Bangladesh Bank (BB) on Wednesday clarified its position on the banking sector’s non-performing loans (NPLs), rejecting media reports that claimed the country’s distressed loan ratio ranged between 45 percent and 60 percent.Bangladesh economic report

The central bank said such figures were based on technically flawed calculations and did not reflect the actual condition of the banking sector as presented in its annual Financial Stability Report (FSR) 2025, reports BSS.

According to the report, the official NPL ratio of the country’s banking sector stood at 10.10 percent as of December 31, 2025.

Bangladesh Bank said this audited and finalized figure remains the authoritative measure of the sector’s non-performing assets.

The central bank noted that some media reports had calculated so-called distressed loans by adding together classified or non-performing loans, rescheduled loans and written-off loans.

It described this method as an inappropriate and technically incorrect approach that led to inflated figures.

Bangladesh Bank further stated that there is no internationally recognized or standardized definition of “distressed loans” among global regulatory and policy-making institutions.

While the term is often used to describe loans that are not generating income or are not being serviced regularly, the aggregate calculation used in the reports does not conform to accepted regulatory or accounting practices.Personal finance e-book

Explaining its position, the central bank said rescheduled loans cannot be considered distressed because borrowers continue to make repayments under approved restructuring arrangements.

These loans remain active assets that generate cash flow for banks.

It also noted that written-off loans are maintained off-balance sheet in line with international practices and therefore cannot be added to active loan portfolios when assessing the current condition of the banking sector.

Bangladesh Bank warned that publication of unverified and technically inaccurate financial data could create negative perceptions about the country’s financial stability among domestic and international stakeholders, potentially affecting confidence in the economy.

The central bank urged media organisations to exercise greater caution in reporting financial sector data and to verify information with official sources to ensure accuracy and maintain public and investor confidence.

The SME Foundation has signed agreements with three banks to disburse more than Tk45 crore in loans to micro, small and medium enterprises (MSMEs) under its Credit Wholesaling Programme.

The loans, to be provided from the foundation's revolving fund, will carry an interest rate of 8% in line with a new directive from the Finance Division.

In a separate initiative aimed at helping returnee migrant workers become entrepreneurs, loans will be distributed through Karmasangsthan Bank with support from the Bangladesh office of the International Labour Organization (ILO). These loans will carry an interest rate of 7%.

Entrepreneurs will be eligible for loans ranging from Tk1 lakh to Tk25 lakh. However, entrepreneurs in cottage, micro, small and medium enterprises engaged in agro-based industries and food processing will be able to access loans of up to Tk1 crore at a 9% interest rate.

The agreements were signed on Tuesday night at a hotel in the capital between the SME Foundation and its partner institutions – Mutual Trust Bank, Dhaka Bank and Karmasangsthan Bank.

The signing ceremony was chaired by Industries Secretary Abdoon Naser Khan, while Industries, Commerce, Textiles and Jute Adviser Khandaker Abdul Muqtadir attended as the chief guest.

Speaking at the event, Muqtadir said the initiative would create a sustainable pathway for transforming remittances into entrepreneurship, entrepreneurship into investment and investment into employment.

Under the programme guidelines, partner banks will be encouraged to provide collateral-free loans, with no collateral required for loans of up to Tk10 lakh. Borrowers will have up to four years to repay their loans, including a grace period of up to six months, subject to their relationship with the lending bank

The Dhaka Stock Exchange (DSE) on Wednesday issued FIX (Financial Information Exchange) certification to three more brokerage houses, bringing them closer to launching their own Order Management Systems (OMS) through API connectivity with the exchange's Nasdaq matching engine.Personal finance e-book

The certificates were handed over at a ceremony by DSE Chief Financial Officer Md Abid Hossain Khan to representatives of GMF Securities Limited, Prime Islami Securities Limited, and Unicap Securities Limited.

Head of IT at GMF Securities Lubna Mahmud, CEO of Prime Islami Securities Md Rajib Hasan and Unicap Securities CEO Waliul Islam received the certificates on behalf of their organisations.

DSE Deputy General Manager Jisan Bin Mubarak and Assistant General Manager Kamrun Nahar, along with other senior officials, were present at the event.

With the latest batch, DSE has now certified a total of 61 brokerage houses under the FIX protocol. Of these, 53 have already gone live with their own OMS platforms, conducting trading operations via API integration with the exchange.

DSE had initiated the API-based Broker House Order Management System (BHOMS) programme in 2020. Following that, 85 brokerage houses applied to DSE seeking API connectivity with the Nasdaq matching engine to operate their proprietary order management systems.

Oil inventories held by OECD member countries fell in May to their lowest level since 1990 as governments drew down stocks to offset the blockage of Gulf crude shipments during the Middle East war, the International Energy Agency said Wednesday.

The drawdown since the start of the conflict has reached 163 million barrels in the Organisation for Economic Cooperation and Development club of wealthy countries, the IEA said in its monthly report.
“Despite the significant reductions in demand for crude oil and refined products, the buffers in the system continue to erode at a record pace,” the agency said.

To ease the burden from soaring oil prices due to Tehran’s effective closure of the Strait of Hormuz, the IEA organised coordinated stock releases of 400 million barrels to the global market, of which 252 million have been released as of June 12.

“The flow of emergency stocks is expected to decelerate somewhat in June and July,” the agency said, after a deal was announced this week to end the war that began on February 28 with US and Israeli strikes on Iran.

But the impact of high prices will weigh heavily on demand through this year, with an expected decline of 1.1 million barrels a day compared to 2025 levels.

“We see growth rebounding to 2 mb/d in 2027, as a normalisation of trade flows, lower oil prices and an improving economic outlook contribute to the recovery,” the IEA said.

Prime Minister Tarique Rahman has outlined a series of government plans in parliament to increase the country's tax-to-GDP ratio, including effective legal action against tax evasion, aiming to raise the ratio to 10% within five years and 15% by 2035.

The prime minister, who is in Moulvibazar on a visit, shared the plans in a written answer that was tabled in parliament today (17 June) as a response to a question from Munshiganj-1 MP Md Abdullah.

