United Finance PLC has reported a strong start to the 2026 financial year, with its net profit after tax surging by 31% during the first quarter of the year ending 31 March.

According to the company's financial results released today (13 May), the non-bank financial institution earned a net profit of Tk0.75 crore in the January-March period, up from the corresponding period of the previous year. This growth was largely attributed to improved operational efficiency and a steady expansion across its core business segments.

The significant bottom-line growth pushed the company's earnings per share (EPS) to Tk0.04 for the three months, compared to Tk0.03 in the first quarter of 2025. The company's net asset value (NAV) per share also saw a modest improvement, rising to Tk17.94 from Tk17.90 recorded at the end of the previous year.

Contacted, Mohammed Abul Ahsan, acting managing director of the firm, said that the results reflect the positive momentum built across the organisation.

He noted that the 31% surge in net profit, combined with healthy growth in both the loan portfolio and deposit base, reaffirms the strength of the company's diversified business model.

Ahsan added that the firm remains focused on delivering sustainable returns to its shareholders while maintaining excellence in customer service.

The Bangladesh economy remained in a "fragile and uneven recovery phase" during the January–March quarter of FY2025–26, as persistent inflation, weak private investment, subdued industrial activity and external sector pressures continued to weigh on overall economic momentum, according to the Metropolitan Chamber of Commerce and Industry.

In its latest "Review of Economic Situation in Bangladesh" for Q3 of FY26, published yesterday (12 May), the business body said although the political and administrative instability that followed the transition period in late 2024 has eased considerably, the economy has yet to regain strong momentum.

"High living costs, cautious private sector sentiment and weak industrial expansion continued to weigh on overall economic performance," the report stated.

According to the review, economic growth during the January–March quarter remained modest due to slower export expansion, subdued private investment and the continuation of tight monetary policy aimed at containing inflation.

Restrictive credit conditions, elevated borrowing costs and high inflation continued to suppress domestic demand, business expansion and consumer spending during the quarter, the report said.

Despite the challenges, the chamber said strong remittance inflows continued to support the economy by stabilising foreign exchange reserves and partially offsetting the impact of a widening trade deficit.

The finance ministry is struggling to manage the sharp rise in LNG subsidy costs after international gas prices more than doubled following the Iran war.

Subsidy demand for just the first two months after the conflict started equals to the Tk8,000 crore allocated for the whole fiscal year.

Finance Division officials said monthly subsidies for LNG imports have risen to between Tk4,100 crore and Tk4,200 crore since the war began. As invoices for spot market LNG must be paid within 15 to 17 days of delivery, subsidy payments have to be released quickly.

In April, Petrobangla's deficit from LNG imports stood at Tk4,220 crore. Against this, the ministry sought Tk4,200 crore in subsidies from the finance ministry. However, the finance ministry released Tk2,500 crore in April, which Petrobangla used to cover part of the import costs.

For May, the Energy and Mineral Resources Division wrote to the finance ministry on 7 May requesting another Tk3,500 crore in subsidies, citing plans to import 11 LNG cargoes during the month.

According to the letter, signed by Senior Assistant Secretary Rafiqul Islam, Bangladesh plans to import two cargoes under long-term contracts, one under a short-term contract, and eight from the spot market in May. Six cargoes are scheduled for the first half of the month and five for the second half.

The total cost of importing these 11 cargoes is estimated at Tk7,730 crore, while Petrobangla expects to earn Tk3,630 crore from sales. This would leave a deficit of Tk4,100 crore. Only Tk500 crore has been allocated for May subsidies, creating an additional funding need of Tk3,600 crore.

The Energy Division warned that failure to pay invoices on time would trigger late payment charges. It said delayed payments could also lead to extra premium charges on LNG purchases, increasing the deficit further.

The division has therefore requested the urgent release of Tk1,999 crore by 15 May and another Tk1,610 crore by 31 May in favour of Petrobangla to meet May's LNG subsidy requirements.

The Bangladesh Bank has issued the "CIBRR-1 Economic Development Sukuk", with total bids worth nearly 12.30 times the offered amount, reflecting strong investor demand for the latest government Islamic investment instrument.

According to a press release, the auction was held for the 8th Bangladesh Government Investment Sukuk, issued against the Rural Road Important Bridge Construction Project, with a face value of Tk5,900 crore and a tenure of 7 years. The Sukuk carries an annual lease return (rent rate) of 10.40%.

The central bank said a total of Tk72,597.94 crore in bids was submitted by a wide range of investors, including Islamic banks and financial institutions, Islamic banking branches and windows of conventional banks, individual investors, and provident funds. As the bids exceeded the issued amount by around 12.30 times, allocation was made on a proportional basis among investors.

For the first time, the Sukuk auction was conducted using the Bangladesh Bank's in-house digital platform, the Shariah Securities Module (SSM).

The central bank said the Sukuk issuance is enabling the government to channel liquidity from Shariah-based banks and financial institutions into development projects, while also creating alternative investment avenues for Islamic financial institutions.

It further noted that the instrument provides individual investors in the country with opportunities to invest in Shariah-compliant securities.

Banks and financial institutions will be able to use the Sukuk as part of their Statutory Liquidity Reserve (SLR), while Islamic banking branches and windows of conventional banks can use holdings of the Sukuk as collateral to access the Islamic Banks Liquidity Facility (IBLF) from Bangladesh Bank.

From 14 May 2026, Shariah-based banks, financial institutions, Islamic insurance companies, conventional banks and insurers, Islamic banking branches and windows, as well as individual investors, will be able to buy and sell the Sukuk in the secondary market, the central bank said.

In total, Tk441.62 crore worth of Sukuk was allocated against 1,011 successful bids from individual investors, provident funds, mutual funds and deposit insurance-related categories.

The Bangladesh Bank said the 8th government investment Sukuk is expected to play a positive role in improving rural infrastructure and socio-economic conditions in the project area through the development of bridges and rural roads.

United States (US) Ambassador to Bangladesh Brent T. Christensen has discussed expanding energy cooperation with leading American energy companies, reaffirming Washington's commitment to supporting Bangladesh's growing energy and infrastructure needs.

