over the years, the experts have pointed out the priorities. Now the necessary measures need to be taken to increase our preparedness.

"At this juncture, we need more than just a budget; we need a detailed roadmap. The government should use the upcoming budget to outline exactly how they plan to achieve their long-term growth targets," Jyoti Rahman said.

However the Awami regime portrayed it, LDC graduation was never meant to be a trophy. It was meant to be a transition. For too long, that distinction was blurred.

Today, the reality is unavoidable: Bangladesh is not yet ready to graduate in a way that is smooth, sustainable, and irreversible. The data says so. The experts say so. Even the government, implicitly, acknowledges it.

And in policymaking, that is often the hardest and most necessary step.

Shadique Mahbub Islam is a journalist.

Oil prices were little changed in choppy trade on ‌Monday, as investors awaited clarity on the status of talks between the US and Iran even as they remained wary about sustained supply losses due to shipping disruptions.

Brent crude futures rose 76 cents, or 0.7 percent, to $109.79 a barrel at 0656 GMT. US West Texas Intermediate crude ​futures were trading 53 cents, or 0.5 percent lower, at $111.01 per barrel.

The pricing moves in Asia trading on Monday ​were dwarfed by an 11 percent surge for WTI and an 8 percent rise for Brent during the previous trading session on Thursday, the biggest absolute price increase since 2020.

On Sunday, Trump ratcheted up pressure on Tehran, threatening ​in an expletive-laden Easter Sunday social media post to target Iran’s power plants and bridges on Tuesday if the strategic ​Strait of Hormuz is not reopened. Still, prices were largely unchanged on Monday.

Iran and the United States have received a plan to end hostilities that could come into effect on Monday and reopen the Strait of Hormuz, a source aware of the proposals said on Monday.

The Strait of ​Hormuz, which carries oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates, remains ​largely closed due to Iranian attacks on shipping after the war began on February 28.

“Not being able to open the Strait of Hormuz is ‌becoming ⁠more a question of political victory,” said Mukesh Sahdev, founder and CEO at consultancy XAnalysts.

Because of the Middle East supply disruptions, refiners are seeking alternative sources for crude, particularly for physical cargoes in the US and Britain’s North Sea.

Some vessels, however, including an Omani-operated tanker, a French-owned container ship and a Japanese-owned gas carrier, have passed through the Strait of Hormuz since Thursday, shipping data showed, ​reflecting Iran’s policy to allow ​passage for vessels from countries ⁠it deems more friendly.

The war threatens to linger on as Iran has officially told mediators it is not prepared to meet with US officials in Islamabad in the coming days ​and efforts to produce a ceasefire have reached a dead end, The Wall Street ​Journal reported on Friday.

On ⁠Sunday, Opec+, consisting of some members of the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to a modest rise of 206,000 barrels per day for May.

However, that decision will largely exist on paper as several of the group’s key ⁠producers ​are unable to raise output due to the war.

Russian supply has been ​disrupted recently by Ukrainian drone attacks on its Baltic Sea export terminals. Media reports on Sunday said its Ust-Luga terminal resumed loadings on Saturday after days ​of disruptions.

Bangladesh Bank Governor Md Mostaqur Rahman yesterday assured business leaders that the export development fund (EDF) may be gradually expanded to $5 billion, according to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

The assurance came during a meeting held at the central bank in Dhaka with FBCCI leaders, said Md Alamgir, secretary general of the apex business body, after the meeting.

Alamgir told journalists that the EDF, formed from foreign exchange reserves to support exporters, once stood at $7 billion but has now declined to around $2.2 billion.

Business leaders urged the central bank to raise the fund to $5 billion, and the governor responded positively, assuring that the amount would be increased in phases, he added.

On lending rates, Alamgir said business leaders stressed the need to keep interest rates stable to encourage investment and maintain industrial competitiveness.

They also recommended gradually bringing lending rates down to single digits.

The business leaders further urged the central bank to increase credit flow to the private sector, saying financing should be directed more towards productive sectors by reducing pressure from public-sector borrowing.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the proposal to expand the EDF had received the governor’s agreement.

“The fund was reduced because of IMF-related conditions. We have proposed raising it from around $2.5 billion to $5 billion first, and later to $8 billion,” Hatem said.

He added that business leaders also sought relaxation in loan classification rules.

At present, borrowers are classified as defaulters if they fail to repay loans for three months.