Abdullah had asked about plans to address Bangladesh's tax-to-GDP ratio, which currently stands between 7.3% and 8%, significantly lower than 23.1% of Nepal, which is a smaller economy.

In his reply, Tarique said the government has adopted various measures to increase the ratio, including the National Board of Revenue's Medium and Long-Term Revenue Strategy (MLTRS).

He said end-to-end digitalisation of the revenue division is underway, along with expansion of online tax deduction management, reduction of unnecessary tax exemptions and holidays, and simplification of tax laws.

The government is also analysing information from various institutions to determine tax risks, strengthening risk-based audits and investigations using sector-specific average indicators, and enriching the taxpayer database, he said.

He added that the government has introduced AI-based online services for taxpayers and awareness programmes to ensure compliance with tax laws, while also taking effective legal action against tax evasion.

The prime minister also mentioned the formulation and implementation of the Tax Expenditure Policy and Management Framework 2026 to minimise tax expenditures.

The government is strengthening revenue collection from post-clearance audits, pending cases, auctions, bank guarantee encashment, unsettled bills, and deferred payments, he added.

The National Tariff Policy 2023 is being implemented in phases, along with the Customs Strategic Plan 2024-2028.

"I hope implementing these plans will make it possible to raise the tax-GDP ratio to 10% within five years," the prime minister said in his written reply. "Additionally, various initiatives have been taken to achieve the target of 15% by 2035, including the implementation of the Strengthening Domestic Revenue Mobilisation Project and rationalising tax exemptions."

The government’s proposed tax incentives and duty cuts for electric vehicles (EVs) in the fiscal year 2026-27 budget are expected to give a significant boost to Bangladesh’s nascent EV market, industry insiders said.

The measures signal official recognition of electric mobility and could accelerate the country’s shift towards cleaner transport. However, some business leaders warn that the incentives may favour imports over domestic manufacturing.

In the proposed budget, the government has extended tax incentives for electric buses and trucks until June 30, 2030, to reduce pollution and strengthen energy security.

It has also proposed substantial tax cuts on imported EVs. The total tax burden on electric cars valued at up to $25,000 will fall to 64 percent from 93 percent, while EVs priced at up to $50,000 will face an 80 percent tax burden.

To support charging infrastructure, all customs duties and taxes on imported EV chargers and charging stations will be removed from the current 39.75 percent rate. Tax concessions have also been extended

To support charging infrastructure, all customs duties and taxes on imported EV chargers and charging stations will be removed from the current 39.75 percent rate. Tax concessions have also been extended to EV manufacturing, battery production, and commercial electric buses and trucks.

According to the Bangladesh Road Transport Authority (BRTA), 669 EVs had been registered in the country as of May 14, 2026.

Formal EV registration began only in September 2022, after the authority introduced guidelines allowing battery-powered vehicles to be registered for the first time. Registrations have risen steadily since then, driven by changing consumer preferences, higher fuel prices and growing awareness of alternative transport options.

At the same time, the government is raising taxes on conventional vehicles. The total tax burden on imported petrol and diesel cars with engine capacities between 1,200cc and 1,600cc is proposed to increase to 155.88 percent from 132.36 percent.

Plug-in hybrid electric vehicles (PHEVs) will also receive tax relief. The total tax burden on PHEVs of up to 1,800cc will fall to 73.44 percent from 93.16 percent, while those of up to 2,000cc will see taxes reduced to 96.10 percent from 132.36 percent.

Business leaders have welcomed the government’s push towards electric mobility but voiced concerns about its implications for local industry.

Hafizur Rahman, chairman of Runner Group, the Bangladesh distributor of Chinese EV maker BYD, said the proposed duty cuts would primarily benefit higher-income consumers purchasing relatively expensive EVs, while offering limited advantages to buyers of lower-priced models.

He also questioned the decision to allow duty-free imports of completely built-up (CBU) electric trucks, arguing that it would do little to create jobs.

Duty-free imports of truck chassis, by contrast, would support local body-building companies, he said. At least 20 such firms have already been established in Bangladesh and could generate employment if given greater opportunities.

“The government should prioritise industrial development and job creation when formulating fiscal policies,” he said.

Rahman argued that the proposed budget offers stronger incentives for trading than for manufacturing and industrial expansion.

Despite these concerns, companies investing in local EV production welcomed the measures.

Mir Masud Kabir, managing director of Bangladesh Auto Industries Limited, which is establishing the country’s first EV manufacturing plant at Bangabandhu Sheikh Mujib Shilpa Nagar, described the duty concessions as an important acknowledgement of the sector’s potential.

He said the measures reflect the government’s commitment to cleaner transport while strengthening confidence among consumers and investors.

According to Kabir, the incentives could help lay the foundations for a domestic EV ecosystem. However, he cautioned that low-duty imports could intensify competition in the commercial EV segment.

Some Chinese manufacturers, he said, can export EVs at prices below production costs, giving them a significant competitive advantage. Without adequate policy support, local manufacturers may struggle to compete with imported vehicles, Kabir added.

He stressed the need for a balanced policy framework that promotes EV adoption while supporting domestic manufacturing, technology transfer, industrial development and employment.

The government’s decision to cut duties on EVs while raising taxes on petrol and diesel vehicles with engine capacities between 1,200cc and 1,600cc is likely to increase vehicle prices for middle-income consumers and affect the reconditioned car market, according to BARVIDA President Abdul Haque.

Haque said Bangladesh’s automotive sector, including its servicing and technical infrastructure, remains largely geared towards conventional and hybrid vehicles.

He also questioned the revised engine-capacity bands, noting that the market has traditionally been structured around 1,000cc, 1,300cc and 1,500cc categories. The changes, he said, could create uncertainty for importers and buyers.

The dollar held steady against most major peers on Wednesday ahead of the Federal Reserve’s first policy decision under chair Kevin Warsh, which could see some volatility as investors adjust to a new style of policy making and communication. The euro was flat on the day at $1.1605, while the pound softened a fraction on both the dollar, to $1.3420, and the euro, to 86.5 pence to the common currency, after cooler-than-expected UK inflation data that could give the Bank of England cover to hold off on raising rates this year.

