Major banking scandals, market manipulation, and financial misreporting have created severe capital shortages in banks and the private sector, Finance Minister Amir Khosru Mahmud Chowdhury said yesterday.

Addressing the “Financial Accounting and Reporting (FAR) Summit 2026” as chief guest at the Pan Pacific Sonargaon Dhaka, he said financial discipline in the banking and capital market sectors has not been restored despite repeated scandals.

He alleged several companies entered the stock market using false representations, which has discouraged strong firms from getting listed and weakened fair competition and price discovery.

Khosru, also the planning minister, said economic management institutions in Bangladesh have become increasingly ineffective, with accountability and monitoring systems failing to function properly.

He noted that regulatory bodies, including the Financial Reporting Council (FRC), play a vital role in ensuring transparency in corporate reporting, but said the overall governance ecosystem has weakened since the council’s establishment in 2015.

He warned against a culture of shareholders treating banks as personal property, despite banks operating mainly with depositors’ funds.

He stressed the need for a transparent and accountable financial system where regulators, institutions, and professional bodies properly discharge their responsibilities.

Referring to the self-regulation model of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in issuing exporters’ utilisation certificates, he said similar accountability mechanisms are needed in accounting, auditing, and financial reporting.

The minister said Bangladesh is attracting strong interest from international investors and global fund managers, particularly in bonds and other instruments.

However, he said such investment depends on confidence in the country’s financial reporting, auditing, and governance systems.

He urged regulators and stakeholders to work together to establish global-standard practices and restore investor trust.

Virtually addressing the event, Rashed Al Mahmud Titumir, finance and planning adviser to the prime minister, said past failures in auditing and financial oversight were driven by weak standards, lack of accountability, and conflicts of interest, where audit firms effectively acted as their own regulators.

He said unreliable financial reporting, manipulated valuations, and weak regulation had pushed the banking and capital market sectors into crisis, resulting in loan defaults, instability, and repeated scams.

He added that thousands of small investors lost money due to misleading financial statements of listed companies, while honest entrepreneurs were disadvantaged as dishonest firms attracted investment by showing inflated profits.

He called for stronger regulation, greater independence and authority for the FRC, stricter punishment for fraudulent reporting, and adoption of international standards to restore investor confidence and strengthen economic governance.

Mahmud Hasan Khan Babu, president of BGMEA, said audit reports often failed to reflect the true condition of banks despite serious sectoral weaknesses.

He said asset quality reviews later exposed multiple irregularities, highlighting major gaps in financial reporting accuracy.

He added that poor reporting led to loans being granted to unqualified borrowers, while viable businesses struggled to obtain financing.

He also noted inconsistencies where companies showed strong financial positions to banks but reported losses to tax authorities, creating challenges in tax compliance and loan recovery.

Md Sajjad Hossain Bhuiyan, chairman of the FRC, presented the keynote paper at the event. The inaugural session was chaired by Md Khairuzzaman Mozumder, secretary of the finance division.

The summit was jointly organised by the FRC, the Institute of Chartered Accountants of Bangladesh, and the Institute of Cost and Management Accountants of Bangladesh.

Bangladesh and Morocco are considering a free trade agreement (FTA) to deepen bilateral trade and economic engagement.

The issue came up during a meeting between State Minister for Foreign Affairs Shama Obaed and Morocco’s Minister of Industry and Trade Ryad Mezzour in Rabat on Tuesday.

The state minister is currently visiting Morocco after concluding a trip to Washington to attend the Second Ministerial Conference on Peacekeeping in a Francophone Environment, which opened yesterday.

During the visit, she also held meetings with Morocco’s Foreign Minister Nasser Bourita and Minister of Economic Inclusion, Small Business, Employment and Skills Younes Sekkouri.

Highlighting Bangladesh’s improved investment climate, Shama Obaed proposed exchanging business delegations to boost commercial engagement between the two countries.

According to officials, bilateral trade between Bangladesh and Morocco currently stands at around $1.15 billion, although trade remains heavily tilted in Morocco’s favour.

Bangladesh exports goods worth around $81 million to Morocco, while imports from Morocco amount to approximately $1.07 billion.

Ryad Mezzour expressed interest in sending a business delegation to Bangladesh by the end of this year.

The two sides also discussed strengthening cooperation in agriculture, particularly through government-to-government collaboration to ensure a stable supply of phosphate exports to Bangladesh.

Shama Obaed reiterated Bangladesh’s interest in promoting eco-friendly jute and jute goods in the Moroccan market.

Both countries also pledged deeper cooperation in innovation, industrial training, ICT and artificial intelligence.

During her meeting with Nasser Bourita, Shama Obaed said Bangladesh is keen to deepen engagement with African countries and elevate relations with Morocco.

The two leaders stressed the importance of regular high-level exchanges in strengthening political ties.

They also reaffirmed their commitment to expanding cooperation in trade and investment, textiles, pharmaceuticals, ceramics, sports, culture, agriculture, education, women’s empowerment, shipbuilding and people-to-people connectivity.

The two countries agreed to hold the next Foreign Office Consultations in Dhaka at the earliest opportunity.

Bangladesh Ambassador to Morocco Sadia Faizunnesa and Abdur Rouf Mondol, director general (Africa) at the Ministry of Foreign Affairs, accompanied the state minister during the meetings.

A candid admission comes from the finance minister that many well-established companies are facing acute capital shortages, in a crunch he attributes to lack of "fair competition" and governance gaps.
FE

"Many big companies and banks are in serious capital shortage," Finance and Planning Minister Amir Khosru Mahmud Chowdhury said Wednesday while speaking as chief guest at the inaugural session of the first-ever Financial Accounting and Reporting (FAR) Summit held at a city hotel.

The summit was jointly organised by the Financial Reporting Council (FRC), the Institute of Chartered Accountants of Bangladesh (ICAB) and the Institute of Cost and Management Accountants of Bangladesh (ICMAB).

Turning to the predicament of banking sector, the finance minister said the current financial strain reflected deeper structural weaknesses, including distorted lending practices within banks.Bangladesh economic report

"Depositors keep money in banks, and loan approvals were often influenced by board-level decisions," he points out, adding that auditors should adopt stronger "self-regulation" to ensure transparency.

He stresses full transparency and accountability for restoring investor confidence and achieving long-term economic stability in the country.

"Bangladesh is now at a crossroads and all depend on the institutions," the finance minister implicitly reminds about the transition following political upheavals.

Mr. Chowdhury notes that the Financial Reporting Council would continue to exist but should focus on supervision and monitoring rather than direct enforcement alone.

"Every day, fund managers are contacting us-from Hong Kong, London, even JPMorgan. But if foreign investors see that our accounting is not up to international standards, they will be discouraged," he told the meet.