Business leaders proposed extending that period to six months. They also urged the central bank to stop the practice under which one defaulting business affects the classification status of its affiliated entities.

In addition, business leaders proposed extending the repayment period after loan rescheduling from the current four to five years to 10 years.

FBCCI also recommended introducing low-cost green financing facilities to encourage investment in renewable energy, including solar power, to reduce energy costs.

The Bangladesh Securities and Exchange Commission has fined asset management company Bangladesh RACE Management PCL Tk55 lakh for failing to comply with regulatory requirements on investments in listed bonds and government treasury bonds.

The penalty follows findings of irregularities in 11 out of the 12 mutual funds managed by the company, with Tk5 lakh imposed on each non-compliant fund, according to a recent order issued by the BSEC and published on its website.

The regulator also directed the firm to deposit the fine within 30 days of the order, warning that failure to do so would trigger further action under securities laws.

The commission, in its order, noted that the penalty was imposed mainly for failing to invest at least 3% of fund portfolios in listed debt securities and at least 1% in government treasury bonds, as required by regulations.

According to the order, "as per the Commission's directive dated 23 May 2021, a mutual fund shall invest at least 3% of its portfolio value in listed debt securities within 30 June 2022 and shall at all times maintain such investment ratio in the listed debt securities."

The deadline was later extended to 30 June 2023. However, the commission found that, as of 30 June 2025, 11 of the 12 funds under RACE had less than the required 3% exposure to listed debt securities.

In a separate directive issued on 19 February 2023, the regulator mandated that market intermediaries – including asset managers, merchant bankers, portfolio managers, stock dealers and mutual funds – must invest at least 1% of their own portfolios in listed treasury bonds by 30 June 2023 to diversify risk.

The commission found that funds managed by RACE had no investment in listed treasury bonds as of 30 June 2025.

Trustees flagged repeated non-compliance

The Investment Corporation of Bangladesh, trustee of six mutual funds, repeatedly instructed RACE during trustee committee meetings in the 2024-25 financial year to comply with the 3% investment requirement in listed debt securities.

Similarly, Bangladesh General Insurance Company Limited, trustee of four other funds, flagged the issue as non-compliance on several occasions.

The regulator noted that RACE did not act on these instructions.

It is also worth noting that, following observations from the ICB, the Commission sent a letter to RACE on 28 May 2025, seeking an explanation on the matter.

As all the funds had similar observations, the Commission's relevant department issued the letter only in the name of "Exim Bank First Mutual Fund". However, RACE has yet to respond to the Commission's letter.

RACE disputes findings

In a statement issued today (6 April) on the enforcement action, RACE said it had never made any investment in Agni Systems, for which the penalties were imposed.

It added that RACE-managed funds had neither invested in nor traded shares of the company, terming the BSEC order illegal and saying it had immediately informed the regulator.

RACE also addressed the requirement to invest 3% in listed debt securities and 1% in listed treasury bonds, stating that during the relevant period its mutual funds were subject to trading restrictions, bank account freezes, and BO account suspensions, creating what it described as an "impossibility of performance".

It said, as a result, the funds were unable to execute trades, settle transactions, or rebalance portfolios, and therefore could not comply with the investment requirements.

"During this period, the Funds, being incapacitated from executing any trades, settling transactions, or undertaking portfolio rebalancing, were unable to maintain the newly introduced requirement of investing 3% in listed debt securities and 1% in listed treasury bonds," the company said in the statement.

"Accordingly, the alleged non-compliance, if any, concerning investment in debt securities and treasury bonds arises solely from regulatory actions, and not from any negligence or failure on the part of RACE or the mutual funds," it added.

The company further alleged that the regulator had repeatedly targeted RACE by imposing operational suspensions that led to such constraints.

RACE said, "It further appears from the record that BSEC has continuously been targeting RACE and imposing suspensions on its operations, which in turn created an 'impossibility of performance' situation. Thereafter, BSEC's highlighting of such non-performance and imposing penalties as justification for alleged violations of securities laws is tainted with malafide and shares arbitrariness on the part of the regulator."

At an earlier hearing on the matter, before the fines were imposed, RACE highlighted similar points to defend its position.

The company said certain measures – including restrictions and directives – had harmed both the company and the funds it manages. "We have found instances where the restrictive actions are not taken directly by BSEC, but rather BSEC instructs trustee/custodian to take the restrictive action," the company said.

