Bangladesh is likely to sign a US$400-million loan deal with China for Mongla seaport development as the government might seek nearly US$6.0 billion worth of funding for different projects and programmes, officials say.

The two sides would sign the loan deal for Mongla port development during the 4-day visit of Prime Minister Tarique Rahman that starts today (Tuesday), Ministry of Finance Affairs (MoFA) officials said Monday.

Besides, Dhaka is also likely to ink another grants deal with Beijing for getting financial support to build a hospital in northern Nilphamari district.

In addition, Bangladesh and China are expected to sign around 10 memorandums of understanding (MoUs) covering green energy, electric vehicles, solar power, media cooperation, training programmes and development of the Chinese Economic and Industrial Zone in Chittagong.

The last interim government approved the 1000-bed Nilphamari Hospital project with a total estimated cost of Tk 24.59 billion where Chinese government grant assistance is earmarked at Tk 22.80 billion and Bangladesh government will share Tk 1.79 billion.

During the visit of the PM, Bangladesh might seek support to some projects and programmes worth nearly $6.0 billion from China, says a senior MoFA official.

"Some fresh priority projects have been included in the list of Bangladesh's needs and our PM will seek support for those ones on his visit from Tuesday," the official adds.

"Although 27 projects were included in the priority-project list during the visit of the Chinese premier to Bangladesh in 2016, in the meantime, there is lot of changes over the last 10 years and our development priority has also changed. So, the priority-project list has been updated and the financial support will be requested for those from Beijing," he says.

Earlier, Bangladesh had requested China to expedite development assistance for 27 priority projects originally agreed upon during Chinese President Xi Jinping's historic visit to Dhaka in October 2016.

The initial 2016 agreement involved a $20-billion foreign-aid package intended to fund infrastructure, energy, and communications megaprojects.

The "Development and modernisation of Mongla Port project" was approved by the last interim government with a cost of Tk 40.68 billion ($400 million) for which China assured of adequate funds.

Additionally, a project worth over Tk 15.38 billion is dedicated to Pashur Channel dredging to maintain port navigability.

Meanwhile, during the Bangladesh PM's ongoing visit, Beijing may propose introducing Panda Bonds and China's Cross-Border Interbank Payment System as part of efforts to internationalise the yuan.

When asked, government officials were reluctant to clarify Bangladesh's position on the financial issue.

Beximco Pharmaceuticals has developed a generic version of a high-cost medicine used to treat cystic fibrosis, a rare genetic disorder that severely affects the lungs and digestive system and can significantly reduce life expectancy.

The first group of patients came to Bangladesh last week from several countries to receive the treatment, which the Bangladeshi drugmaker has made available at a price 96 percent lower than the patented version.

They received their medicines at a special event in Dhaka, according to a media release of Beximco Pharma. The drug is sold globally under the brand names Trikafta or Kaftrio, while Beximco’s version is called Triko.

Cystic fibrosis (CF) is a rare genetic illness people are born with. It damages the lungs and digestive system. In many cases, without diagnosis and treatment, patients may die in early childhood, while in other settings life expectancy remains limited.

US biopharmaceutical company Vertex Pharmaceuticals produces the original branded medicine for the treatment of the disease. In the United States, it costs around $370,000 per patient per year.

Although highly effective, the treatment remains out of reach for many patients globally due to its high cost, especially in low and middle-income countries. As a result, many continue to suffer or die even where treatment exists.

The generic version developed at Beximco Pharma’s facilities is priced at $6,375 per year for children and $12,750 per year for adults, marking a sharp reduction compared with the original branded treatment.

Among the first group of patients to receive the medicine last week was Simon Sevcik, who travelled with his father, Stanislav, from Slovakia. He said he experienced early signs of improvement shortly after starting the treatment.

“I felt the effect within an hour -- I started coughing and I knew it was working. My lungs were clearing,” he said. “This is an amazing moment for me -- I feel like my future has opened up. I hope every CF patient gets to experience this very, very soon. For most of my life, this medicine was not an option for me. Finally, there is effective, affordable treatment.”

Apart from Slovakia, patients from five countries, including South Africa, Qatar, the United States, the United Kingdom and Bangladesh, were among those who received the first doses of Triko last week.

Rabbur Reza, chief operating officer of Beximco Pharmaceuticals, said the drugmaker aims to address major gaps in access to essential medicines.

“At Beximco Pharma, we have always sought to address the unmet medical needs of patients, particularly in therapy areas characterised by severely limited access,” he said.

“We are deeply proud to be part of this meaningful initiative,” Reza added. “We believe that access to this life-saving treatment will have a truly transformative impact on the thousands of patients living with cystic fibrosis who are currently deprived of treatment due to the significant cost burden.”

Tyre manufacturers expect domestic production to rise and import dependence to fall following measures proposed in the fiscal year 2026-27 budget, including a 20 percent supplementary duty on light truck tyre imports and value added tax on agricultural tyres.

The measures are expected to help save foreign currency by encouraging local manufacturing, industry representatives said at a post-budget press conference organised by the Bangladesh Tyre-Tube Manufacturers and Exporters Association (BTMEA) at Holiday Inn in Dhaka yesterday.

In a written statement, Lutful Bari, vice-president of BTMEA and chief executive officer of Meghna Tyres, outlined the budget’s impact on the industry, including its possible effects on investment and employment.

“The proposed measures will encourage fresh investment and help existing factories operating below capacity expand production,” he said.

Bari added that Meghna Group plans to invest around Tk 1,000 crore in a radial tyre manufacturing plant.

He also said that locally produced tyres would be more competitively priced than imported ones.

Sohail Rahman, general manager of Jamuna Tyres, said each direct job in the tyre industry creates about 12 indirect jobs.

“The new supplementary duty will discourage imports and support local manufacturers,” he added.

Rahman also said Bangladesh imported tyres worth around Tk 4,700 crore last year.

The event was also attended by Miraj Rahman, managing director of Rupsha Tyres; Md Faisal Faruque Tuhin, vice-president of BTMEA and representative of Hossain Tyres; and Md Shariful Islam, chief operating officer of RFL.

Finance Minister Amir Khosru Mahmud Chowdhury on Monday said the proposed FY2026-27 budget allows freelancers and content creators to remit up to $5,000 without paperwork, calling it the most youth-friendly budget the country has ever seen.
"Earlier, even bringing in Tk 10 from abroad required filling out forms and going through hassles. Now, freelancers and content creators can bring in up to $5,000 without any formalities," the minister said at an event organised by the Centre for Governance Studies (CGS) at the University of Asia Pacific auditorium in the capital.Personal finance tips

The budget also extends tax exemptions to startups, freelancers, and content creators, the minister said, adding that the government is actively working to bring global payment platforms into the country to make digital earnings easier to repatriate.