But the big event of the day, the Fed meeting, is still to come, and left investors hesitant to take on large positions. The Fed is widely expected to stand pat at Warsh’s debut meeting. The statement, economic projections and news conference, however, will be scrutinised for any signals of the Fed dropping its easing bias as officials grow more hawkish on inflation risks.

“There have been many central banks meeting this month, but this is the one that’s overshadowing everything,” said Jane Foley, head of FX strategy at Rabobank. “There is a lot of uncertainty over what Warsh might signal. No one is expecting a change in interest rates, but is he going to try and downplay the dot plot? Try and set up a new framework? Try to steer them towards an easing bias?” she said.

The so-called “dot plot” shows policymakers’ expectations for the future path of interest rates. Warsh was appointed by US President Donald Trump, who repeatedly criticised the previous Fed chair, Jerome Powell, for being slow to cut rates. Money market pricing actually reflects around an 80 percent chance of the Fed hiking rates this year.

Before the US and Iran reached an interim agreement to end the war in the Middle East, economists had thought the Fed would signal some willingness to raise rates to try to limit the extent to which elevated energy costs spill over into broader inflation. Now though, oil is back below $80 a barrel and the Fed may give different signals.

Bangladesh is set to introduce free trade zones (FTZs) for the first time under a proposed customs framework, marking a major shift in its export strategy, industrial development and investment facilitation efforts.

Under the proposed framework, businesses will be allowed to import raw materials, components and goods into designated FTZs without paying duties. Companies will be able to store, process, assemble, repackage, relabel and re-export products from these zones. Goods may also be supplied to the domestic market after payment of applicable duties and taxes.

The initiative is expected to help reduce supply chain delays, lower production costs and strengthen Bangladesh's position as a regional trade and logistics hub as the country prepares for graduation from least developed country (LDC) status.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Finance Minister Amir Khosru Mahmud Chowdhury, yesterday approved a proposal to establish the country's first free trade zone in Anwara, Chattogram, aimed at boosting trade, investment, and export capacity.

Industry leaders say the move could address one of the biggest challenges facing Bangladesh's manufacturing sector: long lead times in sourcing imported inputs.

Currently, export-oriented manufacturers often require 20 to 30 days to receive imported raw materials due to procedures involving letters of credit, shipping, customs clearance, and inland transportation.

Businesses believe FTZs will allow companies to maintain inventories closer to production facilities, enabling manufacturers to access imported inputs quickly when export orders arrive.

MA Jabbar, managing director of DBL Group and President of Bangladesh Economic Zone Investor Association, said the introduction of FTZs would mark a major shift in Bangladesh's trade and investment landscape.

"Bangladesh's export basket is still highly concentrated. Free trade zones can create opportunities for new sectors to integrate into global supply chains and help generate momentum beyond the RMG industry. This initiative can play a significant role in attracting new investment and diversifying our export base," he said.

SMEs likely to be major beneficiaries

Small and medium enterprises (SMEs) are expected to gain significantly from the proposed system as many currently struggle to import raw materials due to limited access to trade finance, import facilities, and economies of scale.

Under the FTZ model, large operators could import materials in bulk and store them in designated zones, while smaller manufacturers would be able to purchase supplies according to their requirements.

Taskin Ahmed, president of the Dhaka Chamber of Commerce and Industry, said reducing lead time is one of the biggest priorities for Bangladesh's industrial sector.

"Even large manufacturers face losses because of delays in opening LCs and transporting goods. SMEs are even more disadvantaged as many cannot directly import raw materials," he said.

He added that global buyers are increasingly demanding faster delivery, and Bangladesh often loses business opportunities to competing countries because manufacturers cannot arrange inputs quickly enough.

"An FTZ system can substantially reduce that disadvantage," he said.

Anwara in Chattogram to host first FTZ

The Bangladesh Economic Zones Authority (Beza) has been working towards establishing a modern free trade zone in Chatogram's Anwara, in line with international standards.

The establishment of Bangladesh's first Free Trade Zone is being regarded as a landmark step towards the country's economic transformation, enhanced global trade connectivity, and improved regional competitiveness. It is expected to position Bangladesh as a key trade and logistics hub in South and Southeast Asia, said the press release issued by the Cabinet Committee on Economic Affairs.

To that end, a high-level committee comprising 10 relevant agencies including the commerce, industries, and shipping ministries, Finance Division, and National Board of Revenue (NBR), conducted a comprehensive review of FTZ management systems, laws, policies, incentive frameworks, and operational models from countries around the world, culminating in a detailed report.

Based on the committee's recommendations, the Anwara area along the banks of the Karnaphuli river in Chattogram was selected as the most suitable location for the country's first FTZ, taking into account its infrastructure advantages, international trade connectivity, logistics capacity, and potential for future expansion.

Learning from global models

FTZs and free trade warehousing zones have become important tools for trade facilitation and investment attraction in several economies, including the Shanghai Free Trade Zone, India's Free Trade Warehousing Zone (FTWZ) model, the industrial and trade zones of Vietnam, the Jebel Ali Free Zone in the UAE and Singapore's globally recognised trade hub model.

Experts believe Bangladesh could use a similar model to attract investment in sectors beyond garments, including electronics, automotive components, medical devices, agro-processing and light engineering.

"This is a transformative initiative," said Snehasish Barua, director of SMAC Advisory Services and partner at Snehasish Mahmud & Co.

"Currently, companies often wait weeks to receive imported raw materials. FTZs will allow manufacturers to source inputs much faster," he said.

He added that larger companies could import materials in bulk and distribute them among smaller businesses, reducing procurement and logistics costs.

However, Snehasish warned that effective monitoring would be critical.

"If duty-free goods enter the domestic market without proper controls, local industries could face unfair competition," he said.

More than a warehouse system

NBR officials insist that the initiative should not be viewed merely as another warehousing arrangement.

"Bangladesh already has a bonded warehouse system, but it primarily serves specific export-oriented industries," a senior NBR official told TBS on condition of anonymity.

"Free trade zones will be a broader and more modern customs framework that can accommodate a wider range of businesses," he added.

