The government on Saturday invited US companies to expand investment in Bangladesh, promising policy stability, equal treatment for foreign investors and a more business-friendly environment to attract higher foreign direct investment (FDI) and strengthen bilateral economic ties.

Prime Minister’s Adviser and spokesperson Mahdi Amin made the call while addressing a programme marking the 250th anniversary of US Independence, organised by the American Chamber of Commerce in Bangladesh (AmCham) in association with the US Embassy in Dhaka.

Describing the private sector as the main driver of economic growth, Mahdi said the government was committed to restoring investor confidence through transparency, accountability, good governance and the rule of law.

“The government will provide all possible policy support to facilitate investment,” he said.

Acknowledging long-standing concerns over unequal treatment of foreign investors, he said the government was determined to ensure a level playing field for both local and overseas businesses.

He urged leading US companies to step up FDI by bringing advanced technology, expertise and global best practices, creating quality jobs and strengthening local industries through partnerships.

Mahdi said Bangladesh’s large domestic market, expanding middle class and youthful workforce offered significant opportunities for foreign investors, while the government’s development strategy placed the private sector at the centre of economic expansion.

He said recent policy measures included facilitating profit repatriation, pursuing liberal economic reforms and offering tax incentives in economic zones, industrial parks and high-tech parks. The government would continue consulting businesses and implementing reforms to further improve the investment climate, he added.

Highlighting the contribution of American companies, Mahdi said US investment had created employment, transferred technology and management expertise, introduced global best practices and contributed to Bangladesh’s economic development.

“Bangladesh is at a crucial stage where we want to learn from international best practices and create an environment in which both local and foreign companies can thrive,” he said.

Mahdi also called for turning “brain drain” into “brain circulation” by encouraging skilled Bangladeshi professionals abroad, particularly in the United States, to contribute to the country’s economic and technological advancement.

He identified aviation, energy, information and communication technology, agro-based exports, pharmaceuticals, textiles, light engineering and high-value manufacturing as sectors with strong potential for expanded Bangladesh-US cooperation.

He also invited US companies to organise investment roadshows in Bangladesh and engage more closely with policymakers to explore new business opportunities.

Speaking at the event, US Ambassador to Bangladesh Brent T. Christensen said Washington sought to build a fair, reciprocal and long-term economic partnership with Bangladesh based on trade, investment and shared prosperity.

He said the United States wanted to move beyond a relationship centred on unilateral trade preferences and development assistance towards one based on fair and reciprocal trade and investment.

“This is a vote of confidence in Bangladesh’s potential, its dynamic private sector, young workforce and growing importance as a regional economic hub,” he said.

The ambassador, however, said Bangladesh would need to accelerate reforms by reducing bureaucracy, tackling corruption, promoting competition and ensuring a more predictable business environment to unlock its full economic potential.

He said the proposed US-Bangladesh reciprocal trade agreement could deepen bilateral economic cooperation by promoting investment, job creation, skills transfer and long-term business engagement.

He also highlighted opportunities for greater collaboration in energy, technology, the digital economy, healthcare, defence, security and investment.

AmCham President Syed Mohammad Kamal said the chamber would continue serving as the primary platform for American companies exploring business opportunities in Bangladesh.

He said AmCham had played a key role over the past three decades in strengthening bilateral commerce by connecting US investors with Bangladesh’s private sector and facilitating technology and knowledge transfer.

He added that American companies had made significant contributions to Bangladesh’s economic growth and industrial development through investments in sectors including energy, the digital economy, aviation, healthcare and garments.

The government has allowed businesses to file value-added tax (VAT) returns and make payments every three months rather than monthly, marking one of the biggest changes to the country’s indirect tax system in decades.

The move has divided opinion. Businesses have welcomed the relief, and officials at the National Board of Revenue (NBR) say it will make compliance easier and reduce mismatches between VAT returns and payments.
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However, tax practitioners and former revenue officials warn that the reform could strain the government’s cash flow at a time when revenue collection is already under pressure.

Under the previous system, businesses generally filed VAT returns every month. The Finance Act 2026 now allows VAT returns to be filed every three tax periods, or quarterly, within 15 days after the end of the third tax period. If the deadline falls on a government holiday, returns may be filed on the next working day.

The amendment does not abolish the monthly system. Businesses may continue to file and pay VAT every month if they choose.

The amendment therefore introduces quarterly VAT filing as an alternative rather than replacing the existing monthly regime.

BUSINESSES WELCOME

Businesses have welcomed the move, calling it “long overdue”.

Debabrata Roy Chowdhury, former tax and corporate affairs director of Nestlé Bangladesh PLC, said quarterly filing would reduce the compliance burden, improve working capital management, and give businesses greater financial flexibility at a time of high inflation.

He acknowledged that the government could face short-term cash flow pressure but said the benefits for businesses outweighed that concern.

While some fear businesses could use VAT funds for other purposes before the payment deadline, Debabrata said the risk of default exists under any filing system.

“The focus should be on ensuring compliance,” he said.

MA Razzaque, chairman of Research and Policy Integration for Development (RAPID), also said the change was unlikely to create a long-term liquidity problem, although it could cause some initial uncertainty.

“I don’t think the government will face a liquidity crisis as long as businesses submit their VAT returns properly every quarter,” he said.

Razzaque said the new provision gives businesses more flexibility rather than requiring them to delay payments.

“The government has not said that everyone must wait three months to pay VAT. It has simply given businesses more flexibility. Those that already pay VAT regularly can continue to do so, while those that need more time can choose the quarterly option,” he said.

REVENUE RISKS

Revenue experts, however, are less convinced.

Snehasish Barua, director of SMAC Advisory Services, said businesses have been paying VAT every month for the past 35 years.

“If businesses are allowed to keep VAT collections for three months, some may use the money for other purposes before the payment deadline,” he added.