PayPal and several other international payment platforms are already in the process of launching operations in Bangladesh, he said. "We told platforms around the world, come and open up in Bangladesh. Many are already coming. PayPal and three or four others are on their way."

Khosru said the budget has reduced costs across the entire digital ecosystem including making SIM cards more affordable. "We don't want a digital Bangladesh in words we want it to be real. We are moving the entire country to real-time online systems."

He noted that deeper digitalisation would naturally curb corruption by reducing physical contact between citizens and government offices. "We want you to serve your purpose from home, online. The more we reduce physical contact, the more corruption will fall."

The minister said the government has consciously shifted away from old economic models towards what he called "economic democratisation," ensuring that the benefits of growth reach ordinary people, including those long excluded from the mainstream economy.Bangladesh economic report

"If people don't actively participate in the economy and the fruits of growth don't reach them, then all the figures about Bangladesh's GDP growth and export earnings become meaningless."

He added that the government's focus on the creative economy is aimed at bringing in the large segment of the population that has historically remained outside the mainstream, describing it as a central pillar of the new economic vision.

Bangladesh Jeweller's Association (Bajus) today (22 June) raised the gold price in the domestic market by Tk4,432 per bhori, ending a two-round decline, with 22-carat gold now priced at Tk2,30,772 per bhori.

In a notice issued in the morning, Bajus cited a rise in the price of pure gold (tejabi gold) in the local market as the reason behind the upward revision.

According to the new rates, 21-carat gold will be sold at Tk2,20,391 per bhori, 18-carat at Tk1,89,248, and traditional-method gold at Tk1,54,606 per bhori.

BAJUS said the revised price will remain in effect at all jewellery shops across the country until further notice, though applicable making charges will vary by design.

It also clarified that since VAT is already included in the selling price, jewellers cannot charge VAT separately from customers.

Existing BAJUS rules on jewellery exchange and purchase, excluding specific VAT, making charges and gemstones, will remain unchanged. A separate announcement on VAT applicable to silver jewellery will be made shortly.

The latest revision comes just two days after BAJUS cut the price of 22-carat gold by Tk2,216 to Tk2,26,340 per bhori on 20 June.

This is the 79th price adjustment for gold in the domestic market so far this year, with prices raised 40 times, reduced 38 times and VAT-adjusted once.

Meanwhile, silver prices remain unchanged. A bhori of 22-carat silver is currently being sold at Tk5,249, while 21-carat stands atTk 5,016, 18-carat at Tk4,257, and traditional-method silver at Tk3,208 per bhori.

Oil prices fell on Monday on optimism over US-Iran talks, with mediators flagging a “roadmap” to a final agreement, while equities were mixed.

After a meeting planned for Friday was cancelled owing to fighting between Israel and Hezbollah, the negotiations finally got underway on Sunday in Switzerland with teams led by US Vice President JD Vance and Iran’s Mohammad Bagher Ghalibaf.

Traders remain in buoyant mood after news that the two foes had paused their conflict, which had sent energy costs soaring and stoking inflation, sending shivers through the global economy.

There were initial jitters following reports that Iran had called off the talks over US President Donald Trump’s threat to carry out more strikes if Hezbollah kept attacking Israel, but mediators Pakistan and Qatar said the talks took place in “a positive and constructive atmosphere”.

The mood improved as Qatar and Pakistan announced progress in the talks, which aim to address Tehran’s nuclear programme and reopen the Strait of Hormuz, through which about a fifth of oil and gas pass.

The two mediators said the United States and Iran agreed to set up a “communication line” to avoid incidents in the crucial waterway, and “the High Level Committee has agreed upon a roadmap towards reaching a final deal within 60 days, laying the foundation for the immediate commencement of further technical talks”.

Iranian Foreign Minister Abbas Araghchi said on X that “mediation has delivered major progress to end Lebanon War”.

Both main oil contracts fell in afternoon Asian trade, with Brent down more than one percent.

The fallout from the Iran war has pushed Bangladesh's LNG subsidy burden to Tk16,600 crore, nearly three times the original allocation of Tk6,000 crore for the fiscal 2025-26, as the government was forced to rely heavily on costly spot market purchases.

The additional subsidy requirement arose after long-term LNG deliveries were suspended under force majeure conditions by key suppliers, leaving Petrobangla with little option but to purchase gas from the volatile spot market amid attacks on Middle Eastern energy infrastructure and the closure of the vital shipping lane of Strait of Hormuz.

According to Petrobangla, the conflict has added Tk10,600 crore to the LNG subsidy requirement, a 176.7% increase from the original fiscal provision.
"The Iran war cost us an additional Tk10,600 crore as most long-term suppliers have maintained force majeure since March, forcing us to rely on expensive spot purchases," AKM Mizanur Rahman, director (finance) of Petrobangla, told The Business Standard on Saturday.Of the total subsidy requirement, Petrobangla has already received Tk13,100 crore from the government and expects the remaining Tk3,500 crore in the coming months.

Bangladesh's largest LNG supplier, QatarEnergy, invoked force majeure on 2 March, followed by Oman-based OQ Trading Limited on 5 March and US-based Excelerate Energy on 6 March.

The disruptions also affected some short-term contracts because their loading ports and shipping routes were linked to Qatar and the Strait of Hormuz.

Under the pre-war delivery plan, Bangladesh was scheduled to import 115 LNG cargoes during FY2025-26. Between March and June, 41 cargoes were planned, including only eight from the spot market.

However, after supply disruptions, Petrobangla reduced total imports to 37 cargoes during the period and purchased 25 cargoes from the spot market – more than three times the planned volume – at prices ranging between $20 and $28 per mmbtu.

Mizanur further said Petrobangla had also cut two LNG cargoes from its fiscal import plan to contain subsidy costs. "If those two cargoes had been imported, more than Tk2,000 crore would have been added to the subsidy bill at current prices," he said.

Force majeure continues

Petrobangla officials said long-term LNG supplies are unlikely to resume before 16 July, as suppliers continue to cite force majeure conditions.

"Long-term suppliers have informed us that until the Strait of Hormuz is fully reopened, they cannot resume deliveries," Mizanur said.

Officials said the closure of Hormuz has also disrupted short-term supplies, as most cargoes originate from Middle Eastern loading ports.

With uncertainty continuing, Rupantarita Prakritik Gas Company Limited (RPGCL), Petrobangla's LNG procurement arm, has floated tenders to purchase two additional spot cargoes for July delivery.

"I have no information regarding the resumption of term supplies. RPGCL is now working to secure LNG cargoes for July," said Rafiqul Islam, director (operations) of Petrobangla.

According to the pre-war Annual Delivery Plan for July 2026, Bangladesh was expected to import 10 LNG cargoes to supply 1,010-1,030 million cubic feet of gas per day to the national grid. The plan included four cargoes from QatarEnergy, two from Qatar Energy Trading, one from OQ Trading, one from Excelerate Energy, one under a short-term contract and one spot cargo.