The minister also recalls delegating authority for issuing export-utilisation certificates to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) during his tenure as commerce minister in a previous BNP government, and says the move had improved governance after earlier allegations of corruption at the Export Promotion Bureau.Financial literacy course

He strongly feels that Bangladesh needs a financial system built on institutional integrity.

"The current government wants a system of complete transparency and accountability."

The new custodian of exchequer alerts that Bangladesh's economic future depends on institutions such as FRC, ICAB and ICMAB. "No regulator can identify every mistake daily. Accountants and professional bodies must take the lead in self-regulation."

Mentioning that institutions have weakened over time due to past "governance failures", the minister alleges that financial irregularities and bank fund diversions were often linked to misleading accounts.

"Many companies listed on the capital market used false information. Investors were misled," he deplores.

Prime Minister's Finance and Planning Adviser Prof Rashed Al Mahmud Titumir, speaking as special guest, said weak auditing practices had contributed to financial-sector instability.

"In many cases, audit firms have become their own judges," he said through online platform, adding that regulatory gaps had deepened banking-sector vulnerabilities.Economic trend analysis

He says investors had suffered significant losses due to misleading financial statements, while banks had extended large loans based on inaccurate reports that later turned into defaults.

BGMEA President Mahmud Hasan Khan told the meet that out of 7,200 registered member-organisations only around 2,500 were now active, largely due to poor accounting practices.

"Inflated accounts can destroy organisations," he notes, adding that discrepancies between assets and liabilities were a common concern in the sector.

He also warns that lack of transparent accounting discouraged foreign buyers and reduced competitiveness in export markets. Chairman of FRC Md Sajjad Hossain Bhuiyan presented the keynote paper, titled 'Reliable Financial Reporting: Where Does It Really Matter?'

Finance Secretary Dr Khairuzzaman Mozumder chaired the inaugural session. ICAB acting president Rokunuzzaman and ICMAB president Kauser Alam also spoke at the event.

The summit featured two technical sessions attended by CFOs, auditors and policymakers from leading institutions.

The US dollar hit a six-week high on Wednesday as investors came to terms with the possible need ‌for higher interest rates to tackle inflation resulting from the Iran war.

The uncertainty over when the conflict may end has fanned inflation fears and triggered a global bond selloff, with the yield on the US 30-year Treasury bond hitting its highest level since 2007.

The dollar index , which tracks the currency against six peers, rose 0.1 percent to its highest since April 7 at 99.47. The index is up more than 1.3 percent in May due to safe-haven demand and markets pricing ​in chances of the Federal Reserve hiking interest rates by the end of the year.

The euro fell to a six-week low of $1.158, down ​0.16 percent. The British pound slipped 0.07 percent to $1.338, not far from a six-week low it touched earlier this week.

The Australian dollar , often seen as a barometer for risk sentiment, was little changed at $0.711, after dropping 0.9 percent on Tuesday.

Traders are now pricing in a more than 50 percent chance of a Fed rate hike by December, ​CME FedWatch showed, in a sharp reversal from two cuts expected before the war. Investor focus will be on the minutes of the ​Fed’s last meeting due later.

Analysts said the rise in US bond yields had been the key driver of the dollar.

“There is scope for yields to ‌move further higher,” said Derek Halpenny, a senior currency analyst at MUFG.

“While we maintain that the Fed will ultimately hike by less than many other G10 central banks, market pricing remains relatively low at this juncture – especially with the risks of a further jump in crude oil prices building.”

Brent crude futures were down 1.1 percent to $110 per barrel, but remained more than 50 percent higher than in late February before the war began.

Beijing will work with Washington on reducing levies affecting tens of billions of dollars in goods, the commerce ministry said Wednesday, days after US President Donald Trump visited China.

The world’s two top economies spent much of 2025 embroiled in an escalating trade war, until Trump and Chinese President Xi Jinping reached a one-year truce when they met in South Korea in October.

As a result of their summit last week, a trade council has been set up, under the auspices of which “both sides agreed in principle to discuss a framework arrangement for reciprocal tariff reductions on products of equivalent scale”, the ministry said in a statement.

The intended tariff cuts will affect goods worth “$30 billion or more on each side”, the online statement, attributed to an unnamed commerce ministry official, said.

China hopes “the US side will honour its commitment” made during the recent round of negotiations, it added, calling for an extension to the trade truce agreements reached last year.

However, the potential tariff cuts are “not significant enough to change the market’s GDP forecast”, said Zhiwei Zhang of Pinpoint Asset Management in a note.

“Nonetheless this is a positive step in the right direction,” he added. “As long as the two countries are talking to stabilise the bilateral relations, it is good news for global investors.”

The commerce ministry also said China would restore registrations for some US beef exporters, following their lapse last year during the height of tensions with Washington.

Confirming another outcome of the Xi-Trump summit, the ministry said China would purchase 200 aircraft from US aerospace giant Boeing, though it did not specify which model or models.

US media had reported for several months that Beijing was poised to make a major order from Boeing that would include 500 single-aisle 737 MAXs and about 100 larger 787 Dreamliners and 777s.

On the supply of rare earths -- the critical field dominated by China and the target of biting export restrictions implemented last year -- the statement was scant in detail.

“Both sides will work together to study and resolve each other’s legitimate and lawful concerns,” it said.

In a major move to attract more foreign investment into the country's struggling stock market, Bangladesh Bank has eliminated the requirement for an auditor's certificate for every transaction made by non-resident investors.

Under the new directive issued today (20 May), the central bank has streamlined the tax collection process for Non-Resident Investor Taka Accounts (NITA), allowing for the immediate credit of sale proceeds and automated tax withholding by banks.

Previously, foreign investors were required to obtain a certificate from a chartered accountant for every single trade to determine capital gains tax before funds could be reinvested or sent abroad. This practice frequently caused significant delays, increased compliance costs, and discouraged active trading.

According to the central bank's circular, authorised dealer (AD) banks will now ensure the deduction or withholding of applicable taxes on capital gains directly from the sale proceeds of shares or securities held by non-resident investors. These proceeds will be credited directly to the respective NITA for eventual payment to the government exchequer prior to repatriation.

Speaking to The Business Standard, a senior official from Bangladesh Bank said under the previous system, non-resident investors used to buy stock market shares, and selling them would yield profits.

"After deducting taxes from these profits, the remaining amount was credited to their accounts. In other words, profits were deposited only after tax deduction. Many had raised objections to this method because the entire process – including tax calculations and obtaining certificates – took nearly 15 days," the official said.

He further mentioned that under the newly introduced rules, the amount can be credited to the account immediately upon selling the shares.