According to the official, the initiative presents an opportunity to position Bangladesh as a regional trade and logistics hub.

To prevent misuse, the government is planning to introduce digital tracking systems, inventory monitoring and regular customs audits.

NBR officials said the FTZ concept should not be viewed simply as an extension of the existing bonded warehouse system.

Economists believe FTZs could help diversify exports, improve manufacturing competitiveness and attract both domestic and foreign investment.

"Logistics inefficiencies and complicated import-export procedures account for a significant share of business costs in Bangladesh," said Dr Masrur Reaz, chairman of Policy Exchange Bangladesh.

"If managed properly, free trade zones can play an important role in reducing those costs," he said.

He added that port efficiency, customs automation, transport infrastructure and policy stability must improve alongside the FTZ initiative.

Steel manufacturers today urged the government to withdraw proposed hikes in value-added tax (VAT) and duties in the national budget for 2026-27, warning that the measures could increase costs by up to Tk 12,000 per tonne as most mills operate below half their capacity.

At a press conference at the National Press Club, Bangladesh Steel Manufacturers Association (BSMA) President Mohammed Jahangir Alam said the industry was already struggling with rising electricity tariffs, port charges, river dues, transportation expenses, and other operating costs.

The recent hike in electricity prices alone has increased production costs by Tk 1,800-2,000 per tonne, while higher logistics and operational expenses have added another Tk 3,000-3,500 per tonne, he said.

The proposed budget measures—including higher VAT at the sales stage, increased VAT on locally sourced scrap, and additional duties on ferro-alloys, refractory materials, and spare parts—would add a further Tk 2,000-2,500 per tonne to production costs.

"As a result, direct production costs could increase by Tk 5,000-6,000 per tonne," Alam said.

Weak demand has compounded the pressure on manufacturers. According to the BSMA, most steel mills are operating at less than 50 percent of their installed capacity, pushing up overhead, financing, and other fixed costs.

This has created an additional indirect cost burden of Tk 5,000-6,000 per tonne, bringing the combined impact of higher taxes and underutilised capacity to Tk 11,000-12,000 per tonne.

Bangladesh's annual steel demand stands at around 5 million tonnes, while the industry's installed production capacity exceeds 10 million tonnes, leaving many producers with significant idle capacity, Alam said.

He welcomed several business-friendly provisions in the proposed budget, including the repeal of certain minimum tax provisions, lower advance tax requirements for appeals and references, a reduction in withholding tax on interest payments for foreign loans from 20 percent to 10 percent, and a cut in tax deducted at source on electricity bills.

However, he said those benefits would be outweighed by the proposed increases in taxes and duties on steel-related inputs.

The BSMA president argued that increasing industrial output and accelerating the implementation of public infrastructure projects would be a more effective way to boost government revenue than imposing additional taxes on industries facing subdued demand.

He said faster execution of roads, bridges, flyovers, railways, ports, airports, economic zones, housing projects, and power plants would stimulate steel consumption and help manufacturers utilise more of their installed capacity.

BSMA Secretary General Sumon Chowdhury said industries need policy support to expand production and create jobs.

"If factories operate at only 50 percent capacity, government revenue will not increase," he said, adding that higher industrial output would generate more revenue even with a lower tax burden.

He also warned that weak industrial growth could limit employment opportunities for the growing number of graduates entering the job market each year.

The association urged the government to withdraw the proposed additional VAT, duties, and taxes on steel-related inputs; retain the existing VAT structure on local scrap and sales; restore the turnover tax rate to 0.6 percent from the proposed 1 percent; and speed up the implementation of development projects.

Economists and researchers have said the proposed FY 2026-27 budget highlights a significant mismatch between the current fiscal year's economic reality, the government's ambitious targets, and the country's limited implementation capacity.

They said projected targets for GDP growth, inflation control, revenue collection, foreign investment and budget deficit management are not fully aligned with present economic conditions.

The observations were shared at a national seminar titled "Proposed National Budget: From the Perspective of Development and Political Economy," held in the city today (17 June), organised by the Economic Reporters Forum (ERF). One Initiative Research and Development (OIRD) organised the seminar.

Economist and Associate Professor Zubair Ahmed of the Bangladesh Institute of Governance and Management (BIGM) presented the keynote paper.

He noted that although GDP growth stood at 4.14% in the current fiscal year, the upcoming budget has set a 6.5% target, which he described as overly ambitious and misaligned with prevailing economic reality.

He also pointed out structural constraints, saying export earnings remain 82% dependent on the ready-made garment sector, making diversification difficult. While foreign direct investment (FDI) is typically around 0.4–0.5% of GDP, the budget target has been set at 2.7%, which he termed unrealistic.

He further said the attempt to raise growth to 6.5% while reducing inflation from 8–10% to 7.5% appears contradictory. He warned that allocating Tk40,000 crore to the banking sector and increasing social safety net spending could add further pressure on the market.

Despite long-standing gaps between National Board of Revenue (NBR) targets and actual collection, he said the new revenue targets also appear unrealistic.

Zubair Ahmed added that although allocations in some sectors of the Annual Development Programme (ADP) have been reduced, spending has increased in education, health and agriculture. He stressed aligning revenue targets with NBR capacity, ensuring sectoral balance, and strengthening oversight of public expenditure for stability.

Professor A K M Waresul Karim, Dean of the School of Business and Economics at North South University, said Bangladesh's budget has expanded more than 120 times over time but does not always reflect the country's actual economic capacity.

He said a larger budget does not necessarily mean a better one, as it increases pressure on borrowing, taxation and money supply to finance deficits. He also said a significant share of the budget is spent on administrative costs, limiting the effectiveness of social protection and development spending.

He further said combined direct and indirect taxes impose a tax burden of around 45–60% on the public, which may negatively affect investment and employment.

Mohammad Mizanur Rahman, executive director of the Centre for Strategic and Peace Studies, said Tk40,000-42,000 crore has been allocated to the defence sector, much of which is spent on salaries, allowances and administrative expenses, leaving limited scope for modern equipment procurement and creating capacity gaps.

He also expressed concern over agriculture, noting that only 5-6% of the national budget is allocated to the sector. He alleged that a large portion of agricultural subsidies goes to intermediaries rather than farmers.