He warned that this could increase the risk of default among financially troubled firms and slow the government’s revenue inflows.

A former NBR member shared the same concern, saying the proposal comes at a time when the government is struggling to raise revenue and meet rising expenditure.

“The government now needs to strengthen revenue collection, not delay it,” he said, warning that the reform could weaken revenue mobilisation without strong enforcement.

VAT is one of the government’s most reliable sources of revenue, collected throughout the year to fund salaries, pensions, interest payments and development projects. The timing of VAT receipts is especially important because the NBR is under heavy fiscal pressure and revenue collection has repeatedly fallen short of targets.

In FY26, the NBR collected nearly Tk 4.15 lakh crore, about Tk 1.39 lakh crore below its own target and around Tk 88,000 crore short of the government’s revised target.

If a large share of VAT receipts is delayed, the Treasury could face temporary cash-flow shortages even if total annual revenue remains unchanged. How serious the impact becomes will depend on the government’s cash reserves, borrowing capacity and business compliance.

Some specialists believe the government may have to rely more on short-term bank borrowing if quarterly VAT collections become uneven, according to the former NBR member.

Razzaque questioned whether the change was necessary, arguing that businesses should normally be able to determine their VAT liabilities within a month.

He also warned that a longer payment period could increase the risk of revenue leakage if businesses keep the money, underreport their liabilities or fail to pay the full amount later.

“If the government ultimately receives the same amount of revenue and the overall flow does not fall, there may be some initial disruption before the system adjusts,” Razzaque said.

“The concern about possible revenue leakage is valid, but it is too early to say whether it will happen or how serious it could be,” he added.

Gold rose on Friday and was set for a weekly gain after four straight weeks of declines, as weak US jobs data dampened expectations for a near-term Federal Reserve rate hike.

Spot gold was up 1.3 percent at $4,174.21 per ounce at 1241 GMT, after hitting its highest since June 23. Bullion held above its 21-day moving average and is up over 2 percent for the week so far.

US gold futures for August delivery gained 1.5 percent to $4,186.80/oz. Data on Thursday showed that US nonfarm payrolls rose by 57,000 last month, below the 110,000 expected by economists in a Reuters poll. Gold’s rally was driven by a sharp slowdown in US hiring last month, said Han Tan, chief market analyst at Bybit.

The World Bank has upgraded Sri Lanka's status to an upper-middle income economy due to its expansion in the economy supported by a broad-based recovery across industries and growth in tourism and financial services, reports The Hindu.

Sri Lanka was earlier upgraded to the upper-middle income in 2019 but lost the status within a year, and then experienced an economic crisis.

According to the World Bank's latest income classification update released on Wednesday (1 July), the present status of Sri Lanka came three years after the island nation faced a severe economic crisis that pushed the country to the brink of collapse.

In its report, describing the country as "a story of recovery", the World Bank said, "Just three years after a severe economic crisis brought the country to the brink of collapse in 2022, real GDP grew by 5% in 2025, driven by a rebound across industries and growth in financial and tourism services."

"The reclassification is a marker of resilience, though the country only narrowly crossed the threshold," it added.

The recovery is attributed to revival in tourism, stronger worker remittances, improving external sector performance and a return to economic growth following two years of contraction.

The reclassification indicates the progress made since then under a far-reaching economic stabilisation effort backed by the International Monetary Fund (IMF), alongside fiscal consolidation, monetary reforms and external debt restructuring.

Earlier, Sri Lanka faced the Easter Sunday attacks in 2019, the Covid-19 pandemic and the subsequent balance-of-payments crisis which culminated in the country's sovereign default in 2022, pushing the economy into its deepest downturn in decades.

The World Bank has four country income classifications: high, upper middle, lower middle, and low based on gross national income per capita estimates from the previous calendar year. The milestone serves as a symbolic marker of the nation's economic rebound following its recent financial crisis.

This year's edition covered 218 countries, and the results will serve as a global reference until the end of June 2027.

Sri Lanka first entered the upper-middle-income category in 2019 before falling back to lower-middle-income status as economic growth slowed and income levels deteriorated amid mounting domestic and external pressures.

Bata Shoe Company (Bangladesh) Limited shareholders have approved a 248% cash dividend for 2025, comprising a 143% interim dividend already paid and a 105% final dividend for the last quarter of the year.

The approval came at the company's 54th annual general meeting (AGM), held virtually today (30 June) and chaired by Shaibal Sinha. Shareholders also approved the audited financial statements for 2025.

According to a press release, Bata posted a turnover of Tk916 crore in 2025, demonstrating resilience despite macroeconomic volatility, political uncertainty and global geopolitical pressures.
Managing Director Faria Yasmin, Director Clifford Gary Reuter, Independent Directors Farzanah Chowdhury and Reazul Haque Chowdhury, Finance Director Elias Ahmed and Company Secretary Riajur Reza Md Faisal attended the meeting.

Concluding the AGM, Chairman Shaibal Sinha thanked shareholders, customers, suppliers, employees and the government for their continued support.

Bata has been operating in Bangladesh since 1962 and runs two manufacturing facilities in Tongi and Dhamrai with a combined daily production capacity of around 160,000 pairs of shoes. The company sells about three crore pairs of shoes annually.

The Bangladesh operation is a subsidiary of Bafin (Nederland) BV of the Netherlands, which holds a 70% stake and is part of the global Bata Shoe Organisation that oversees the brand's international business.

The World Bank on Monday extended its climate change policy framework indefinitely, but dropped its targets for the percentage of financing that must have climate-related impacts, according to a statement.

“We will complete our shift from inputs to outcomes to maximize development impact,” said a World Bank Group statement.
“We will retire the 45-percent climate co-benefits target and the 35-percent target in the (Climate Change Action Plan),” it said.

The United States, the World Bank’s largest shareholder, has abruptly changed policy on climate change under President Donald Trump, who has called it a “hoax” and ramped up spending on fossil fuels.