FY2026-27 plan delayed

The uncertainty surrounding the Iran conflict has also stalled Petrobangla's LNG import planning for FY2026-27.

"Once force majeure is withdrawn, we will prepare the import plan for FY2026-27. Until then, there is little value in finalising such plans," Mizanur said.

He added that Petrobangla is currently focused on securing sufficient spot cargoes to maintain gas supplies and remains in regular contact with long-term suppliers.

The government may be losing an estimated Tk4,062 crore in annual revenue due to the existing cigarette pricing mechanism and discrepancies between officially declared retail prices and actual market prices, according to the Power and Participation Research Centre (PPRC).

The estimate was presented at a post-budget press conference on the FY2026-27 budget held at the National Press Club today (22 June).

The briefing, based on an analysis of tobacco taxation policy and market dynamics, said loopholes in the current cigarette pricing and tax structure allow a portion of market transactions to remain outside the government's tax net.

According to PPRC, cigarette taxes in Bangladesh are currently determined based on the government's declared minimum retail price (MRP). In reality, however, most cigarettes are sold as individual sticks, with prices often rounded up to convenient figures.

As a result, retailers are able to charge more per stick than the price implied by the official packet rate. While consumers pay the higher amount, the additional revenue generated is not reflected in the tax base.

Data presented at the conference showed that the official retail price of a 10-stick pack in the low-tier segment is Tk62. However, when sold individually, retailers can charge up to Tk7 per stick. Similar gaps between official and actual retail prices exist in the medium-tier segment.

PPRC said sales of low- and medium-tier cigarettes reached around 61.18 billion sticks in FY2024-25. Given the scale of the market, even a small difference in per-stick pricing translates into a significant amount of untaxed revenue.

According to the organisation, the discrepancy between packet prices and retail prices could cost the government around Tk4,062 crore in revenue.

It stressed that tobacco tax policy should pursue two objectives: reducing smoking and increasing government revenue. However, the current four-tier cigarette pricing structure limits the achievement of both goals.

Because low-priced cigarettes remain relatively affordable, many smokers opt for cheaper brands instead of quitting when prices rise, it said.

To address the issue, PPRC recommended restructuring cigarette price tiers, narrowing the tax gap between low- and medium-tier brands, regulating single-stick sales, implementing a track-and-trace system, and ensuring that actual retail prices are reflected in the tax structure.

Dr Shafiun Nahin Shimul noted that Bangladesh sells around 70 billion cigarette sticks annually, and despite successive price increases, smoking rates have not declined as expected.

He also expressed concern over emerging nicotine products, noting that nicotine pouches have already received regulatory approval. Bangladesh, he said, should avoid repeating mistakes observed in other countries.

Referring to international experience, Dr Shimul said: "The rapid spread of nicotine products among young people in several countries serves as a warning about the risks of regulatory delays. Bangladesh must act proactively to prevent similar outcomes."

Dr SM Abdullah, associate professor of economics at the University of Dhaka, said the latest budget reflected a shift from curative to preventive healthcare. In line with the policy, the government should adopt taxation regime that help reduce tobacco consumption, he argued.

Welcoming the government's track-and-trace initiative, he noted that track-and-trace mechanisms are typically applied to cigarette packs, whereas most cigarette sales in Bangladesh occur through individual sticks. As a result, the effectiveness of the system could be limited unless single-stick sales are addressed.

In his closing remarks, PPRC Chairman Dr Hossain Zillur Rahman said tobacco is linked to public health, the younger generation and government revenue.

"If young people are not health-conscious, we will struggle to achieve our expected outcomes in the creative economy and sports," he said.

While acknowledging recent increases in cigarette prices, he said the hikes were insufficient. He also criticised the government's approach to e-cigarettes, saying that despite stricter regulations introduced during the interim government's tenure, the current government has adopted a softer stance and effectively legitimised nicotine pouches by bringing them under the tax regime.

He urged the government to take stronger measures to regulate the market and curb the use of e-cigarettes and other nicotine products.

The government’s proposal to significantly reduce import duties on plug-in hybrid electric vehicles (PHEVs) has raised concerns among local automobile manufacturers, who say the move could encourage imports at the expense of domestic production.

In a letter to National Board of Revenue (NBR) Chairman on June 17, the Bangladesh Automobiles Assemblers and Manufacturers Association (BAAMA) urged the tax authority to revise the proposed fiscal measures, arguing that they create a policy imbalance between imports and local manufacturing.

“The existing budget framework will encourage imports of completely built vehicles rather than the establishment of PHEV manufacturing and assembly operations in Bangladesh,” Hafizur Rahman Khan, president of BAAMA, wrote in the letter.

In its letter, the association called for extending to local PHEV manufacturers the same level of support currently available to EV producers.

Under the proposed budget for fiscal year 2026-27, the total tax incidence on completely built-up (CBU) PHEVs with engine capacities of up to 1,800cc would fall to 73.44 percent from 93.16 percent. For vehicles between 1,801cc and 2,000cc, it would decline to 96.10 percent from 132.66 percent.

However, BAAMA says comparable incentives have not been offered for the local production, assembly and value addition of PHEVs.

The association noted that while the government recently introduced special incentives for locally manufactured electric vehicles (EVs) through SRO No. 163-Ion/2026/18/Customs, issued on June 8, no similar support has been announced for PHEV production.

Industry representatives say this could make importing fully built vehicles more attractive than investing in manufacturing facilities and supply chains in Bangladesh.

The concern comes as hybrid vehicles continue to gain popularity. Data cited by BAAMA from Bangladesh Road Transport Authority (BRTA) registrations show hybrids accounted for 57 percent of passenger vehicle registrations in 2025, up from 42 percent in 2021. Over the same period, the share of conventional internal combustion engine (ICE) vehicles fell from 58 percent to 42 percent.

Despite growing interest in cleaner transport, fully electric vehicles remain a niche segment, accounting for only 0.57 percent of registrations last year. Industry stakeholders attribute the slow uptake to limited charging infrastructure, high battery costs and concerns over long-distance travel.

BAAMA argues that Bangladesh is in a transition phase between conventional fuel-powered vehicles and full electrification, making PHEVs an effective intermediate technology that combines electric driving capability with the flexibility of a conventional engine.

The association said PHEVs can reduce fuel consumption by 40 percent to 60 percent, helping cut fuel import costs while lowering carbon emissions and air pollution.

The debate also has implications for Bangladesh’s emerging automotive industry. Several global brands, including Hyundai, Mitsubishi, Chery and Proton, have invested in local assembly operations through partnerships with Bangladeshi companies. Chinese EV manufacturer BYD has also initiated plans to establish manufacturing operations through a joint venture with Runner Automobiles.