Criticising the increase in the personal income tax exemption limit, he said inflation-adjusted relief for the public would remain limited, while changes in the tax structure could increase pressure on taxpayers.

Chapainawabganj-3 MP Md Nurul Islam Bulbul said the large budget deficit will increase reliance on borrowing, posing risks to the economy. He said achieving targets for revenue collection, inflation control, growth and investment would be difficult, citing weaknesses in the banking sector, absence of a clear employment plan.

AB Party General Secretary Barrister Mohammad Asaduzzaman Bhuiyan said budget implementation and accountability are more important than its size. He alleged that the lack of transparent evaluation of implementation creates scope for corruption and waste.

Bangla QR, Bangladesh’s interoperable quick response (QR) payment collection system introduced by the central bank, expanded to nearly 9.63 lakh merchants by the end of 2025, reinforcing its role in the digital payments ecosystem.

A total of 46 banks, seven mobile financial service (MFS) providers, and four payment service providers (PSPs) now offer the service, according to the Payment Systems Report 2025, published by the Bangladesh Bank (BB) on Monday.

More than Tk 2,700 crore worth of payments were processed through the system last year.

The latest data comes as the central bank seeks to use Bangla QR to achieve 80 percent digital transactions within the next decade and transform the country into a cashless, technologically empowered economy.

In April this year, the BB directed all banks, MFS providers, PSPs and payment system operators (PSOs) to replace proprietary QR codes at merchant points with Bangla QR by June 30, warning of penalties of up to Tk 30 lakh for non-compliance.

A total of 46 banks, seven mobile financial service providers and four payment service providers now offer the Bangla QR service

The central bank launched the interoperable QR-based settlement system in January 2023 to improve transparency, reduce risks, lower transaction costs and accelerate digital payments.

As part of its target of making 75 percent of transactions cashless by 2027, the authorities have already made QR payment facilities mandatory for obtaining or renewing trade licences nationwide.

The platform enables customers of participating banks and MFS providers to make payments using a single QR code, unlike proprietary systems that restrict transactions to specific providers.

According to the report, the payment network reached a major milestone in November last year when banks, PSPs, PSOs and MFS providers began conducting live interoperable transactions for the first time. The development allowed customers to transfer funds to any registered bank account, MFS or PSP wallet, regardless of the service used.

The central bank followed up on this on December 15, 2025, by approving instant settlement for Bangla QR transactions, a move aimed at improving liquidity for small traders.

BB data showed that nearly 66 lakh transactions were conducted through the payment system. However, Bangla QR still accounted for only a small share of transactions routed through the National Payment Switch Bangladesh (NPSB).

The report also showed that the total number of transactions across Bangladesh’s payment system rose 19 percent to 108 crore in 2025, although the overall value of transactions slipped 1 percent.

Alongside Bangla QR, the BB’s national debit card, TakaPay, also gained momentum in 2025. Introduced in November 2023 to reduce reliance on international card networks and lower transaction costs, TakaPay transitioned from magnetic-stripe cards to chip-based debit cards in June 2024, when nine banks first rolled them out. The report said 17 banks are now actively issuing TakaPay cards.

All TakaPay transactions are processed through the NPSB, giving cardholders’ access to around 16,500 ATMs and cash recycler machines, as well as approximately 130,000 point-of-sale terminals nationwide.

“This integration ensures seamless interoperability across participating banks, merchants, and ATMs, allowing cardholders to transact reliably regardless of their issuing institution. By consolidating transaction processing through a unified national switch, TakaPay eliminates fragmentation and establishes a cohesive foundation for digital payments,” the BB said.

The report said Bangladesh had 792,132 credit card users as of December 2025, making credit cards the smallest category of digital payment instruments, well behind the 82.3 lakh debit cardholders and 1.23 crore savings account holders.

The data highlighted a stark urban-rural divide. Cities accounted for 99.41 percent of credit card transaction volume and 92.69 percent of transaction value, leaving rural areas with just 0.59 percent of volume and 7.31 percent of value.

The BB attributed the disparity to structural barriers, including income documentation requirements, limited access to credit bureaus and merchant card-acceptance infrastructure that remains overwhelmingly concentrated in urban areas.

To narrow the gap, the central bank suggested expanding alternative digital credit models, such as transaction-based lending linked to mobile financial services usage, which could broaden access to credit without weakening risk controls.

Despite Bangladesh Bank's campaign to promote a cashless society, cash remains the dominant mode of payment in the country, accounting for 67.2% of total transactions in 2025, according to the central bank's latest annual report.

Data from Bangladesh Bank's payment systems department shows that digital platforms accounted for 32.8% of total transaction value during the year.

The figures, however, indicate gradual progress. In 2024, cash transactions accounted for 72% of total transactions, with the remainder conducted through digital channels.

According to the report, Tk209 lakh crore out of total Tk311 lakh crore was conducted in cash in 2025, while digital mode shared Tk102 lakh crore.

Digital payments include transactions through systems such as Real Time Gross Settlement, National Payment Switch Bangladesh, Bangla QR, internet banking and mobile financial services.

However, cash withdrawals and deposits through bank branches, ATMs or MFS agents are classified as cash transactions because physical money changes hands.

A transaction remains digital only as long as it stays within the digital ecosystem. Once cash is withdrawn or deposited, it is counted as a cash transaction, said a central bank official.

Informal economy remains a major hurdle

Experts say the persistence of cash reflects the size of the informal economy, where a significant transaction remains outside the formal banking system.

Although mobile financial services, digital banking and QR-based payment solutions have expanded rapidly, many businesses and individuals continue to prefer cash for convenience and to avoid greater financial scrutiny.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said, "The country's informal sector remains outside the banking system. A large share of economic transactions takes place there in cash, and we have not yet been able to bring these activities into formal financial channels."

Dr Md Zahid Hussain, former World Bank lead economist in Dhaka, said building a cashless society would remain difficult unless the informal sectors are brought under the formal financial system.

"Large businesses in transport, agriculture, and wholesale-retail trade continue to operate outside banking channels. Many of them are reluctant to join the formal system because doing so would expose them to taxation and regulatory oversight," he said.

