Bangladesh Bank has purchased dollars from commercial banks for two consecutive days in the second week of May.
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The central bank bought $20 million from a commercial bank on Tuesday at a rate of Tk 122.75 per dollar, according to officials.

A day earlier, the regulator purchased $45 million from another bank at the same rate.

Arief Hossain Khan, executive director and spokesperson for the central bank, told bdnews24.com: “So far this month, up to $145 million has been purchased from the market.”Stock Market Data

The central bank’s cut-off rate for dollar purchases throughout May has remained Tk 122.75 per dollar.

According to Bangladesh Bank data, the regulator has bought a total of $5.82 billion from the market so far in the current fiscal year.

Following the trend of previous months, inward remittance has continued to maintain positive momentum in May.

In the first 11 days of the month, expatriates sent $1.44 billion in remittances, which is 56.4 percent higher than the same period last year.

During the corresponding period in 2025, remittance inflow stood at $922 million, the central bank said.

The increased remittance inflow has boosted foreign currency holdings at commercial banks, with many banks exceeding their foreign exchange retention limits.

At the same time, dollar demand has remained subdued due to lower import pressure.

In such a situation, Bangladesh Bank has been absorbing dollars from the market to provide local currency liquidity against remittances and maintain exchange rate stability.

The move is helping the central bank stabilise the dollar market while also increasing foreign exchange reserves.

On May 7, Bangladesh paid $1.51 billion in liabilities to the Asian Clearing Union (ACU).

Following the payment, Bangladesh Bank resumed dollar purchases on Monday after reserves declined.

The central bank again bought dollars on Tuesday to further strengthen reserves.

After Monday’s purchase, foreign exchange reserves stood at $29.56 billion under the BPM6 calculation method and $34.22 billion in gross terms, according to Bangladesh Bank data.

The Dhaka Stock Exchange (DSE) witnessed a massive block transaction today (12 May), as 4.53 crore shares of BRAC Bank worth Tk335 crore changed hands.

The trades were executed at negotiated prices ranging between Tk71.30 and Tk74 per share. Market sources said the transaction, facilitated through City Brokerage Limited, was primarily part of a strategic reshuffle among foreign investment portfolios.

A senior brokerage official said such large-scale transactions are common when global asset managers reallocate holdings among different funds under their management to meet liquidity requirements or rebalance portfolios.

Block trades are large, privately negotiated transactions executed outside the public order book to avoid sharp price volatility. Under DSE regulations, any transaction valued at Tk5 lakh or more qualifies as a block trade.

As of April, foreign investors held a significant 36.22% stake in the bank, while sponsors and directors owned 46.17%, and institutional investors accounted for 11.48%.

The spike in block market activity follows the bank's strong financial performance. BRAC Bank recently became the first local private-sector lender to surpass the Tk2,000 crore profit milestone, posting a record consolidated net profit of Tk2,250.94 crore in 2025. The figure marked a staggering 57% year-on-year increase from the previous year.

In light of the record earnings, the bank's board recommended a 30% dividend for shareholders, comprising 15% cash and 15% stock dividends.

The bank has scheduled its annual general meeting for 11 June on a digital platform to finalise the dividends. The record date for determining eligible shareholders has been fixed for 17 May.

LafargeHolcim Bangladesh reported a net profit after tax of Tk112.2 crore for the first quarter ended 31 March 2026, down 19% from Tk139.1 crore in the corresponding quarter of the previous year.

LafargeHolcim Bangladesh reported a net profit after tax of Tk112.2 crore for the first quarter ended 31 March 2026, marking a 19% decline from the Tk139.1 crore recorded in the same period last year.

The multinational cement manufacturer said its bottom line came under pressure from rising energy costs and persistent inflation, driven largely by the broader macroeconomic fallout from the West Asia crisis, according to a company press release.

According to the company's financial disclosure, net sales during the January–March period stood at Tk803.8 crore, down 6% year-on-year from Tk851.5 crore in the first quarter of 2025.

Operating earnings before interest and taxes fell 31% to Tk123.3 crore, while earnings per share declined to Tk0.97 from Tk1.20 a year earlier.

Despite these headwinds, the company maintained a profit-after-tax margin of 14% through operational efficiency initiatives and strict cost-control measures.

Chief Executive Officer of LafargeHolcim Bangladesh Iqbal Chowdhury said despite persistent inflationary pressure, the company remains focused on resilience through innovation and operational excellence.

He added that specialised product lines, including Water Protect and Fair Face, continued to perform strongly, reinforcing the company's market leadership and consumer confidence.

Looking ahead, management acknowledged that the remainder of the year will remain challenging due to elevated inflation and energy costs. However, the company said it remains optimistic after implementing rigorous cost-efficiency measures and strategic pricing reviews.

The cement maker said it aims to sustain strong performance and preserve industry-leading margins by balancing innovation with operational efficiency as the economic environment gradually stabilises.

The company also began the year by diversifying its portfolio with the launch of Holcim Coastal Guard and Power Crete — specialised solutions designed for coastal environments and the ready-mix concrete segment. These new offerings are expected to contribute to performance growth in the coming quarters.

Meanwhile, the company's sustainability arm, Geo-cycle, co-processed around 12,000 tonnes of non-recyclable waste and achieved a 13% replacement of fossil fuels with alternative fuels, supporting both environmental sustainability and operational efficiency.

The country's premier bourse returned to a positive trajectory on Tuesday as the benchmark index snapped a five-day losing streak, supported by a significant surge in trading activity.

Market turnover at the Dhaka Stock Exchange (DSE) crossed the prestigious Tk1,000 crore mark for the first time in recent weeks, jumping by 54% to reach Tk1,101 crore.

While broad-based bargain hunting played a role in the recovery, the massive turnover was largely driven by a single heavyweight transaction in the block market, where shares of BRAC Bank worth Tk335 crore changed hands.

The benchmark DSEX index rose by 24 points to settle the session at 5,229. The blue-chip DS30 index followed a similar path, gaining 4 points to close at 1,989.

The day's trading reflected a shift in investor sentiment as opportunistic buyers moved in to accumulate fundamentally strong scrips that had become undervalued during the previous week's persistent decline, according to the market insiders.