According to BAAMA, policies that favour imports over domestic production could affect future investment decisions and discourage expansion by existing manufacturers.

The association also said the proposed tariff structure departs from the principle of tariff escalation, under which higher duties are imposed on finished vehicles while lower tariffs and incentives support local assembly, component manufacturing and value addition.

Such frameworks are intended to promote industrialisation, employment, technology transfer and the development of domestic supply chains.

BAAMA also referred to the Automobile Industry Development Policy 2021, which commits to supporting local manufacturing through fiscal incentives and investment-friendly measures while promoting fuel-efficient and environmentally friendly vehicle production.

An NBR official, speaking on condition of anonymity, said the proposed duty reduction on plug-in hybrid electric vehicles is part of the government’s broader strategy to promote energy-efficient and environmentally friendly transport

The measure is expected to reduce reliance on fossil fuels and accelerate the adoption of cleaner vehicle technologies.

The official said the government has not overlooked the interests of local manufacturers, noting that a range of fiscal and policy incentives has already been introduced to support the domestic production and assembly of electric vehicles.

Issues related to PHEVs remain under review, and any future policy decisions will seek to balance industrial development, investment promotion, technology transfer, and environmental sustainability.

The Dhaka Stock Exchange (DSE) has resumed halting share trading under its real-time surveillance mechanism, a practice that had largely fallen out of use for nearly a decade.

In the past two weeks, the DSE halted trading in Sonargaon Textiles, Shyampur Sugar Mills and Bangladesh National Insurance, each after citing “unusual price movements”.

Trading resumed in all three the following day, but industry officials say the monitoring provides early warning signals to investors that there might be suspicious trading, which helps them make critical decisions.

“As this type of trading halt has not been practised in the market for many years, it seems unusual -- however, it’s business as usual,” said Nuzhat Anwar, managing director of the DSE. “We will always do that to protect investors’ interests.”

Real-time surveillance is a common practice to correct market distortions, and the DSE is equipped to do that, she said, adding that the stock exchange is getting support from the regulator in this regard.

The mechanism works in stages. Once a halt is triggered, the exchange asks the company whether it has any undisclosed price-sensitive information. If irregularities are suspected, it investigates whether unusual trading or malpractice occurred, and can take action accordingly.

Abul Kalam, spokesperson of Bangladesh Securities and Exchange Commission, said the halts serve as an early warning signal to investors that trading in a particular security may be suspicious.

He explained that previously, formal enquiries into suspicious trading took too long, that ordinary investors would buy into the stock in the meantime, unaware of the suspected irregularity, and suffer losses when the correction came.

“Now they are receiving early warning signals,” he said.

The real-time monitoring practice was last used around a decade ago before being discontinued. The DSE has authority under its listing rules to halt, suspend or delist securities.

The price data illustrates how sharply the targeted stocks had run up. Shyampur Sugar Mills, a junk-category stock, had surged 66 percent to Tk 239 in the month before the halt. It has since corrected around 30 percent to Tk 167, according to DSE data.

Shares of Sonargaon Textiles more than doubled from Tk 42 to Tk 87 over a month, and fell about 8 percent to Tk 80 after trading was halted.

Bangladesh National Insurance rose 46 percent to Tk 116 before the halt, and has since dropped around 9 percent.

Separately, the DSE board has decided to develop software to monitor investors’ funds and shareholding positions in real time, aimed at curbing misappropriation by brokers through consolidated customer accounts.

The move comes against the backdrop of thousands of investors falling victim to embezzlement at several brokerage firms over the past five years.

Saiful Islam, president of the DSE Brokers’ Association, welcomed the real-time surveillance but said a one-day suspension alone is not sufficient.

He noted that shares of companies that have been out of production for years continue to surge periodically, misleading investors.

Islam called on the exchange to publicly disclose the names of companies that have remained out of production for extended periods and to follow global practice, where such companies face trade suspension until they resume operations and are eventually delisted if they do not.

According to listing regulations, a company will be delisted if it remains out of production for three years. However, stock exchanges are reluctant to delist companies in Bangladesh as investors have strongly protested such decisions in the past, a top official of the Dhaka bourse said.

Islam hopes that the current DSE board will begin enforcing the rule. “Otherwise, the market will remain full of junk stocks year after year.”

The scale of the problem is significant. Of 396 listed shares, 125 are classified as Z category or junk stocks, while 75 are low-performing B category companies. Only 196 are A-category stocks, according to DSE data.

Around Tk3,000 crore worth of closed-end mutual funds under the trusteeship of the Investment Corporation of Bangladesh (ICB) are set to face conversion into open-end funds or liquidation under newly introduced mutual fund rules.

Of the 20 mutual funds under ICB's trusteeship, 18, including eight managed by ICB Asset Management Company, have fallen within the scope of the new regulations. This is even though the funds' original maturity periods run from 2027 to as late as 2033.

Under the rules, any closed-end mutual fund whose average trading price remains at a discount of 25% or more to its cost-based Net Asset Value (NAV) over six months must be converted into an open-end fund or liquidated.

The trustee must convene an extraordinary general meeting (EGM), seek unit holder approval, and obtain subsequent clearance from the Bangladesh Securities and Exchange Commission (BSEC). A decision requires at least 75% support from votes cast.

Data show that the discount between market prices and cost-based NAVs for the 18 affected funds ranges from 30% to 76% – well above the 25% threshold – making conversion or liquidation mandatory, subject to unit holder voting.

BSEC Executive Director and spokesperson Abul Kalam told The Business Standard that trustees would arrange unit holder meetings and implement whichever decision clears the 75% threshold.

The process became entangled in legal complications after investors filed writ petitions challenging the rules, prompting the High Court to issue a status quo order. On 9 June, BSEC directed trustees to proceed with conversion or liquidation.

Two days later, it issued a follow-up letter instructing trustees to continue while excluding the interests of petitioning unit holders – a move that alarmed market participants who feared compliance could be construed as a violation of the court order. ICB consequently sought clarification from the regulator and withheld action.

The impasse ended on 17 June when the Appellate Division's Chamber Court stayed the High Court order, clearing the path for the process to resume. Lawyers said trustees may now move forward, though an ICB trustee official said the organisation had yet to receive fresh instructions.

"We heard about the stay order, but have not received any instruction from the commission. We have already written to them seeking guidance," the official said.

Stakeholders continue to object to certain provisions, particularly Section 62, of the new rules. A senior asset management official, speaking anonymously, noted the rules were framed under the previous commission and called on the new commission to engage asset managers and trustees on their concerns.

Bangladesh RACE Asset Management, which has also filed a writ petition, is scheduled for a hearing on 22 June.