The envoy met Javier La Rosa, President of Chevron, to discuss ongoing cooperation in Bangladesh's energy sector, the US embassy in Dhaka said today (13 May).

The embassy said Chevron currently supplies nearly 60 percent of Bangladesh's natural gas, helping power homes, industries and economic activities across the country.

The US ambassador also held talks with Steven Kobos, president and chief executive officer of Excelerate Energy, on meeting Bangladesh's growing energy demand through American innovation and expanded LNG and energy infrastructure.

The discussions focused on delivering cleaner and more reliable energy to households and businesses, the embassy said.

The envoy recently led a delegation of 25 Bangladeshi business leaders to the SelectUSA Investment Summit in Washington, D.C.

Meanwhile, Assistant US Trade Representative Brendan Lynch recently visited Bangladesh and held meetings with government officials, business leaders, companies and labour organisations.

The two sides discussed ways to strengthen bilateral trade and investment ties through implementation of the US-Bangladesh agreement on reciprocal trade aimed at improving market access, removing investment barriers and expanding commercial opportunities.

The Board of Directors of Bangladesh Bank (BB) has given primary approval to the liquidation of five Non-Bank Financial Institutions (NBFIs) that are struggling with massive loan defaults and an inability to repay depositors.
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The liquidation process for these institutions is expected to commence in July, according to sources privy to the decision made during a board meeting chaired by Governor Mostaqur Rahman on Tuesday.

The five institutions slated for liquidation are FAS Finance, Fareast Finance, Aviva Finance, People's Leasing and Financial Services, and International Leasing and Financial Services.

According to the central bank data, the non-performing loan (NPL) ratios of these institutions have reached critical levels, ranging from 93 per cent to nearly 100 per cent. Due to their prolonged failure to recover loans, they have been unable to honour withdrawal requests from depositors.

The central bank plans to shut down these entities under the Bank Resolution Act 2026. As part of the process, it will appoint one of its directors as an administrator for each institution, assisted by two additional officials. These institutions will eventually be declared defunct.

Central bank officials estimate that approximately Tk 50 billion will be required to return funds to individual depositors. The central bank reportedly moved forward with the liquidation decision after receiving positive assurances from the government regarding fund allocation in the upcoming national budget.

The Bank Resolution Act provides a framework for the merger, restructuring, or closure of financially distressed institutions and dictates how assets should be liquidated to pay off creditors.

The decision follows a lengthy review process. In May last year, the central bank issued show-cause notices to 20 NBFIs for high NPLs and failure to return deposits. Later, nine institutions with unsatisfactory recovery plans were earmarked for closure. That list was trimmed to six in January and finally to five, with Premier Leasing being excluded from the current final list.

The financial health of these entities, as of December last, paints a dire picture with FAS Finance having 99.99 per cent NPL ratio, International Leasing 99.44 per cent, Fareast Finance 98.50 per cent, People's Leasing 95 per cent and Aviva Finance 93.93 per cent NPL ratio.

Industry insiders attribute this collapse to years of systemic irregularities, corruption, and massive loan scams. Notably, disgraced businessman PK Halder is accused of embezzling at least Tk 35 billion from four institutions: People's Leasing, International Leasing, FAS Finance, and BIFC.

Bangladesh's pharmaceutical industry may face major pressure after the country graduates from Least Developed Country (LDC) status, stakeholders warned.

They said many medicines currently produced under patent waiver facilities may no longer be manufactured without licences from international companies once those benefits end. This could raise production costs and push up medicine prices.

Experts said Bangladesh will struggle to remain competitive in international markets unless investment in research and development (R&D) increases.They also warned that next-generation medicines for cancer and other complex diseases could become unaffordable for ordinary people.
The issues were discussed today (13 May) at a workshop held at Pan Pacific Sonargaon Hotel in the capital. The inception workshop, titled "Strengthening Competitiveness and Innovation of the Pharmaceutical Industry for Sustainable Growth in the Context of LDC Graduation," was jointly organised by the Asian Development Bank (ADB) and the Health Economics Institute.

The keynote paper was presented by health economist Professor Dr Syed Abdul Hamid. He said Bangladesh is currently able to produce many generic medicines without licences from global companies, helping keep production costs low and prices affordable.

"The situation may change after LDC benefits expire," he said.

"Production of newly patented medicines would then require licences, compliance with international standards, and mandatory bioequivalence and biosimilar testing. Most local firms are not yet fully prepared for this, meaning tests may need to be conducted abroad, increasing costs," the professor added.

The Bangladesh Bank has reduced the penal interest rate on overdue loans to 0.5% from the previous 1.5%, offering borrowers additional relief in case of delayed repayments.

The central bank issued a circular in this regard today (13 May), instructing all scheduled banks to implement the decision with immediate effect.

Earlier, in a circular issued in May 2024, the central bank had fixed the penal interest rate at 1.5%.

According to the new circular, if a loan or instalment is classified as partially or fully overdue, banks will now be allowed to charge a maximum penal interest rate of 0.5% on the outstanding balance for continuous and demand loans, and on overdue instalments for term loans.

Bankers, however, criticised the move, saying higher penal interest rates are generally maintained to encourage borrowers to repay instalments on time.

They argued that reducing the penalty by 100 basis points could weaken repayment discipline and create additional pressure on banks.

Several bankers warned that the decision could further worsen the already rising volume of default loans in the banking sector.

A deputy managing director of a private commercial bank told The Business Standard that banks may respond by increasing regular lending rates.

"Currently, lending rates are around 14.5%. Due to the reduction in penal interest, some banks may raise rates to 15.5%, and ultimately the burden will fall on borrowers," he said.

A managing director of another private bank said the policy would put additional pressure on banks' profitability and could encourage habitual defaulters. "This kind of policy may encourage borrowers who already fail to repay loans regularly."

A senior official of a private bank said overdue loans already create operational and financial complications for banks, and the latest decision effectively lowers the cost of delayed repayment for borrowers.