Market breadth turned positive as well, with 188 issues advancing, 138 declining, and 67 remaining unchanged on the DSE floor.

According to the daily market review by EBL Securities, the capital bourse staged a modest recovery yesterday after five consecutive losing sessions. The market opened on a firm footing and maintained positive momentum throughout the day. Although the rebound offered some relief to the market's weakened sentiment, analysts said investors remain cautious amid concerns over potential policy developments and evolving geopolitical tensions in the Middle East.

The banking sector dominated the day's proceedings, accounting for a staggering 36% of the total turnover, primarily due to the high-value block trades. This was followed by the engineering sector with 11% and the pharmaceutical sector with 9.7% of the total trading volume.

In terms of returns, the jute sector led the gainers with a 2.5% increase, while services and information technology also posted gains of 1.6% and 1.2%, respectively.

On the other hand, the mutual fund sector faced the steepest correction of 2.2%, while the paper and tannery sectors also saw marginal declines.

Among individual performers, RD Food and Rahima Food topped the gainers' list, both surging by over 9.9%. Other notable gainers included Islami Commercial Insurance, Prime Textile, and VFS Thread.

Conversely, Meghna Pet emerged as the top loser, shedding 6.20% of its value, followed by Monno Ceramic and several mutual funds.

Monno Ceramic also featured prominently in the turnover chart alongside Dominage Steel, Acme Pesticide, Asiatic Laboratories, and NCC Bank.

The positive sentiment extended to the Chittagong Stock Exchange (CSE) as well, where the key indices settled in green territory. The selective categories' index (CSCX) gained 25 points, while the all share price index (CASPI) rose by 41 points.

Islami Bank Bangladesh reported that it incurred a loss of Tk288 crore in the January-March quarter of 2026.

According to the bank's price sensitive statement, its consolidated loss per share was Tk1.79 in the first quarter.

The bank said, it incurred the loss mainly due lower interest earnings, higher deposit cost and rising non performing loan.

Finance Minister Amir Khosru Mahmud Chowdhury directed authorities to work towards bringing at least one member from each of the country’s nearly 4 crore families under the Universal Pension Scheme (UPS) by 2030.

The directive came at a high-level meeting held at the finance ministry yesterday to review the progress, challenges, and future roadmap of the pension scheme.

During the meeting, officials said a total of 377,545 people had enrolled in the four existing schemes -- Probash, Progoti, Surokkha, and Somota -- as of April 30 this year.

The pension fund has so far accumulated Tk 256 crore in contributions, while total investments, including profits, have reached Tk 280 crore, according to a press release.

The previous Awami League government rolled out the UPS in August 2023 with a view to bringing the country’s growing elderly population under a single social security system.

Khosru stressed the need to further expand the pension scheme, particularly among people working in the informal sector, who account for nearly 85 percent of the employed workforce.

They remain without any retirement protection, he said.

Officials at the meeting also highlighted concerns over the country’s growing ageing population and the increasing dependency ratio in the coming decades, the press release said.

The meeting discussed several proposals aimed at making the scheme more attractive and inclusive, including the introduction of a Shariah-based pension scheme, lifetime pension benefits for nominees, and the inclusion of outsourced workers under the Progoti scheme.

Officials also informed the meeting that the Asian Development Bank (ADB) has pledged $100 million in concessional loans for a project to strengthen the UPS.

Currently, contributions can be deposited through 45 banks and financial institutions, as well as mobile financial services such as bKash and Nagad.

The finance minister also emphasised the importance of strengthening public confidence in the pension system through wider awareness campaigns, enhanced cybersecurity measures, and the recruitment of skilled professionals.

BRAC Bank reported that its consolidated net profit jumped by 44% to reach Tk695.68 in the January-March quarter of 2026.

According the bank's price sensitive statement, its consolidated earnings per share was Tk2.90 in the first quarter, which was Tk2.02 during the same quarter a year ago.

The bank said, net profit was driven by higher interest income as well as investment income. Moreover, robust performances fron the subsidiaries companies also helped to post such profit growth during the quarter compared to the previous year.

The Bangladesh Startup Investment Company (BSIC), a venture capital platform formed by 39 commercial banks, plans to invest from its inaugural $35 million fund in at least three firms over the next four months, according to officials involved in the process.

They, however, also said the number of recipient companies could exceed during the period.

The announcement of the investment came at the launch event of BSIC at the Radisson Blu Water Garden Hotel yesterday (12 May), where officials described the initiative as the country's first institutionally governed venture capital platform backed by banks.

Finance Minister Amir Khosru Mahmud Chowdhury attended the launch event as the chief guest, while Bangladesh Bank Governor Md Mostaqur Rahman was present as the special guest.

Mashrur Arefin, managing director of City Bank, serves as the chairman of Bangladesh Startup Investment Company.

The platform launched the "Onkur Bangladesh Fund 1" with committed capital of around Tk425 crore or $35 million. Participating banks will contribute 1% of their annual net profits to the fund, creating a recurring capital structure rather than a one-time allocation.

BSIC officials stated that the fund will invest in seed, late-seed and Series A-stage startups. While the investment scope is broad, agro-based and technology-focused ventures are likely to receive priority.

However, the company will not provide financing at the very initial stage of a startup. Instead, it plans to back ventures that have already demonstrated operational and growth potential, with further investments to be made in phases to support expansion.

Officials also said the disbursement policy is still being finalised, although investments are expected to be made through equity participation.

Alongside domestic investment, BSIC is also working to attract foreign investment into Bangladesh's startup ecosystem in an effort to strengthen funding opportunities for local ventures.

The launch event was attended by representatives from several international investment firms and development-focused organisations, including VentureSouq, Wavemaker Partners, 500 Global, Plug and Play, ADB Ventures, GFR Fund, Sturgeon Capital, Conjunction Capital and Orbit Startups, as well as regional technology media outlets Tech in Asia and FWDstart.

Officials said the platform is currently in discussions with international investors and development partners to mobilise additional capital alongside its own investments.

The initiative is being seen as a major effort to mobilise domestic financial capital for Bangladesh's startup ecosystem, which has historically relied heavily on foreign investors.