RACE further argued that such continual actions were "against fundamental principles of equity and constitutional fairness in Bangladesh" and detrimental to unitholders. "These unlawful and restrictive actions, arbitrarily imposed, are exacting a heavy price on the wellbeing of the funds, especially eroding their asset value."

The company added that restrictions under trust deeds, particularly sectoral exposure limits, had affected its ability to comply with the investment requirements.

"The Trust Deed as approved by BSEC restriction had a direct and material impact on the ability to comply with the 3% listed debt and treasury bond securities requirement," it said, noting that most such securities in Bangladesh are issued by banks.

"As long as sectoral exposure remained above the 25% limit, the trust deeds prevented the funds from purchasing many of the listed debt and treasury bond securities that would have counted toward satisfying the Commission's requirement."

RACE noted it could only move towards compliance by first reducing bank-sector holdings and rebalancing portfolios within the allowed timeframe.

Finance Minister Amir Khosru Mahmud Chowdhury has unveiled a comprehensive roadmap to revitalise Bangladesh's capital market, underscoring the government's firm commitment to building a vibrant, dynamic and sustainable financial ecosystem to support long-term economic growth.

Speaking in parliament today in response to a query from Noakhali-5 lawmaker Mohammad Fakhrul Islam, the minister said the government has already incorporated specific commitments for capital market development in its election manifesto.

He underscored that a strong and efficient capital market is critical for economic expansion and long-term financing, adding that coordinated reforms led by the Bangladesh Securities and Exchange Commission are underway to achieve these objectives.

Restoring investor confidence remains central to the reform strategy, he said, with measures focused on strengthening governance, ensuring transparency and accountability, diversifying financial products, and expanding market depth. Measures are also being taken to scale up investment education nationwide.

A key priority is positioning the capital market as a major source of long-term financing. This includes efforts to develop a robust bond market, encourage fundamentally strong companies to get listed, and bring state-owned enterprises into the stock market.

The government is also planning to introduce modern financial instruments such as exchange-traded funds, sukuk (Islamic bonds), and green bonds, while improving governance in mutual funds to attract broader investor participation. Initiatives to launch commodity and financial derivatives are also in the pipeline to enhance market sophistication.

To improve market discipline, the minister said, authorities are stepping up efforts to curb irregularities and manipulation by strengthening investigation and enforcement, accelerating digital transformation, and easing market access for both local and foreign investors. Measures to protect whistleblowers and reinforce corporate governance across listed firms are also being prioritised. Strengthening corporate governance across listed companies is another key pillar of the reform agenda.

Legal reforms are progressing alongside these initiatives. The government is reviewing a draft Bangladesh Securities and Exchange Commission Act, 2025, aimed at consolidating existing laws to boost regulatory efficiency and investor protection.

A draft Capital Market Stabilisation Fund Act, 2026 is also under consideration to ensure proper management of unclaimed dividends, rights shares and IPO proceeds. New whistleblower protection rules and an updated corporate governance framework are in the works to replace the 2018 code and strengthen accountability.

Planned amendments to debt securities rules will incorporate sustainable instruments such as green, blue, orange and social bonds, reflecting a growing focus on environmentally and socially responsible financing.

The minister also highlighted efforts to expand investment education, including integrating it into school, college and university curricula, and organising nationwide training programmes for young entrepreneurs. Awareness campaigns are being rolled out at district and upazila levels, supported by digital platforms and a dedicated programme on Bangladesh Television to enhance public understanding of the capital market.

Finance Minister Amir Khosru Mahmud Chowdhury on Monday said that the government is working with a comprehensive plan to increase people’s income and transform Bangladesh into a trillion-dollar economy by 2034.

Replying to a written question from ruling party lawmaker SM Jahangir Hossain (Dhaka-18) in the Jatiya Sangsad, the finance minister said that according to the latest data published by the Bangladesh Bureau of Statistics (BBS), the per capita income of the country stood at US$2,769 in the fiscal year 2024-25.

He said the present government has set a major target to achieve the milestone of a trillion-dollar economy by 2034, and in this regard a broad-based action plan is being formulated focusing on investment, employment generation, economic democratization, creative economy and sports economy.

The finance minister said the government is not focusing on a single sector to increase per capita income; rather it is simultaneously working on employment, investment, production, exports, remittances, skill development, social protection and macroeconomic stability.

He outlined several key initiatives taken to raise people’s income and strengthen the economy.

The minister said the government is giving top priority to creating new employment opportunities in production, construction, services, ICT, agro-processing and small entrepreneurship sectors to reduce unemployment and increase household income.

