In the rolling, wind-swept grasslands of Chifeng in northern China's Inner Mongolia, towering white wind turbines line hilltops like sentinels over a hydrogen industry Beijing is trying to prise away from coal.

They are part of a $2 billion project - the biggest of its kind - that harnesses renewable energy to run banks of electrolysers that produce the molecules needed for fertiliser, marine fuel and low-emission steelmaking.

India shares China's "green hydrogen" ambitions, but its commitments are even more concrete and aggressive. Backed by subsidies worth some $2.1 billion, New Delhi is targeting 5 million metric tonnes of green hydrogen annually by 2030 - five times the current size of the global market and about double what analysts estimate Chinese output will be by then.

The massive bets by the world's two most populous nations come at the same time that the West has quietly backed away from its ambitious green hydrogen goals from the start of this decade after cost constraints proved stickier than anticipated.

What China and India have in common - despite very different motives - is the power and political will to force a market into existence, by underwriting projects, steering demand and pushing costs down through scale.

India has drawn private capital by pairing subsidies with offtake guarantees from refineries, fertiliser plants and steelmakers, making projects bankable from the outset.

The motivation is energy security. Hydrogen in India is overwhelmingly derived from imported natural gas, whose supply has suffered a sequence of shocks from the Middle East, Ukraine and the pandemic.

For China - able to deploy state-owned giants or attract private firms with large-scale, planning-led industrial projects - the aim is to preserve its dominance in hydrogen as the industry shifts towards cleaner energy.

In its five-year plan announced in March, Beijing listed green hydrogen alongside quantum computing, brain-computer interfaces and AI-enabled robotics as a frontier industry - an elevation in status that signals more capital will flow its way.

China: speed and scale

China invested $3.7 billion in green hydrogen production last year, more than double US levels, said Rystad Energy's head of hydrogen, Minh Khoi Le.

By 2031, China will have some 2.6 million tonnes per year online, representing $26 billion in investment, according to Rystad projections.

Much of 2025's outlay went into the Chifeng project, operated by Chinese wind turbine maker Envision Energy. It aims to sell green hydrogen and ammonia to markets in Asia, Europe, Latin America and the Middle East, and delivered its first green ammonia cargoes to South Korea's Lotte Fine Chemical in February.

"If we go back a year or two ago, China was not very visible on this situation of green hydrogen, and then two years later they have almost all the biggest projects in the world," said the International Energy Agency's hydrogen lead, Jose Bermudez.

China last year likely doubled its renewables-based hydrogen production capacity to 250,000 tonnes - more than half of the global total, and surpassing a 2022 target to produce 100,000 to 200,000 tonnes annually by 2025 - said Agora Energy China managing director Kevin Tu.

In Inner Mongolia and other places with high winds and strong sunlight, costs can fall to around $2 per kilogram for green hydrogen, close to parity with coal-based hydrogen, Tu said. On average, producing green hydrogen in China costs around $4 per kilogram, he said.

India: aggregating domestic demand

India has brought the price of producing green hydrogen as low as 279 rupees (around $3) per kilogram, from around $5 in 2023, when the government launched the National Green Hydrogen Mission under the clean energy ministry.

Abhay Bakre, who heads the mission, told Reuters that the cost should drop to near $2 by 2032 as technology improves, processes become more efficient and more components are made domestically.

Projects will begin delivering "large quantities" of green hydrogen as soon as next year, he said, and "scale up very fast" to hit the target of 5 million tonnes by 2030.

Under the initiative, industrial heavyweights including Larsen & Toubro, Bharat Petroleum Corp, GAIL and JSW Steel produce about 8,000 tonnes of green hydrogen and its derivatives annually.

New Delhi is kick-starting demand through state-run reverse auctions, where sellers try to undercut each other to win long-term contracts, effectively revealing the lowest price producers can bear.

The government said last month that suppliers and fertiliser companies had signed offtake agreements for 724,000 tonnes of green ammonia, which could cover one third of the country's hydrogen requirements.

Maintaining momentum will require "bold, sector-specific domestic initiatives, coupled with strategic international partnerships to unlock export potential", analysts at the Institute of Energy Economics and Financial Analysis wrote in a report.

"With one of the lowest costs of renewable power generation in the world, India is well placed to capture a significant portion of the export market."

Bangladesh’s garment industry does not have overproduction capacity that could harm the American manufacturing sector and is free from forced labour, as exporters comply with internationally recognised labour laws, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The association made the remarks in a position paper submitted to the commerce ministry as the government prepares to attend a hearing of an investigation launched by the United States Trade Representative (USTR) on April 29.

The probe covers alleged overproduction capacity and forced labour in 60 countries, including Bangladesh.

Responding to the USTR’s “structural excess capacity” or “overproduction” concerns, the BGMEA said the terms do not have a universally accepted definition or measurable benchmark.

It argued that in a market-driven economy, production levels constantly adjust to shifts in demand, input costs and supply chain conditions. Determining “excess capacity” without clear parameters or methodology is a major challenge.

The association added that Bangladesh’s apparel sector has not expanded suddenly or in a way that would indicate structural excess capacity. The industry’s growth should be viewed over the long-term.

Over the past decade, the sector has followed a steady growth path, it said, driven by global demand and changing sourcing strategies rather than policy-induced expansion.

After more than four decades of development, Bangladesh exported garment products worth $39.3 billion in fiscal year 2024-25, accounting for nearly 7 percent of the global apparel market. It is now the world’s second-largest garment exporter after China.

In 2025, Bangladesh accounted for 10.73 percent of US apparel imports by volume and 10.53 percent by value, according to the American Apparel and Footwear Association (AAFA).

The BGMEA said the dominance of the sector in national exports shows structural constraints in economic diversification and reliance on a single industry, rather than excessive industrial capacity.

It added that the concentration of resources in apparel should be seen as part of a development pathway, not as evidence of overcapacity.

From a US perspective, the association said Bangladesh primarily exports labour-intensive, low to mid-priced apparel that is not produced in the US in significant volumes. In domestic production, the US focuses on advanced manufacturing and heavy industries rather than basic clothing items such as T-shirts and casual wear.

As a result, such imports do not adversely impact US manufacturing, but instead support consumers by providing affordable clothing, particularly for low and middle-income households, it added.

The BGMEA said Bangladesh’s role in the global apparel value chain complements the US economy.

It also said the government provides policy support, including cash incentives, to offset structural disadvantages such as inadequate infrastructure, longer lead times and limited backward linkage industries.

These factors add an additional seven to ten days of transit time and increase logistics costs, conditions that are not faced by competitors such as China, India and Vietnam.

On allegations of forced labour, the BGMEA said Bangladesh maintains a firm and unequivocal position that there is no forced labour in its export-oriented garment sector.

It said the industry operates under a strong legal and institutional framework that ensures compliance with national labour laws and internationally recognised standards.

Citing the official US Customs and Border Protection (CBP) dashboard, the BGMEA said 55 Withhold Release Orders (WROs) are currently active across all industries.