Speaking at the event, Amir Khosru said, "This fund will not be used for political motives, and there will be no political intervention." He said the fund would operate free from political interference and would be used solely to support the growth of startups.

"Bangladesh is entering a new phase of economic transformation, where future growth must increasingly come from productivity, technology, entrepreneurship, and private sector innovation," the minister further said.

"BSIC reflects confidence in our young entrepreneurs and in the ability of domestic institutions to help build the next generation of nationally and globally competitive companies."

Governor Mostaqur said the BSIC fund will be managed independently and will support start-ups, helping strengthen the rural economy. "BSIC represents an important step in mobilising domestic capital for productive, technology-enabled enterprises that can contribute to employment, productivity, and financial inclusion," he said.

"We expect the Association of Bankers, Bangladesh, to support the initiative of Bangladesh Bank in building a cashless society," he further said, adding that another initiative would be implemented in the coming days.

According to published data, Bangladesh's startup sector has received more than $1 billion through over 450 investment deals since 2010. However, less than 7% of the total investment came from domestic sources.

Addressing the event, Mashrur Arefin said the fund would prioritise SMEs and technology-based companies, although non-tech businesses would also be eligible. "This fund helps the growth of companies, and a company can expand their business through BSIC's equity participation," he said.

Mohammad Ali, managing director and CEO of Pubali Bank PLC and also a board member of BSIC, said the company also planned to support cottage-level startups.

"We will finance them, and if they succeed, we will work to turn them into corporations as well. That should be a way of journey," he said.

Separately, at the event, BSIC announced the appointment of Sami Ahmad, a global venture capital veteran, senior advisor at B Capital and previously a general partner at the firm, as an advisor to the BSIC board.

The board of Bangladesh Bank yesterday decided in principle to liquidate five non-bank financial institutions (NBFIs) from July this year, according to central bank officials.

The non-banks are FAS Finance, Fareast Finance, Aviva Finance, People’s Leasing and International Leasing.

Before the liquidation process begins, the central bank will announce a scheme for depositors. Under it, individual depositors with savings of up to Tk 10 lakh will receive a full refund of their principal amounts, but no interest payments.

Officials familiar with the matter told The Daily Star that the central bank will seek funds from the Ministry of Finance to meet the repayment obligations.

The decision was taken at the central bank board meeting yesterday. It was chaired by Bangladesh Bank Governor Md Mostaqur Rahman.

Central bank officials said that individual depositors with savings above Tk 10 lakh will be repaid on a proportional basis, depending on the availability of funds and the size of their deposits.

To manage the process, they said the central bank is planning to introduce a separate repayment mechanism.

Earlier, the Bangladesh Bank board under the interim government approved the liquidation of six non-banks, including Premier Leasing.

In November last year, it approved the liquidation proceedings under the Bank Resolution Ordinance 2025, the country’s first comprehensive framework for resolving failed banks and non-banks.

The latest decision to liquidate five NBFIs came amid protests by depositors of the distressed institutions.

On May 7, an alliance representing more than 12,000 depositors of six troubled NBFIs urged the central bank to take urgent steps to return their long-frozen funds.

The six institutions are FAS Finance, Premier Leasing, Fareast Finance, Aviva Finance, People’s Leasing and International Leasing.

The depositors have submitted multiple memorandums to the Bangladesh Bank governor, saying they have faced severe financial hardship, mental distress and a humanitarian crisis as their savings have remained locked for nearly seven years.

“Many depositors are unable to access treatment for critical illnesses such as cancer, kidney disease, and heart conditions due to a lack of funds,” one memorandum said, adding that several depositors had already died without receiving necessary medical care.

Over the years, several NBFIs have collapsed due to widespread mismanagement, weak governance and heavy exposure to non-performing loans. Poor regulatory intervention and oversight failures further deepened the crisis, eventually leading to liquidation.

Under the interim government, the regulator initially proposed liquidating nine NBFIs: FAS Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing and International Leasing.

According to Bangladesh Bank data, these nine institutions hold deposits worth Tk 15,370 crore, of which Tk 3,525 crore belongs to individual depositors and Tk 11,845 crore to banks and corporate clients.

After hearings in January this year, three institutions, Prime Finance, GSP Finance and BIFC, were given three to six months to improve their financial condition.

As of September 2025, the country’s 35 NBFIs had non-performing loans of Tk 29,408.66 crore, accounting for 37.11 percent of total outstanding loans of Tk 79,251.11 crore, according to Bangladesh Bank data.

A year earlier, in September 2024, the sector’s non-performing loan ratio stood at 35.52 percent.

Major Asian ​liquefied natural gas (LNG) importers Japan and South Korea ramped up coal-fired power generation in April and into early May, ‌market data showed, as the Iran war disrupted supplies of the super-chilled fuel and boosted prices.

Japan’s gas-fired power supply hit two-year lows in April and South Korea’s dropped to six-month lows, according to data from the Japanese Electricity Market Data Hub and Korea Power Exchange (KPX).

The switch underscores how the conflict is reshaping power ​generation patterns after Iranian retaliation to US-Israeli attacks knocked out 17 percent of LNG export capacity in No. 2 global supplier Qatar.

“The longer ​this war continues, the more switching we will see,” Andre Lambine, a power analyst at S&P Global Energy, told a recent industry event.

In April, coal-fired power supply in Japan surged 11.1 percent, the fastest pace in at least a year, as ​gas-fired power plunged 12.9 percent to 16,447 gigawatt-hours (GWh), statistics from the Japanese Electricity Market Data Hub showed.

Japan and South Korea typically use LNG to ​offset nuclear maintenance shutdowns before demand starts rising in June.

“Japan’s rising coal power output displaced roughly 4 LNG cargoes in April - already about half the annual imports the government expected to avoid by using more coal,” said Fei Xu, senior gas analyst at ICIS.

“This has helped maintain end-April LNG inventories near 5-year averages.”

South ​Korea’s coal-fired power supply rose 39.7 percent annually to 10,733 GWh in April - the sharpest rise since August 2019, while gas-fired power fell 6.4 percent, ​data from KPX showed.

Nuclear supply fell 2.7 percent annually in Japan and 14.6 percent in South Korea in April ‌and continued declining in the first 10 days of May, the data showed.