In April, US Treasury Secretary Scott Bessent called for the Bank to drop its climate finance targets, saying it “breeds inefficiency, distorts economic decision making, and moves the Bank away from its core mission.”

The World Bank statement said that further work on climate change outcomes would be driven by demand from client countries.

The Bank’s yearly climate financing targets under its Climate Change Action Plans (CCAPs) have largely been reached since work on the area began in 2016.

In 2025, 48 percent of the World Bank Group’s financing had “climate co-benefits,” amounting to roughly $50.8 billion, according to official data.

The Intergovernmental Panel on Climate Change (IPCC) says that climate change is indisputably attributable to human activity, and in particular to the burning of fossil fuels (gas, oil, coal), especially since the end of the 19th century.

Under Trump, however, there has been a widespread official rejection of climate change as a manmade phenomenon, with the administration embracing high-polluting fossil fuels and shelving renewable energy projects.

Since taking office for his second term, Trump has also exerted pressure on global institutions and other countries to lessen their focus on climate change.

One of the main causes of global warming is the enhanced greenhouse effect, caused by greenhouse gases (GHGs) that persist in the atmosphere.

The World Bank will continue to report on net greenhouse gas emissions and on the percentage of its projects that have a climate-change impact, the statement said. The World Bank’s work is primarily focused on developing countries, which are least responsible for global warming.

Climate-financing for these countries include loans for renewable energy projects, technical advice on dealing with impacts of climate change and projects that build resilience in areas prone to natural disasters.

Taxmen in their last-minute efforts managed to mobilise around Tk 4.20 trillion for the just-concluded fiscal year, shortening an anticipated large gap to Tk 800 billion against the revised budgetary target, officials say.

Economists had projected the revenue gap could exceed Tk 1.0 trillion in the fiscal year 2025-26 because of sluggish economic activity. But tax officials say they could contain the shortfall through "intensified enforcement, improved planning and stronger compliance measures".Economic Trend Analysis

The National Board of Revenue (NBR) taskforces on income tax, value-added tax (VAT) and customs met Wednesday with Finance Adviser Dr Rashed Al Titumir to formulate a medium-term strategy for achieving yet higher revenue target for this fiscal year (FY2026-27).

Speaking to The Financial Express, Dr Titumir said the government would prepare a three-year revenue strategy identifying both the sources of revenue and priority areas for public spending.

"It is clearly evident that revenue collection has gained momentum from mid-February through June under the present government's leadership," he says about the democratic transition after political upheavals.

"The tax base has been broadened while loopholes causing revenue leakage are being plugged," he adds.

Newly appointed NBR Chairman Ahsan Habib has said revenue collection reached Tk 4.12 trillion as of Wednesday and was expected to increase by another Tk 100 billion once end-of-year adjustments were completed.

"The NBR started working actively from day one under its own Budget Implementation Plan (BIP) for FY2026-27. We have prepared written strategies to achieve the revenue target," he says.Financial Planning Tools

He expects that the revenue board would continue working in full vigour with the existing taskforces which had achieved significant success over the past three months.

According to him, the customs and VAT wings have already finalised their revenue-mobilisation plans, while the income-tax wing is expected to complete its strategy shortly.

Former NBR chairman Abdur Rahman Khan says the FY2026-27 budget has introduced several measures aimed at encouraging investment while strengthening revenue mobilisation.

"The measures, including the turnover-based VAT regime, the 0.2-percent advance income tax on supplies to retailers and stronger actions against tax evasion, will contribute to higher revenue collection," he hopes.

He mentions that online income-tax-return submissions had exceeded 4.6 million as of June 30, describing it as a major milestone in the country's tax digitisation drive.

The government has set a tax-revenue target of Tk 6.04 trillion for the NBR in FY2026-27, to help finance an ambitious budget worth Tk9.38 trillion.Business News Alerts

For FY2025-26, the original target was Tk 4.99 trillion, which was later revised up to Tk 5.03 trillion. Based on the projected collection of Tk 4.20 trillion, the revenue shortfall would stand at around Tk 800 billion.

For FY 27, target for VAT-and income-tax wings has been set at Tk 2.23 trillion each, followed by Tk 1.57 trillion for customs wing.

Remittance inflows into Bangladesh hit a historic high of US$ 35.56 billion in the immediate past fiscal year 2025-26, registering a robust double-digit growth driven by strong contributions from expatriates through formal channels.Bangladesh Investment Opportunities

According to the latest data from Bangladesh Bank, the total remittance receipts between July 2025 and June 30, 2026 stood at $35.56 billion. This marks a significant 17.3 percent growth compared to the $30.32 billion received in FY2024-25, also the previous highest remittance inflows in a financial year.

Central bank officials noted that on the final day of the fiscal year (June 30), the country pulled in $120 million in provisional remittance earnings. However, this single-day figure excludes data from 11 commercial banks due to the bank holiday.

Meanwhile, monthly remittance inflows for June 2026 stood at $2.80 billion, reflecting a minor 0.6 percent dip compared to the $2.82 billion recorded during the same month last year (June 2025).

Despite the marginal monthly decline in June, the overall annual trend remained extraordinarily strong throughout the fiscal year, providing a critical buffer to the country’s foreign exchange reserves and macroeconomic stability.

Bangladesh Bank on Tuesday unveiled a monetary policy statement for the first half of the financial year of 2026-2027, making no change in the existing interest rate framework.Bangladesh Market Analysis
The central bank presented the MPS for the July-December period at its headquarters with BB governor Md. Mostaqur Rahman in the chair.

Under the current MPS, the policy rate will remain as high as 10 per cent while the upper ceiling of the interest rate corridor known as SLF (standing liquidity facility) will be 11.50 per cent, and the floor rate or SDF (standing deposit facility) is 7.50 per cent.