A WRO is a command by US Customs to stop, and hold imported goods at the border if they are suspected of being made with forced labour. A thorough review of the database confirms that there is no instance of any WRO issued against Bangladesh.

Bangladesh Bank (BB) has removed Mohammad Imdadul Islam, managing director of International Leasing and Financial Services Limited, over irregularities and concealment of information.

The central bank sent a letter in this regard to the chairman of the board of directors of the leasing company on Monday and instructed its board to take the necessary steps.

In a letter issued on January 25, the central bank asked Islam to explain why action should not be taken against him for alleged misconduct, including falsification of board meeting minutes and violation of human resources policies.

The regulator also cited his role in dismissing five officials, including the chief financial officer, on January 1 this year in breach of internal policies and regulatory guidelines.

The BB investigation also reviewed his previous tenure as managing director and CEO of GSP Finance Company, where multiple irregularities were identified
Bangladesh Bank said the explanation submitted by Islam on January 28 was found to be unsatisfactory.

The central bank’s investigation also reviewed his previous tenure as managing director and CEO of GSP Finance Company (Bangladesh) Limited, where multiple irregularities were identified.

These included showing a Tk 49.9 crore loan to Keya Cosmetics Ltd as unclassified without prior approval from the central bank, which significantly reduced GSP Finance’s classified loan ratio.

He was also found to have restructured loan facilities of a subsidiary in violation of regulatory circulars, leading to a financial penalty under the Financial Institutions Act, 1993.

In addition, the regulator alleged that excess penal interest was imposed on a loan account of Dorin Hotels & Resorts Ltd during the Covid period, despite repeated instructions to comply with regulatory directives.

According to the Bangladesh Bank, Islam failed to disclose these issues in his application and affidavit when seeking appointment as managing director of International Leasing.

“Considering his involvement in the irregularities and submission of a false affidavit, he has been removed from the post under Section 19 of the Finance Company Act, 2023,” the central bank said.

The regulator also advised the leasing company to appoint a qualified senior official as acting managing director in line with existing guidelines.

The Economic Partnership Agreement (EPA) between Bangladesh and Japan is set to serve as a precedent for future agreements with major economies such as the European Union, the Association of Southeast Asian Nations (Asean), and the United Kingdom, as Bangladesh seeks to expand its global trade network.

As Bangladesh’s first comprehensive economic partnership with a developed economy, the EPA is viewed as a strategic step in preparing for its post-Least Developed Country (LDC) era, according to the latest news bulletin of the International Chamber of Commerce-Bangladesh (ICCB), released on Monday.

Under the agreement, Japan has granted duty-free access to 7,379 Bangladeshi products, covering nearly 97 percent of the country’s export basket, including readymade garments.

This is expected to help Bangladesh mitigate potential tariff shocks as it graduates from LDC status.

The EPA goes beyond tariff benefits, incorporating provisions on services, investment, customs facilitation, intellectual property, and digital trade.

Japan will open 120 service sub-sectors to Bangladeshi professionals, while Bangladesh will allow access to 97 sub-sectors, creating new opportunities in areas such as IT, engineering, and caregiving.

The ICCB bulletin noted that the agreement could play a key role in diversifying Bangladesh’s export base, which has long been dominated by garments.

Sectors such as electronics, automotive components, and processed goods are likely to benefit from increased Japanese investment and integration into regional supply chains.

The EPA is also expected to enhance regulatory transparency and reduce non-tariff barriers, strengthening Bangladesh’s position as a reliable destination for trade and investment.

In contrast, ongoing discussions on a Bangladesh-US reciprocal trade arrangement offer a more limited framework, with conditional market access and less comprehensive coverage in services and investment.

Despite these opportunities, experts stress that Bangladesh’s ability to fully benefit from such agreements will depend on domestic preparedness, including improvements in logistics, trade facilitation, quality infrastructure, and human capital development.

The ICCB added that the EPA represents more than a trade milestone, signalling Bangladesh’s readiness to move beyond its LDC status and integrate more deeply into the global economy.

Bangladesh's export of vegetables, fruits, and processed agricultural products to the Middle East, Europe, and other destinations is facing severe disruption as cargo airfreight costs have nearly doubled following the ongoing war between Iran, the United States, and Israel.

Exporters say shipments have dropped sharply, while costs have become uncompetitive in global markets.

According to exporters, airfreight charges have surged across all major destinations. Shipping agri products to the Middle East now costs Tk180-280 per kg, up from Tk120-140 before the conflict. For Europe and the United Kingdom, the cost has jumped to Tk620-650 per kg from Tk400-450 earlier. Freight charges to other destinations have also nearly doubled.

Prior to the war, it cost about $2,800 to ship a container of vegetables and fruits to the Middle East. Now, the cost has risen to around $6,200-6,400, making exports increasingly unviable.

Exporters also say securing cargo space has become significantly more difficult, further disrupting supply chains.

Export slump pushes farmers into losses

Mohammad Kanchan Mia, proprietor of Arot Agro BD, who exports vegetables, fruits, and dry foods to multiple regions including the Middle East, Europe, Malaysia, and Singapore, said his business has been severely affected.

He normally operates 9-10 shipments per month but managed only one potato container in March. "Due to the war, airfreight rates have increased so much that exports have almost dropped to zero," he said.

Mushtaque Ahmad Shah, proprietor & CEO of Shah Traders, said air freight charges have doubled within a month, making bookings nearly impossible. He added that exporters from India are not facing similar increases and continue exporting at previous rates. "If this continues, exports will fall to near zero. Our freight charges are being increased every few days," he said.

Md Shahid Sarker, another exporter, said Bangladesh is losing competitiveness. He noted export costs from India are Tk200-250 per kg and lower in Pakistan, while Bangladesh pays nearly Tk700 per kg.

"It is impossible to compete with them," he said, adding that products are now being sold at lower prices in the domestic market due to halted exports.

Mango export fears rise ahead of peak season

Bangladesh exports agricultural goods worth around $1 billion annually, but recent data shows a sharp decline. According to the Export Promotion Bureau, vegetable exports fell by 45% in March compared to last year. During the same period, dry food exports dropped by 19.40%, spices by 12.74%, and beverages, spirits, and vinegar by 34.36%.

Concerns are now mounting ahead of the May-September mango export season. Exporters say rising freight costs could severely impact shipments of mangoes and jackfruits, which are cultivated under strict Global Good Agricultural Practices (GAP) standards and have high production costs.

Mohammad Hafizur Rahman of the Bangladesh Fruits, Vegetables and Allied Products Exporters Association said exports have "almost come to a halt," adding that freight to London has reached nearly Tk600 per kg from under Tk400 earlier.

Mushtaque Ahmad Shah said Bangladeshi mangoes previously received strong demand, including at a fruit fair in Qatar, but current conditions have halted initiatives. "At current freight rates, it is simply impossible to compete with India and Pakistan," he said.