The conflict is reshaping power generation after attacks disrupted 17% of LNG export capacity in Qatar, the world’s second-largest supplier
That was offset by an 18.3 percent annual increase in coal-fired supply in Japan and 14.7 percent in South Korea in May, as gas-fired power plunged 23.4 percent and 12.2 percent respectively.

S&P’s Lambine said South Korea could use more coal as its coal-fired power plants remained underutilised, while ICIS’ Xu said Japan’s ability to switch from gas to coal may be larger and faster ​than expected.

Elsewhere, a heatwave across ​Southeast Asia drove a 12.3 percent surge ⁠in Vietnam’s coal-fired output to a record 17,864 GWh last month, pushing coal’s share in its power mix to the highest since March 2024, government data showed.

The war-induced LNG supply crisis and hot weather ​also drove a surge in Asian thermal coal shipments in May outside China and India - the top ​global coal users, ⁠with imports by countries set to rise 9.4 percent annually to 31 million metric tons, according to London-based DBX Commodities.

Vietnam’s electricity-grade coal imports surged to a record 5.4 million tons in April, Kpler data showed.

In May, coal imports by South Korea and Japan are on track for annual rises of ⁠more than ​50 percent and 20 percent respectively, the data showed.

Asian spot LNG prices have surged 62 percent since ​the start of the war, dwarfing a 13 percent rise in the Newcastle coal benchmark . Coal’s supply chain to Asian markets is unaffected by the war.

“Coal’s value is increasingly ​being defined by security rather than economics,” said DBX Commodities CEO Alexandre Claude.

The country’s remittance inflow registered a strong year-on-year growth of 41.7 percent, reaching $1,280 million in the first 11 days of May, according to the latest data released by Bangladesh Bank (BB).Bangladesh Investment Guide

During the same period last year, remittance inflow stood at $904 million.

The steady rise in inward remittances reflects continued resilience in external earnings and stronger inflows through formal banking channels, officials said.

Data also showed that expatriate Bangladeshis sent a total of $30,613 million in remittances during the period from July to May 11 of the current fiscal year. In comparison, the inflow was $25,441 million during the corresponding period of the previous fiscal year.

The upward trend in remittance earnings is expected to provide support to the country’s foreign exchange reserves and help stabilise the external sector, analysts added.

Oil prices rose by about 3 percent on Tuesday as stark differences ‌between the US and Iran on a proposal to end the war in the Middle East pushed supply concerns back into the spotlight.

Brent crude futures gained $2.85, or 2.7 percent, to $107.06 a barrel by 0931 GMT and US West Texas Intermediate was up $3.13, or ​3.2 percent, at $101.20. Both benchmarks climbed nearly 3 percent on Monday

Oil prices moved higher after President Trump ​cast doubt on the durability of the ceasefire with Iran, prolonging uncertainty around the ⁠Strait of Hormuz and global energy supplies, said MUFG analyst Soojin Kim.

US President Donald Trump said on Monday ​that the ceasefire was on "life support", pointing to disagreements over demands such as the cessation of hostilities on all ​fronts, the removal of a US naval blockade, the resumption of Iranian oil sales and compensation for war damage.

Iran also emphasised its sovereignty over the Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas flows.

Disruptions ​linked to the near-closure of the strait have prompted producers to curtail exports, with a Reuters survey ​on Monday showing OPEC oil output in April fell to its lowest level in more than two decades.

"A genuine breakthrough towards ‌a ⁠peace deal could trigger a sharp $8 to $12 correction, while any escalation or renewed blockade threats would quickly push Brent back toward $115-plus," said KCM Trade analyst Tim Waterer.

Saudi Aramco CEO Amin Nasser had warned on Monday that disruptions to oil exports through the strait could delay a return to market stability until 2027, with the ​loss of about 100 million ​barrels of oil per ⁠week.

Elsewhere on the supply front, US crude stocks were estimated to have dropped by about 1.7 million barrels last week, a Reuters poll of analysts showed.

Walt ​Chancellor, energy strategist at Macquarie Group, said that strong waterborne export flows of ​crude and products ⁠are likely for the next several weeks.

Market participants were also keeping a close eye on President Trump's planned meeting with Chinese President Xi Jinping on Thursday and Friday after Washington imposed sanctions on three individuals and nine companies for ⁠facilitating ​Iranian oil shipments to China.

Tariffs imposed during the US-China trade war ​have halted most Chinese imports of US oil and LNG, which were worth $8.4 billion in 2024, the year before Trump began his second ​term.

The country's banking sector posted robust profits in 2025 despite a sharp slowdown in private sector lending as higher returns from government treasury securities increasingly replaced traditional business lending as the sector's main source of income, raising concerns among economists and bankers over the sustainability of the model.

Several private banks, including BRAC Bank, City Bank, Midland Bank, Prime Bank and Jamuna Bank, reported strong profit growth during the year, driven largely by investments in government securities that offered comparatively risk-free returns amid weak demand for loans from businesses.
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According to published financial statements compiled by financial advisory firm Lion City Advisory, several banks posted strong earnings, with BRAC Bank and City Bank both crossing the Tk1,000 crore mark in 2025.

BRAC Bank recorded the highest net profit in the sector, posting Tk2,250 crore in 2025, up 57% from Tk1,432 crore a year earlier. The bank's investment in government treasury securities rose to Tk40,647 crore in 2025 from Tk28,671 crore a year ago, accounting for 31% of its total assets. Treasury investments contributed 32% of its total income during the year.
City Bank reported a consolidated net profit of Tk1,324 crore in 2025, marking a 31% increase from Tk1,014 crore in 2024. The bank's treasury investment rose sharply to Tk19,125 crore from Tk12,487 crore a year earlier, representing 23% of its total assets. Treasury operations accounted for 35% of the bank's income in 2025.

Jamuna Bank invested Tk19,402 crore in treasury securities, accounting for 45% of its total assets, up from Tk12,411 crore in 2024. The bank generated 23% of its operating income from lending to the government.Midland Bank increased its treasury investment to Tk3,273 crore in 2025 from Tk2,127 crore a year earlier, with government securities accounting for 26% of its total assets. Treasury income contributed 37% of the bank's total income during the year.
NCC Bank also significantly expanded its exposure to government securities. Its investment in treasury securities rose to Tk9,100 crore at the end of December 2025 from Tk6,591 crore a year earlier. The bank earned Tk609 crore from treasury operations in 2025, accounting for 21% of its operating income.