The securities commission has decided to allow open-ended mutual funds (MFs) to reinvest profits instead of distributing dividends, subject to approval from trustees.
The decision was taken at a meeting on Wednesday at the office of the Bangladesh Securities and Exchange Commission (BSEC).Bangladesh Investment Opportunities

The reinvestment is not mandatory. If an asset manager proposes reinvesting profits in a pooled fund, it will need approval from the trustee. The trustee may give its consent considering the interest of unitholders and the capital market.

The reinjection of cash will not involve the issuance of reinvestment units (RIU); rather, it will improve the fund's net asset value (NAV).

For example, if a fund earns a profit of Tk 1 per unit with a NAV of Tk 10, and the profit is reinvested, the NAV will increase to Tk 11 per unit.

BSEC spokesperson Md Abul Kalam explained how reinvestment will benefit investors.

The FY27 budget imposes a 15 per cent tax on dividend income but waives capital gains tax for mutual funds. Unitholders are required to pay Tk 0.15 in tax against dividend income of Tk 1.

In case of reinvestment, they will not pay the tax but will be able to redeem units at any time at the rate of the increased NAV.

The market will also benefit through fresh investments, said Mr Kalam.

In contrast, the scope of reinvestment previously offered to close-ended funds was detrimental to investors. Neither could they get dividends, nor could they surrender units at NAV. They saw their money stuck at heavily discounted market prices, with funds' maturity periods extended.

Presently, the number of open-ended funds stands at 94 while close-ended funds number 29. Total assets under management in the mutual fund industry stood at Tk 121.7 billion as of March 31, according to IDLC Asset Management.

The securities regulator imposed a bar on launching any new close-ended fund in the revised mutual fund rules, which were brought into effect last year.

Meanwhile, at Wednesday's meeting, the BSEC returned the authority to fix the limits of circuit breakers on the market prices of listed securities to the exchanges.

From now on, the exchanges will be able to determine market control mechanisms.

As per the securities rules and regulations, the stock exchanges can set market control parameters and operational requirements independently.

Nevertheless, the securities regulator created scope to intervene through a directive issued in June 2021.

"The exchanges should be allowed to exercise their authority in line with their rules and regulations," said the BSEC spokesperson.

The regulatory intervention had prevented the stock exchanges from exercising that authority. "That's why the regulator has made its previous directive null and void," Mr Kalam added.

The central bank has launched a pilot framework to enable digital processing of trade documents under documentary collections and letters of credit (LCs), aiming to modernise cross-border trade operations.
The framework will allow electronic submission, transmission, and verification of trade documents across approved international trade corridors, according to a notification issued by the Bangladesh Bank (BB) on Wednesday.Bangladesh Market Analysis

The initiative covers both export and import transactions governed by Uniform Rules for Collections (URC), Uniform Customs and Practice for Documentary Credits (UCP) and their electronic versions (eURC and eUCP).

The central bank officials, however, said the framework introduces the use of Electronic Transferable Records (ETRs) as legally reliable alternatives to paper documents, subject to compliance with applicable standards.

It emphasizes interoperability, technology neutrality, data privacy, and decentralized verification using secure digital mechanisms, they added.

Under the framework, authorised dealer (AD) banks need to seek the BB’s approval to participate in the pilot by specifying trade corridors, counterparties, transaction types, and technology arrangements.

The system will support electronic handling of documents such as invoices, transport documents, and draft.

While electronic processing will be encouraged, AD banks may still require physical documents in jurisdictions where digital records are not legally recognized, the officials said, adding that the framework also mandates strong security features, including encryption, authentication, and audit trails.Newspapers

The pilot will be implemented in phases, with future expansion depending on performance and regulatory assessment, the central bank in its notification.

Bangladesh Bank has capped the maximum charge on merchant payments made through the National Payment Switch Bangladesh (NPSB) at 1%, down from the previous ceiling of 1.5%, aiming to promote digital transactions and reduce costs for small and medium-sized enterprises.

The central bank's Payment Systems Department issued a circular in this regard today (1 July), with immediate effect.Under the new policy, banks and payment service providers will not be allowed to charge merchants more than 1%, including VAT, as the merchant rate for transactions processed through NPSB.
In practical terms, when a merchant accepts a digital payment from a customer, the bank or payment service provider can deduct a maximum fee of 1% from the transaction value.

The revised charge will apply to merchant payments made through point-of-sale terminals, Bangla QR, and e-commerce platforms under the NPSB network, reads the circular.

The 1% cap covers payments made through bank accounts, debit cards, prepaid cards, credit cards, mobile financial services, and payment service providers using Bangla QR.

According to Bangladesh Bank, establishments that provide digital payment acceptance services to merchants may charge less than 1% as part of promotional campaigns to encourage greater use of digital payments.

The central bank also said the measure is intended to accelerate the country's transition towards a cashless economy by making digital payment acceptance more attractive for merchants of all sizes.

Bankers said the previous 1.5% ceiling discouraged many small businesses from accepting digital payments due to the higher transaction cost.

They believe the lower fee cap, combined with a uniform ceiling across different payment methods, including cards, MFS and bank transfers, is expected to increase the volume of digital transactions.

The Bangladesh Bank has decided to liquidate five troubled non-bank financial institutions (NBFIs) after determining that they are no longer financially viable, while granting four others a final three-month opportunity to restore their financial health under strict conditions.

The decision was taken under the Bank Resolution Act, 2026 following a review of Financial Viability Reports on nine distressed NBFIs at a recent board meeting.

The institutions slated for liquidation are People's Leasing and Financial Services Limited, International Leasing and Financial Services Limited, Aviva Finance Company Limited, FAS Finance and Investment Limited, and Far East Finance and Investment Limited.
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The central bank said protecting depositors would be the top priority during the liquidation process. To facilitate repayments, the government and Bangladesh Bank have decided to establish a special fund.