"However, when repatriating funds outside Bangladesh, the capital gains tax and the actual profit made from the share sale must be kept separate, allowing the remaining balance to be repatriated. This ensures the account is credited instantly, enabling the investor to reinvest in shares right away if they wish. If depositing funds into the account takes 30 days, it delays their reinvestment in the stock market. Now, reinvesting will take much less time, which serves as an incentive to attract foreign investment into the country."

The official added that Bangladesh Bank granted this approval in response to an application from the Dhaka Stock Exchange (DSE).

Misbah Uddin Affan Yusuf, managing director and CEO of City Brokerage Limited, told TBS that this was a long-standing barrier for international participants.

"Previously, even for small transactions, clients had to manually collect a CA certificate and submit it to their custodian bank. While large institutional investors could manage this through big firms like KPMG, it was a nightmare for smaller investors," Yusuf explained.

"This lengthy process essentially prevented foreign investors from trading freely. Now, the bank handles the 15% capital gains tax calculation and issues the certificate only at the time of repatriation. This is a massive relief that allows for seamless trading," he added.

Saiful Islam, president of the DSE Brokers Association (DBA), hailed the move as a "fundamental change" for the market.

"DSE and DBA have written to the central bank multiple times since the introduction of the capital gains tax, urging them to simplify NITA transactions. Finally, this issue has been resolved. It removes the hurdles for the free entry and exit of foreign capital, which is vital for market liquidity," he said.

The balances in a NITA can be used to purchase listed shares and IPOs. These balances, along with dividends and sale proceeds, are freely remittable abroad in equivalent foreign exchange, provided the applicable taxes have been withheld by the handling bank as per the new simplified rules, he added.

How NITA works for foreign investors

According to the Foreign Exchange Guideline of Bangladesh Bank, Non-Resident Bangladeshis (NRBs) and foreign individuals can invest in the local capital market using freely convertible foreign currency remitted from abroad through formal banking channels.

To begin investing, an investor needs two accounts: a Foreign Currency (FC) account for inward and outward remittances, and a NITA for converting that foreign currency into Taka to buy securities. These must be opened with an Authorized Dealer bank in Bangladesh.

Private sector credit growth fell to 4.72 percent -- a record low -- in March, marking another month of slowdown.

The downturn in loan flow was recorded at a time when Bangladesh elected a new government for five years after the general election, which many thought would bring an end to the dry spell in private investment.

The latest data has dampened those expectations. Rather, it has raised questions about what has gone wrong.

The obvious answer is the US-Israel war on Iran and the consequent closure of the Strait of Hormuz, a key maritime chokepoint, by Iran and its ripple effects on the global economy. Oil prices, as well as gas, fertiliser and various other commodity prices jumped, unnerving investors.

Many investors who planned to make a fresh start after the election held back amid an uncertain global economic environment, risks of imported inflation and worries over the war fallout on Bangladesh’s economy, a net import-dependent country.

“None invests under such an unstable environment,” said Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry.

The record-low credit growth, he said, reflects that investors are “downbeat” because of the economic pressure since the Covid-19 pandemic. The Russia-Ukraine war, worsening energy crisis, persistent inflation and rising interest on bank loans were some of the challenges they faced over the last few years.

The war has added a fresh concern for entrepreneurs. So, this low credit growth is a culmination of all these factors, Ahmed said.

Sohail R K Hussain, Managing Director of Bank Asia PLC, said many investment decisions have been deferred as investors fear that the local currency may be devalued further, since several countries have devalued their currencies against the US dollar amid global uncertainty.

He added that during the last seven to eight years of the Awami League-led government, there was excessive lending to some large borrowers; as a result, the market is now correcting, and demand has weakened.

Mir Nasir Hossain, former president of the Federation of Bangladesh Chambers of Commerce and Industry, said the slowing credit flow is bad for investment and employment.

One main factor is soaring interest rates, which has made borrowing costly not only for fresh loans but also for existing loans. Banks are also reluctant to extend commercial loans. Many make hefty profits by investing in government bonds for secure returns.

For Hossain, the latest private credit growth data is an ominous sign. “It is really very concerning.”

Abdur Razzaque, chairman of Research and Policy Integration for Development, echoed similar concerns. To him, the exceptionally weak private sector credit growth is a critical warning sign of a deeper private investment crisis.

“It reflects a unique situation in which firms are reluctant to expand, banks are increasingly constrained or unwilling to take credit risks, borrowing costs remain high, public borrowing is absorbing financial space, and uncertainty over energy, inflation, external conditions and the exchange rate continues to weigh on business decisions.”

A number of factors -- rising non-performing loans, provisioning pressure, undercapitalisation, fragile depositor confidence and liquidity constraints -- have weakened banks’ capacity to lend, while uncertainty over borrower quality has reduced their willingness to extend fresh credit.

“In effect, the banking system is becoming more defensive. It is protecting its balance sheets rather than supporting new investment.”

Razzaque said the overall situation is quite unusual as Bangladesh is facing both weakened demand for credit and a lacklustre supply response from the banking system.

“This combination risks pushing the economy into a low-equilibrium trap: firms are not investing because confidence is weak, banks are not lending because risks are high, production remains subdued because investment and imports are compressed, and slow activity then further weakens the case for new lending. Breaking this cycle will require more than marginal changes in credit targets.”

However, Md Ezazul Islam, director general of Bangladesh Institute of Bank Management, said credit demand will pick up from April to May as political stability returns. “It seems that the sluggish phase has bottomed out,” he said.

However, Razzaque said the recovery of private sector credit growth will remain difficult unless the government recognises the wider consequences of excessive borrowing from the banking system.

“When public borrowing offers banks a safer and easier return, private enterprises are pushed further to the margins. Restoring credit growth, therefore, requires not only lower inflation and a more stable exchange-rate environment, but also credible banking-sector repair, disciplined public borrowing, improved confidence, and a clear policy signal that productive private investment will again be treated as the central engine of growth.”

He said the government and the central bank should increase lending to the small and medium enterprise (SME) sector at low interest rates under refinance schemes.

He also said ongoing legal reforms could help improve the investment climate further.

The National Board of Revenue (NBR) is on course to miss its annual revenue target for the current fiscal year, extending its run of shortfalls to a tenth straight year.

Revenue officials blame the shortfall on a slowing economy, ambitious targets and inefficient collection.

In the first 10 months of fiscal year 2025-26, the tax authority collected Tk 3.27 lakh crore, falling Tk 1.04 lakh crore short of the July-April target, according to provisional revenue data released yesterday.

To avoid another shortfall, the NBR would have to collect Tk 2.27 lakh crore in the remaining two months, a goal officials describe as a “herculean task”.