Shift towards government securities

Bankers say the combination of high lending rates, weak business confidence and global uncertainty has discouraged private sector borrowing and pushed banks towards safer investment instruments.

According to Bangladesh Bank data, private sector credit growth fell to 6.03% in February, the lowest level in 21 years. The figure declined from 6.1% in December and remained far below the 10.13% growth recorded in July 2024.

Although credit growth briefly rose to 6.58% in November, analysts attributed the increase to loan restructuring ahead of the 12 February national election rather than fresh investment in productive sectors.

At the same time, government borrowing from the banking system accelerated sharply.

Data from Bangladesh Bank, the Centre for Policy Dialogue and the Asian Development Bank show that total banking sector deposits rose to Tk21 lakh crore at the end of December 2025 from Tk18.83 lakh crore a year earlier, representing an increase of 11.57%.

Meanwhile, banks' investment in treasury bills and bonds surged more than 40% year-on-year to Tk5.38 lakh crore from Tk3.82 lakh crore.

Total banking sector assets stood at Tk28.09 lakh crore at the end of 2025, growing by only 6% compared with the previous year.

Ershad Hossain, director at Putnam Capital Advisory Pte Ltd, said banks were increasingly moving away from lending to businesses and relying heavily on government securities offering yields of around 10% to 12%.

"Private sector credit growth has dropped to 6.03%, a 21-year low, while government borrowing from banks has surged by 24%, exceeding the central bank's ceiling," he said.

"This shift has fundamentally altered banks' income structure, with the majority of operating income now coming from government securities rather than traditional lending."

He also warned that the trend is already affecting the broader economy. Imports of capital machinery, a key indicator of industrial investment, fell 10.43% between July 2025 and March 2026, while banks now hold 67% of public debt. He added that the sector's capital adequacy ratio had dropped to 1.53%, far below the minimum regulatory requirement of 12.5%.

Concerns over crowding out

Economists have warned that excessive government borrowing from banks could crowd out private sector investment by reducing the availability of credit for businesses.

They say prolonged dependence on treasury income could weaken industrial expansion, slow job creation and reduce long-term economic growth.

City Bank Managing Director Mashrur Arefin described the rise in treasury investments at the expense of loan growth as "a major negative signal" for the economy.

"Over the past year, there has been virtually no alternative to making profits from treasury bills because businesses are not borrowing," he said.

According to him, political uncertainty, external economic risks and weak investor confidence have discouraged businesses from opening large letters of credit or importing capital machinery. Even borrowers with approved credit limits are not fully utilising them.

He said banks with strong public confidence and stable deposit inflows were placing increasing amounts of liquidity into government securities because demand for corporate loans remained weak.

Mashrur warned that the trend was not sustainable in the long run.

"If credit growth does not recover, economic growth will eventually slow and banks themselves will suffer," he said.

He added that City Bank is shifting focus towards small loans, digital nano-credit and microfinance through platforms such as bKash to offset weaker corporate lending demand.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, described the growing dependence on treasury income as an "underlying weakness" in the banking sector.

He said a sustainable banking model should rely primarily on financing productive private sector activities and supporting entrepreneurship rather than depending on government borrowing.

"Investment in government securities may be safe, but it does not directly contribute to investment growth or employment generation," he said.

According to him, businesses remain reluctant to borrow because of geopolitical tensions, political uncertainty and an unfavourable business environment.

He said improving logistics support, introducing effective single-window services and reducing the cost of doing business would be necessary to revive private investment and encourage banks to increase lending to productive sectors again.

Abdullah Al Faisal, director at Lion City Advisory Limited, said the growing reliance on treasury income reflected rising risk aversion among banks and weakening credit demand.

"Such income is non-core and highly sensitive to interest rates, making bank profitability less sustainable over time," he said.

Economists and bankers alike caution that while treasury investments currently offer attractive and secure returns with virtually no default risk, the continued shift away from productive lending could weaken the banking sector's long-term role in supporting economic growth.

The Bangladesh Bank (BB) has allowed scheduled banks to launch fully digital “e-loan” services of up to Tk 50,000, stepping up efforts to widen financial inclusion and support the transformation towards digital transactions.

In a circular issued yesterday, the central bank said customers will be able to take e-loans for up to 12 months through end-to-end digital processes. These will cover customer onboarding, loan approval, disbursement and recovery.

Banks have been instructed to include the term “e-loan” in the service name and ensure that all stages of lending are conducted digitally, without physical documents or branch visits.

The move comes at a time when digital lending services are rapidly expanding globally due to increasing smartphone penetration, internet usage and mobile financial service adoption.

In many countries, banks and fintech firms now offer instant small-ticket loans through banking apps, e-wallets and other digital platforms, expanding access to credit and reducing reliance on informal borrowing.

The BB said the increasing use of digital devices in banking, along with expanded internet and mobile network coverage, has raised demand for digital lending through internet banking, mobile apps, mobile financial services and e-wallets.

“The availability of such services can play a vital role in promoting financial inclusion, familiarising marginal populations with digital financial services, and achieving the vision of a cashless society,” the central bank said in the circular.

Banks will be allowed to set market-based interest rates for e-loans. However, the rate cannot exceed 9 percent if they avail themselves of refinancing facilities.

The central bank has instructed lenders to clearly communicate all loan-related information, including annual interest rates, tenure, repayment methods, the disbursement process and any additional charges, before obtaining customer consent.

Banks have also been asked to take necessary steps to improve customer-level financial literacy regarding digital loans.

To strengthen security, the BB said customer identity verification must be conducted through biometric authentication alongside OTP and two-factor authentication (2FA) or multi-factor authentication (MFA), where necessary.

However, agents or third parties engaged by banks will not be allowed to store customers’ biometric data.

The central bank directed commercial lenders to follow existing rules on interest calculation, fees, loan classification and provisioning, while prohibiting CIB inquiry charges for e-loans.

Banks must prevent defaulted borrowers from accessing such loans by verifying existing liabilities before disbursement.