Before any repayments are made, each institution will undergo a mandatory forensic audit by a reputed audit firm to identify those responsible for financial irregularities. Legal action will be taken against individuals found guilty.

According to Bangladesh Bank officials, the five institutions hold around Tk2,700 crore in deposits belonging to about 27,000 depositors. Once administrators are appointed, individual depositors will initially receive up to Tk10 lakh each under the repayment plan.

Bangladesh Bank's latest Financial Stability Report shows the extent of the crisis. As of December last year, FAS Finance's non-performing loan ratio stood at 99.99%, International Leasing's at 99.44%, Far East Finance's at 98.50%, People's Leasing's at nearly 95%, and Aviva Finance's at 93.93%.

Among the five institutions, Aviva Finance was chaired by controversial businessman Saiful Alam, while the other four were controlled by former financier Prashanta Kumar (PK) Halder, who has been accused of masterminding one of Bangladesh's biggest financial scandals.

Meanwhile, Prime Finance and Investment Limited, GSP Finance Company (Bangladesh) Limited, Bangladesh Industrial Finance Company Limited (BIFC) and Premier Leasing and Finance Limited have been given three months to regain financial viability under Section 15 of the Bank Resolution Act.

To avoid liquidation, the institutions must inject fresh capital through sponsor shareholders, sell assets, recover defaulted loans to improve liquidity and meet other conditions set by the central bank.

Bangladesh Bank warned that failure to meet even one of the conditions within the stipulated period would trigger immediate resolution or liquidation proceedings. The four institutions have also been directed to submit monthly progress reports to the central bank's Resolution Department by the seventh day of each month.

The latest action follows notices issued to 20 NBFIs in May last year over high default loans and failure to repay depositors. After assessing their recovery plans, the central bank concluded that nine institutions had failed to present credible turnaround strategies, leading to the latest resolution measures.

The Bangladesh Merchant Bankers Association (BMBA) has welcomed the capital market-friendly measures included in the national budget for fiscal year 2026-27, saying the initiatives are expected to restore investor confidence, attract fresh investment and support the long-term development of the country's capital market.Bangladesh Market Analysis

In a statement on Wednesday, the association thanked the government for introducing a series of fiscal incentives aimed at strengthening the capital market and creating a more investment-friendly environment.

The BMBA said the budget's "timely and pragmatic" measures would help rebuild investor confidence, deepen the market, enhance its stability and contribute to Bangladesh's long-term economic growth.

The association particularly welcomed the extension of tax incentives for initial public offerings (IPOs), tax benefits for zero-coupon bonds, dividend-related tax incentives, supportive measures for the banking sector and the rationalisation of the tax structure for mutual funds.

According to the BMBA, these policy initiatives are expected to encourage more companies to raise funds through the capital market, promote the development of new investment instruments and improve overall market efficiency.

The association also reaffirmed its commitment to working closely with the government, regulators and other stakeholders to support ongoing reforms, modernise the capital market and help build a sustainable, investment-friendly financial ecosystem.Food Assistance Programs

BMBA Secretary General Sumit Poddar thanked the government and policymakers for incorporating capital market-focused measures into the budget and expressed hope that their effective implementation would accelerate the market's recovery and sustainable growth.

Parliament passed the FY2026-27 budget on Tuesday, while the Finance Bill 2026 was approved a day earlier.

The Parliament on Tuesday passed a Tk 9.38 trillion national budget for 2026-27 fiscal year (FY27), setting targets to accelerate economic growth to 6.5 per cent and bring inflation down to 7.5 per cent after prolonged price pressures eroded living standards for much of the population.
The budget, the first presented by Finance Minister Amir Khosru Mahmud Chowdhury, is 19 per cent larger than the Tk 7,90 trillion budget for the current fiscal year, as per a UNB report.Economic Trend Analysis

The fiscal deficit has been projected at Tk 2.43 trillion, equivalent to 3.6 per cent of the country's gross domestic product (GDP), while the overall budget size represents 13.7 per cent of the projected GDP for FY27.

As part of the government's economic roadmap, the finance minister unveiled a "3R Strategy" aimed at reviving the economy and supporting Bangladesh's ambition of becoming a $1.0 trillion economy.

The strategy comprises Recovery and Stabilisation, Restoration, and Reconstruction for Acceleration, and will be implemented in three phases over a period of one to five years.

Key features of the budget include a revenue collection target of Tk 6.95 trillion, of which the National Board of Revenue (NBR) is expected to collect Tk 6.04 trillion.

To facilitate implementation of the budget, Finance Minister Amir Khosru Mahmud Chowdhury moved the Appropriation Bill, 2026, seeking authorisation for government expenditure amounting to Tk 15.15 trillion. The bill was passed by voice vote.

Earlier on Monday, Parliament passed the Finance Bill, 2026, with several significant amendments, including raising the tax-free income threshold and abolishing the provision requiring disclosure of investments.Personal Finance Guide

Before the passage of the Appropriation Bill, ministers concerned presented justifications for expenditure under their respective ministries through 59 demands for grants covering both development and non-development spending.

The House also rejected, by voice vote, 1,343 cut motions submitted by opposition lawmakers against the 59 demands for grants.

A total of 43 MPs from Jamaat, the National Citizen Party (NCP) and independent members moved the cut motions and participated in discussions on 36 ministries and divisions.

The 36 ministries, divisions and offices included in the opposition's list for cut motions are: the Prime Minister's Office, Cabinet Division, Ministry of Public Administration, Bangladesh Public Service Commission Secretariat, Finance Division, Office of the Comptroller and Auditor General of Bangladesh, Internal Resources Division, Financial Institutions Division, Economic Relations Division, Planning Division, Implementation Monitoring and Evaluation Division (IMED), Ministry of Commerce, Ministry of Foreign Affairs, Law and Justice Division, Ministry of Home Affairs, Ministry of Primary and Mass Education, Secondary and Higher Education Division, Ministry of Science and Technology.