According to the Department of Agricultural Extension, mango exports stood at 2,194 tonnes last year, down from 3,100 tonnes in 2023 and up from 1,321 tonnes in 2024.

Officials say discussions with airlines and civil aviation authorities are planned ahead of the mango season to address cargo fare issues.

Abu Noman Faruq Ahmmed, professor at Sher-e-Bangla Agricultural University, warned that rising production costs combined with lack of export opportunities are discouraging farmers.

Prof Faruq, also a registered trainer of GLOBAL GAP, said without reducing freight costs, Bangladesh will struggle to remain competitive in global markets.

Unilever Consumer Care Limited, a multinational company listed on the capital market, posted a decline in both its top and bottom-line revenue performances during the first quarter of 2026.

The net profit of the company dropped 12% year-on-year to Tk12.11 crore in January-March this year, weighed down by sluggish sales. Consequently, earnings per share (EPS) for the three-month period stood at Tk6.29.

According to the company's unaudited financial statements for the January–March period, the total revenue of Unilever slipped by 8% to Tk87.44 crore compared to the same period a year ago.

The revenue decline was observed across its core product categories ranging from health and food drinks including flagship brands like Horlicks, Boost, and Maltova – dropping by 9% to Tk71.81 crore. Similarly, its glucose powder segment saw a 4% decline, bringing in Tk15.62 crore.

In its final financial statement, a leading player in Bangladesh's health and nutrition segment Unilever Consumer Care Limited attributed the drop in profitability primarily to lower net finance income and a marginal contraction in its gross margins. However, the management noted that these negative impacts were partially offset by strategic cost-optimisation initiatives within its operating expenses.

At the end of March 2026, the company's net asset value (NAV) per share stood at Tk 122.58 while the net operating cash flow per share was recorded at Tk10.74.

Following the disclosure of these results on the websites of the Dhaka and Chittagong stock exchanges, the company's share price inched down by 0.32% to settle at Tk2,070.90 on Tuesday.

The recent performance follows a 420% cash dividend recommendation for the 2025 financial year, which was notably lower than the 520% dividend declared in 2024. The proposed payout is scheduled for final approval at the upcoming Annual General Meeting on 18 May.

Unilever Consumer Care, formerly known as GlaxoSmithKline (GSK) Bangladesh, underwent a significant transition in 2020 when Unilever acquired GSK's local health food drink business for approximately Tk2,000 crore. Since the acquisition and subsequent name change, the company has operated as a subsidiary of Unilever, focusing on its dominant market share in the energy and nutrition drink segments.

Ring Shine Textiles, a "Z" category company listed on the Dhaka Stock Exchange (DSE), has decided to take an interest-free loan from its sister concern, Lark Textiles, to repay its high-interest bank liabilities.

The decision was approved during a board meeting held on Monday and subsequently disclosed on the DSE website today (21 April).

Following the disclosure, Ring Shine's share price jumped 8.82% to close at Tk3.70.

Under the plan, Ring Shine will borrow Tk9.5 crore from Lark Textiles to settle outstanding dues with Eastern Bank Limited. The loan will carry a 10-year tenure, with repayments scheduled to begin in 2027 through ten equal annual instalments.

Ring Shine management hopes that replacing high-interest bank debt with interest-free funds will significantly reduce its interest burden and bolster its net income.

The company also noted that it has secured certain financial concessions from the bank under a debt rescheduling facility.

The implementation of this plan remains subject to shareholder approval, which the company intends to seek through an upcoming extraordinary general meeting (EGM) or annual general meeting (AGM).

The development comes as Ring Shine continues to grapple with severe financial distress. Since its 2019 listing, the company has declared dividends only in its debut year, failing to reward shareholders over the past six years.

The company's track record has also been marred by regulatory controversies. An earlier probe by the Bangladesh Securities and Exchange Commission (BSEC) uncovered major irregularities in its initial public offering (IPO), where a substantial number of shares were allotted without actual payment. Those shares were later sold, causing significant losses for general investors.

These beneficiaries later offloaded their shares, leaving general investors to face substantial losses.

Currently, Ring Shine is struggling with a mounting debt burden and poor operational performance.

Its last disclosed financial report for the January–March of FY26 quarter showed a staggering loss of over Tk46 crore.

Textile millers are suffering mounting losses as more than a dozen troubled banks have failed to settle overdue payments against local back-to-back letters of credit (LCs), leaving thousands of crores of taka in accepted bills unpaid for years.

Around Tk3,000 crore to Tk4,000 crore in overdue payments has accumulated over the past five years as banks failed to honour accepted bills after maturity, according to bankers, despite clear obligations under the Guidelines for Foreign Exchange Transactions 2018.

The unpaid bills relate to local back-to-back LCs, under which garment exporters buy yarn, fabric and other raw materials from local suppliers on the strength of export orders received from foreign buyers. Once a bank accepts a bill submitted by the local supplier, it becomes legally bound to settle the payment on the maturity date, usually within 120 days.

However, many banks have failed to do so even years after accepting the bills.

A back-to-back LC, also known as a local LC, is a financing mechanism where a master LC from a foreign buyer acts as collateral for a second, separate LC issued to a local supplier. Local LCs specifically facilitate sourcing raw materials from domestic suppliers for export-oriented industries, crucial in Bangladesh for garment manufacturing, often settled in local currency rather than dollars.

Banks' obligation

Speaking to The Business Standard, Mohammad Shahriar Siddiqui, Bangladesh Bank assistant spokesperson and director, said there is no provision for non-payment against accepted bills.

He explained that the central bank typically clears overdue payments by deducting the relevant amount from the commercial bank's account maintained with the Bangladesh Bank. However, in cases where document disputes arise, the central bank resolves them on a case-by-case basis upon appeal, he said.

"While some overdue payments exist with troubled banks, the central bank has explicitly instructed them to settle these liabilities immediately," Shahriar said.

This follows an earlier circular issued on 26 October 2022, in which the Bangladesh Bank noted that some banks were failing to follow settlement instructions, thereby disrupting foreign exchange operations.

Under that directive, banks were strictly ordered to settle all payments for both local and foreign LCs upon maturity. The circular also warned that failure to comply would lead to the cancellation of Authorised Dealer (AD) licences and disciplinary action against the officers responsible.

Overdue for years

TBS found numerous cases in which banks accepted documents from suppliers, including invoices and bills of lading, but then failed to make payment years after the maturity date.

Prosanta Kumer Das, manager of Ahmed Group, said the group has around $15 million, equivalent to nearly Tk200 crore, outstanding against accepted bills with several banks.

"When a bank accepts the bill, the liability shifts entirely to the lender," he said.

"In the case of foreign LCs, banks never delay payment. Even if the customer fails to pay, the bank settles the bill from its own funds. But they are not following the same practice for local LCs."

Prosanta said banks are supposed to create forced loans in the name of their exporter clients and use those funds to settle accepted local LC bills.