He also noted that since 2024, Bangladesh has followed a three-month overdue classification timeline in line with international practices, although some business groups have demanded extending the period to six months.

"That would be completely inappropriate and could increase default loans further," he said.

The official added that banks will eventually have to fully comply with IFRS 9, which would make risk management stricter. "Good businesses do not seek these kinds of facilities. Responsible borrowers are already repaying banks on time."

Remittance disbursement through agent banking outlets in Bangladesh is growing because of their rising popularity as rural households find the service convenient.

During the January-March period of 2026, agent banking outlets handled Tk 8,959.8 crore in inward remittances, posting a 15 percent year-on-year increase. Banks disbursed Tk 7,814 crore in remittances in the first quarter of 2025.
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The amount of remittance disbursement, a key pillar for net-importing Bangladesh, accounted for 7.4 percent of the country’s total remittance inflows during January-March 2026.

However, remittance inflows through agent banking were overwhelmingly concentrated in rural areas, according to the latest Bangladesh Bank quarterly report on agent banking statistics published yesterday.

The report said that of the total remittances received through agent banking outlets during the quarter, Tk 8,133 crore, or more than 90 percent, went to rural areas, while urban areas received Tk 826.6 crore, which was less than one-tenth of the amount.

The BB said remittances received in rural areas through the agent banking channel were 9.8 times higher than those received in urban areas.

The central bank earlier said agents were contributing significantly to remittance disbursement since customers were able to receive doorstep banking services within the shortest possible time.

“Agent banking operations in remote areas remove the gap created by the insufficient presence of bank branches, thereby enhancing accessibility to financial services for marginalised communities,” said the BB’s latest report.

Agent banking provides an efficient and cost-effective alternative to traditional branch banking, enabling broader access to financial services and facilitating economic development.

The BB said 30 scheduled banks were operating agent banking services through 20,339 active outlets. On average, each outlet serves approximately 8,551 people in Bangladesh.

More than 85 percent of the outlets are located in rural areas, highlighting banks’ focus on extending formal financial services beyond urban centres.

As such, agent banking transactions remained heavily rural-centric.

During January-March 2026, agent banking outlets handled transactions worth Tk 1.43 lakh crore, mostly in rural areas, said the BB, which introduced agent banking in 2013 as an alternative delivery channel to expand banking services in remote and underserved regions.

The BB report said that at the end of March 2026, total deposits held through agent banking accounts stood at more than Tk 50,560 crore, marking an 18.6 percent increase from a year earlier. Rural areas accounted for Tk 41,695 crore of the deposits.

Deposit growth was higher in urban areas than in rural areas.

At the end of March 2026, total outstanding loans stood at Tk 11,906 crore, with urban areas accounting for 37 percent of the total outstanding amount.

The BB data showed that outstanding loans were nearly one-fourth of the total deposit balance at agent banking outlets.

The BB also highlighted growing female participation in agent banking activities.

The central bank said that in March 2026, the number of female-owned agents increased compared with March 2025, while deposit accounts owned by women increased noticeably.

“Both deposit and loan accounts for women increased,” said the report, adding that deposit accounts owned by women rose by 8 percent in March from a year earlier.

For generations, Bangladeshis began their mornings at wet markets, checking hilsa by the gills, poking gourds for tenderness and haggling over banana blossoms before heading home with heavy bags.

But rapid urbanisation and changing lifestyles have altered that routine. Few city dwellers now have time for early market trips, and many are no longer confident about selecting fresh fish.

Around 25 years ago, the country’s first superstores arrived to serve urban shoppers.

Over the years, modern retail followed a similar model across different chains, focusing on quality products, fresh groceries and convenience. With this recipe, the sector’s share of the wider market has remained at about 3 percent, or Tk 20,000 crore, over the past two and a half decades.

However, following a sales boost during the pandemic and the recent withdrawal of the additional value-added tax (VAT) on superstore purchases, more local and foreign firms are competing for a share of the retail segment with an estimated growth of 20 percent annually.

Unlike earlier models, many new entrants are adopting different approaches. For instance, Fresh Super Mart, a new brand from Meghna Group of Industries, has been opening stores at metro rail stations in Dhaka.

Like modern cities such as Tokyo and London, Fresh Mart says it is following footfall patterns rather than opening outlets only in residential neighbourhoods.

Currently, there are 30 major superstore brands in the country, according to the Bangladesh Supermarket Owners Association.

The sector basically started in the major cities, but franchise models from ACI’s Shwapno and Pran Group’s Daily Shopping have pushed it into some upazila towns.

Many urban consumers now buy monthly groceries, including rice, vegetables, fish, meat and household goods, from superstores. However, most still combine supermarket visits with traditional wet market shopping, especially for fresh produce.

Roksana Afroz, a resident of Dhaka’s Badda area, said she mainly buys products that are easier to find in superstores than in local shops. “In grocery stores, there is usually a limited variety of packaged goods and the brands are limited to a few specific ones. However, super shops make a wider range of products easily available.”

“Since I do not have to pay extra VAT, I can buy products at the same price, and sometimes even get discounts. In some cases, certain vegetables are also cheaper than in the market, and there is no hassle of bargaining,” she added.

She also said imported goods offer added assurance in superstores. “Additionally, for imported products, the importer’s seal ensures confidence and allows for safe purchases.”

Shahjahan Ali, a resident of Mirpur in Dhaka, said he uses both superstores and kitchen markets depending on need. He said superstores offer more stable pricing.

As an example, he said edible oil prices recently increased by Tk 10 to Tk 20 per litre in the open market without notice, while superstores continued selling at earlier rates.

He added that superstores save time as most essentials are available under one roof. However, he still prefers traditional markets for vegetables and leafy greens.

PROMISE OF CONVENIENCE, QUALITY AT THE CENTRE

The country’s first retail chain, Agora, was established in 2001 by Rahimafrooz Superstores Ltd. Its tagline was “Quality you can trust”.

A year later, Gemcon Group launched Meena Bazar, promising freshness to everyday life.

Shwapno, now the market leader with 902 outlets and a 53 percent share of modern retail, was launched by ACI in 2008. Its slogan is “best shopping with your hard-earned money”.