ICB Asset Management Company operates nine mutual funds, eight of which are caught by the new rules, with discounts to cost-based NAV ranging from 47% to 67%. All six funds managed by Bangladesh RACE Asset Management PCL also exceed the threshold and face conversion or liquidation.

Across the broader mutual fund industry, total approved fund size stands at Tk13,090 crore – 35 closed-end funds accounting for Tk4,431 crore and 105 open-end funds for Tk8,659.5 crore.

The government has formed a taskforce to oversee its deregulation drive and will launch a dashboard from the first week of next month to monitor the progress of project implementation in every ministry, Finance Minister Amir Khosru Mahmud Chowdhury said yesterday.

Running a business in Bangladesh is not possible without deregulation, the minister said at a discussion on the proposed national budget organised by the Centre for Policy Dialogue (CPD) at Lakeshore Hotel in Dhaka.

“Those who will create barriers in deregulation, we will show them the way out, as we are working for the country, for the people. We are an elected government,” he said.

He noted that project preparation alone currently takes more than one and a half years, with implementation taking considerably longer still, driving up project costs, the burden of which is ultimately borne by ordinary people.

To keep such delays in check, the government is rolling out dashboards in each ministry that will track implementation progress on a daily basis, said Khosru, who is also the planning minister.

As part of broader institutional reform, the government will also separate the National Board of Revenue’s (NBR) policy formulation and tax collection functions, he said. The policy formulation wing will be under a panel of experts, while a panel of bureaucrats will handle implementation.

He added that the traditional system of Letters of Credit will also be revised, as LC-related delays slow down trade and raise the cost of doing business.

Responding to criticism from various quarters over the budget’s size and targeted revenue mobilisation, the minister said the government would issue bonds to help finance the budget and reduce reliance on bank borrowing, in order to free up funds for the private sector.

He said he was hopeful these reforms would help raise the tax-to-GDP ratio.

Khosru also mentioned that the government has worked to make the Family Card programme transparent, with safeguards against political interference, to ensure intended beneficiaries receive the benefits.

He identified gas, electricity and reliable internet connectivity as major challenges, saying the government has been working to address them.

The minister projected that it may take around two years to stabilise the current fragile economy, with signs of broader prosperity expected to follow from the fourth and fifth years.

He also said the government has allocated Tk 800 crore for the creative economy, to provide loans for developing theatres and the sports economy and to support singers, bringing them into mainstream economic activity.

CPD FLAGS IMPLEMENTATION RISKS

Presenting the keynote paper at the event, CPD Executive Director Fahmida Khatun said the budget relies on optimistic assumptions and that its success will depend heavily on the quality of execution.

“This will require strong institutions that have the capacity to implement the budget efficiently and deliver tangible outcomes,” she said, adding that the budget represents the new government’s first major opportunity to demonstrate its ability to drive economic recovery through sustained structural reforms.

In the keynote paper, CPD laid out eight key observations on the proposed budget. The think tank said macroeconomic projections for FY2026-27 appear optimistic and warned that the proposed fiscal framework is unlikely to hold.

While public expenditure has been reprioritised towards human capital sectors, CPD noted that the Annual Development Programme, though ambitious, faces concerns over effective implementation.

The think tank also said fiscal measures reflect a degree of predictability but raise equity concerns, and flagged the absence of a comprehensive roadmap to support Bangladesh’s LDC graduation.

It further observed that the social sectors prioritised in the budget lack adequate implementation capacity, and that allocations meant to drive employment generation point to a deeper structural challenge.

Businessmen, ministers and economists participated in the discussion moderated by CPD Distinguished Fellow Mustafizur Rahman.

Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre (PPRC), called on the government to formulate a roadmap to implement the proposed budget, as there are concerns about its capacity for implementation.

The government should also publish a three-month progress report on budget implementation so that people can know its real status, he said.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), said the proposed budget stands at 13 percent of GDP, while 23 percent of GDP would be required to achieve the government’s targeted outcomes.

He said the Family Card programme could reduce the poverty rate by 7 percentage points if properly implemented.

To reach the government’s target of a $1 trillion economy by 2034, Razzaque said GDP growth would need to reach 8 percent, and the investment-to-GDP ratio, combining public and private investment, would need to rise to 40 percent from the current 28 percent.

He said the government should act quickly to achieve this while also controlling high inflation, noting that the revenue target is ambitious even as official development assistance continues to decline.

Anwar-ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, said the private sector continues to face significant difficulties due to inadequate energy supply and high bank interest rates, despite various measures taken to address them.

Montu Ghosh, president of the Bangladesh Garment Workers Trade Union Centre, said budget implementation will be difficult given existing capacity constraints, and that the lives of workers are unlikely to change significantly as their concerns have not been given adequate importance in the proposal.

He noted that workers and union leaders have long demanded a rationing system for garment workers, which has yet to be introduced.

He also criticised the government’s bank borrowing plans, warning that they could affect credit flow to the private sector.

Bangladesh has proposed allowing individual taxpayers to submit income tax returns throughout the year, with a 5 percent rebate for those filing in the first quarter, under changes outlined in the 2026–27 budget proposal.

The proposal comes as repeated extensions of return filing deadlines have still failed to bring in the expected number of taxpayers, prompting revisions through the Finance Bill 2026.Bangladesh economic report

Under the proposed amendment to the Income Tax Act, taxpayers will be able to file returns across the entire fiscal year after the end of an income year.

However, tax payment and incentive calculations will depend on the quarter in which the return is submitted.

According to the Finance Bill 2026, individual taxpayers filing returns between Jul 1 and Sept 30 -- the first quarter -- will be eligible for a 5 percent rebate for early submission, capped at Tk 25,000.

However, the Bill does not provide detailed mechanisms for how the rebate will be applied, raising concerns among tax analysts.

Experts say it would be preferable to adjust incentives at the point of tax payment.

They caution that if rebates are issued through refunds after full tax payment, taxpayers may fear delays or non-receipt.

They also note that if adjustments are tied to audit processes, many may not perceive it as a meaningful incentive.

There are already complaints that excess advance tax or withholding tax is often not refunded promptly, with allegations of administrative delays and informal payments in some cases.

Taxpayers filing in the second quarter, from Oct 1 to Dec 31, will not receive any rebate but will also not face penalties.

Those filing in the third quarter, from Jan 1 to Mar 31, will be subject to a late filing penalty of 2 percent of tax or a maximum of Tk 3,000.

Returns filed in the final quarter, from Apr 1 to Jun 30, will attract a penalty of 5 percent of tax or a maximum of Tk 5,000.

Under the current system, taxpayers generally submit returns by Nov 30 without additional tax, and there is no incentive for early filing.

The government may extend deadlines by one month at a time under special consideration, a practice commonly seen each fiscal year.

Previously, extensions ran until December or January, but in recent years deadlines have been pushed to February and March.