"Our operations have been suffering because of the long delays. We cannot repay the loans that we took to import raw materials, and our daily operations have been disrupted," he added.

Bank Asia has more than 400 such overdue cases with different banks, involving nearly $16 million, according to the bank.

Sohail RK Hussain, managing director of Bank Asia, said delayed payment against accepted bills has become common in recent years.

"In the case of foreign LC payments, the Bangladesh Bank immediately intervenes and settles the dues by deducting money from the banks' accounts held with the central bank," he said.

"The same intervention is needed for local LCs because at least 15 troubled banks are unable to make payments."

He said Bank Asia had recently sent reminder letters to two troubled banks to settle overdue accepted bills of their clients and was considering legal action against banks that continued to default.

The Bangladesh Textile Mills Association, the representative body for the country's textile entrepreneurs, does not have recent statistics on the total amount of funds currently stuck in this manner.

However, an official from the organisation noted that as of the last available data in November, the amount pending with banks stood at approximately $90 million.

How textile millers suffer

Industry leaders said the growing defaults have weakened Bangladesh's backward linkage industry for the garment sector, with textile mills struggling to repay loans, pay workers and continue operations.

Md Mosharaf Hossain, managing director of Mosharaf Composite Textile Mills, said around $2 million owed to his company remained unpaid, with some payments overdue for as long as five years. "Those payments should have been settled within 120 days of acceptance."

Most of the money is stuck with Islami Bank Bangladesh, Premier Bank, Agrani Bank and Exim Bank, he said.

Md Anwarul Islam, managing director and CEO of Agrani Bank, said banks have no scope to leave overdue payments unsettled for an extended period. "However, we will look into the matter if any such case persists," he added.

Despite repeated attempts, officials from Islami Bank Bangladesh, Exim Bank, and Premier Bank could not be reached for comment.

Documents seen by TBS show that one supplier delivered yarn worth around $1,92,000 in mid-2021 against six separate LCs opened by New Town Knitwear Company Limited. Four of the LCs were issued through Islami Bank Bangladesh and two through Exim Bank, yet the supplier has still not received the money nearly five years after the maturity date.

Similarly, payment for goods worth about $1,20,000 supplied to Optimum Fashions Wear Limited against three LCs has remained overdue with two banks for about 18 months.

Two other firms based in Narayanganj – Abanti Colour Tex Limited and Crony Apparels Limited – have failed to receive payment worth $4,72,000 and $35,000, respectively, even after two years.

Officials of the company said legal notices had already been served on the institutions concerned and on the relevant bank officials.

Furthermore, after repeated reminders over the past few years went unheeded, the firm has filed lawsuits against nine companies, to which raw materials were supplied, as well as the relevant bank officials.

TBS has obtained several documents related to the lawsuits and legal notices issued by the institution.

Mosharaf Hossain said, "Because we are not receiving payment on time, we cannot repay our bank loans," he said. "As a result, we have to pay additional interest. At the same time, a shortage of working capital is making it difficult to pay workers' wages and allowances."

"The same bank that cannot pay what it owes us is charging interest on our loans," he added.

Mosharaf said his company had always paid wages on time in the past, but had still not fully paid workers' salaries for March this year.

"Without support from the banks, we are disappearing from business," he said.

Saleudh Zaman Khan, managing director of NZ Apparels Limited, said his company had around $8,00,000 in unpaid bills for goods supplied to garment factories.

Some of the payments under Islami Bank LCs are now more than a year overdue, he said.

Besides Islami Bank, EXIM Bank, and Premier Bank, some other banks controlled by the S Alam Group are also failing to make payment, Saleudh said. "Because of this, we have to pay extra interest on our loans and divert funds from other businesses to avoid our loans becoming classified."

He added that LC agreements require banks to pay interest to suppliers if payment is delayed by more than five days after maturity. "But even after months of delay, we are not receiving that interest."

The volume of forced loans at Rupali Bank hit $1.87 billion by the end of December 2025, nearly doubling in four years, according to a Bangladesh Bank inspection conducted by its Bank Supervision Department.

Central bank data reveals a 91.59% surge since 2021 when forced loans stood at $976 million. The debt climbed steadily over the period, reaching $1.23 billion in 2023 and $1.49 billion in 2024.

In banking, a forced loan is triggered when an importer fails to settle a letter of credit (LC) or credit facility on time. In such cases, the bank must then pay the foreign entity from its own coffers, converting the unpaid obligation into an immediate loan in the importer's name.

Officials say the growing volume of such loans reflects importers' failure to settle LC liabilities on time, forcing the bank to convert those dues into loans – a shift that severely strains liquidity and asset quality.

Economists warn that rising forced loans are a red flag for a bank's financial health, signalling that borrowers cannot meet their obligations and increasing the risk of these debts turning into non-performing loans (NPLs).

Dr Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said the trend signals financial fragility within the bank.

"A rise in forced loans means the bank's financial condition has weakened. When a bank's forced loans approach $2 billion, it means the bank has already paid this amount to foreign banks, but the importers have not repaid the money to the bank," he said.

"Forced loans should not be allowed to increase. They can occur either intentionally or unintentionally, but in many banks in our country, forced loans are created through collusion between banks and customers. The bank's board needs to take stricter measures in this regard," he added.

A senior official of Rupali Bank told The Business Standard that most of the bank's forced loans are linked to the garment sector. The bank paid foreign banks against LCs opened by various garment companies in the country, but the money was not repaid to the bank.

Concerns over import payments, documentation

Moreover, the Bangladesh Bank has also uncovered extensive irregularities and a breakdown of internal controls within Rupali Bank's foreign exchange operations.

The state-owned lender reportedly paid $2.20 billion to foreign banks against import payments, but failed to provide proof that the goods entered the country – known as a bill of entry.

According to the inspection report, a large volume of these documents remains outstanding against bills that have already been settled. This indicates that while the bank has funnelled dollars abroad on behalf of importers, there is no verification that the corresponding goods ever entered the country.

The central bank, in the report, warned that these outstanding documents create a significant risk of money laundering and trade-based illicit outflows, as there is currently no evidence that the imported goods exist.

Central bank's rejection of new AD branch licence

The central bank also rejected Rupali Bank's application to open a new authorised dealer (AD) branch in Rajarbagh, Dhaka, in March this year, citing weak risk management. The decision was based on the findings in the inspection report.

Although the bank currently operates 28 AD branches, Bangladesh Bank raised alarms over the financial stability of its foreign exchange operations.

The regulator declined to grant the licence after observing that key indicators of the bank's foreign trade operations – including imports, exports, remittances and bill of entry submissions – have declined over the past four years.

However, in a curious development, the director of the relevant department responsible for AD licensing was transferred to another department, with 1 April marking his last working day. Later, another director assigned to the department was expected to join but was on leave abroad for medical treatment from 2 April to 5 April, according to department sources.

During that period, a note was submitted to the relevant executive director recommending that the bank be allowed to reapply for a new AD licence.