Economists too say that is unrealistic. Collecting nearly half of the full-year target in the final two months would require an unprecedented surge.

“The NBR is set to miss its target this year,” said Towfiqul Islam Khan, additional director (research) at the Centre for Policy Dialogue (CPD). “This will significantly constrain the government’s fiscal space.”

Measured against the original annual targets, the situation looks worse. By that yardstick, the NBR has failed to meet its goal for 14 consecutive years.

As revenues fall short, the government is leaning more heavily on borrowing.

In the July-February period of FY26, net deficit financing rose 67 percent year-on-year to Tk 1.05 lakh crore, up from Tk 63,040 crore in the same period last year. Of that, Tk 88,309 crore came from the banking system, according to Bangladesh Bank data.

Despite the shortfall, the government has set a revenue target of Tk 6.95 lakh crore for the next fiscal year, covering both tax and non-tax income. That implies growth of at least 42 percent over the revised FY26 target.

CPD Additional Director Khan called it a “near-impossible revenue challenge”.

“No historical benchmark supports this,” he said, noting that even the most optimistic compound annual growth rate between FY01 and FY19 was 15.6 percent and would still leave a Tk 1.3 lakh crore shortfall.

“For FY27, the budget deficit and the government’s financing capacity are more likely to become the main anchors of public financial management, rather than expenditure ambitions alone,” he added.

He said much of the country’s foreign borrowing is tied to the Annual Development Programme (ADP), leaving limited flexibility in public spending.

“At the margin, the government’s ability to mobilise domestic revenue will determine the extent of total public expenditure in FY27,” he added.

Last month, Finance Minister Amir Khosru Mahmud Chowdhury told parliament that the tax-to-GDP ratio has dropped from about 11 percent to below 7 percent.

The fallout from the US-Israel war on Iran has added pressure to state finances, as the government has been forced to buy fuel at elevated prices. Bangladesh imports about 95 percent of its energy, and state agencies have increasingly turned to the volatile spot market.

“The mounting costs are bleeding the exchequer,” the minister said on the sidelines of the IMF-World Bank Spring Meetings in Washington last month, citing nearly $2 billion in additional energy import costs following supply disruptions.

“On top of that, the tax-to-GDP (ratio) is not increasing because of business stress; the businesses are in bad shape,” he said, adding that if businesses do not recover, tax receipts will not improve.

He said the government has sought budget support from development partners and is pursuing structural reforms. It has prepared an action plan aimed at building a trillion-dollar economy by 2034, centred on investment, jobs and macroeconomic stability.

INCOME TAX GROWTH OUTPACES VAT

In the July-April period, income tax recorded the strongest growth among major revenue heads. Collections rose 11.59 percent year-on-year to Tk 1.09 lakh crore, accounting for 33.5 percent of the total.

Value-added tax (VAT) remained the largest single source of revenue, contributing 38 percent of the total. Receipts increased 11 percent to Tk 1.26 lakh crore.

Revenue from import duties and supplementary taxes grew more slowly, rising 8.87 percent to Tk 90,762 crore.

In April alone, VAT collection contracted by 3.17 percent year-on-year. Facing mounting pressure, the NBR is considering structural changes for the next fiscal year.

A senior revenue official said yesterday that the board is proposing several fiscal measures in the upcoming budget to expand the tax base.

It is also weighing steps to strengthen collection, including reintroducing a wealth tax, raising rates for the ultra-rich and rationalising existing exemptions.

“We will also strengthen enforcement to curb tax evasion and gradually reduce existing tax exemptions, aiming to raise revenue collections,” he said.

The NBR also plans to raise the top marginal income tax rate for ultra-rich individuals from 30 percent to 35 percent, with the measure tentatively scheduled for FY28.

Fewer than 3 percent of manufacturing units in Bangladesh use computers or information technology (IT) in their production work, according to the latest Economic Census 2024.

The census shows that only 2.44 percent of 11.19 lakh manufacturing units in the country use computers or IT in the production processes.

Use varies by type of establishment. Among permanent units, 4.74 percent use computers in production. The rate falls to 1.36 percent for temporary units and just 0.80 percent for economic households.

There are also wide regional differences. Dhaka division records the highest rate of ICT use in production at 5.65 percent, while Barishal division has the lowest at 1.14 percent.

According to sector-wise data, 9.06 percent of establishments in electricity, gas, steam and air-conditioning supply use computers in production. In construction, the rate is the lowest at 0.92 percent.

Across industrial units as a whole, the rate stands at 2.41 percent.

There are also wide regional differences. Dhaka division records the highest rate of ICT use in production at 5.65 percent, while Barishal division has the lowest at 1.14 percent.
Location also matters for computer use by businesses. In urban areas, 4.03 percent of businesses use computers in production, while the rate drops to 1.60 percent in rural areas.

The figures come after years of Digital Bangladesh campaigns by the previous Awami League government. Yet technology use in productive work remains limited, especially outside large cities.

The contrast is stark because manufacturing contributes about 21.9 percent to GDP. Even so, most factories and business units still depend on manual processes.

A 2021 World Bank study found that more than 40 percent of firms in Bangladesh still use handwritten records for business administration. Nearly three-quarters carry out quality checks by hand. The report said that the country risks losing competitiveness unless firms adopt better technology and raise productivity.

Over the past decade, internet access has expanded quickly in the country. Bangladesh now has more than 130 million internet subscribers.

In fiscal year 2024-25, 53.4 percent of the population was online, according to the latest survey by the Bangladesh Bureau of Statistics (BBS). That still leaves nearly half the population without internet access.

Experts say wider connectivity has not led to greater use of technology inside factories, workshops and small businesses. According to them, access to the internet alone does not improve productivity.

Other countries in the region have moved faster. Vietnam and India have introduced more automation, software systems and digital supply tools in manufacturing. This has helped them attract higher-value investment.

Fahim Mashroor, founder and CEO of BDjobs.com and former president of Bangladesh Association of Software and Information Services (Basis), said Bangladesh should now focus less on expanding access and more on using technology effectively in production, logistics and business management.

Greater use of software and digital systems could reduce productivity losses across industries, he said.

“We have a large number of SMEs in the country, but technology adoption remains concentrated among bigger firms,” he said. “The more businesses become mechanised, computerised and automated, the more productivity will improve.”

He said wider use of ICT is essential if Bangladesh is to remain competitive in global markets.

“Without wider adoption of digital tools in businesses, particularly among small and rural enterprises, Bangladesh may struggle to improve productivity,” he added.

The government is likely to reintroduce a provision allowing the legalisation of undisclosed income through investment in selected sectors in the national budget for the next fiscal year.

The proposed amnesty scheme will include disclosure conditions, a finance ministry official said yesterday.