Infrastructure, trust challenges

Bankers also point to infrastructure constraints as a major barrier to digital adoption.

Many consumers still lack access to smartphones, reliable internet connections or the digital skills needed to use electronic payment systems. Small merchants and rural businesses often lack the infrastructure required to accept digital payments.

Syed Mahbubur said policy support alone would not be enough to accelerate the shift.

"Digital payment systems must become easier, more accessible and more convenient if we want people to adopt them on a larger scale," he said.

Dr Md Touhidul Alam Khan, managing director and CEO of NRBC Bank, said banks face a dual challenge of ensuring security while making digital services simple enough for users with limited digital literacy.

He warned that fraud incidents, failed transactions and complicated interfaces may erode trust and push users back toward cash.

The banker also stressed the need for an inclusive transition, saying the objective should be to expand consumer choice rather than eliminate cash.

Digital payment adoption remains sluggish even as the country continues to bear the substantial costs of a cash-driven economy. According to banking sector estimates, Bangladesh spends between Tk20,000 crore and Tk22,000 crore annually on printing currency notes.

QatarEnergy is ready to resume liquefied natural gas production ​at its Ras Laffan LNG plant very quickly ‌and could reach within a month full output of facilities unaffected by Iranian strikes, a person with knowledge of the matter told Reuters ​on Tuesday (16 June).

Two of Qatar's 14 LNG trains and ​one of its two gas-to-liquids (GTL) facilities were damaged in ⁠the strikes, which knocked out 17% of the country's ​LNG export capacity, and will take years to repair, the ​group's CEO told Reuters in March.

However, production at other facilities, idled because of the de facto closure of the Strait of Hormuz oil ​and LNG export gateway for the region during the Iran ​war, could be quickly restored, the source said.

"The problem will be how ‌fast ⁠can we bring ships in and how fast we can load them after the strait opens," the person, who declined to be named, told Reuters. "It's more of a shipping ​and logistics problem ​than production."

Despite ⁠a framework agreement between the US and Iran on terms to end their war and reopen ​Hormuz, a little more than a dozen LNG ​tankers ⁠have managed to exit the strait since the war began in late February.

Shippers are awaiting reassurance on safety to cross the ⁠strait, ​including the clearing of mines, which ​could delay a return to normal shipping traffic by weeks.

The Executive Committee of the National Economic Council (ECNEC) today approved five projects involving an estimated cost of BDT 70.03 billion.

Of the total project cost, BDT 45.36 billion will come from the government's own resources, while BDT 24.67 billion will be financed through project loans.

The approval came from the 13th ECNEC meeting of the current fiscal year (FY26) held at the Cabinet Division conference room at the Bangladesh Secretariat, with ECNEC Chairperson and Prime Minister Tarique Rahman in the chair.

Among the approved projects, three are new, while two are revised schemes.

The approved projects include one project under the Prime Minister's Office titled “Supporting Infrastructure Project for Chinese Economic and Industrial Zone”.

Three projects under the water resources ministry were also approved. These are: Rehabilitation of Muhuri-Kahua Flood Control, Drainage and Irrigation Project in Feni District (Phase-I); Karatoya River System Development Project, and the first revised project for protecting Talbaria area under Mirpur upazila and Komorkandi area of Shilaidaha Union under Kumarkhali upazila in Kushtia district from erosion by the Padma River.

In addition, ECNEC approved the third revised project titled “Establishment of One Technical School and College in Each of 100 Upazilas”.

The project is being implemented under the education ministry.

The meeting was also informed about four projects involving costs below BDT 500 million that had already been approved by the planning minister.

These projects are: construction of an Airmen Barrack Complex at Bangladesh Air Force Base Cox's Bazar; establishment of Navy School and College at Savar; construction of physical infrastructure for improving educational standards and teaching capacity at BAF Shaheen College under Bangladesh Air Force Station Shamshernagar; and the fourth phase of the Pagoda-based Pre-primary and Tripitaka Education Programme.

The meeting was attended by Finance and Planning Minister Amir Khosru Mahmud Chowdhury; LGRD and Cooperatives Minister Mirza Fakhrul Islam Alamgir; Foreign Minister Dr Khalilur Rahman; Industries, Textiles and Commerce Minister Khandakar Abdul Muktadir; Road Transport, Bridges, Railways and Shipping Minister Shaikh Rabiul Alam; Home Minister Salahuddin Ahmed; Education and Primary and Mass Education Minister Dr A N M Ehsanul Hoque Milon; Water Resources Minister Md Shahiduddin Chowdhury Anee; State Minister for Planning Zonayed Abdur Rahim Saki and senior government officials.

Bangladesh's first budget by the newly elected government sets "ambitious" revenue targets that may prove difficult to achieve given the country's weak track record in tax mobilisation and reform implementation.

Such is the just-presented budget's ratings coming from the New York-based outfit Fitch Ratings.

Finance and Planning Minister Amir Khosru Mahmud Chowdhury last Thursday rolled out his maiden budget in parliament for next fiscal year beginning July 01. The budget size is Tk 9.38 trillion and the revenue target set at highest-ever Tk 6.95 trillionPersonal finance e-book

The revenue-to-GDP ratio is 10.2 per cent, up from around 8.0 per cent in the outgoing financial year (FY2025-26), also the highest level since 1993.

"Revenue collection will be the main test of fiscal performance, as the budget projects nominal revenue growth of 18 per cent year on year alongside a 19-percent increase in public spending," says Fitch in its latest analysis on Bangladesh budget.

It mentions that to boost revenue, the government has proposed simplified tax procedures, a reduction in tax exemptions, easier VAT compliance for small and midsize enterprises (SMEs), and higher non-tax income from state investments in state-owned enterprises, corporations and banks.

While these measures could gradually broaden the tax base, Fitch says, weak implementation has limited the effectiveness of past reform efforts.