Declining foreign exchange indicators

The state-owned lender's foreign trade indicators have deteriorated sharply over the past few years.

Its import volume fell from $3.17 billion in 2021 to $836 million in 2025, while exports declined from $386 million to $213 million during the same period. Remittance inflows also dropped significantly, from $708 million in 2021 to $293 million in 2025, according to central bank data.

Bangladesh Bank noted that all major indicators related to the bank's foreign currency transactions have weakened.

Meanwhile, the bank's total non-performing loans reached Tk21,358 crore as of 31 December 2024, accounting for 41.60% of its total loans.

Inspection uncovers more irregularities

The inspection by the supervision department at five authorised dealer branches of Rupali Bank uncovered 46 serious irregularities and fraudulent activities.

Among the major findings were the concealment of actual loan liabilities by presenting Export Development Fund (EDF) and UPAS LC obligations, granting new credit facilities to the same customers despite existing forced loan defaults, and creating forced loans without approval from the head office.

The inspection also found that export proceeds were used to repay other loans instead of adjusting back-to-back LCs, and that "best exporter" certificates were issued in violation of regulations.

The report further said the bank received an "unsatisfactory" rating in three key areas – internal control and compliance (ICC), credit risk management (CRM), and ICT security.

A senior central bank official said the bank's NPL ratio exceeding 41% clearly indicates a deteriorating financial condition, warning that it could create greater risks for the bank in the future.

On the issues, Ahsan Habib, director at BIBM, said the growing backlog of bills of entry and the rising volume of forced loans are deeply worrying.

"Outstanding bills of entry and increasing forced loans are extremely alarming. It means money is going abroad but not returning to the country," he said.

"If the bank's board and management are not strong, it will be difficult to reduce these risks. The current board should identify which companies required the forced loans and bring them under accountability," he added.

Rupali Bank's response

Responding to the allegation, a Rupali Bank general manager familiar with the matter said around 95% of the bills of entry are linked to the Bangladesh Petroleum Corporation (BPC).

Central bank officials also acknowledged the matter and attributed the discrepancies to tariff valuation issues during BPC's fuel imports, noting that while discussions have been held between the BPC, the National Board of Revenue (NBR), and the central bank, a resolution remains elusive.

When contacted, a senior official at BPC declined to comment on the matter.

The bank's general manager further clarified that the discrepancies in the bill of entry amounts have arisen due to fluctuations in the dollar exchange rate.

On the rise in forced loans, he said, "Many garment sector businesses failed to make payments on time due to order cancellations and the slowdown following Covid. However, if we receive a new AD licence, our exchange earnings will increase, and the situation will normalise."

Stocks staged a moderate recovery today (21 April) as bargain hunters returned to the Dhaka bourse, lifting the benchmark index after two consecutive sessions of decline, although lingering geopolitical tensions in the Middle East continued to cap stronger gains.

The DSEX, the broad index of the Dhaka Stock Exchange (DSE), rose 24 points to settle at 5,257, while the blue-chip DS30 index advanced 4 points to close at 1,984. Market breadth turned positive, with 215 issues advancing against 108 decliners, reflecting renewed investor participation across sectors. Turnover also picked up momentum, jumping 13% to Tk929 crore, indicating improved trading activity.

According to EBL Securities, the market rebound was largely driven by opportunistic investors taking positions in beaten-down stocks at attractive valuations. The session began on a positive note with active participation from both buyers and sellers, but sustained buying interest throughout the day helped the market close firmly in the green, offsetting intermittent selling pressure.

The improved participation suggests cautious optimism among investors, who are gradually returning to the market amid expectations of economic recovery. However, analysts noted that the lack of any near-term resolution to ongoing Middle East tensions continues to weigh on sentiment, preventing a stronger rally. The geopolitical uncertainty has disrupted the market's earlier recovery trajectory, which had been supported by domestic political stability.

Sector-wise, trading activity was dominated by engineering stocks, which accounted for 16.1% of total turnover, followed by textile and general insurance sectors. The sectoral performance remained mixed, with life insurance, IT and general insurance posting notable gains, while cement, financial institutions and mutual funds experienced slight corrections.

Among individual stocks, City Bank, Acme Pesticides, Dominage Steel, Summit Alliance Port and Khan Brothers PP Woven Bag led the turnover chart, highlighting investor focus on both financial and manufacturing scrips.

On the gainers' side, BD Lamps, Nahee Aluminum, Samata Leather, Agni Systems and Ring Shine Textiles recorded strong price appreciation, while International Leasing, FAS Finance, Peoples Leasing, IFIC Bank First Mutual Fund and Shurwid Industries were among the major losers.

Meanwhile, the Chittagong Stock Exchange also ended the session higher, with its key indices posting modest gains, although turnover remained relatively low at Tk33.29 crore.

Giving priority to the rural economy, the proposed Annual Development Programme (ADP) for FY2026-27 has allocated the highest share to the Local Government Division, while significantly increasing allocations for ministries and divisions linked to education and health.

However, the Power Division has seen a cut in its proposed budget, according to a letter sent by the Finance Division to the Implementation Monitoring and Evaluation Division of the Planning Commission on 20 April.

The letter outlines the proposed allocations for the 10 highest-funded ministries and divisions.

These include the Road Transport and Highways Division, Ministry of Primary and Mass Education, Secondary and Higher Education Division, Power Division, Ministry of Science and Technology, and the Health Services Division.

The Local Government Division has been allocated Tk36,228 crore under the proposal, up from Tk34,702 crore in the current fiscal year's ADP.

The Roads and Highways Division, the second-largest recipient, has been allocated Tk31,064.51 crore, slightly lower than the Tk31,772.25 crore in the current ADP.

The Primary and Mass Education Ministry has seen a sharp increase, with a proposed allocation of Tk21,347.53 crore, up 267.8% from Tk5,803.43 crore in the current fiscal year.

The Secondary and Higher Education Division has received Tk20,835.44 crore, an increase of nearly 75%.

The Power Division's allocation has been reduced to Tk19,285.66 crore, down 18.63% from Tk23,702.76 crore in the current fiscal year.

The Ministry of Science and Technology has been allocated Tk17,315.74 crore, up 47%, with priority given to the Rooppur Nuclear Power Plant project.

The Health Services Division has seen one of the sharpest increases, with a proposed allocation of Tk26,808 crore, up 258% from Tk 7,484.36 crore in the current fiscal year.

The Shipping Ministry has been allocated Tk 10,968.9 crore, broadly in line with the current allocation of Tk 10,661 crore.

The Health Education and Family Welfare Division has received Tk8,444.85 crore, marking a 75.57% increase.

Among other allocations, the Water Resources Ministry has been proposed Tk 7,903 crore, while the Railways Ministry has been allocated Tk 7,547 crore, slightly higher than Tk 7,535 crore in the current ADP.