Speaking on condition of anonymity, the official said taxpayers may be allowed to regularise undisclosed funds by investing in designated sectors, provided they declare the actual transaction value in income tax returns filed by both buyers and sellers.

“Taxpayers can legalise their income by paying their regular rate in any assessment year in certain sectors, without any concessional treatment,” said the finance ministry official.

The Awami League government previously allowed taxpayers to legalise undisclosed assets by paying a flat 15 percent tax rate. Under that arrangement, individuals could declare previously undisclosed money in any assessment year by paying the specified rate, after which no government agency would question the source of the income.

But the proposed provision this time will introduce changes to that approach, said the official.

According to him, taxpayers will not be offered a single flat rate for regularising undisclosed income. Instead, in cases involving such undeclared gains, both buyers and sellers will be required to adjust their declared income and reflect the actual transaction values in their tax returns.

He added that structural inefficiencies in parts of the economy often lead to portions of income or capital gains remaining undeclared, and the government wants to provide an opportunity to adjust such income to encourage productive investment.

He also said the prime minister has, in principle, approved the proposal on May 14, with the expectation that it could help accelerate investment flows.

The official argued that the measure is intended to broaden the tax base and formalise informal capital, rather than offer a blanket waiver or reduced tax rate, as seen in previous amnesty schemes.

The move comes amid ongoing debate in policy circles over how to address large volumes of undisclosed income generated through property transactions, especially in land, flats and commercial real estate, where significant gaps often exist between market prices and declared deed values.

However, the proposal has already drawn criticism from economists and tax experts, who say repeated regularisation windows risk weakening compliance and discouraging honest taxpayers.

National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan recently reiterated that the tax administration is moving away from concessional whitening schemes that allowed undeclared income to be legalised at reduced rates.

“We want to say that anyone can disclose undisclosed income in their tax records by paying taxes according to the existing rates. In fact, we would welcome that,” he said during a pre-budget discussion.

Criticising past practices, he added that successive amnesty schemes over the past five decades had “ultimately backfired”, as they discouraged compliant taxpayers and distorted tax culture.

“We want to move away from this culture,” he said, adding that individuals who evaded taxes in the past should not be incentivised with lower rates.

“At the very least, you must pay the regular tax,” he said.

Listed companies in Bangladesh may soon have to overhaul their boards under rules that would limit independent director tenures, bar executives from holding dual roles and give the securities regulator direct power to remove directors.
The changes have been proposed in the draft “Bangladesh Securities and Exchange Commission (Corporate Governance) Rules, 2026” published by the commission for stakeholder feedback recently.
The draft, open for comments until May 31, would replace the existing corporate governance code with a more comprehensive rule-based framework, tightening oversight over board composition, executive appointments, subsidiary operations and documentation requirements.

INDEPENDENT DIRECTORS
Some of the major proposed changes relate to independent directors.

The draft states that an independent director can serve a maximum of two consecutive three-year terms, after which a three-year gap is required before reappointment.

The post of independent directors cannot remain vacant for more than 90 days, it also states.

The BSEC has also proposed giving itself direct authority to directly remove independent directors found to pose “a risk to the future of the company.”

The commission may make a pool of eligible candidates for independent director positions, with remuneration governed by board-approved policy and specified in appointment letters, according to the draft.

Independent directors must have at least 12 years of cumulative experience across business, corporate, government offices, academic or professional fields. However, female independent directors would need at least eight years.

BOARD AND TOP MANAGEMENT

The draft rules require that boards include at least one female director – a directive the BSEC has been pushing for years.

In a bid to strengthen separation of powers, the proposed rules mandate that the chairman and managing director or CEO must be different individuals .The chairman must also be elected from among non-executive directors.

Any director of a stock exchange, depository, central counterparty, stockbroker, stock dealer or merchant banker — except an independent director representing a holding company — would be ineligible to serve on the board of a listed company.

Under the proposed rules, a CEO or managing director of a listed company cannot simultaneously hold the same position at another listed company.

The posts of CEO, company secretary, chief financial officer (CFO) and head of internal audit and compliance must each be held by separate individuals. In addition, none of them can hold executive positions at another company concurrently, though the commission may allow CFOs or company secretaries to serve within group companies under certain conditions.

The draft rules also state that no top executive can be removed without board approval and immediate disclosure to the commission and stock exchanges.

AUDIT COMMITTEE AND GOVERNANCE

The audit committee must meet at least four times a year and include at least one financially literate independent director with a minimum of 10 years of accounting or financial management experience.

The BSEC has further proposed stronger documentation requirements for board and shareholder meetings.

The draft rules state that companies must preserve board and shareholder meeting minutes permanently, record online participation details and formally document dissenting opinions. Directors whose objections are not recorded in minutes can file complaints with the commission within 30 days.

All listed companies must arrange governance programmes for directors within one year of the rules taking effect. Newly appointed directors may also be required to complete certification programmes from institutions recognised by the commission.

The new rules will apply to all companies with ordinary shares listed on the main board, the SME board and alternative trading board of the stock exchanges, as well as any public interest entity.

SUBSIDIARIES

The rules propose tighter oversight of subsidiary companies as well.

At least one independent director from the holding company — preferably the chairman of the audit committee — would have to sit on the board of the subsidiary company.

Holding company boards and audit committees would also be required to review subsidiary affairs, investments and inter-company transactions.

The regulator will review the feedback before finalising the framework.

In Bangladesh today, the greatest struggle for ordinary citizens is no longer political uncertainty; it is economic survival. For millions of families, the daily challenge is not debating national issues but simply affording basic necessities. A visit to any local market reveals the reality: middle-income families are cutting back on groceries, while low-income households are struggling to afford even the most essential items.

At such a critical moment, the proposal by the National Board of Revenue (NBR) to increase the source tax on essential commodities from 0.5 percent to 1 percent raises serious concerns. The proposed tax hike would affect key everyday goods such as rice, pulses, edible oil, and fruits. While the increase may appear marginal on paper, its consequences in Bangladesh’s fragile market structure could be far-reaching.

In theory, a 0.5 percent increase may seem insignificant. In practice, however, additional taxation rarely remains confined to importers or wholesalers. Importers pass the extra cost on to wholesalers, wholesalers shift the burden to retailers, and retailers ultimately transfer it to consumers. In economic terms, this is known as cost pass-through, and in Bangladesh, the final burden almost always falls on ordinary citizens — basically, the final consumers.

At a time when inflation continues to erode purchasing power, such a move risks deepening public hardship. Inflation in Bangladesh is no longer an abstract economic indicator; it is a harsh daily reality. Families that once managed their monthly budgets comfortably are now forced to cut spending before the month ends. Many households have reduced their consumption of fish, meat, and fruits, while others are struggling to maintain basic nutrition.