In the current fiscal year, multiple extensions and the introduction of mandatory online filing allowed taxpayers to get up to 90 additional days, with many effectively filing throughout the year without penalty.

The capital bourse kicked off the week on a negative note today (21 June) as widespread profit-taking snapped a two-session winning streak, dragging the benchmark index down.

The DSEX, the prime index of the Dhaka Stock Exchange (DSE), shed 21 points to settle at 5,639. Meanwhile, the blue-chip DS30 index managed to buck the trend slightly, gaining 2 points to reach 2,145.

Market breadth heavily favoured the bears, with only 71 issues advancing, 298 declining, and 27 remaining unchanged.

A cautious investor stance also dampened trading participation, causing daily turnover to plunge 16% to Tk1,002 crore compared to the previous session.

According to the daily market review by EBL Securities, the benchmark index retreated in the first session of the week as profit-taking in recently appreciated stocks heavily outweighed selective buying in perceived fundamentally attractive scrips.

The brokerage firm added that the market came under sustained selling pressure from the opening bell, as widespread profit-taking gained momentum throughout the session, weighing on the majority of listed scrips and pushing the market into negative territory.

Mirroring this view, Sheltech Brokerage Limited noted that market sentiment was largely influenced by investors' profit-taking following the recent advance.

The brokerage highlighted that despite a strong start to the session, supported by buying pressure in selective large-cap stocks, the market failed to sustain its early gains as profit-taking pressure intensified from mid-session onward.

On the sectoral front, pharmaceuticals accounted for the highest share of turnover at 13.5%, followed closely by engineering at 12.5% and textiles at 11.8%.

Most of the sectors displayed negative returns, out of which services fell by 3.9%, miscellaneous dropped by 3.4%, and general insurance corrected by 2.1%, exerting the most downward pressure.

On the flip side, telecommunication, pharmaceuticals, and food sectors bucked the trend to exhibit the highest returns on the bourse today, gaining 1.5%, 0.5%, and 0.3% respectively.

The primary index draggers pulling down the market included Olympic Industries, United Commercial Bank, Asiatic Laboratories, National Bank, and Summit Alliance Port.

Despite the correction, Beximco Pharmaceuticals, Summit Alliance Port, IPDC Finance, and Robi emerged as the top traded stocks of the day.

In terms of individual performance, Prime Finance First Mutual Fund led the gainers with a 7.61% jump, followed by Simtex Industries at 5.70% and KDS Accessories at 4.64%.

On the losing side, Meghna Pet and Beximco Limited hit the bottom by plummeting 9.87% each, followed by Regent Textile which lost 9.67%.

The port city bourse, the Chittagong Stock Exchange (CSE), also mirrored the capital city's bearish tone.
The CSCX index ended 61 points lower at 9,327, while the CASPI broad index plummeted 104 points to close at 15,249. Trading activity on the CSE witnessed a massive contraction as its daily turnover dropped by 64% to stand at a meager Tk30 crore.

The Bangladesh Securities and Exchange Commission (BSEC) has instructed the Dhaka Stock Exchange (DSE) to strengthen its surveillance system through effective real-time monitoring and control measures aimed at curbing market irregularities and protecting investors.

The instruction was given at a meeting held between the regulator and the DSE surveillance team at the BSEC headquarters in Agargaon yesterday.

BSEC Acting Chairman Tanwir Habib Rahman, along with Commissioners Nahid Mahtab and Md Nafeez Al Tarik, and other senior officials attended the meeting. The DSE was represented by its Managing Director Nuzhat Anwar and Acting Chief Regulatory Officer Mohammad Shafiqul Islam Bhuiyan, among others.

According to a BSEC press release, the meeting focused on the development and modernisation of the capital market, with particular emphasis on maintaining market integrity and protecting investors’ interests.

The regulator also stressed the need to prevent all forms of market manipulation and misconduct, while discussing surveillance and oversight issues at the stock exchange. BSEC officials said a transparent, accountable and efficient capital market is essential for sustainable market development. In line with international best practices, the commission directed the DSE to enhance its real-time surveillance capacity and adopt necessary monitoring tools.

The meeting also covered plans to upgrade and modernise the surveillance system to improve investor protection and overall market supervision.

The move reflects the regulator’s efforts to restore investor confidence and ensure a fair and orderly market through stronger oversight and improved technology.

The government is set to split the National Board of Revenue into separate policy and implementation wings as part of broader efforts to address Bangladesh's persistently low tax-to-GDP ratio and strengthen revenue administration, Finance Minister Amir Khosru Mahmud Chowdhury said today (21 June).

Speaking at a budget dialogue organised by the Centre for Policy Dialogue at a hotel in Dhaka, Khosru said the planned restructuring would separate tax policy formulation from tax administration, with experts rather than bureaucrats taking the lead in designing tax policies.

He argued that weaknesses in tax policy formulation were at the core of the country's revenue challenges.
"Bangladesh's major taxation problem and NBR's problem is policy-making. If you get that right to start with, then 50% of the problem is solved," he said.According to the minister, the policy wing will comprise tax specialists and individuals with a strong understanding of Bangladesh's socio-economic realities, while career bureaucrats will focus on implementation and enforcement.

"We want an expert group to make the policy, not the bureaucrats. The expert group will make the policy. Bureaucrats' job is to execute it," he said.

The interim government on 13 May 2025 proceeded with the reforms, officially dissolving the NBR and establishing two separate entities -- the Revenue Policy Division and the Revenue Management Division.

The move later got stalled amid protest by revenue officials who viewed the move as undermining their roles and the integrity of the tax administration system.

Centre for Policy Dialogue (CPD) on Sunday said the national budget for FY2026-27 reflects a clear philosophy of economic recovery through human development, but its ambitious macroeconomic targets rest on shaky ground and the fiscal framework is unlikely to hold as proposed.

CPD Executive Director Dr Fahmida Khatun presented the think tank's Independent Review of Bangladesh's Development (IRBD) analysis at its Budget Dialogue 2026 held at a hotel in Gulshan, UNB reports.

The think tank put forward eight key observations on the FY27 budget, which Finance Minister Amir Khosru Mahmud Chowdhury presented to parliament on June 11.

CPD noted that the government's GDP growth target of 6.5 per cent represents a recovery from an estimated 5.0 per cent in the revised FY26 budget, but provisional data from the Bangladesh Bureau of Statistics (BBS) puts actual FY26 growth at only 4.14 per cent.

On revenue mobilisation, CPD said the government targets an 18.2 per cent increase in revenue collection to Tk 6.95 trillion (Tk 695,000 crore). However, its own projection based on data through March 2026 suggests actual FY26 collection may be around Tk 4.5 trillion (Tk 450,000 crore), implying that the required growth would be closer to 54.4 per cent.