The Agriculture Ministry's allocation has been raised to Tk 6,540 crore from Tk 5,833.82 crore, while the Technical and Madrasah Education Division has been allocated Tk 6,112.99 crore.

Planning Commission sources said the Finance Ministry has proposed a total ADP size of Tk3,00,000 crore for FY27. The structure of funding was finalised at a meeting of the Budget Monitoring and Resource Committee on 10 April.

Of the total ADP size, Tk1,90,000 crore will come from domestic resources, while Tk1,10,000 crore is expected from foreign loans and grants.

The final ADP for FY27 will be placed before the National Economic Council (NEC), chaired by the prime minister, next month for approval, the Planning Commission said.

The government yesterday approved the direct purchase of 1.75 lakh tonnes of diesel and octane from two suppliers, bypassing the standard tender process as concerns deepen over Gulf supply disruptions caused by the US-Israeli war on Iran.

The Cabinet Committee on Government Purchase (CCGP) cleared multiple proposals from state agencies to that end at a cost of nearly Tk 1,700 crore.

As per the proposals, 100,000 tonnes of diesel will be bought from US-based Archer Energy LLC at Tk 674 crore. Another 75,000 tonnes of fuel, including 50,000 tonnes of diesel and 25,000 tonnes of octane, will be bought from Dubai-based DBS Trading House FZCO at Tk 1,023 crore.

The war on Iran, which began on February 28, sent oil prices spiralling after Iran effectively blocked the Strait of Hormuz, through which roughly one-fifth of global oil supply passes.

The head of the International Energy Agency said yesterday that the conflict is producing the worst energy crisis the world has ever faced.

Bangladesh is especially exposed to the volatility in the international energy markets, given its growing import dependency. Some 46 percent of the country’s total energy supply came from imports in 2023. In the fiscal year 2024-2025 (FY25), imports accounted for 65 percent of its power needs. with the reliance increasing every year.

The government has been scrambling for alternative suppliers. It earlier approved the purchase of 2 lakh tonnes of diesel from Kazakhstan.

In a separate development yesterday, the Cabinet Committee on Economic Affairs allowed Bangladesh Petroleum Corporation (BPC) to compress its tender preparation and submission period for refined fuel imports from 42 days to 10, a move designed to speed up procurement as supply pressures mount.

Finance Minister Amir Khosru Mahmud Chowdhury chaired the meeting.

Earlier, the committee approved the direct import of 2.75 lakh tonnes of fuel oil, which implies that the BPC can buy additional 1 lakh tonnes of petroleum through direct purchase method.

The BPC sold 68.35 lakh tonnes of fuel in FY25 and 43.5 lakh tonnes or 63 percent of the total sales were diesel, according to the BPC.

The state agency had imported 46 lakh tonnes of refined petroleum and 15 lakh tonnes of crude oil that year.

Commerce Minister Khandakar Abdul Muktadir today sought Australian investment in Bangladesh’s solar power generation sector to meet the growing domestic demand for electricity.

The minister made the call at a meeting with Australian High Commissioner in Bangladesh Susan Ryle at the minister’s secretariat office in Dhaka.

The two discussed strengthening bilateral trade, investment, and economic cooperation between Bangladesh and Australia, according to a statement from the commerce ministry.

The minister said his government has been working to create an investment-friendly environment and is particularly encouraging foreign investment in the renewable energy sector.

He added that revitalising existing industrial enterprises, establishing new industries, and generating employment are among the government’s current priorities.

The government has been activating industrial sectors with assets worth approximately $7 billion, and making them production-oriented through private investment is a key objective.

In this context, the minister invited increased Australian investment in Bangladesh’s solar power generation sector.

Ryle said bilateral trade between the two countries currently stands at around $5.14 billion and continues to grow steadily.

She highlighted significant potential for investment in Bangladesh, particularly in the energy sector—especially renewable energy.

A high-level Australian delegation is exploring opportunities for cooperation in green energy, innovation, and technology, the high commissioner also said.

She mentioned that around 28,000 Bangladeshi students are currently studying in Australia, making it one of the most important destinations for Bangladeshi students.

Both sides expressed interest in expanding cooperation in trade, education and scholarships, enhancing the capacity of officials of the Ministry of Commerce, and increasing collaboration in infrastructure development.

The conflict between Iran and the United States and Israel is creating the ​worst energy crisis ever faced by the ‌world, the head of the International Energy Agency (IEA) said on Tuesday.

"This is indeed the biggest crisis ​in history," Birol told France Inter ​radio in an interview broadcast on Tuesday.

"The ⁠crisis is already huge, if you combine ​the effects of the petrol crisis and the ​gas crisis with Russia," he added.

The war in the Middle East has choked up maritime traffic in ​the Strait of Hormuz, which is a ​conduit for a fifth of global oil and liquefied ‌natural ⁠gas flows.

It has also come on top of the effects of Russia's war with Ukraine, which had already severed Russian gas supplies to ​Europe.

Birol had ​said earlier ⁠this month that he viewed the current situation in global energy ​markets as worse than previous crises in ​1973, ⁠1979 and 2022 combined.

In March, the IEA agreed to release a record 400 million barrels of ⁠oil ​from strategic stockpiles to ​combat rising oil prices caused by the U.S.-Israeli war with ​Iran.

The Chittagong Stock Exchange (CSE) has urged deeper collaboration and the deployment of Indian capital market expertise, particularly in promoting the commodity derivatives market.

CSE Managing Director M Shaifur Rahman Mazumdar made the call on April 19 when Rajeev Ranjan, assistant high commissioner of India, visited the port city bourse in Chattogram.

In a press release, the CSE said Mazumdar presented a strategic plan for Bangladesh’s capital market growth and diversification, highlighting opportunities for collaboration with India in several priority areas.

He sought cooperation in expanding other asset classes, positioning CSE as a multi-asset exchange, and invited Indian brokers and investors to explore opportunities in Bangladesh.

In his remarks, Ranjan said India has a wealth of experience in the capital market—expertise it is eager to share with Bangladesh.

By arranging joint technical sessions, specialized workshops, and knowledge transfer programs, Bangladesh can tap into India’s proven expertise to develop its financial market, particularly in commodity derivatives.

This, he noted, is an essential step for price discovery and risk management for Bangladeshi commodity stakeholders.

The Multi Commodity Exchange of India, a global leader in commodity derivatives, could serve as a blueprint for CSE once formal cooperation is established with the Securities and Exchange Board of India.

“India is fully committed to supporting Bangladesh’s ambitions. We see Bangladesh not only as a neighbor but as a true development partner, and we will walk this path side by side,” Ranjan added.

CSE Chairman AKM Habibur Rahman expressed hope for further strengthening bilateral cooperation in the development of Bangladesh’s capital market.

Assistant US Trade Representative (USTR) Brendan Lynch for South and Central Asia will visit Bangladesh soon, US Ambassador to Bangladesh Brent T Christensen said today.

The ambassador shared the information during a meeting with Commerce Minister Khandakar Abdul Muktadir at the commerce ministry’s secretariat office in Dhaka.