The most troubling aspect of this proposed tax increase is that it targets essential goods — items people cannot simply stop buying. Rice, pulses, and cooking oil are not luxury products; they are necessities. Economists describe these products as having “inelastic demand,” meaning consumers must continue purchasing them even when prices rise. As a result, higher taxes on these items disproportionately hurt lower- and middle-income families.

Such decisions not only create economic pressure but also carry political repercussions because ordinary people determine a large part of their satisfaction or dissatisfaction with the government based on their everyday experiences. When people see that their incomes are not increasing but their daily expenses are rising, questions about the government’s economic management naturally emerge.

History has repeatedly shown that prolonged increases in living costs create widespread social stress and public dissatisfaction. It has been observed in various countries that a prolonged rise in commodity prices creates stress in the daily lives of ordinary people and increases expectations from the government.

In Bangladesh too, people naturally want the government to play an effective role in controlling the market situation and keeping the prices of essential commodities at a tolerable level. Therefore, it is important to consider the purchasing power of the general public and the overall market reality when making such decisions in the current situation. Timely and people-friendly measures can strengthen public trust in the government.

This expectation becomes even more significant considering the government’s repeated commitments to building a just, humane, and prosperous Bangladesh — often referred to as “Bangladesh First” — by reducing poverty, strengthening social protection, and improving living standards. Election promises emphasized lowering the cost of living and creating a more efficient market system. Yet imposing additional taxes on basic necessities appears inconsistent with those commitments.

Certainly, taxation remains essential for any government. Revenue is needed to fund infrastructure, education, healthcare, and social welfare programmes. However, an important question must be asked: should revenue generation come at the expense of ordinary people’s kitchens?

Bangladesh has long faced allegations of large-scale tax evasion, loan defaults, illicit financial outflows, and administrative inefficiencies involving billions of taka. If the government chooses to increase taxes on basic goods without taking stronger action against major tax evaders and financial irregularities, it risks reinforcing public perceptions of inequality and unfairness.

Consumer confidence remains a critical driver of economic growth. When households have less disposable income, demand declines, small businesses suffer, and economic activity slows. While taxing essential goods may generate short-term revenue, it could create long-term economic and political costs.

The responsibility of a government extends far beyond revenue collection; it must also safeguard the welfare and dignity of its citizens. At a time when many families are already struggling with rising living costs, imposing additional financial burdens through higher taxes on essential commodities is both economically questionable and socially insensitive.

Instead, policymakers should prioritize broadening the tax base, curbing wasteful public expenditures, addressing tax evasion, and strengthening market regulation to ensure greater efficiency and fairness in revenue generation.

The success of a government should not be assessed solely through large-scale infrastructure projects or ambitious development agendas. It must also be measured by its ability to reduce the everyday hardships faced by ordinary citizens. The proposed increase in source tax on essential goods is not merely a fiscal measure; it carries significant implications for household affordability, market stability, and public confidence in government policies.

Given Bangladesh’s current economic challenges, the need of the hour is to identify alternative revenue streams and implement meaningful reforms in market governance without placing further pressure on low- and middle-income households. Development, in its truest sense, should improve the quality of life for citizens, not make it more difficult.

Gold prices fell on Tuesday, but ‌stayed above a 1-1/2-month low hit in the last session, as markets consolidated while awaiting further developments after US President Donald Trump paused a planned attack against Iran.

Spot gold fell ​0.5 percent to $4,544.17 per ounce by 0820 GMT.

US gold futures for June delivery ​lost 0.2 percent to $4,547.70.

Gold prices fell 2.4 percent on Friday in their biggest one-day decline since March 26 and extended losses on Monday to touch $4,479.54, the lowest ​level since March 30, as mounting inflation fears triggered a rout in the global ​bond market. Bullion recovered to close Monday slightly higher.

“It seems like an oscillation in this kind of inflation fear trade and a sort of digestion of the fireworks from Friday,” ​said Ilya Spivak, head of global macro at Tastylive, adding that markets are ​now awaiting broad sentiment markers such as the minutes of April’s FOMC meeting to be ‌released on Wednesday.

Bonds steadied following a steep selloff after Trump said on Monday he had paused a planned attack against Iran to allow for negotiations to take place on a deal to end the US-Israeli war, after Iran sent a new peace ​proposal to Washington.

Oil ​prices fell more ⁠than 2 percent, easing some inflation fears. Gold is considered a hedge against inflation, though higher interest rates tend to weigh ​on the non-yielding metal.

Kevin Warsh will be sworn in as ​Fed chair ⁠on Friday by Trump, a White House official said on Monday, putting the financier at the helm of the central bank as it grapples with intensifying inflation that ⁠may ​make it hard to push through the interest-rate ​cuts Trump desires.

The US dollar rose on Tuesday as investors balanced cautious hopes ​for a Middle East peace deal against concerns that the Federal Reserve could raise rates to curb energy-driven inflation.

US ‌President Donald Trump said on Monday there was now a “very good chance” of reaching a deal limiting Iran’s nuclear program.

The dollar jumped in March after Iran’s effective closure of the Strait of Hormuz pushed oil prices higher, weighing on oil-dependent economies such as Japan and the euro area ​while increasing safe-haven demand for the greenback.

Oil prices fell 2 percent on Tuesday after Trump’s remarks.

“There are reasons why the ​dollar has not strengthened back to the levels seen in March,” Paul Mackel, global head of forex research at HSBC, said.

“Notably, global risk sentiment has recovered strongly; tension remains in USD OIS (overnight index swaps) markets which ​have stopped short of pricing an aggressive Fed hiking cycle; and monthly global growth momentum is still positive,” he added.

At the ​same time, investors are now pricing in almost a 48.5 percent chance that the Fed could raise rates in December, and a 98.8 percent chance it maintains current rates at its next meeting in June, according to the CME FedWatch tool.

“Even if the Fed moves to signal that it ​will adopt a neutral bias in June, it may not be enough to stabilize inflation expectations and long-term US Treasury yields,” ​said Thierry Wizman, Macquarie Group’s global foreign exchange and rates strategist.

“An opportunity to change the Fed’s rhetoric decidedly toward ‘hawkish’ will come with the ‌small ⁠flurry of Fed speeches, between now and June 6,” he added.

The US dollar index , which measures the greenback’s strength against a basket of six currencies, was up 0.2 percent at 99.18, after snapping a five-day winning streak on Monday as fears eased of an escalation in the war.

India today hiked petrol and diesel prices by nearly ninety paise per litre in the second increase in fuel rates in less than a week after state-run oil firms ended a nearly four-year freeze on rate revisions.