The think tank welcomed the budget's reprioritisation of public expenditure toward human capital sectors, noting that allocations for health and education increased by 124 per cent and 42.7 per cent, respectively, compared with the revised FY26 budget.Bangladesh stock market

However, it cautioned that both sectors suffer from persistently weak budget utilisation, with health-sector development spending utilisation falling from 80 per cent in FY15 to just 30 per cent in FY25.

On the Annual Development Programme (ADP), CPD said the Tk 3 trillion (Tk 300,000 crore) allocation, a 50 per cent increase over the revised FY26 figure, reflects an ambitious fiscal stance. However, only 35.4 per cent of last year's ADP was spent in the first 10 months, signalling low absorptive capacity.

It also noted that none of the eight mega projects scheduled for completion in FY27, including the Rooppur Nuclear Power Plant, is expected to be finished on time.

CPD raised equity concerns over the personal income tax structure, pointing out that lower-income groups face a proportionately higher increase in tax burden than those earning more than Tk 3 million annually.

On social protection, the Social Safety Net Programme (SSNP) allocation rose 13.9 per cent to Tk 1.44 trillion (Tk 144,000 crore) in FY27. However, CPD observed that pension management and agricultural subsidies together account for 43.2 per cent of the total SSNP allocation, although these programmes are not strictly targeted at the poor.

Regarding the government's pledge to create 10 million new jobs within 18 months, CPD found that budget allocations for four key employment-related ministries either declined or remained stagnant as a share of total expenditure.

The Ministry of Commerce recorded the sharpest cut, with its allocation reduced from Tk 9.09 billion (Tk 909 crore) to Tk 3.29 billion (Tk 329 crore).

CPD also highlighted the absence of a medium-term roadmap to address preference erosion ahead of Bangladesh's graduation from the least developed country (LDC) category, despite the government's formal request for a three-year deferral in February 2026.

“This budget is the first major opportunity for the new government to demonstrate its ability to drive economic recovery through sustained structural reforms,” Fahmida Khatun said, adding that its success would ultimately depend on the quality of implementation and the strength of institutional capacity.

Finance Minister Amir Khosru Mahmud Chowdhury on Sunday said the government will overhaul its public finance architecture to fund the proposed budget for fiscal year 2026-27 while minimising the debt burden on the economy.

“We cannot keep looking towards the World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB). We need to restructure our own public financing,” he said while speaking at the “CPD Budget Dialogue 2026” organised by the Centre for Policy Dialogue (CPD) at a city hotel.

The minister said the government is working to develop alternative financing channels and will introduce market-based financing mechanisms to fund the budget.

He noted that the gap between multilateral financing rates and market interest rates is narrowing, making borrowing costs considerably higher and leaving little option but to rely on market-based instruments.

Announcing a phased withdrawal from local bank borrowing, Khosru said local banks are charging 12-14 per cent interest, a burden that even the private sector struggles to bear. “It is simply not feasible for the government to sustain such borrowing costs.”

On broader economic challenges, he said the Middle East labour market, worth $4 billion, is facing headwinds and that the government inherited hundreds of crores of taka in outstanding bills across all sectors upon taking office.

The minister also noted that the government had only one and a half months to prepare a budget that normally takes six months.

He said the government inherited 1,300 projects from the previous administration, many of which were conceived to serve personal interests, and that a number of schemes have since been cancelled or repurposed. Projects that were 80 per cent complete were being finished despite uncertain returns.

To ensure accountability, Khosru announced that an ADP dashboard will go live in the first week of July, allowing real-time tracking of project progress and implementation status.

On trade facilitation, he said Bangladesh will gradually move away from the letter of credit (LC) system towards direct payment mechanisms for import and export transactions, in line with global practice, allowing credible businesses to trade internationally without opening LCs.

On education, the minister said the allocation will be raised to 5 per cent of the ADP by the end of the government's current term, up from the current 2 per cent.

He stressed that vocational training will receive the strongest emphasis this year, citing China's model, where 60 per cent of students pursue vocational education after secondary school. “Bangladesh's certificates hold little value in the job market because skills are absent. Vocational training is how we bridge that gap.”

On health, Khosru said the government is working towards establishing universal healthcare, with preventive healthcare as the first priority.

Addressing questions over the Family Card programme, he said 72,000 people have already received cards under a pilot project, which he described as the largest social protection initiative in Bangladesh's history.

The minister said the selection process has been deliberately kept free of political interference, with a new formula developed to ensure fairness at both the local and central levels.

He acknowledged a roughly 1-1.5 per cent error rate and said the government is actively working to identify and resolve the causes.

Khosru reaffirmed the government's commitment to carrying out all necessary economic reforms during its tenure.

The government’s proposal to significantly reduce import duties on plug-in hybrid electric vehicles (PHEVs) has raised concerns among local automobile manufacturers, who say the move could encourage imports at the expense of domestic production.

In a letter to National Board of Revenue (NBR) Chairman on June 17, the Bangladesh Automobiles Assemblers and Manufacturers Association (BAAMA) urged the tax authority to revise the proposed fiscal measures, arguing that they create a policy imbalance between imports and local manufacturing.

“The existing budget framework will encourage imports of completely built vehicles rather than the establishment of PHEV manufacturing and assembly operations in Bangladesh,” Hafizur Rahman Khan, president of BAAMA, wrote in the letter.

In its letter, the association called for extending to local PHEV manufacturers the same level of support currently available to EV producers.

Under the proposed budget for fiscal year 2026-27, the total tax incidence on completely built-up (CBU) PHEVs with engine capacities of up to 1,800cc would fall to 73.44 percent from 93.16 percent. For vehicles between 1,801cc and 2,000cc, it would decline to 96.10 percent from 132.66 percent.

However, BAAMA says comparable incentives have not been offered for the local production, assembly and value addition of PHEVs.

The association noted that while the government recently introduced special incentives for locally manufactured electric vehicles (EVs) through SRO No. 163-Ion/2026/18/Customs, issued on June 8, no similar support has been announced for PHEV production.

Industry representatives say this could make importing fully built vehicles more attractive than investing in manufacturing facilities and supply chains in Bangladesh.

The concern comes as hybrid vehicles continue to gain popularity. Data cited by BAAMA from Bangladesh Road Transport Authority (BRTA) registrations show hybrids accounted for 57 percent of passenger vehicle registrations in 2025, up from 42 percent in 2021. Over the same period, the share of conventional internal combustion engine (ICE) vehicles fell from 58 percent to 42 percent.

Despite growing interest in cleaner transport, fully electric vehicles remain a niche segment, accounting for only 0.57 percent of registrations last year. Industry stakeholders attribute the slow uptake to limited charging infrastructure, high battery costs and concerns over long-distance travel.