Trade experts believe the USTR may discuss various trade-related issues during the visit, as Bangladesh and the USA signed the Agreement on Reciprocal Trade on February 9 this year.

He comes to Bangladesh months after the USTR began investigations into production overcapacity in different sectors across 60 countries, including Bangladesh, and into forced labour practices.

In today’s meeting, various aspects of strengthening bilateral trade, investment, and economic cooperation between Bangladesh and the United States were discussed, according to a statement from the commerce ministry.

The US ambassador noted that expanding bilateral trade would be beneficial for both countries.

The commerce minister said his ministry, along with other relevant ministries, is working on formulating the new Import Policy Order. He expressed hope that the draft of the Import Policy Order 2026 would soon be shared with the business community for feedback.

Both sides expressed interest in further expanding cooperation in trade, investment, and policy matters, the statement read.

Bangladesh confronts a nearly trillion-taka record revenue shortfall in the bygone three quarters of this financial year, scaling up pressure on government's fiscal management.Bangladesh market report

Until March, the National Board of Revenue (NBR) had lagged behind its target by about Tk 980 billion, marking the largest deficit in the country's history for the July-March period.

Revenue officials say the gap was partly due to an upward revision of the target without adequate assessment of prevailing economic conditions, as the interim government raised the tax-revenue target from Tk 4.99 trillion to Tk 5.03 trillion for the first time.

Revenue growth remained weak, rising only 2.67 per cent in March.

Over the July-March period, the NBR had collected Tk 2.87 trillion against a target of Tk 3.85 trillion, leaving a deficit of Tk 979.90 billion.

None of the three major tax heads met their targets, with income tax posting a shortfall of Tk 400 billion, VAT Tk 340 billion and import duty Tk 229.73 billion.

Officials and analysts attribute the poor performance to sluggish business activity, declining imports, weak investment inflows, Middle East tensions, rising fuel prices and persistently high inflation.

The large shortfall is set to put further pressure on the new government to manage rising expenditures and secure external budget-support funds.Banking sector news

On Tuesday, Finance Minister Amir Khosru Mahmud Chowdhury held a meeting with Prime Minister Tarique Rahman discussing conditions tied to the loan from the International Monetary Fund (IMF) and the next course of action.

Under the original US$4.7-billion IMF loan programme, Bangladesh is required to increase revenue by at least 0.5 per cent of GDP annually, although the tax-to-GDP ratio declined by 0.66-percentage points last year instead of a coveted rise.

In the remaining three months of the fiscal year, from April to June, the NBR will need to collect about Tk 2.15 trillion, which translates into Tk 710 billion to Tk 730 billion per month, far exceeding the current monthly average of Tk 300 billion to Tk 370 billion. Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), says weak revenue mobilisation has forced the government to rely more on bank borrowing to meet expenditures, warning that a year-end shortfall now appears inevitable and describing the situation as worrisome.

"Although the government has started trimming development spending to contain the budget deficit and ease borrowing pressure, such measures cannot be sustained for long."

The revenue target for the next fiscal year, set at Tk 6.04 trillion, will be difficult to achieve unless the NBR intensifies efforts to reduce tax exemptions and identify new sources of revenue, the economist forewarns.Global economy analysis

He cautions that if the current shortfall persists, achieving nearly 50-percent growth in revenue mobilisation next year would be unrealistic under prevailing economic conditions.

The economist, however, welcomes government move to introduce property tax and inheritance tax in the upcoming fiscal year as a positive step.

Finance Minister Amir Khosru Mahmud Chowdhury on Tuesday told Parliament that Bangladesh’s foreign debt stood at around $78 billion as of February 2026.

“According to the account up to February, 2026, the foreign debt of the Bangladesh government amounts to $78,067.20 million,” he said while replying to a starred question from independent lawmaker Rumeen Farhana (Brahmanbaria-2).Bangladesh economic indicators

Earlier, the Tuesday’s sitting of parliament started at 3:00 pm with Speaker Hafiz Uddin Ahmad, Bir Bikram, in the chair.

The finance minister said the Economic Relations Division (ERD) repays foreign loans on behalf of the government.

Each fiscal year, a projection is prepared to estimate the total expenditure for servicing foreign debt including both principal and interest, and necessary allocations are kept in the national budget.

Loan repayments are being made from the budgetary allocation throughout the year following a scheduled plan.

In reply to a scripted question from treasury bench member Md Shamsur Rahman Simul Biswas (Pabna-5), Khosru said that the government received a total of $85,992.64 million (nearly $86 billion) in foreign loans from 2008–09 fiscal year to 2025–26 fiscal year.

During the same period, the government repaid $22,328.47 million in principal and $8,696.82 million in interest, he said.

As of December 30, 2025, the foreign debt stood at $77,279.12 million ($77 billion), said Amir Khosru.

He told the House that from the 2007–08 fiscal year to February of 2025–26, the government borrowed a total of $87,396.03 million and repaid $22,050.79 million in principal.

“As a result, the country’s foreign debt amount increased by $65,346.24 million during this period,” the minister added.

Recovering defaulted loans is a more complicated process for banks than one might think. The verdict for a case with a financial loan court takes years. But when a bank gets the verdict in its favour, it cannot yet go and auction the mortgaged properties to recover the loan defaulted. It must then file another case – called an execution case – for that purpose and this takes another few years before being disposed of.

While the original case itself may take 5-10 years to conclude, the execution case required to enforce the verdict in a bank's favour and sell the mortgaged assets also takes several more years.

Bank officials say this "double legal process" significantly prolongs and complicates loan recovery, causing banks to incur substantial losses as they pursue legal procedures for years.

Experts in banking law argue that the provision requiring a separate execution case after obtaining a verdict should now be amended. In many countries, court rulings on defaulted loans can be directly enforced without requiring a separate process.

According to Supreme Court statistics, 33,406 such execution cases are currently pending in courts (joint district judge courts) across the country, involving approximately Tk57,000 crore in bank dues. Among these, 1,108 cases have been pending for over a decade, involving more than Tk10,000 crore. Nearly 14,000 cases have been pending for over five years, involving about Tk22,000 crore.

As of December last year, around 78,000 cases involving over Tk2,50,000 crore in defaulted loans were pending in financial loan courts.

How execution cases drag on for years

In one case, ARM Food Ltd took a Tk57 crore loan from a Janata Bank branch in Narayanganj in 2004. After the loan defaulted, the bank filed a case in 2009, claiming about Tk94 crore with interest. In 2016, the court ruled in favour of the bank, allowing the mortgaged property to be auctioned.

To enforce the verdict, the bank filed an execution case in July 2016. However, the case remains unresolved, preventing the auction of nearly two acres of land and a house held as collateral.

A lawyer for the bank said the original case took about seven years to resolve, while the execution case has remained pending for nearly a decade due to a High Court stay order obtained by the borrower.