The global ratings agency notes that higher spending commitments make successful revenue mobilisation even more important. Social protection-and welfare programmes account for 29.7 per cent of total expenditure, while physical infrastructure receives 18.7 per cent, reflecting the new government's election pledges.Bangladesh economic report

However, as a saving grace, Bangladesh's longstanding tendency to underspend budget allocations could help contain the fiscal deficit if implementation again falls short of targets.

Fitch says energy-sector initiatives outlined in the budget could support medium-term economic growth if effectively implemented.

More than 40 per cent of the country's power-generation capacity is gas-based, and the budget prioritises domestic gas exploration, efficiency improvements in generation, transmission and distribution, and enhanced infrastructure for liquefied natural gas (LNG) imports.

The agency also says that Bangladesh has sought a new programme from the International Monetary Fund (IMF), while completion of the final review under the current arrangement, which expires in January 2027, appears increasingly unlikely. Any agreement on a new reform agenda could take time, leaving the budget's credit implications largely dependent on the government's ability to improve revenue mobilisation and investment execution.

Fitch also questions the government-set growth assumptions.

The authorities expect real GDP growth of 6.5 per cent in FY27, compared with Fitch's forecast of 3.5 per cent.

The agency cites a still-fragile banking sector, weak private-sector credit growth, policy shortcomings and an uncertain external environment as key factors continuing to weigh on investment and economic activity.

The market valuation of Beximco Limited has witnessed a catastrophic decline, losing around Tk4,860 crore in just six trading sessions following the withdrawal of its floor price.

The flagship company of the Beximco Group saw its share price plunge 47% to Tk58.60 by Tuesday from the floor price of Tk110.10, which had remained in place for more than two years.

The free-fall began after the Bangladesh Securities and Exchange Commission (BSEC) lifted the trading restriction on 9 June to restore market-based price discovery for major stocks, including Beximco and Islami Bank Bangladesh PLC.

Unlike Islami Bank, which recovered after a central bank-led board restructuring, Beximco has continued to hit the lower circuit breaker with virtually no buying interest.

Market data reveals an extreme lack of liquidity for the scrip, as buyers have almost entirely shunned the stock. Despite crores of shares being placed for sale by panicked investors, only a meagre 77,327 shares changed hands during these six days.

Market analysts attribute the collapse in investor confidence to the severe crisis facing the group following the imprisonment of its vice chairman, Salman F Rahman, after the change in the Awami League-led government.

Industry sources suggest that the company's vast industrial operations have ground to a near halt, while several banks have initiated legal proceedings over massive loan defaults.

The company's outlook has been further clouded by regulatory and legal challenges. In late 2024, the BSEC appointed independent directors to Beximco Limited, Beximco Pharmaceuticals and Shinepukur Ceramics on instructions from the Financial Institutions Division. The move was challenged in the High Court, where the case remains pending.

Beximco has also failed to approve or publish financial statements since December 2024, raising concerns over transparency. Its latest available report for the first half of FY25 showed a loss per share of Tk3.78.

Meanwhile, the company remains under pressure from a court-backed move to place Beximco Group firms under receivership. Acting on a writ petition filed in September 2024, the High Court directed Bangladesh Bank to appoint a receiver and attach the group's assets.

The Appellate Division largely upheld the order in November 2024, exempting only Beximco Pharmaceuticals, to prevent asset dissipation and facilitate the recovery of allegedly laundered funds.

As of May 2026, general and institutional investors collectively hold more than 66% of the company's shares. With no financial updates, no dividends since a minor stock payout in 2024, and a share price that continues to hit the lower circuit breaker daily, investors see little hope for a near-term recovery.

Analysts warn that as long as the operational paralysis and legal disputes regarding the group's massive liabilities remain unresolved, Beximco Limited will continue to weigh heavily on the market's total capitalisation.

Despite efforts by Bangladesh Bank to promote a cashless economy, cash remained the country's preferred payment method in 2025, accounting for 67.2% of total transaction value, according to the central bank's latest annual report.

Central bank data show that digital channels made up the remaining 32.8% of transaction value, highlighting the slow pace of the transition towards digital payments.

Informal economy a major hurdle

Experts say the persistence of cash reflects the size of the informal economy, where a significant portion of transactions remains outside the formal banking system.Although mobile financial services, digital banking and QR-based payment solutions have expanded rapidly, many businesses and individuals continue to prefer cash for convenience and to avoid greater financial scrutiny.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said, "The country's informal sector remains outside the banking system. A large share of economic transactions takes place there in cash, and we have not yet been able to bring these activities into formal financial channels."
Cash still accounts for 67.2% of transactions in Bangladesh despite cashless push

Zahid Hussain, former World Bank lead economist in Dhaka, said building a cashless society will remain difficult unless the informal sector is brought under the formal financial system.

"Large businesses in transport, agriculture and wholesale-retail trade continue to operate outside banking channels. Many of them are reluctant to join the formal system because doing so would expose them to taxation and regulatory oversight," he added.

Infrastructure, trust challenges

Bankers also point to infrastructure constraints as a major barrier to digital adoption.Many consumers still lack access to smartphones, reliable internet connections or the digital skills needed to use electronic payment systems.Small merchants and rural businesses often lack the infrastructure required to accept digital payments.

Mutual Trust Bank CEO Mahbubur said policy support alone will not be enough to accelerate the shift.

"Digital payment systems must become easier, more accessible and more convenient if we want people to adopt them on a larger scale," he added.

Md Touhidul Alam Khan, managing director and CEO of NRBC Bank, said banks face a dual challenge of ensuring security while making digital services simple enough for users with limited digital literacy.

He warned that fraud incidents, failed transactions and complicated interfaces may erode trust and push users back toward cash.

The banker also stressed the need for an inclusive transition, saying the objective should be to expand consumer choice rather than eliminate cash.

Digital payment adoption remains sluggish even as the country continues to bear the substantial costs of a cash-driven economy.

According to banking sector estimates, Bangladesh spends between Tk20,000 crore and Tk22,000 crore annually on printing currency notes.

The Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) has welcomed the proposed national budget for the fiscal year 2026-27, saying it reflects the government’s efforts to maintain macroeconomic stability, control inflation, and create a more investment-friendly environment despite ongoing global economic uncertainty.