The increase pushed petrol prices in New Delhi to Rs 98.64 per litre from Rs 97.77, while diesel rose to Rs 91.58 from Rs 90.67.

On 15 May, petrol and diesel prices were raised by Rs 3 per litre for the first time in more than four years, as surging global crude prices following the West Asia war forced state-run fuel retailers to pass on part of their mounting losses.

Fuel rates vary across Indian states due to differences in value-added tax.

Also on 15 May, compressed natural gas (CNG) prices were raised by Rs 2 per kg in cities. This was followed by a hike in CNG prices by Re 1 a kg on 17 May.

Global crude prices have surged more than 50 per cent since US-Israeli strikes on Iran on 28 February and Tehran's retaliation, disrupting flows through the Strait of Hormuz, a key artery for global oil shipments.

Despite the surge, retail fuel rates were kept frozen at two-year-old rates as part of what the Indian government said was an effort to shield consumers from higher global energy costs.

On Monday, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, stated that the 15 May hike had cut losses by a fourth and that oil companies were still incurring about Rs 750 crore a day in losses.

Prices have remained frozen since April 2022, except for a one-off reduction of Rs 2 a litre each on petrol and diesel in March 2024, just before Lok Sabha elections. Rates were last hiked in April 2022.

Petrol in Mumbai now costs Rs 107.59 a litre and diesel costs Rs 94.08 per litre. In Kolkata, petrol now costs Rs 109.70 per litre and diesel Rs 96.07, while in Chennai, prices increased to Rs 104.49 for petrol and Rs 96.11 for diesel.

India's retail inflation, measured by the Consumer Price Index (CPI), rose to 3.48 per cent in April this year from 3.40 per cent in March, while wholesale price inflation (WPI) surged to 8.3 per cent, a 42-month high, driven by a sharp rise in fuel and energy prices amid elevated global crude oil rates.

The benchmark indices of the Dhaka Stock Exchange (DSE) posted a slight gain today (19 May), snapping a two-session losing streak in a modest market recovery.

The gains, however, lacked conviction. Trading activity remained subdued as investor participation stayed low, with many market players continuing to exercise caution amid a weak short-term trend. Restrained buying interest prevented any broad-based rally from taking shape.

The DSEX rose 8 points to close at 5,212. The blue-chip DS30 index added 2 points to settle at 1,970, while the Shariah-based DSES index edged up 3 points to 1,059.

Advancers outnumbered decliners — 181 issues gained against 138 that fell, with 74 stocks ending unchanged. Market turnover, however, slipped 6.89% to Tk676 crore from Tk726 crore in the previous session.

In its daily market review, EBL Securities noted that the bourse traded largely flat as investors' selectively accumulated large-cap stocks, though participation remained muted amid persistent caution over near-term market momentum. Indices held in positive territory throughout the session on resilient bargain-hunting interest.

Trading volumes were also weighed down by investors trimming leveraged positions and managing liquidity ahead of upcoming festival holidays, the brokerage added.

Market indices remained firmly in positive territory, with resilient bargain-hunting interest throughout the session.

However, trading activity stayed relatively subdued amid sustained cautious sentiment, while paring back exposure from leveraged positions and liquidity considerations ahead of upcoming festival holidays also somewhat weighed on the market's overall turnover.

On the sectoral front, Pharmaceuticals led turnover with a 16.9% share, followed by General Insurance at 13.6% and Banking at 11.4%. Among sector performances, Ceramic and Jute each rose 1.9%, and Services gained 1.3%. On the downside, Mutual Funds fell 0.8%, Food declined 0.6%, and Life Insurance dropped 0.5%.

At the Chattogram Stock Exchange (CSE), the market also closed in the green. The Selective Categories' Index (CSCX) gained 23.0 points, while the All Share Price Index (CASPI) rose 31.1 points.

British American Tobacco Bangladesh recorded a 14 percent year-on-year decline in domestic cigarette sales volume in the first quarter of FY2025-26, as tax-driven affordability pressures, downtrading, and competition from illicit cigarettes weighed on sales, according to an earnings update by BRAC EPL Stock Brokerage Ltd.

Domestic gross revenue fell 10.7 percent year-on-year, while net revenue dropped 21 percent as the total tax burden rose to 84.1 percent from 82 percent in the same quarter last year.

A modest 3.8 percent growth in unit revenue failed to offset the combined drag of lower volumes and higher taxes.

The Bangladesh Cigarette Manufacturers’ Association estimates that illicit cigarettes now account for 15 to 18 percent of the total market, posing a structural challenge for compliant manufacturers.

Non-core revenue offered little relief. Cigarette exports remained zero for the third consecutive quarter, while leaf export revenue fell 22.5 percent year-on-year due to a 27.1 percent decline in volume, partly offset by a 6.3 percent rise in unit price.

Revenue from third-party contract manufacturing -- now in its second quarter -- plunged 68 percent quarter-on-quarter, while no revenue was generated from semi-finished goods.

Gross profit fell 12 percent year-on-year to Tk 802 crore, although gross margin expanded by 707 basis points to 56 percent as cost of sales dropped 33.8 percent year-on-year, outpacing the 23.1 percent decline in total net revenue.

BATBC did not explain the margin improvement, which likely reflected price-mix benefits, input cost normalisation, and efficiency gains from consolidated production.

Operating expenses surged 40.7 percent year-on-year despite the revenue contraction, with no explanation offered. Salaries, IT costs, and technical assistance fees are the principal expense heads, according to the company’s 2025 annual report.

Net finance expenses eased to Tk 49.2 crore from Tk 53.9 crore a year earlier, mainly due to lower lease costs.

Total interest-bearing debt rose sharply to Tk 2,381 crore at the end of March from Tk 1,489 crore in December.

Operating cash outflow widened to Tk 1,226 crore from Tk 952 crore a year earlier, driven by lower profitability and inventory build-up.

Inventories climbed to Tk 5,386 crore from Tk 3,829 crore at year-end, prompting the company to increase short-term borrowing to manage operations.

The country's private sector credit growth fell to a historic low of 4.72% in March this year, reflecting weak business confidence, slowing investment and mounting uncertainty in the economy.

Economists and bankers said political uncertainty eased somewhat after the February election, but the deeper problems discouraging investment and new business activity remain unresolved.

In addition, the fuel crisis emerged as another contributing factor in March, leading to a sharp slowdown in bank lending growth compared with previous levels, they said.

Private sector credit growth had been declining steadily in recent months, falling from 6.58% in November 2025 to 6.20% in December, and then to 6.03% in both January and February 2026, before dropping sharply in March, central bank sources confirmed.

Outstanding loans to the private sector stood at Tk23.35 lakh crore in March 2026, according to Bangladesh Bank data.