Legal complications

Experts say execution cases follow nearly the same legal procedures as the original cases. After filing an execution case under Sections 26, 27, and 28 of the Financial Loan Court Act, 2003, the court issues notices asking why the mortgaged property should not be auctioned.

Defaulters often exploit legal loopholes to delay proceedings, taking years to respond to summons and using influential lawyers to prolong hearings. Although the law requires execution cases to be resolved within a month and auctions to be conducted within 15 days, this is rarely followed in practice.

Defaulters also frequently file writ petitions in the High Court, which often issues stay orders and rules asking why the execution case should not be dismissed. These rulings remain unresolved for years, effectively halting the original execution process.

Extent of High Court stays

According to Supreme Court sources, as of February, 4,809 out of 33,406 execution cases, involving over Tk13,000 crore, are currently stayed by the High Court. Among them, 806 cases have remained stayed for more than five years.

In another case, LSG Leather Products defaulted on a Tk39 crore loan from AB Bank in 2008. The court ruled in favour of the bank in 2017, but the execution case was stayed by the High Court in 2018. Since the rule issued by the court remains unresolved, the mortgaged property cannot be auctioned.

What could be the solution

Former Bangladesh Bank deputy governor and former AB Bank chairman Mohammad A (Rumi) Ali said in countries such as the US, the UK, Switzerland, Singapore, and Malaysia, court verdicts in loan recovery cases are directly enforced by relevant authorities without requiring separate execution cases.

He noted that Bangladesh's current system – where a verdict must be followed by another case and then routed through district administration – is unnecessarily complex and needs reform.

He added that the shortage of judicial manpower already delays case disposal, and requiring a separate case for enforcement only worsens the situation. Simplifying the process would benefit both banks and borrowers as prolonged delays increase liabilities for borrowers due to accumulated interest and penalties.

Advocate Ahsanul Karim, a constitutional and company law expert, told The Business Standard that the law was enacted in 2003 – nearly two decades ago – but has yet to be updated to meet present-day needs. He said that once a law is enacted, it should be revised periodically in line with changing realities.

He noted that the Money Loan Court Act is widely applied and closely tied to the country's overall economic system. Due to various minor flaws in the law, banks face significant difficulties and incur unnecessary costs and delays. Therefore, he emphasised that amending the law has now become an urgent necessity.

The National Board of Revenue (NBR) fell short of its nine-month tax collection target by nearly Tk 1 lakh crore, leaving it needing to mobilise over Tk 2.60 lakh crore in the final quarter of fiscal year 2025-26 (FY26).

Provisional data released yesterday showed collections of Tk 2.87 lakh crore during July-March, an 11 percent rise year-on-year, but well below the pace required to meet the full-year target of Tk 5.54 lakh crore.

Analysts say it is highly unrealistic to expect that the board will succeed in collecting nearly half of the full-year target in three months.

The board has consistently missed its annual target every year for over a decade. Yet in late November last year, the interim government revised the target upward from Tk 4.99 lakh crore, following strong first-quarter collections.

The revenue weakness is playing out against a deteriorating economic backdrop.

The country’s GDP growth slowed to 3.03 percent in the second quarter of FY26, down from 3.53 percent in the same period last year. Defaulted loans in the banking sector have reached Tk 5.45 lakh crore as of December 2025.

Finance Minister Amir Khosru Mahmud Chowdhury told parliament this month that the tax-to-GDP ratio has fallen from around 11 percent to below 7 percent, and that businesses are “in bad shape.”

More recently, the impact of the US-Israel war on Iran has been draining the state funds as the government was forced to buy fuel oils at high prices. Bangladesh imports about 95 percent of its energy, and state agencies have increasingly been forced onto 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 week, 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 fixes. It has prepared an action plan targeting a trillion-dollar economy by 2034, built around investment, employment and macroeconomic stability.

Amid consistent revenue shortfall, the government has turned sharply to borrowing. Net deficit financing reached Tk 1.05 lakh crore during July-February, up 67 percent from Tk 63,040 crore in the same period last year. Of that, Tk 88,309 crore came from the banking system.

Zaidi Sattar, chairman of the Policy Research Institute (PRI) and head of the National Taskforce on Tax Restructuring, said fiscal space has effectively closed.

“The gap between current expenditure and revenue means there is little to no surplus available to support development spending,” he said, adding that the Annual Development Programme (ADP) will likely depend almost entirely on deficit financing in the upcoming budget.

He warned that domestic borrowing carries serious risks. “It creates serious challenges, including fuelling inflation and potentially crowding out private sector investment,” he said.

Without fundamental reform in revenue administration, any substantial increase in collections is “almost impossible”.

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said weak imports will further dampen revenue in the final quarter.

“If the government depends heavily on banks, it will affect credit flow to the private sector,” he said, warning that without revenue growth, more extreme measures such as money printing could not be ruled out.

Describing the broader pattern, Razzaque said, “The revenue target is not binding, it’s aspirational. We set targets and repeatedly fail to meet them. We are stuck in a Catch-22.”

“Big budget, big revenue deficit, and the NBR failing to raise revenue -- this is the typical Bangladesh story,” he added, noting that despite talk of reforms, “we are not seeing the momentum or a firm commitment.”

He mentioned the IMF’s recent decision to withhold a loan instalment, citing that the country has failed to implement agreed reforms in the revenue and banking sectors.

This decision by the multilateral lender adds to the country’s pressure. “It sends a signal about reform commitment, and other development partners take such signals seriously,” Razzaque said.

Within the July-March figures, VAT from domestic activity was the largest contributor at 38 percent of total collection, rising 13.66 percent year-on-year to Tk 1.09 lakh crore. Direct taxes accounted for 33.5 percent, climbing 11.25 percent to Tk 98,501 crore, while import tariffs grew more modestly at 7.77 percent to Tk 80,223 crore.

Facing mounting pressure, the NBR is eyeing structural changes for next year. Speaking at a pre-budget discussion earlier this month, NBR Chairman Md Abdur Rahman Khan pledged to strengthen enforcement to curb tax evasion and gradually reduce existing tax exemptions aiming to raise revenue collections.

He informed that the board is considering a range of measures to strengthen revenue collection in the upcoming fiscal year 2026-27 (FY27), including the reintroduction of a wealth tax, a new inheritance tax, higher rates for the ultra-rich, and a rationalisation of existing tax exemptions.

“We are exploring the possibility of reintroducing a wealth tax,” Khan said at the event, noting that Bangladesh had such a levy from 1963 until it was abolished in 1999.

A committee has been formed to examine the matter.

Khan added that the NBR is weighing the introduction of an inheritance tax, at least on a limited scale, with a focus on high-value property transfers.

On tax exemptions, Khan signalled a gradual shift away from the status quo. “We are committed to gradually phasing them out and bringing beneficiaries into the regular tax regime.”

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

More immediately, he said the NBR is considering raising the tax rate for individuals earning over Tk 1 crore annually by around five percentage points from FY27.