Pran introduced Daily Shopping in 2014, focusing on convenience. Since then, the sector has expanded steadily, with new outlets opening regularly.

During the pandemic, supermarket sales received an additional boost as online delivery services gained popularity.

Sabbir Hasan Nasir, managing director of Shwapno, said most consumers in Bangladesh prefer to shop close to home. Therefore, the company follows a neighbourhood-based model through multiple retail formats.

Nasir said Shwapno has expanded from 37 outlets in 2012 to 902 outlets at present, with rapid growth after the Covid pandemic.

Pran’s Daily Shopping began in January 2014 with just seven outlets and 30 employees in Dhaka. Initial investment stood at about Tk 1 crore, said Firoj Alam, general manager of Daily Shopping.

The chain has now expanded to 112 outlets and plans to open about 35 more.

Alam said the growth shows changing consumer habits. The company now employs about 1,000 people, with total investment rising to around Tk 90 crore.

He said superstore usage has increased from less than 1 percent of the population to about 3 percent, and could rise to 6 percent as incomes grow and habits change.

Pricing transparency is one of the key reasons customers choose superstores, according to Alam.

“Another advantage is customers enjoying greater freedom. In traditional wet markets, vendors select products for buyers, but in superstores, customers can personally choose and inspect the products they want,” he said.

He added that the removal of the 5 percent value added tax on superstore purchases has made organised retail more competitive and accessible.

Shameem Ahmed Jaigirder, chief operating officer at Meena Bazar, said they wanted to build a direct and sustainable link between small farmers and consumers.

“We still want to empower farmers by ensuring fair value for their produce while delivering fresher and safer products to customers. Our ‘Back to Root’ initiative shows our long-term commitment to strengthening local agriculture and building a more transparent food supply chain,” he said.

GROWING MARKET DRAWS FOREIGN INVESTMENT

As modern retail gains popularity, foreign firms are taking notice, either through joint ventures with local brands or by opening outlets directly.

This year, Shwapno has signed a partnership with Japan’s Mitsui & Co Ltd. The partnership is meant for reducing financing costs and improving services.

Separately, Indonesian retail giant Alfamart entered Bangladesh in October 2025. In a joint venture with Kazi Farms Group, it launched a chain of compact superstores targeting urban and semi-urban consumers.

Japan’s Mitsubishi Corporation is one of Alfamart’s existing shareholders. The first phase of the project involves foreign investment of $50 million, followed by a further $70 million in a second phase.

“So far, we have opened one store in Gulshan and another in Uttara,” said Kazi Zahin Hasan, director of Kazi Farms Group.

Firoj Alam of Daily Shopping said rising competition from local and international brands is a positive development. “We see this competition positively because it prevents monopolies, encourages service improvement, and gives customers better choices in terms of quality and pricing,” he said.

MEGHNA NOW OPENING STORES BY RAIL TRACKS

As competition intensifies, retailers are rethinking how and where they operate. Instead of waiting for shoppers, many are moving closer to high-footfall urban spaces.

Under an agreement with the Dhaka Mass Transit Company Limited, Meghna Group Industries (MGI) will run nine Fresh Super Mart outlets at metro stations for five years from January 2026.

The locations include Motijheel, Bangladesh Secretariat, Dhaka University, Mirpur 10, Mirpur 11, Pallabi, Uttara Centre and Uttara North stations.

Tanveer Ahmed Mostofa, director of Meghna Group Industries, said the stores will offer a modern retail environment focused on daily essentials, including dairy, frozen foods, groceries, household items, health and beauty products, café items, ready-to-eat food and over-the-counter pharmacy goods.

He said metro stations have become key retail points due to heavy commuter traffic. “Thousands of commuters pass through daily, often needing quick purchases.”

Mostofa said that MGI wants to build a neighbourhood-style retail experience rather than large destination supermarkets.

“We are not building a destination superstore. We are creating a network of small-format stores suited to how the city moves today; quick breakfast and coffee on the way in, essentials on the way home, and a familiar face at the counter,” he said.

The group already runs four outlets at Tejgaon, Meghnaghat and the Meghna Industrial Zone, with another planned at its Gulshan office.

Meghna data shows outlets at Dhaka University and Mirpur 10 are showing promising sales.

Md Deen Islam, in-charge of the Dhaka University metro station outlet, said the store carries about 30 product categories and has seen consistent sales since opening.

He said there are two peak periods each day. The first runs from 8am to 12pm, driven by office workers, students and commuters. The second runs from 4pm to 8pm, as people return home.

Islam added that the outlet has developed a base of repeat customers, particularly for snacks, desserts and ready-to-eat items. “A significant portion of our customer base, nearly 40 percent, consists of Dhaka University students, which reflects the strong connection between the outlet and the campus community,” he said.

Fitch Ratings has revised its outlook on Bangladesh to “negative” from “stable”, citing rising external financing pressures and macroeconomic vulnerabilities linked to exposure to the Middle East conflict.

The global ratings agency kept Bangladesh’s long-term foreign-currency issuer default rating (IDR), which measures the ability to service foreign-currency-denominated debt over time, unchanged at B+.

“The Middle East conflict creates significant downside risks, particularly through the supply and cost of energy imports and remittances,” Fitch said in a statement yesterday.

Nearly half of the country’s remittances come from the Middle East, while crude oil and petroleum products together account for almost 15 percent of imports, worth about $10 billion in 2025.

“Strong remittances so far in financial year 2026 provide near-term support to external finances; however, uncertainty regarding the conflict’s duration poses substantial downside risks,” said Fitch, an American-British credit rating agency.

In July 2025, S&P Global, another member of the “Big Three” global credit rating agencies, said Bangladesh’s long-term outlook was stable and kept the country’s foreign and local currency sovereign credit ratings at B+.

Fitch, which kept its outlook on Bangladesh stable in May last year, said in the latest statement that limited progress in reforms to address weaknesses in the policy framework, public finances and financial sector, along with continued weak institutional governance, would gradually erode the economy’s capacity to absorb shocks.