Speaking to The Business Standard, Mustafizur Rahman, distinguished fellow at Centre for Policy Dialogue, said, "The major trend indicates that it is not increasing. Both necessary and sufficient factors are at work here."

"The necessary factor is political stability, which has improved somewhat after the election. But the sufficient factors – such as the cost of doing business, inflation, logistics policies and several other issues – have not seen any major changes."

He said the energy crisis added further pressure in March. "These problems already existed, and energy became an additional challenge. Inflation, the cost of doing business and other factors have created uncertainty," he added.

The Bangladesh Bank has been publishing private sector credit growth data since 2003. A review of the data shows March recorded the lowest growth in the past 24 years.

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

He said several factories owned by large business groups, including Nassa Group, Beximco Group and Gazi Group, had closed, reducing demand for bank borrowing. "When factories were operational, they imported capital machinery. But even the firms still running have reduced production by 60-70%," he said.

Bankers question BB's policy direction

Several managing directors of private banks told TBS they remain unclear about the central bank's policy direction in dealing with the current economic challenges.

Bankers said lending decisions depend heavily on broader policy clarity, including interest rates, exchange rates and inflation trends. They explained that when businesses seek loans for new investments or ventures, banks assess the overall policy environment, borrowing costs and the likely movement of the US dollar before approving financing.

One private bank managing director said the governor had spoken about lowering lending rates, but questioned how feasible that would be at a time of high inflation.

He also criticised Bangladesh Bank for holding the dollar exchange rate at Tk122.75 despite pressure on the local currency. Another MD said the central bank's decision to cap trade finance interest rates at 3% during a crisis period had created concerns.

He noted that the cost of foreign borrowing currently stands at SOFR plus 2.5%, while the additional cap on UPAS financing – a foreign currency-based import financing system – would further limit financing opportunities.

"If financing through UPAS becomes difficult, banks will have to lend in local currency at interest rates of 12-13%. The central bank believes this will increase credit growth, which is why rates on trade finance have been lowered. But this decision is not correct – it is a mistake," he said.

Another bank MD said businesses and banks remained uncertain about the central bank's main priority – whether it was controlling inflation, lowering interest rates or boosting GDP growth.

"There were expectations that many new projects would emerge after the election, but that has not happened," he said.

He added that the government's heavy borrowing from banks because of a revenue shortfall could further increase interest rates and crowd out private sector borrowers. "There is also uncertainty over where the exchange rate will stand in the next six months," he said.

Another bank MD said many large corporate firms had sought policy support from the central bank, signalling financial distress. "When companies need policy support, banks become less willing to finance them. It also becomes very difficult for those firms to make new investments or expand business operations," he said.

Banks shift towards government securities

With demand for private sector loans weakening, banks have increasingly turned to treasury bills and bonds for income.

A senior official at a private bank said lenders were moving towards safer government securities amid weak private investment.

At the same time, the government has been borrowing heavily from banks through treasury bills and bonds, including an additional Tk10,000 crore outside the regular borrowing calendar during the October-December quarter.

Limited opportunities for private investment have allowed banks to earn nearly 11% interest on what are effectively risk-free government securities. For many conventional banks, a growing share of income now comes from this segment.

Despite concerns at the start of 2025 over rising deposit rates, high inflation, political uncertainty and weak loan demand, stronger private banks have posted higher profits largely through earnings from government securities rather than loan expansion.

Bangladesh Bank data showed the government collected Tk33,000 crore through treasury bills in March this year. In April, the amount rose 39% month-on-month to Tk46,000 crore.

Of that amount, Tk32,800 crore was used to repay liabilities from previously issued treasury bills, leaving the government's net borrowing through treasury bills at Tk13,200 crore in April.

The Bangladesh Bank is set to introduce stricter rules for transferring money from bank cards to mobile financial services (MFS) accounts, commonly known as "add money", amid growing concerns over cyber fraud and unauthorised transactions.

Under the new rules, which will take effect from 1 August this year, customers will only be able to transfer money from a bank card to an MFS account if both are registered under the same name. Banks and MFS providers will be required to verify that the receiving MFS account belongs to the cardholder.

The central bank decided to impose the restriction following a major fraud incident involving a foreign bank operating in Bangladesh, where fraudsters transferred money from customers' cards to MFS wallets through unauthorised transactions.

Officials familiar with the matter said the Payment Systems Department of the Bangladesh Bank is expected to issue a circular on the new measures soon.

As an interim arrangement until August, customers will still be able to transfer money from one person's card to another person's MFS account. However, a token transaction of up to Tk500 must first be completed during the card-linking process.

Regular transactions will only be permitted 24 hours after the successful completion of the token transaction and linking process.

The Bangladesh Bank has also instructed MFS providers to classify card-to-MFS add money transactions as "fund transfers" rather than "merchant payments". The central bank further said the beneficiary wallet number must remain visible to the card-issuing bank during transactions.

Banks and MFS providers that fail to ensure this facility by 31 July will not be allowed to offer add money services through those cards from 1 August onwards.

According to sector insiders and central bank officials, a cybercrime group in the last week of August 2025 syphoned off nearly Tk27 lakh from at least 54 customers of Standard Chartered Bank (SCB) by bypassing one-time password protections on credit and debit cards issued by bank and transferring funds to mobile wallets such as bKash and Nagad.

Victims had reported that without their knowledge or any transaction, Tk50,000 was transferred from their cards to bKash and Nagad accounts in each instance. The money was then quickly withdrawn by the fraud group, and the MFS accounts were immediately closed.

An investigation by The Business Standard found that the fraudsters used SIM cards and MFS accounts registered under other people's names to move the stolen funds.

Following the incident, SCB suspended the add money feature from its cards to MFS platforms.

Bangladesh Bank (BB) will not intervene in the dollar exchange rate in the near term, with the currency instead expected to be determined by market supply and demand, the central bank governor told treasury heads of banks at a meeting today (19 May).

A senior Bangladesh Bank official, who attended the meeting, confirmed the development to The Business Standard, saying the governor sought a clearer understanding of foreign exchange market operations and listened to bankers' concerns over current dynamics.

According to the official, the governor informed bankers that the central bank would no longer dictate the foreign exchange market and that exchange rates would be allowed to adjust based on supply and demand conditions.
=

He also said the regulator is working towards a more market-based foreign exchange regime. At the same time, the governor cautioned banks against any attempts to manipulate the dollar market.

However, a deputy managing director (DMD) of a private commercial bank told TBS that Bangladesh Bank had intervened in the foreign exchange market between March and April this year.

He alleged that during that period, central bank officials contacted banks and informally indicated a ceiling for dollar exchange rates.