The central bank also mandated a six-month pilot before commercial launch and stressed strict compliance with cybersecurity and data protection laws, requiring all customer and loan-related data to be stored within Bangladesh.

Bangladesh already has experience in digital nano-lending through partnerships between banks and mobile financial service providers. In 2021, bKash and City Bank jointly launched an instant nano-loan service that offers small loans to selected users through the bKash app.

Several other banks have introduced digital lending products.

Dhaka Bank launched “e-Rin”, an end-to-end digital nano-loan service through its mobile app. Prime Bank introduced “PrimeAgrim” through its app, while BRAC Bank has also rolled out digital lending services.

As President Donald Trump prepares to meet with Chinese President Xi Jinping this week, the US auto industry and lawmakers on both sides of the aisle are hammering him with ​a simple message: Please don’t offer China any access to the US car market.

Trump in January told the Detroit Economic Club that it would be “great” if Chinese automakers wanted to build ‌plants in the US and employ Americans, adding: “I love that. Let China come in, let Japan come in.”

His comments rang alarm bells in an industry that had systematically lobbied successive administrations to bar Chinese cars from the US market with tough data security rules and high tariffs on electric vehicles.

So automakers, suppliers, steelmakers, unions and politicians have redoubled their efforts, arguing that Chinese automakers, with limitless state support, massive scale, an EV technology edge and rock-bottom prices, would crush domestic and other foreign producers, hollowing out the core ​of the US manufacturing base.

Democratic Senator Elissa Slotkin of Michigan went to the same forum in Detroit on Thursday specifically to urge Trump not to make a deal with Xi to allow Chinese investment ​in the US auto sector that brings Chinese-brand cars into US dealerships.

“Please don’t make a bad deal,” said Slotkin, who also promoted her bipartisan bill with Republican Senator Bernie Moreno of Ohio that would explicitly bar Chinese vehicles over data collection concerns.

Their Connected Vehicle Security Act, which has a bipartisan companion bill in the House of Representatives, would codify a data rule effectively banning ​Chinese vehicles implemented by former President Joe Biden, making a reversal extremely difficult.

The House bill would go further, banning industry partnerships with Chinese companies. Congressional aides told Reuters that with broad support, the legislation could pass this year, possibly ​attached to a transportation spending bill.

“Every vehicle on American roads is a rolling data collection device, capturing information on location, movement, people, and infrastructure in real time, and we cannot allow Chinese vehicles or components to be a part of that system,” sponsoring representatives Debbie Dingell, a Democrat, and John Moolenaar, a Republican, said in a joint statement.

They are both from auto-heavy districts in Michigan. Some 74 House Democrats, and 52 House Republicans signed letters recently urging Trump not to allow Chinese automakers to enter the American market.

INDUSTRY ​BACKS CHINESE AUTO BAN

The US auto industry has shown unusual unity in supporting a ban.

Groups representing US and foreign-brand automakers, car dealers and parts manufacturers in March told the administration that China’s efforts to dominate global auto ​production and gain access to the US market “pose a direct threat to America’s global competitiveness, national security and automotive industrial base.”

Steel industry groups followed through with a similar letter on April 30, and the Information Technology and Innovation Foundation (ITIF), which has criticized Trump’s ‌past tariffs on Chinese imports, also applauded the legislation to ban Chinese vehicles.

“Chinese automakers are not normal market competitors. Their EVs are the product of decades of state-backed mercantilism designed to help China capture global leadership in advanced industries,” said ITIF vice president Stephen Ezell.

“Once China’s subsidized firms are embedded in the US market, the economic and national security damage would be far harder to reverse — and it would not be limited to Detroit,” Ezell added.

US Trade Representative Jamieson Greer said in Detroit in April that there were no plans to change the connected car rule, and that autos were not on the agenda at the Beijing summit. Commerce Secretary Howard Lutnick also has ruled out Chinese investments in ​the US autos sector.

But Scott Paul, president of the Alliance ​for American Manufacturing, a domestic industries group, said there is a strong concern that Trump, who often talks of attracting more auto assembly plants to the US, could act alone.

“He’s left wiggle room in dealing with the auto sector,” Paul said.

Any plant approved would take two-to-three years to launch production, leaving consequences to Trump’s successor.

The White House and the Chinese embassy in Washington did not ​respond to requests for comment on the matter.

LOW PRICES, MARKET SHARE GAINS

The industry wants to avoid a repeat of Chinese automakers’ steady market share gains in ​Europe and Mexico. A growing auto affordability crisis in the US, where Kelley Blue Book estimates the average vehicle list price now exceeds $51,000, makes existing producers especially vulnerable to cheaper Chinese models.

Last year, Chinese brands doubled their share of Europe’s car market to 6 percent, but took 14 percent of Norway’s market, 9 percent in Italy, 11 percent in Britain and 9 percent in Spain, and consumer interest in Chinese EVs is growing as the Iran war spikes gasoline prices.

Canada is beginning to import 49,000 Chinese EVs annually and 34 Chinese auto brands are now on ​sale in Mexico, accounting for about 15 percent of that market at prices far below anything available in the US.

Geely’s EX2 EV starts ​at about $22,700 in Mexico, more than twice its price in the cut-throat Chinese market, but far below the cheapest Tesla Model 3 US price of $38,630.

Even Toyota, which undercut Detroit automakers in the 1980s and 1990s, is having difficulty with Chinese pricing in the Mexican market, said Toyota Motor ​North America division manager David Christ.

“Obviously there’s some level of government support, or else they couldn’t transact at that price,” Christ said in an interview. “So it has a huge impact on business.”

The Bangladesh Telecommunication Regulatory Commission (BTRC) has decided to restart joint drives against the marketing, sale and distribution of illegal mobile handsets after more than three years of inactivity.

The decision was taken at a recent commission meeting following a proposal from its Enforcement and Inspection (E&I) Directorate.

Alongside mobile phones, the regulator will also take action against other illegal radio and telecom devices across the country.

The BTRC has long carried out joint operations with law enforcement agencies to curb illegal telecom equipment, including unauthorised mobile phones and wireless devices.