“The ratings reflect moderate government debt and access to concessional external financing, balanced against a still relatively weak external liquidity position, governance standards lower than those of peers, significant financial sector challenges, and lagging structural metrics compared with peers,” Fitch said.

It said Bangladesh has relatively low external buffers, with foreign exchange reserves standing at $29.5 billion in March 2026, equivalent to about four months of external payments.

The agency cautioned that wider current account deficits, stronger domestic demand for foreign currency or reduced external financing due to uncertainty around the IMF programme could renew pressure on the currency and reserves.

“Reform outlook uncertain,” it said, citing rising uncertainty over the new government’s willingness to push through changes.

Fitch said Bangladesh’s low government revenue-to-GDP ratio remains a key fiscal weakness, falling to 7.9 percent in fiscal year 2024-25 from 8.3 percent a year earlier.

Revenue collection is constrained by large tax exemptions, weak tax administration and poor compliance, contributing to wider fiscal deficits. The agency projected a budget deficit of 3.6 percent of GDP by 2027.

“Inflationary pressures are high, due partly to a shortage of essential commodities,” Fitch said, adding that price rises in petroleum and liquefied petroleum gas could fuel inflation further.

The agency expected that overall inflation would remain around 9 percent in fiscal year 2027.

Bangladesh economy is projected to grow by 3.7 percent in FY26 and 3.5 percent in FY27.

“Prolonged high energy prices and rising global uncertainty could further weaken growth. Ready-made garment exports are declining due to redirected orders following reciprocal tariffs, weaker global demand, and higher domestic production costs.”

Fitch said banking sector vulnerabilities remain elevated, particularly among state-owned banks, and warned that the non-performing loans ratio could rise once regulatory forbearance measures are withdrawn, creating contingent liability risks.

“This remains a source of contingent liability if credit stress intensifies.”

The agency expects Bangladesh’s public debt to stabilise at about 38 percent of GDP over the medium term. However, it mentioned that risks remain from potential liabilities in the banking sector, debt of state-owned enterprises and higher borrowing costs.

Fitch also noted that the interest-revenue ratio has been rising and reached about 29 percent, more than double the median of 14 percent as of the end of 2025, adding further pressure on public finances.

Bangladesh’s pharmaceutical industry could face major challenges after graduation from least developed country (LDC) status due to weak research capacity, reliance on imported raw materials, and the possible loss of patent waivers, which could raise medicine prices, according to experts.

“Recent studies have raised concerns about Bangladesh’s pharmaceutical sector ahead of the post-LDC graduation period, particularly its weak research and development capacity,” said Syed Abdul Hamid, professor at the Institute of Health Economics at the University of Dhaka.

He made the remarks yesterday while presenting the keynote at a workshop titled “Strengthening pharmaceutical industry competitiveness and innovation for sustainable growth in the context of LDC graduation”.

The workshop was jointly organised by the Institute of Health Economics, the health ministry and the Asian Development Bank (ADB) at the Pan Pacific Sonargaon Dhaka.

Citing a Centre for Policy Dialogue study, he said that “only 3.4 percent of total investment in the sector goes to research and development,” adding that many firms are more interested in buying patent rights after the TRIPS waiver expires than investing in innovation.

Hamid warned that “medicine prices, especially for patented drugs, could rise sharply once Bangladesh loses the waiver benefits,” as local manufacturers would no longer be able to reverse-engineer patented medicines without licences.

He also said that demand for advanced medicines for cancer, respiratory illnesses and other complex diseases would further intensify the challenge.

He further noted the sector’s heavy dependence on imported active pharmaceutical ingredients (APIs), stressing the need for stronger research and development, closer industry–academia collaboration, implementation of the API Industrial Park, and regulatory reforms.

Rashed Al Mahmud Titumir, finance and planning adviser to the prime minister, said the pharmaceutical industry is “at a critical stage” as the country prepares for LDC graduation and works towards becoming a $1 trillion economy by 2034.

He said the wider economy is facing pressure from high inflation, depreciation of the taka against the US dollar, and a worsening business environment that has slowed production and investment.

“The old model will not work anymore,” he warned, calling for an investment-led growth strategy focused on diversification, productivity and competitiveness.

He also criticised what he called years of “regulatory capture” in the pharmaceutical sector, alleging that powerful business interests have distorted competition and weakened institutions.

“The industry must be a price taker, not a price maker,” he said, stressing the need for an independent regulator and stronger oversight.

Titumir also questioned why global agencies such as the World Health Organization and Unicef still do not procure medicines from Bangladesh. He said the country must strengthen regulatory standards and the Directorate General of Drug Administration to expand access to global markets.

INVESTMENT, STANDARDS AND GROWTH PROSPECTS

Blaire Ng, investment specialist at the ADB, said Bangladesh’s pharmaceutical industry still faces “major challenges”, particularly in research and development, dependence on imported APIs, and compliance with international manufacturing standards.

She said the key question is how Bangladesh can use its existing strengths to ensure sustainable growth after LDC graduation, adding that the country is well-positioned to benefit from global efforts to diversify pharmaceutical supply chains.

She described the sector as one of Bangladesh’s strongest areas for export diversification and industrial upgrading.

“The lesson for Bangladesh is that a crisis can become a critical moment for domestic transformation and stronger research and development capacity,” she said.

She added that the ADB is ready to support Bangladesh through policy reforms, infrastructure development, regulatory support, technical assistance and financing for pharmaceutical projects and companies.

Akhira Matsunaga, officer-in-charge of the ADB, said Bangladesh’s pharmaceutical industry has strong potential to deepen its integration with regional and global markets.

He said continued investment will be crucial during and after LDC graduation, helping Bangladesh benefit from opportunities in industry upgrading, innovation, technology transfer, investment expansion, and production of higher-value pharmaceutical products.

“There is strong potential for Bangladesh’s pharmaceutical sector to develop further into a competitive regional and global industry, while also contributing to broader economic diversification and resilience,” he said.

Sheikh Momena Momi, additional secretary of the WH Wing at the Health Services Division, said she hoped the assessment would help identify needed reforms, improve investment readiness, and strengthen the pharmaceutical sector’s capacity for innovation.