In a statement, the chamber said the budget’s focus on education, healthcare, social protection and employment generation demonstrates a commitment to inclusive and sustainable growth. These priorities, it noted, are crucial for developing the skilled workforce needed to support Bangladesh’s economic transformation.

JBCCI also appreciated the government’s emphasis on the private sector as a key driver of growth. Measures aimed at improving the business climate, encouraging industrial diversification, boosting exports and attracting foreign direct investment were described as positive signals for the international business community.

The chamber particularly welcomed initiatives to digitalise tax and customs administration, including automated VAT registration, expanded online compliance systems, recognition of ERP-based documentation and more structured audit procedures. It said these measures could improve transparency, reduce administrative burdens and make business operations more predictable.

Reforms related to customs modernisation, bonded warehouse operations, logistics and free trade zones were also praised.

According to JBCCI, efficient customs procedures and modern logistics infrastructure are among the most important factors considered by Japanese manufacturers and global supply chain operators when selecting investment destinations.

The chamber further welcomed incentives for emerging sectors such as electric vehicles, battery technology, semiconductors, advanced electronics and medical devices, saying they could help attract quality investment, encourage technology transfer and create skilled jobs.

JBCCI noted that the budget comes at a significant moment in Bangladesh-Japan economic relations as the two countries prepare to implement the Bangladesh-Japan Economic Partnership Agreement (EPA).

The agreement, combined with ongoing domestic reforms, could strengthen bilateral trade and investment while deepening Bangladesh’s integration into global supply chains.

While expressing support for the budget’s overall direction, the chamber stressed that effective implementation remains critical.

It said timely issuance of rules, clear operational guidelines and consistent interpretation by authorities will be essential to ensure the intended benefits reach businesses.

The chamber also called for greater regulatory predictability, reliable digital systems and continued efforts to reduce the cost of doing business through improvements in logistics, energy supply and administrative processes.

It emphasised the need for continued investment in trade infrastructure and stronger collaboration between industry, universities and technical institutions to develop skills in advanced manufacturing and technology sectors.

Although a Bangladeshi team is not taking part in the FIFA World Cup 2026, products “made in Bangladesh” have still made their way to football’s biggest stage.

Jerseys manufactured in Bangladesh were worn by the Cape Verde national team during their World Cup debut match against Spain in Atlanta on Monday night, a game that ended in a draw.

The jerseys were produced by Garments Manufacturing and Assembling Ltd (GMA), a factory located in Dhaka’s Turag area. The company supplied 5,000 player jerseys through New York-based sportswear company Capelli Sport.

“Not only the 5,000 jerseys for the players, but also 13,000 fan jerseys of different countries were exported through Capelli Sport,” GMA Manager Showmik Barmon told The Daily Star over the phone.

Fan jerseys are sold to supporters in stadiums, while player jerseys are worn directly by national team players at the World Cup.

GMA, established in 2019, has been producing sports garments and supplying them to Capelli Sport from the beginning, Barmon said.

Capelli Sport placed the order in January this year, and GMA delivered the jerseys to Cape Verde in March. Each player’s jersey was sold at $8, he added.

Barmon also said that making football jerseys requires Coolmax fabric, which is made from special yarn designed to reduce sweating during matches.

Another local garment giant, Youngone Corporation, supplied the fabric to GMA after importing the special yarn.

Although GMA has produced sports garments since its inception, this is the first time it has supplied player jerseys for a FIFA World Cup, he added.

Bangladesh supplies jerseys for major global sporting events, including football and cricket World Cups and other international tournaments, and has built a strong position in the global garment industry with high production capacity, becoming one of the world’s leading apparel suppliers after China.

Its garments have also become popular among European football fans, especially young supporters who travel to stadiums to watch club football and cricket matches.

“It is true that during the FIFA World Cup, jersey exports increase every four years, but Bangladesh exports jerseys and sports garments every day,” said Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

He added that Bangladesh is a preferred destination for all types of garment products, as local manufacturers have the capacity to produce high-end, value-added items with their existing production facilities.

Myanmar’s inflation spiked to nearly 25 percent as shocks from the Middle East conflict compounded the effects of the country’s civil war, the World Bank said Tuesday.

The Bank also slashed its growth forecast for the financial year that started in April, citing “a less favorable external environment”.

Myanmar has been mired in civil war since the military snatched power in a 2021 coup, plunging it into a half-decade of instability and a backslide into poverty for many of its more than 50 million citizens.

The country also imports 90 percent of its fuel oil, according to official figures, leaving it highly exposed to closure of the Strait of Hormuz since the US-Iran war started on February 28.

That sent inflation to as high as 24.6 percent on-year in April, according to the Bank’s biannual Myanmar Economic Monitor report, which also saw officials cut their 2026-27 economic growth outlook to two percent, from three percent previously estimated.

Myanmar’s economy is “stabilising at low levels” the World Bank said, but “a renewed fuel shock magnifies longstanding structural weaknesses and leaves the outlook highly vulnerable to further disruption”.

“The fuel shock has reignited inflation pressures,” senior economist Kemoh Mansaray told reporters.

“What this means is household purchasing power has gone down, and these households were already facing very thin buffers with high poverty levels.”

Inflation for the 12 months to the end of March came in at 21.1 percent.

The Bank’s report also said 2025 poverty levels hit 29.9 percent -- “still far above pre-2021 trends”.

“Because we’re struggling just to afford food, there are children we can’t send to school,” said one 28-year-old father in Yangon, speaking on condition of anonymity for security reasons.

“We have three school-age children at home,” he said.

A female Yangon shopkeeper -- also speaking anonymously -- complained soaring prices had crippled her business and family.

“Our income and expenses don’t match. We just manage day by day,” added the 45-year-old.

“Prices only go up, they never go down,” she said. “Now no matter how much we earn, it’s still not enough.”

The closure of the Strait of Hormuz has been particularly damaging to Asia, where 80 percent of oil transiting the seaway is bound, according to the International Energy Agency.

US President Donald Trump said Monday ships were again sailing through the strait after Washington and Tehran announced a deal to end the war, and claimed the oil route would be “completely open” by Friday.

However analysts warn economic recovery from the conflict will be a long process.