Besides, Health Services Division, Information and Communication Technology Division, Ministry of Social Welfare, Ministry of Women and Children Affairs, Ministry of Labour and Employment, Ministry of Housing and Public Works, Ministry of Information and Broadcasting, Ministry of Youth and Sports, Ministry of Industries, Ministry of Agriculture, Ministry of Environment, Forest and Climate Change, Ministry of Land, Ministry of Water Resources, Road Transport and Highways Division, Ministry of Railways, Ministry of Civil Aviation and Tourism, Posts and Telecommunications Division, and the Anti-Corruption Commission.

Upon the request of Opposition Leader Dr Shafiqur Rahman, the Speaker expedited the passage of the demands for grants by imposing the guillotine.Bangladesh Market Analysis

Opposition and independent MPs were present in the House when the Appropriation Bill was passed and did not object to its adoption.

Bangladesh Bank’s latest Monetary Policy Statement (MPS) leaves the policy rate unchanged at 10 percent, reaffirming its “contractionary” stance to bring inflation under control. The decision comes after nearly two years of monetary tightening, during which private sector credit growth slowed to around 5 percent in May, one of the lowest rates in decades.

Yet inflation has remained stubbornly high.

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This apparent disconnect has fuelled a growing argument among business leaders and even some economists: if inflation has remained close to double digits despite a collapse in private credit growth, doesn’t that prove contractionary monetary policy has failed?

It is a legitimate question. But it points to the wrong conclusion.

The problem is not the stance of monetary policy but the weakening of the transmission mechanism through which it influences market interest rates, savings and inflation expectations. The debate should therefore move beyond whether policy is too tight or too loose. The more important question is whether Bangladesh Bank’s policy instruments reinforce or dilute the transmission of that stance.

Viewed individually, each measure can be justified. Together, however, they create an increasingly inconsistent policy framework.

One instrument seeks to restrain aggregate demand through high interest rates. Another cushions borrowing costs for selected sectors through interest subsidies and targeted refinancing.

A third limits banks’ ability to adjust interest rates in response to market conditions. Together, they pull monetary policy in different directions.

WHY HASN’T INFLATION FALLEN FASTER?

Monetary policy affects inflation through several channels. Slower credit growth is only one of them. Changes in the policy rate influence lending and deposit rates, household savings, investment decisions, exchange-rate expectations and, ultimately, inflation expectations. Only when these channels work together does inflation gradually moderate.

Bangladesh’s recent experience illustrates this well. Credit growth has slowed sharply despite abundant liquidity. According to the MPS, banks have increasingly preferred investing in government securities to extending private credit because of elevated public borrowing and heightened credit risks. Meanwhile, real deposit rates have remained negative, and lending and deposit rates have adjusted only partially to the policy stance.

Inflation has reflected not only domestic demand pressures but also exchange-rate depreciation, imported commodity prices, food supply shocks and administered price adjustments -- factors monetary policy alone cannot fully offset. That helps explain why inflation has proved more persistent than the decline in private credit growth alone would suggest.

This distinction matters because Bangladesh Bank itself acknowledges that inflation reflects structural and supply-side factors beyond the reach of monetary policy alone. The challenge, therefore, is not maintaining a restrictive stance but ensuring that other policy instruments reinforce rather than dilute its transmission. Bangladesh’s experience suggests that monetary tightening has operated more through the quantity of credit than through market interest rates -- a pattern inconsistent with a well-functioning monetary transmission mechanism.

Weak inflation outcomes do not demonstrate that contractionary monetary policy is ineffective. They suggest instead that the transmission mechanism has remained impaired. The appropriate response is therefore not necessarily to abandon monetary tightening but to strengthen the channels through which it reaches the broader economy.

Some of Bangladesh Bank’s recent measures, though individually understandable, may nevertheless weaken those channels.

INTEREST RATES CONSTRAINED FROM BOTH SIDES

The latest interest-rate data illustrate why monetary transmission remains constrained. In May, the weighted average lending rate stood at 11.92 percent -- 12.12 percent for large industries and 12.58 percent for SMEs. The weighted average deposit rate was only 6.22 percent, although fixed deposits -- the rates most relevant for attracting new savings -- earned around 9.2 to 9.5 percent.

The newly introduced 4 per cent intermediation spread cap risks reinforcing this pattern. At prevailing lending rates, it effectively limits banks’ ability to raise deposit rates while preserving their margins. In principle, banks could increase both lending and deposit rates while maintaining the prescribed spread. In practice, however, lending rates much above the low-teens have proved politically difficult to sustain. The earlier 9 percent lending-rate ceiling, the compression of margins under the Six-Month Average Rate on Treasury bills (SMART) framework, and now the spread cap reflect a recurring pattern of administrative intervention whenever borrowing costs rise sharply.

The May data suggest that the weighted average intermediation spread was about 5.7 percentage points, well above the new ceiling. Banks can comply in only three ways: lower lending rates, raise deposit rates, or do both. None is costless. Lower lending rates dilute the intended tightening of monetary policy. Higher deposit rates, without corresponding flexibility on lending rates, reduce banks’ ability to price credit according to risk and operating costs. That matters particularly for SMEs, whose loans are relatively expensive to originate and monitor. A uniform spread cap therefore risks encouraging banks to shift lending towards larger, lower-cost corporate borrowers while tightening credit conditions for smaller firms.

THE CHALLENGE OF POLICY COHERENCE

The inconsistency becomes clearer when the spread cap is viewed alongside the Tk 60,000 crore financial support package.

A restrictive policy rate is intended to moderate aggregate demand by raising the cost of credit. The support package, by contrast, lowers the effective cost of borrowing for selected sectors through interest subsidies and targeted refinancing. The Tk 20,000 crore corporate facility will be financed from banks’ own resources, with the government subsidising part of the interest cost, while the agriculture and SME components will receive refinancing support. Though they operate differently, both seek to maintain credit to priority sectors despite a high policy rate.