“With coordinated efforts and continued collaboration, Bangladesh’s pharmaceutical industry can strengthen its position in regional and global markets,” she said.

Md Enamul Haque, director general of the Health Economics Unit at the ministry, said Bangladesh spent nearly Tk 39,000 crore on medicines in 2020, which accounted for almost half of total healthcare spending.

He said the highest expenditure was on medicines for musculoskeletal, cardiovascular, and gastrointestinal diseases, and noted that irrational drug use and self-medication remain major concerns.

He warned that medicine costs could rise further after Bangladesh graduates from LDC status, increasing pressure on households that already face high out-of-pocket healthcare expenses.

The government is moving ahead with a plan to bring the Bangladesh Investment Development Authority (Bida), Bangladesh Economic Zones Authority (Beza) and Bangladesh Export Processing Zones Authority (Bepza) under a single umbrella entity to streamline the investment ecosystem and improve coordination among investment-related institutions, Commerce Minister Khandakar Abdul Muktadir said yesterday (12 May).

"The government has undertaken a series of regulatory reforms aimed at reducing the cost of doing business, simplifying business entry and accelerating Bangladesh's transition towards a trillion-dollar economy," he said while disclosing the plan during a call-on meeting with a delegation from Business Initiative Leading Development (BUILD), according to a press release.

As part of the reforms, the government plans to introduce provisional licences valid for 12 months for six essential approvals, including fire service, DIFE and chamber memberships, allowing entrepreneurs to begin operations without delay, he said.

India today hiked import duties on gold and silver to 15% from 6% as part of measures to curb inbound shipments of precious metals amid a rising import bill due to the Middle East crisis.

The move came a couple of days after Prime Minister Narendra Modi's call for curbs on gold purchases for a year, along with other austerity measures to save foreign exchange.

The duty hikes will raise the overall customs duty on gold to 15%.

India, the second biggest gold importer after China, had in the 2024-25 budget cut customs duty on gold to 6% to boost the domestic gems and jewellery industry, curb smuggling and bring down local prices.

In 2022, India had increased gold import tax to 15% to check capital account deficit amid a falling rupee due to the Russia-Ukraine war that began in February that year.

India's imports of the yellow metal went up by over 24% to an all-time high of $71.98 billion in 2025-26. In volume terms, however, the shipments dipped 4.76% to 721.03 tonnes in 2025-26.

BRAC Bank's second subordinated bond started trading on the Alternative Trading Board (ATB) platform of the Dhaka Stock Exchange (DSE) today (12 May), marking another step in the country's bond market expansion.

The "BRAC Bank 2nd Subordinated Bond" was listed following the signing of a listing agreement between the bank and DSE at the stock exchange's office in Dhaka today.

DSE Managing Director Nuzhat Anwar and BRAC Bank Managing Director and CEO Tareq Refayet Ullah attended the signing ceremony along with senior officials from both organisations.

Trading of the bond commenced under the "P" category on the ATB platform with the trading code "BBL2NDSB" and scrip code "55008".

BRAC EPL Investments Limited acted as the lead arranger of the bond, while UCB Investment Limited served as the trustee.

According to DSE data, the Tk700 crore bond carries a face value and minimum investment of Tk10 lakh per unit. The non-convertible, fully redeemable, unsecured subordinated bond offers a floating coupon rate of 12.59% per annum, payable semi-annually.

Issued on 11 March 2024, the bond currently has a remaining tenure of around four years and 10 months. Repayment will begin annually from the end of the third year from the issue date, specifically on 11 March each year. The DSE approved the listing on 20 April 2026.

The stock exchange has also imposed special circuit breaker rules for the initial trading sessions. A 4% circuit breaker will apply during the first two trading days. On the first day, the limit will be determined based on the present value calculated using at least a 10% annual discount rate, while the second day will use the reference price.

Trading will remain suspended on the third trading day before the regular 5% circuit breaker rule takes effect from the fourth trading day.

Market insiders said the bond would strengthen BRAC Bank's long-term capital base, as subordinated bonds are considered part of regulatory capital and help maintain the capital adequacy ratio required by regulators.

They added that the listing reflects growing interest among banks in raising long-term funds through the capital market instead of relying solely on deposits and conventional borrowing.

DSE's Alternative Trading Board was introduced to facilitate trading of bonds, sukuk, exchange-traded funds (ETFs), alternative investment funds and other non-equity securities, aiming to diversify investment products and support long-term financing in Bangladesh's capital market.

Analysts said the expansion of the corporate bond market through the ATB platform would create more fixed-income investment opportunities for investors and help deepen the country's capital market.

Bangladesh Bank (BB) has instructed banks to introduce QR-based digital verification systems for bank statements and other financial documents submitted by customers for overseas visa applications.

In a circular issued yesterday, the central bank said Bangladeshi citizens are often required to submit bank statements, solvency certificates, investment certificates, and similar documents to embassies or visa centres while applying for visas for different countries.

However, embassies and visa centres frequently face difficulties in instantly verifying the authenticity of these documents.

To reduce processing time and administrative costs and to make verification easier and more reliable, BB said such documents must be made digitally verifiable immediately.

Under the new directive, banks have been advised to follow several measures while issuing documents related to visa applications.

Banks must include a digitally verifiable QR code in bank statements, solvency certificates, investment certificates, and similar documents requested by customers for visa purposes.

By scanning the QR code, embassies or visa centres should be able to verify at least the following information related to the customer: bank statement, account number, account name, opening balance on the statement date, closing balance on the statement date, and statement generation date.

BB also instructed banks to ensure that the information remains stored and digitally verifiable for at least six months.

Banks have been given 90 days from the date of the circular to prepare and implement the required systems.

The central bank further said banks must ensure compliance with existing cybersecurity and data protection regulations while introducing the new verification mechanism.

The instruction was issued under Section 45 of the Bank Company Act, 1991, and came into effect immediately.