BAAMA argues that Bangladesh is in a transition phase between conventional fuel-powered vehicles and full electrification, making PHEVs an effective intermediate technology that combines electric driving capability with the flexibility of a conventional engine.

The association said PHEVs can reduce fuel consumption by 40 percent to 60 percent, helping cut fuel import costs while lowering carbon emissions and air pollution.

The debate also has implications for Bangladesh’s emerging automotive industry. Several global brands, including Hyundai, Mitsubishi, Chery and Proton, have invested in local assembly operations through partnerships with Bangladeshi companies. Chinese EV manufacturer BYD has also initiated plans to establish manufacturing operations through a joint venture with Runner Automobiles.

According to BAAMA, policies that favour imports over domestic production could affect future investment decisions and discourage expansion by existing manufacturers.

The association also said the proposed tariff structure departs from the principle of tariff escalation, under which higher duties are imposed on finished vehicles while lower tariffs and incentives support local assembly, component manufacturing and value addition.

Such frameworks are intended to promote industrialisation, employment, technology transfer and the development of domestic supply chains.

BAAMA also referred to the Automobile Industry Development Policy 2021, which commits to supporting local manufacturing through fiscal incentives and investment-friendly measures while promoting fuel-efficient and environmentally friendly vehicle production.

An NBR official, speaking on condition of anonymity, said the proposed duty reduction on plug-in hybrid electric vehicles is part of the government’s broader strategy to promote energy-efficient and environmentally friendly transport

The measure is expected to reduce reliance on fossil fuels and accelerate the adoption of cleaner vehicle technologies.

The official said the government has not overlooked the interests of local manufacturers, noting that a range of fiscal and policy incentives has already been introduced to support the domestic production and assembly of electric vehicles.

Issues related to PHEVs remain under review, and any future policy decisions will seek to balance industrial development, investment promotion, technology transfer, and environmental sustainability.

A multi-year credit drought in Bangladesh’s private sector has deepened while government borrowing from the banking system has increased. Central bank data show the government took BDT 756.2 billion more in net bank credit during the first ten months of the 2025–26 fiscal year than it did a year earlier. Private-sector borrowing fell by BDT 250 billion over the same period. The trend intensified through May and June, officials said, leaving entrepreneurs more credit-starved than before.

Net government borrowing from banks stood at BDT 325.62 billion in the July to April period of FY 2024–25. It reached BDT 1,081.82 billion in the same stretch this year — a threefold rise. The original budget had set a bank-borrowing target of BDT 1,040 billion. The revised budget raised it to BDT 1,180 billion.

Finance ministry and Bangladesh Bank officials now expect net borrowing to exceed even the revised target by the fiscal year-end. The revenue shortfall had already topped BDT 1.04 trillion by April and is forecast to widen further in May and June. A large portion of that gap must be met through bank credit.

This outsized reliance on banks is pushing the private sector into an ever more precarious condition, according to former finance secretary and comptroller and auditor general Mohammad Muslim Chowdhury. “Government expenditure far exceeds revenue capacity. That’s why borrowing is overshooting targets,” he told Bonik Barta. “High interest rates on treasury bills and bonds are also driving up the cost of this borrowing. No effective steps to curb spending or raise revenue are yet visible.”

“The private sector has been struggling for years. Entrepreneurs are either not getting bank loans or have no appetite to expand their businesses,” the former CAG said. “Interest rates are also quite high, and the prevailing economic conditions don’t favour a private-sector revival. To create jobs and get the economy moving, the private sector must be rejuvenated. There’s no alternative to increasing credit flow.”

The private sector accounts for roughly 95 percent of employment and more than 80 percent of GDP in Bangladesh. Yet it is this engine of the economy that has been languishing for years. Many banks have now withdrawn from private lending after a third of their loans turned non-performing. Central bank data show private-sector credit growth was a mere 4.75 percent in April this year — a nadir that bank executives call rare in the country’s history.

Even that meagre expansion does not signal fresh lending, the executives say. It reflects the capitalisation of unpaid interest on defaulted loans. Credit extended through past irregularities and graft has gone largely bad, yielding no revenue for the lenders. The accrual of overdue interest inflates the loan books of weak banks, while sounder lenders have seen their portfolios shrink.

BRAC Bank, widely rated as one of the country’s best-run banks, reported an outstanding loan book of BDT 731.40 billion at the end of December. By end-March it had fallen to BDT 717.08 billion. Over the same period, its investments in government bills and bonds climbed from BDT 419.37 billion to BDT 449.65 billion. Most healthier banks show a similar shift.

Central bank data corroborate the picture. Net private-sector credit flow reached BDT 558.38 billion in the first ten months of FY 2025–26, against BDT 805.93 billion in the same stretch of the 2024–25 fiscal year — a drop of BDT 247.55 billion.

Anwar-ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, traced the imbalance to government yields. “The government is paying 10 to 12 percent on treasury bills and bonds. For three or four years, banks have preferred lending to the state over entrepreneurs,” he told Bonik Barta. “Unless government borrowing demand falls, the private-sector crisis won’t end. Interest rates were hiked in the name of containing inflation, but we see inflation rising instead. No entrepreneur can run a business at 14 or 15 percent interest. If this stagnation continues, the economy will face a far bigger disaster.”

When the BNP government took office in February this year, total public debt stood at more than BDT 23 trillion. By end-March it had climbed to nearly BDT 24 trillion, of which BDT 6.41 trillion was owed to the banking system. There is no sign the borrowing will slow soon. The finance division’s latest projections show that on the current trajectory the debt stock will reach roughly BDT 34 trillion by the 2028–29 fiscal year.

The division’s medium-term macroeconomic policy statement warns that debt will rise to a level that places heavy strain on the wider economy, private-sector growth and foreign-exchange reserves. It projects the total at BDT 26.33 trillion by the close of FY 2026–27, BDT 29.56 trillion the following year and BDT 33.77 trillion in FY 2028–29. Domestic borrowing would account for BDT 18.80 trillion and external debt for BDT 14.97 trillion.

The surge is multiplying interest costs. The government will pay BDT 1.27 trillion in interest in FY 2026–27, rising to BDT 1.62 trillion two years later. A large share of the budget will consequently be absorbed by servicing past obligations, squeezing development spending. Because the bulk of domestic debt is raised from banks, the private sector will suffer further.

Mashrur Arefin, chairman of the Association of Bankers, Bangladesh and managing director of City Bank PLC, said private credit demand has collapsed. “For several years, entrepreneurs have retreated from business expansion. Hardly any new entrepreneurs have emerged. That’s why private credit growth has dropped to around 4 percent. I have never seen such low demand in my banking career,” he told Bonik Barta.

Arefin said the government and central bank have taken steps to revive the private sector. “Bangladesh Bank has created a BDT 600 billion incentive fund. If implemented, the private sector will recover. I expect banks to play an effective role in implementing the scheme.”