Each measure addresses a legitimate concern. Together, however, they send mixed signals. The policy rate tightens financial conditions, the support package cushions selected borrowers, and the spread cap constrains credit pricing. The issue is not any individual instrument but the coherence of the overall policy mix. Monetary policy is most effective when its instruments reinforce rather than offset one another.

Ultimately, monetary policy depends not simply on the policy rate but on confidence that changes in it will influence savings, lending and inflation expectations. Bangladesh Bank would argue, with some justification, that the spread cap protects productive investment during a difficult period. That concern is understandable, but there is an unavoidable trade-off. Administrative measures that limit the adjustment of interest rates may provide short-term relief for borrowers, but they also weaken risk-based pricing and reduce the transmission of monetary policy.

The latest MPS should therefore be judged not only by its decision to leave the policy rate at 10 percent, but also by whether the broader policy framework is internally coherent. A restrictive policy rate, a financial support package and a binding spread cap do not naturally reinforce one another; they pull monetary policy in different directions.

Bangladesh’s monetary debate has become polarised between those who believe higher interest rates have failed and those who insist tighter policy alone will tame inflation. The debate should therefore move beyond whether policy is too tight or too loose. The more fundamental question is whether the surrounding policy framework allows the chosen stance to influence savings, lending and inflation expectations. Restoring that coherence may matter more than any single adjustment to the policy rate.

In 2021, banks earned most of their income the traditional way -- by lending. Four years later, lending, the core business of banking, became a relatively minor source of earnings, according to their financial reports.

As private sector credit growth slowed and non-performing loans (NPLs) mounted, net interest income of banks came under increasing pressure. At the same time, sluggish imports also weighed on commission income from trade-related services such as opening letters of credit (LCs).
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To survive and, for many, to thrive, commercial banks, whose DNA is to create credit and take calculated risks by backing businesses, instead took shelter in the safety of Treasury bills, lured by their higher returns.

On paper, banks now appear highly profitable because of those elevated Treasury yields. They are earning strong returns without taking credit risk.

But economists and bankers say the windfall comes with two risks.

If banks continue to favour government securities over lending, private investment could weaken further, slowing the country’s economic recovery. And if Treasury yields begin to fall, banks will simply fail to maintain their current level of earnings.

INCOME PATTERN SHIFTS SWIFTLY

In 2021, the country’s 52 major banks generated a combined Tk 40,793 crore in income.

Interest income accounted for 47 percent of the total, while investment income contributed 34 percent. The remaining 19 percent came from commission income, according to financial reports of the commercial lenders.

In 2022, investment income increased but remained below interest income. The overall pattern changed little in 2023.

The balance shifted swiftly in 2024, when investment income overtook interest income to become the largest source of banks’ earnings.

By 2025, net interest income accounted for just 6.8 percent of total income, while investment income surged to 73 percent. Commission income contributed around 20 percent.

Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank, said this is a matter of serious concern.

He said foreign investors have already warned that banks could face significant difficulties if Treasury bond yields start to decline.

Explaining the shift in banks’ income sources, he said the cost of deposits has risen alongside overall operating expenses, narrowing lending margins.

“The biggest issue is that NPLs [non-performing loans] in the banking sector have risen sharply. As a result, banks are not receiving interest income from a large portion of their loans, yet they still have to pay interest to depositors.”

“Consequently, net interest income has declined. Ideally, a bank’s primary source of income should be its net interest income, as lending is its core business,” he added.

The CEO said the growing volume of bad loans has handicapped banks. At the same time, credit growth has slowed, prompting commercial lenders to increase their investments in Treasury bonds.

“Commission income has also declined because the country’s trade volume has weakened. In addition, the margins that banks previously earned from foreign exchange transactions have largely disappeared.”

“For the long-term sustainability of banks, their core income remains critically important. However, given the current state of private sector investment, sluggish credit growth, and the fact that NPLs have yet to improve,” he said, adding, “I do not expect the situation to improve in the near future.”
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CONCERNS OVER INVESTMENT, GROWTH

Another notable trend is the steady decline in banks’ net interest income over the past three years. Commission income also fell by around 8 percent year-on-year in 2025.

Investment income, however, has risen gradually over the past five years.

Kazi Monirul Islam, chief executive officer of Shanta Asset Management, said banks had a clear incentive to invest in Treasury securities because they offered attractive yields while lending became significantly riskier.

“That is why investment income has increased,” he said.

Monirul said banks naturally gravitate towards areas where they can earn higher returns with lower risk.

However, when banks choose government securities over extending loans, the wider economy suffers. If the trend continues, it will constrain private investment and slow the country’s economic recovery, he added.

As long as Treasury yields remain high, banks are likely to continue posting strong earnings. Once yields begin to fall, banks may initially benefit from capital gains on their Treasury portfolios, said the CEO of the asset management firm.

“Over time, however, their overall income is also likely to decline,” he added.

He believes that unless economic growth strengthens, banks will struggle to redirect the large volume of funds currently invested in government securities into productive private sector lending.

On the decline in commission income, Monirul said subdued imports and weaker export earnings had reduced trade-related fees and commissions.

Banks that operate brokerage houses also earned less commission because of weak trading activity in the stock market. However, he expects commission income to improve this year.

According to data from the Dhaka Stock Exchange (DSE), average daily turnover stood at Tk 1,474 crore in 2021. It fell to Tk 960 crore in 2022 and Tk 578 crore in 2023.

Turnover declined further to Tk 566 crore in 2024 before plunging to Tk 51 crore in 2025.

Oil prices fell more than 1 percent on Wednesday as talks between Iran and the US aimed at reaching a final agreement to end their war continued and the market awaited data from the US regarding stock draws. Brent futures fell $1.14, or 1.6 percent, to $71.81 a barrel at 0859 GMT, while US West Texas Intermediate crude was down $1.11, or 1.6 percent, to $68.39 a barrel.