Khosru added that steps are being taken to boost private investment and industrialization by simplifying business procedures, ensuring investment-friendly policies and encouraging production-oriented industries to create more jobs and income opportunities.Business intelligence tools

To strengthen the SME and entrepreneurship sector, the government is facilitating easier financing, supporting new entrepreneurs and encouraging women and youth entrepreneurs to expand economic activities at the local level.

The finance minister also said that export growth and market expansion are being prioritized through diversification of export products, exploration of new markets and retention of existing markets to increase foreign earnings and industrial production.

Highlighting remittance, he said initiatives have been taken to enhance overseas employment, improve workers’ skills and encourage sending remittances through legal channels, which will strengthen rural economies and foreign exchange reserves.

Khosru further said that skill development and training programmes are being expanded in line with domestic and international labour market demand so that skilled manpower can secure better jobs and higher income.

“The government is also strengthening agriculture, rural infrastructure and agro-based economic activities to increase production and income at the grassroots level,” he added.

Regarding implementation, the finance minister said some initiatives are already being implemented in the 2025-26 fiscal year, while others will be executed in short, medium and long-term phases.Personal finance consulting

He expressed hope that through sustained efforts in employment, investment, exports, remittances and skill development, Bangladesh will achieve higher per capita income, reduce unemployment, increase purchasing power and move steadily toward becoming a trillion-dollar economy by 2034.

The government is facing growing uncertainty over how to mobilise funds to meet mounting expenditure pressures as a surge in global fuel prices threatens to widen the fiscal gap in the upcoming budget.

Officials at the finance division say the cost of subsidies in the power and energy sectors alone could approach Tk1 lakh crore annually, driven by nearly doubled oil and gas prices in international markets amid the Middle East war.

Additional pressure is seen from increased subsidies in agriculture and fertiliser alongside spending commitments linked to the government's election pledges.

However, revenue mobilisation prospects remain weak due to sluggish economic activity, raising concerns over how the government will bridge the widening gap between income and cost.

Against this backdrop, the government's coordination council is set to meet tomorrow to review the overall situation, identify risks and outline strategies for the next fiscal year's budget.

Finance ministry officials said they had initially begun work on a budget of around Tk8.8 lakh crore to Tk9 lakh crore for FY2026, expecting a post-election rebound in investment and employment.

But the overall global situation has forced a reassessment as rising energy costs squeeze fiscal space while revenue growth remains constrained.

Officials are now considering a contractionary budget, with the size likely to be between Tk8.5 lakh crore and Tk8.6 lakh crore.

The government is expected to set a revenue target of around Tk6 lakh crore for the next FY, including approximately Tk5.3 lakh crore from the National Board of Revenue. However, concerns persist over the feasibility of this target.

The Centre for Policy Dialogue has already warned that NBR collections in the current FY may fall short of the target by about Tk1 lakh crore.

"Global economic uncertainty and structural weaknesses in revenue mobilisation have made it increasingly difficult to balance income and expenditure while delivering on election promises," a senior finance ministry official said.

He also said that the final budget size could be revised upward, potentially reaching Tk9 lakh crore, depending on the government's decisions.

The government has set a target of raising GDP growth from a provisional 3.5% this FY to 5% in the next, alongside efforts to contain inflation and boost domestic demand.

However, officials remain sceptical about achieving these targets given global perspectives.

Currently, the government has been managing subsidy pressures through spending cuts and alternative financing measures. These include reducing allocations in various sectors, issuing bonds to borrow from the private sector and utilising funds earmarked for "unforeseen expenditures."

Recent austerity measures include a ban on government vehicle purchases and restrictions on foreign travel funded by the state. While such steps have helped manage additional costs for a few months, officials warn that sustaining them over a longer period will be challenging.

"If the situation persists, adjustments in fuel and power prices may become necessary," the finance ministry official said, cautioning that such moves could further fuel inflation. This, in turn, may require higher allocations for social safety net programmes to protect low-income groups.

While initiatives like the "family card" programme have already been introduced, officials say there is limited scope to expand new schemes in the next budget. Instead, the focus will be on improving efficiency and preventing duplication in existing programmes.

Budget support from development partners is feared to decline sharply, from around $3.5 billion in FY2025 to about $1.2 billion in the current FY. Inflows may remain just above $1 billion next FY, although an additional $1.8 billion could come from the IMF under ongoing programmes.