While enforcement against items such as signal jammers, boosters, repeaters and illegal VoIP equipment has continued, action against illegal handset traders has remained suspended since April 2023.

According to BTRC documents, the enforcement activities were paused due to the rollout of the National Equipment Identity Register (NEIR) system and preparations for the 13th national parliamentary election in 2026.

The NEIR system was introduced in 2021 to verify legal mobile devices by linking IMEI numbers with national ID and SIM data. However, key features like blocking illegal handsets were never activated, leaving the system largely inactive.

Although the platform has recently been relaunched, handset blocking is still awaiting a policy decision from the new government, a BTRC official said.

The commission has recently observed a sharp rise in the use, production, import, marketing and sale of illegal mobile handsets and wireless equipment in divisional cities, city corporations and district towns.

It noted that these activities are punishable under the Bangladesh Telecommunication Regulatory Act, 2001.

Industry insiders said weak enforcement over time, the depreciation of the taka, rising global handset component prices and repeated tax increases have all contributed to the growth of the illegal handset market in Bangladesh, particularly in the smartphone segment.

According to industry estimates and BTRC data, grey-market smartphones now account for 40 to 50 percent of the country’s handset market, which is valued at around 1.7 billion US dollars. The grey market is expected to exceed 0.7 billion US dollars in 2025.

Data from Samsung shows that grey-market imports rose from 24 percent in 2022 to 40 percent in 2024. In the same year, 93 percent of premium phones from one brand and around 69 percent of mid-range phones in Bangladesh entered the market through unofficial channels.

The commission said illegal handsets and wireless devices are causing several problems, including consumers being misled with low-quality products, loss of government revenue from illegal imports, disruption in telecom regulation and network management, and financial losses for legitimate handset manufacturers.

In response, the E&I Directorate proposed restarting joint drives with law enforcement agencies, including the Rapid Action Battalion, police and executive magistrates, to stop these activities nationwide.

The commission has decided that enforcement drives will resume at an appropriate time after further instructions.

In a stark revelation of the deep-rooted financial distress within the country's largest private sector lender, Islami Bank Bangladesh PLC has reported that its classified loans skyrocketed by 44% to reach a staggering Tk94,322 crore at the end of 2025.

The figure, disclosed in the bank's latest audited financial statements, marks the highest volume of bad loans ever recorded by a single bank in Bangladesh's banking history.

The escalation of non-performing loans (NPLs) means that bad debt now accounts for a massive 51% of the bank's total loan portfolio, a sharp increase from the 42.36% recorded just a year earlier in 2024.

The magnitude of Islami Bank's crisis is further evidenced by its share of the national burden.

According to data from Bangladesh Bank, total classified loans across the sector stood at Tk5.57 lakh crore at the end of 2025, meaning Islami Bank alone accounts for 17% of the banking sector's total defaulted debt.

To provide context, Janata Bank holds the second-highest volume of classified loans in the country, which stood at Tk72,804 crore during the same period.

A senior official of the bank attributed this unprecedented surge to the exposure of "hidden" bad loans linked to the S Alam Group. The official explained that the previous management had systematically concealed these irregularities, but the new management's efforts to reveal the actual data have resulted in the skyrocketing numbers.

The 2025 audit report, prepared by Mahfel Huq and Co, chartered accountants, also revealed a massive gap in the bank's provisioning against bad assets.

The auditors issued a qualified opinion, noting that as of 31 December 2025, the bank required a total provision of Tk92,537.56 crore against its bad investments and assets. However, the lender maintained provisions of only Tk7,922.41 crore, leaving a monumental shortfall of Tk84,615.15 crore.

According to the auditors, failure to recognise the full provision shortfall significantly overstated the bank's assets, net profit and equity while understating its liabilities.

Furthermore, the audit firm drew attention to the bank's "going concern" status, stating that the financial statements were prepared based on the assumption that the bank will continue to operate only due to the extraordinary regulatory forbearance extended by Bangladesh Bank.

The auditors noted that the bank's ability to remain operational is entirely dependent on the central bank's ongoing policy support.

The bank's capital position is equally precarious. While the required capital based on Risk-Weighted Assets was Tk19,200.91 crore, the bank reported capital of only Tk9,855.19 crore.

This indicates a reported capital shortfall of Tk9,345.72 crore. However, the auditor clarified that if the Tk84,615 crore provision shortfall were fully taken into account, the bank's regulatory capital shortfall would actually reach a nearly incomprehensible Tk93,960.92 crore.

Under standard central bank directives, Islami Bank was required to maintain a Capital Adequacy Ratio (CRAR) of 12.50%, but it managed to report only 6.42%. Most tellingly, the auditor pointed out that without the central bank's special intervention, the bank would have incurred a solo aggregate loss of Tk84,507.83 crore for the year 2025.

Despite these grim realities, Bangladesh Bank granted the lender permission on 28 April 2026 to finalise its financial statements without incorporating the full provision adjustment.

This move was allowed due to the bank's insufficient profits, provided the shortfall was adequately disclosed to the market. In exchange for this life support, bank management must now submit a board-approved, time-bound action plan within one month to address the massive deficit, the auditor said.

The bank's exposure to the S Alam Group remains the primary engine of this collapse. Major borrowers identified in the report include S Alam Steels and Refined Sugar Industries, with an exposure of Tk10,394 crore; S Alam Vegetable Oil, with Tk14,899 crore; and S Alam Super Edible Oil, with Tk12,983 crore.

Financially, the bank's core performance has dwindled. Net investment income plunged by 40% to Tk1,847 crore in 2025. While the bank reported a technical net profit of Tk136 crore, this figure exists only because of the aforementioned regulatory forbearance.

As a result, the bank declared no dividend for its shareholders for the second consecutive year. This failure to reward investors has led to the bank being downgraded to the 'Z' or junk category on the stock exchange.

The market reaction has been one of paralysis. Currently, Islami Bank shares remain stuck at the floor price of Tk32.60.

Meanwhile, around 83% of the bank's total shares, which are linked to the S Alam Group, have been confiscated following orders from the central bank.

Garment exporters yesterday urged the government to ensure uninterrupted power and energy supply, quick release of export receipts from banks, reopening of closed factories, and easing of customs rules.

Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) made the demands at a meeting with Prime Minister Tarique Rahman at his secretariat office in Dhaka.

In separate meetings with the two trade bodies, the prime minister listened to the problems and challenges they face in running their businesses.

After the meeting, BGMEA President Mahmud Hasan Khan said they discussed export diversification within the garment sector, reopening of closed factories, and the struggles many factories face for survival.

Regarding factory reopening, Khan said a total of 104 factories have informed the BGMEA about their closure so far. The BGMEA will scrutinise the cases of closed factories to identify the genuine reasons for the shutdowns. Following the scrutiny, the association will send recommendations for reopening those factories, as the government is working to open a Tk 20,000 crore fund to assist in their revival.

BKMEA President Mohammad Hatem said they thanked the prime minister for taking the initiative to defer Bangladesh’s graduation from the least developed country (LDC) category for three more years. The BKMEA also welcomed the government’s amendment of the labour law to meet international standards, as demanded by global stakeholders.

Hatem noted that some 400 factories were closed in the last three years, nearly 300 of them due to non-cooperation from banks. He explained that banks release export receipts to exporters’ lien accounts, but delays in payment often force loans into default, leaving exporters unable to pay suppliers on time.

He also demanded uninterrupted supply of power and gas to industrial units, as recent shortages of fuel oil have severely affected productivity. Hatem further raised concerns about the misuse of the bond facility and urged action against violators of bond licences.

Additionally, he called for easing National Board of Revenue (NBR) rules, particularly customs procedures, to smooth export and import processes and reduce lead times. He stressed that complex and time-consuming customs procedures have deterred both domestic and foreign direct investment.

Commerce Minister Khandakar Abdul Muktadir was present in both the meetings.

Oil prices rallied on Monday, a day after President Donald Trump said Iran’s response ‌to a US peace proposal was “unacceptable,” raising supply fears as the Strait of Hormuz stayed largely closed, which kept the global market tight.

Brent crude futures climbed $2.70 or 2.67 percent to $103.99 a barrel at 0902 GMT US. West Texas Intermediate was at $97.66 a barrel, up $2.24, or 2.35 percent. They rose to $105.99 and $100.37 ​a barrel, respectively, earlier in the session.

Last week, both contracts recorded 6 percent weekly losses on hopes for an imminent end to the 10-week-old conflict that would allow oil transit through the Strait of Hormuz. “Despite reassuring noises, our take is that the US and Iran are as ​far away from agreement as when this supposed ceasefire started,” analyst John Evans said.

“We do not see anything changing before Donald Trump visits China and asks for Beijing’s aid in pressuring Iran.”

Trump is scheduled to arrive in Beijing on Wednesday and is expected to discuss Iran among other topics with Chinese President Xi Jinping, according to US officials.

The world has lost about 1 billion barrels of oil over the past two months and energy markets will take time to stabilise even if flows resume, Saudi Aramco CEO Amin Nasser said on Sunday.

“Our bullish view remains and we align with Saudi Aramco’s opinion that even if Hormuz is settled and opened, it will take many months ‌for normality ⁠in oil supply to break out,” Evans said.

Saudi Arabian crude oil exports to China are expected to fall further in June after buyers cut nominations because of costly prices linked to the US-Iran conflict and lower supplies, trade sources told Reuters.

Meanwhile, three tankers carrying crude exited the Strait of Hormuz last week and on Sunday with trackers switched off to avoid Iranian attacks, Kpler shipping data showed. One was loaded with Iraqi crude and bound for Vietnam.

Japan’s ⁠industry ministry said a tanker carrying Azerbaijani crude oil was set to arrive as early as Tuesday, the first cargo of oil received from Central Asia since the Iran war began.

ANZ analysts ​expected Brent to remain above $90 per barrel through 2026 and around $80 to $85 per barrel into 2027 ​as demand growth ⁠resumes and inventories are gradually rebuilt.

In an attempt to hedge prices and ensure revenue, US producer Diamondback Energy bought options to sell the price difference between US West Texas Intermediate crude and Brent at around minus $42 a barrel in the coming months, a bet that could ⁠pay off ​if the US banned oil exports.

This would lead to a rise in domestic inventory as US refiners typically process less domestic crude than is produced in the country and would push down WTI prices and widen its discount to Brent.

The Middle East war triggered the world's largest energy shock, with market recovery likely to extend into 2027 even if the Hormuz blockade is lifted soon, Saudi oil giant Aramco's CEO told investors Monday (11 May).

A day earlier, Aramco had announced a net profit rise of more than 25% in the first quarter of 2026 compared to the same period last year, fuelled by higher oil prices as exports remain blocked in the Strait of Hormuz.

"The energy supply shock that began in the first quarter is the largest the world has ever experienced," said Aramco CEO and president Amin H. Nasser.

"If the Strait of Hormuz opens today (11 May), it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalisation will last into 2027," he added.

Crude prices jumped during the first quarter from the mid $60s in early February to more than $100 a barrel in March as Iran's shutdown of the key waterway sparked a global energy crisis.

The market has seen an "unprecedented supply loss of about a billion barrels of oil", he said, putting the figure at roughly 880 million barrels.

"If the current disruptions continue at this rate, the market will lose around 100 million barrels for every week the Strait of Hormuz remains closed," he added.

The loss was offset in part by oil flows bypassing Hormuz, the release of strategic government petroleum reserves, and Saudi Arabia's East-West pipeline -- which avoids the blockaded strait, he said.

Saudi Arabia has used the pipeline at its maximum capacity of 7 million barrels per day to deliver oil despite the blockade.

US-Iran talks have failed to produce a lasting deal following a truce last month, with US President Trump on Sunday (10 May) rejecting Tehran's response to Washington's proposal as "totally unacceptable".

"If and when normal trade and shipping resume, we anticipate a very robust return to demand growth significantly higher than the initial estimate for the growth in 2026," Nasser said.

The oil-rich Gulf has borne the brunt of Iran's attacks during the war, with Tehran targeting US assets but also civilian infrastructure, including energy facilities.

In Saudi Arabia, facilities in Riyadh, the Eastern Province, and the industrial city of Yanbu were all targeted. This included infrastructure for oil and gas production, transport and refining, and petrochemical plants and power facilities.