The government is set to allow the private sector to build, operate and manage jetties and terminals at seaports. The initiative has been taken to expand trade and commerce, improve ease of doing business, and attract foreign investment.

To facilitate this, the shipping ministry is drafting the "Private Jetty and Terminal Construction, Operation and Management Policy-2026". The policy will be published soon, Shipping Secretary Md Zakaria told TBS on 10 May.

The draft states that import-export trade centred around seaports has expanded significantly. Considering future economic growth, more industries are expected to be set up, which will further increase trade volumes.

As a result, alongside the government, the private sector may be included in constructing, operating and managing jetties and terminals to ensure smooth cargo unloading, loading and other services, it says.

According to Bangladesh Bank data, Bangladesh exported goods worth $43.96 billion worldwide in FY2024-25, while imports stood at $64.36 billion during the same period, with 93% of external trade being handled through seaports.

According to the shipping ministry, in FY2024-25, ports handled 3 million TEUs of containers, 105 million tonnes of cargo, and 4,500 ships.

At times, current port capacity is insufficient to handle containers, cargo and ships efficiently, leading to congestion, delays in raw material supplies to factories and export shipments to destinations.

A jetty or berth is a port structure that includes platforms, stages, ramps and docking points where ships can safely berth for unloading, loading and transshipment.

Under the draft policy, private entrepreneurs will be able to establish such jetties on both government and privately owned land within port boundaries, subject to approval from the shipping ministry.

Companies in which the government holds shares will also be allowed to jointly establish such jetties with private investors.

Selection process must be transparent

East Coast Group Chairman Azam J Chowdhury told The Business Standard that the initiative is undoubtedly positive.

"It will benefit domestic entrepreneurs. The more terminals there are, the lower different service charges at ports will become. In most countries, port operations are managed by the private sector. At the same time, modern technology will be introduced, making port-related activities easier and faster," he said.

However, he added that the process for selecting who will receive responsibility for building and operating jetties must be transparent.

"If qualified institutions are not selected, the benefits of this policy will not be realised. It must be ensured that financially and technically capable organisations receive the responsibility," he said.

Speaking to TBS, BGMEA President Mahmud Hasan Khan said including the private sector in building, operating and managing jetties and terminals would create competition in service delivery.

"Customers will go wherever they receive better service. This will create competition between government and private services, ultimately benefiting users," he said.

How ports are managed globally

Port insiders said there are four types of port management systems globally: service port, tool port, landlord port and pure private port.

The government plans to allow private sector participation under the landlord port model.

In a landlord port, land belongs to the government, while most infrastructure is built and operated by the private sector. Bangladesh's Laldia Container Terminal and Patenga Container Terminal fall under this category.

Currently, Chattogram Port, Mongla Port and Payra Port operate under the tool port model.

In a tool port, land, infrastructure and equipment belong to the state or port authority, while private companies use the facilities for cargo loading and unloading.

A service port is fully state-owned, including land, infrastructure, equipment and labour.

A pure private port is one where everything, including land ownership, belongs to private entities.

India's Mundra Port, owned by Adani, is an example of a pure private port. Similar ports exist in the Philippines, Indonesia, Australia, the UK and Brazil.

The draft policy also states that private jetties and terminals must use the relevant port's operational system or an approved automated system.

They must pay designated fees to port authorities.

For customs operations, private jetties must provide the necessary infrastructure for customs officials.

Modern equipment and technology must be used for cargo loading, unloading and handling to reduce users' time, cost and physical presence.

Tariffs or fees for imports, exports and handling at private jetties will be determined by the port authority.

Private jetty owners and port authorities will sign separate tariff-sharing agreements specifying how revenue generated from the jetty or terminal will be divided.

According to the draft policy, the application fee for setting up such jetties or terminals will be Tk20 lakh, non-refundable.

Approved companies will also need to deposit Tk1 crore as security with the government.

Among the major port users are members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), as more than 80% of the country's exports come from the ready-made garment sector.

The sector also imports cotton, yarn, fabrics and other raw materials.

Bangladesh currently has three seaports – Chattogram, Mongla and Payra. In addition, the Matarbari Deep Sea Port is under construction and expected to be operational this year.

Chattogram Port, with 18 jetties and container terminals, handles around 90% of the country's trade with the world. It has general cargo berths, container terminals and the New Mooring Container Terminal.

The National Board of Revenue is weighing doubling the source tax on export cash incentives provided by the government from 10% to 20% in the upcoming national budget, according to officials at the Ministry of Finance.

If implemented, the move could significantly boost tax collection from export incentive payments at a time when exporters – particularly the RMG sector, which accounts for nearly 85% of Bangladesh's export earnings – are already under mounting pressure from slowing shipments and rising costs.

In the current fiscal year 2025-26, the government allocated Tk9,025 crore for export incentives, including support for the jute export sector. If export performance and incentive rates remain unchanged in the next fiscal year, doubling the tax rate could generate around Tk900 crore in additional revenue for the government.

A budget-related meeting between Prime Minister Tarique Rahman and the NBR is scheduled for Thursday, according to relevant NBR sources. The meeting will review proposals that the NBR plans to incorporate into the finance bill.

Finance Minister Amir Khosru Mahmud Chowdhury, Prime Minister's Finance Adviser Rashed Al Mahmud Titumir, and budget-related officials from the Ministry of Finance are also expected to attend.

NBR officials said the proposals could be revised or expanded based on directives from the prime minister.

The finance ministry official said corporate tax rates in Bangladesh currently range from 22% to 27%, while in some cases they are as high as 45%.

"In comparison, the 10% tax on export incentives is relatively low. That is why increasing the tax rate for this sector is being considered," he said.

Exporters, however, believe raising taxes on incentives would be unjustified, arguing that the support has already been reduced over the years.

Mohammad Hatem, president of Bangladesh Knitwear Manufacturers and Exporters Association, told TBS, "The rate of these incentives has already been reduced over the past several years. These incentives are almost like charity for us. We had proposed abolishing the tax deduction imposed on these funds."

"If the tax is increased instead of reduced, it would be completely unreasonable," he said. "Garment exports are already declining, and entrepreneurs in this sector are currently under enormous pressure. Increasing taxes at this moment would create additional pressure on exporters."

Exporters also said they face significant harassment, lengthy delays, and procedural complications in receiving incentive payments due to audit requirements. They argued that further tax increases would reduce the practical value of the incentives.

Currently, around 43 export sectors, including the garment industry, are eligible for export incentives, with rates ranging from 0.30% to 10%.

All categories of garment exports receive a 0.30% incentive, while garment exports using locally sourced yarn receive 1.5%. Small and medium-sized exporters receive 2%, and exports to non-traditional markets receive 3%.

Leather and leather goods exporters receive incentives ranging from 6% to 10%, while jute and jute goods exporters receive between 3% and 10%.

A leader of the Bangladesh Garment Manufacturers and Exporters Association, speaking anonymously to TBS, said the industry had earlier been assured that taxes would not be increased in the next budget.

"The government had asked us not to seek any tax benefits in the upcoming budget. However, we were assured that taxes would not be increased," he said. "But now we are also hearing that taxes on export incentives may be increased."

Fresh nuclear fuel has been successfully loaded into the reactor core of Unit-1 at the Rooppur Nuclear Power Plant, marking a major milestone toward the plant's commissioning and electricity generation.

The fuel loading process began on 28 April and involved the sequential insertion of 163 fuel assemblies into the reactor core, according to officials involved in the project.

The operation is considered one of the most critical stages before the unit begins commercial power generation.

Alexey Deriy, vice president of Atomstroyexport, said the work was carried out in full compliance with the initial core loading programme, operational regulations and international nuclear safety standards.

"The next stage includes installation of the upper reactor unit and integration of all required in-core instrumentation systems," he said.

"Hundreds of additional tests will then be conducted to ensure the reliable and safe operation of all process systems."

According to him, the reactor will soon be brought to its minimum controllable power level, after which capacity will gradually be increased.

These procedures will pave the way for power startup and trial commercial operation of Unit-1.

The Rooppur Nuclear Power Plant, Bangladesh's first nuclear power facility, is being constructed with Russian technical and financial assistance.

The project includes two VVER-1200 reactors with a combined generation capacity of 2,400 megawatts.

Officials said the Generation III+ reactor design complies with international nuclear safety standards.

The engineering division of Rosatom is serving as the project's general designer and contractor.

A foreign-aid laden annual development budget of Tk 3.0 trillion in size is forthcoming as the new government has proposed 53-percent hike in project assistance for bankrolling its recipe,
FE

Officials say for the first time in two decades that such foreign loan-dependent development programme is being framed, now that the time of tightfisted of interim era is over.

Considering external and internal economic shocks, the past interim government slashed the project aid for consecutive two years for reducing dependence on foreign loan, but this government overturns that policy, they say.Economic Trend Reports

The project-aid target, mainly foreign loans, in the upcoming Annual Development Programme, accompanying the national budget, has been proposed at Tk 380 billion that is 53-percent higher than that in the revised ADP of the outgoing fiscal year FY2025-26, Ministry of Finance (MoF) and Planning Commission (PC) officials said Tuesday.

The PC has already finalised the Tk 3.0 trillion ADP for the next fiscal year (FY2027) with Tk 1.10 trillion targeted as project aid, to be borrowed from external sources. The remaining funds worth Tk 1.90 trillion will come from internal resources.

In the current fiscal's Tk 2.0-trillion ADP, the government allocated Tk 720 billion worth of PA, mostly come from foreign loans, while the remaining Tk 1.28 trillion is being provided from state coffers, usually mobilised from revenue income.

According to an FE analysis, Bangladesh government's highest growth in project-loan allocation in the ADP was in FY2016-17 as Bangladesh started the Rooppur nuclear power plant and metro-rail construction works.

Meanwhile, in the last FY2025, foreign debt, including interest and principal, was repaid with Tk 500 billion -- the highest ever.Business News Alerts

In the current FY2026, foreign-debt service cost Tk 430.61 billion during the first 9 months (July to March).

This foreign debt-repayment rate is 10-percent higher over the same period of the last fiscal year. The repayment rate has reached a point where it is more than the amount of loan received from development partners every month.

The installment repayment of the loan taken from Russia for the Rooppur Nuclear Power Plant will start soon, which will add up to the current debt-servicing obligation. According to the Economic Relations Division (ERD), some Tk 46.36 billion will have to be repaid every year. The time schedule for the repayment of many other big loans would also start within next few years.

Economist Masrur Reaz says the dependency on foreign loan would put further pressure on the repayment amid the lower revenue-income base.

"Following the current domestic and international situation, though the government has no good alternative except for borrowing foreign loans, but their best utilisation would have to be ensured," Dr Masrur notes.

According to a report by the Implementation and Monitoring Department (IMED) of the Ministry of Planning, government dependence on foreign loans and grants had increased in the last five fiscal years. The rate of use of domestic resources has decreased.Bangladesh Investment Guide

Meanwhile, the scope for loans on easy terms is becoming limited as most of the donors going for lending market-based loans. This has created additional pressure on loan repayment.

Some major development partners, including the World Bank, the Asian Development Bank (ADB) and Japan International Cooperation Agency JICA, are gradually making their terms and conditions harder.

Incidentally, currently, almost all of the foreign loans and grants in development projects are mainly loans. Grants are very small.

According to the Economic Relations Department (ERD), 90.67 per cent of the money released from development partners in the last fiscal year 2024-25 came as loans. Only 9.33 per cent were grants.

Officials of ERD and PC have told the FE that the proposed Tk 3.0-trillion ADP with the allocation of Tk 1.10-trillion project aid has been prepared by considering the government's election manifesto, the demands of various ministries, and the progress in the implementation of the ADP during the last 9 months.

The proposed ADP will be presented for approval in the National Economic Council (NEC) meeting soon ahead of presentation in parliament along with the national budget which is forecast to be around Tk 9.0 trillion in size.Economic Trend Reports

Meanwhile, the updated report of IMED shows that 40 per cent of the total allocation for foreign loans had been spent in the last nine months till March.