“Stuttering talks between the US and Iran are raising concerns of fresh supply disruptions. On the other hand, investors are confident that whatever issues are hindering negotiations will be resolved soon,” said PVM Associates analyst Tamas Varga.

“All in all, the downside bias is intact, hard data in the form of stock depletion or the re-closure of the strait might alter the prevailing mood.” Indirect technical talks between the United States and Iran are under way in Doha with Qatar and Pakistan serving as mediators, a source with direct knowledge of the discussions told Reuters on Wednesday. US President Donald Trump’s son-in-law Jared Kushner and envoy Steve Witkoff arrived in Doha for what the White House described as “high level” talks on Tuesday. But Iran and host Qatar said they would meet with mediators rather than the Iranians themselves.

Brent fell by around $45 a barrel in the second quarter of this year, its largest quarterly loss since the global financial crisis in 2008. US crude futures, meanwhile, fell by around $31, their largest quarterly loss since 2020, when the COVID-19 pandemic crushed global oil demand. The declines followed progress toward ending the Middle East conflict, after sharp gains in March triggered by the outbreak in hostilities.

Following five straight monthly increases, analysts have cut their 2026 oil price forecasts for the first time since the Iran war began, as the reopening of the Strait of Hormuz eased concerns over prolonged supply disruptions, a Reuters poll showed. Tanker traffic through the critical waterway has started to recover, with US Vice President JD Vance claiming that oil flows through the strait had been restored to pre-war levels.

Meanwhile, markets are awaiting official US oil stock data from the Energy Information Administration, which will be released at 10:30 a.m. EDT (1430 GMT) on Wednesday. US crude oil inventories fell again last week, market sources said, citing data from the American Petroleum Institute released on Tuesday.a

Listed engineering company Dominage Steel Building Systems Limited has applied to the Bangladesh Securities and Exchange Commission (BSEC) for approval to transfer 30.78 million shares, representing around 30% of the company's total shares, from its sponsor-directors to Akij Resources Limited, Sheikh Jasim Uddin, and Faria Hossain.

The proposed transfer will be executed through an off-market negotiated transaction under CDBL Bye-Laws 11.6 via a matched transaction.

The company's board of directors approved the proposed share sale at its meeting held on 25 April. However, the transaction remains subject to BSEC's final approval. Once the regulatory clearance is obtained and the transfer is completed, a new board of directors representing the incoming investors is expected to assume control of the company's management and operations.
Following the application, BSEC sought a series of documents and information from the company before considering approval of the share transfer.

The regulator requested a tripartite agreement among the buyers, sellers and the financing bank or non-bank financial institution (NBFI), a No Objection Certificate (NOC) from the relevant bank or NBFI, an asset valuation report, a business plan, a plan to protect the interests of minority and general shareholders, a declaration on whether the shares are pledged, particulars of the directors, and any other relevant documents.

Market analysts believe the proposed acquisition could mark a significant turning point for Dominage Steel, which has been struggling with financial and operational challenges in recent years. They say the entry of Akij Resources, a concern of the Akij Group with an established presence in the steel industry, could inject fresh capital, industrial expertise and stronger management into the company, helping revive production and improve operational efficiency.

Earlier, Raihan Kabir, Deputy Chief Financial Officer of Akij Resources, told The Business Standard that although the company viewed the potential acquisition positively, the proposal was still at a preliminary stage and was undergoing due diligence along with financial and legal assessments before any final decision.

Dominage Steel's financial performance remains weak. During the July-December period of FY2025-26, the company's revenue fell 54% to Tk5.75 crore, while it incurred a net loss of Tk0.94 crore. Its loss per share (LPS) stood at Tk0.09 during the period.

A Dhaka Stock Exchange (DSE) inspection conducted in late 2025 found the company's Narsingdi factory closed, although Dominage Steel said its Savar unit remained operational. The company maintained that, as an engineering and construction firm, it does not require continuous production at all factories because much of its work is project-based and carried out at construction sites.

Despite its weak fundamentals, speculation surrounding the potential acquisition has fuelled a sharp rally in the company's stock. Since February 2026, Dominage Steel's share price has surged by about 226%, reaching Tk82.50 at its peak. On Tuesday, the stock closed at Tk79.70 on the Dhaka Stock Exchange.

Listed on the stock market in 2020, Dominage Steel most recently declared only a 0.35% cash dividend for the FY2024-25.

The Bangladesh Securities and Exchange Commission (BSEC) has restored the authority of the country's two stock exchanges to independently set circuit breakers and other key trading parameters, reversing a 2021 directive that centralised those powers under the regulator.

The decision was taken at an emergency commission meeting chaired by BSEC Chairman Masud Khan today (1 July).

Under the new directive, the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) will be able to independently determine trading control measures, including circuit breakers, tick size, market lot, block size, order size, closing price calculations, market protection percentages and index calculation frequency.The exchanges must immediately notify the BSEC of any changes and ensure the information is properly communicated to market participants.

The commission also repealed its 17 June 2021 order that had transferred these operational powers from the bourses to the regulator.

BSEC spokesperson Abul Kalam told TBS that the decision is part of the commission's broader deregulation initiative.

He said the regulator had previously exercised these powers through various directives despite the exchanges originally having the authority. With the latest decision, the BSEC will no longer intervene in setting circuit breakers and other trading parameters.

To ensure a smooth transition, he said, the existing trading limits will remain in force until the exchanges formally approve and implement new rules.

Dhaka Stock Exchange Managing Director Nuzhat Anwar confirmed that no immediate changes would be made to the current circuit breaker system.

She said any future revisions would first be reviewed and approved by the DSE board before being implemented. As a result, trading today will continue under the existing price movement limits to maintain market stability.

Under the current framework, securities priced up to Tk200 can move by up to 10% a day, while those priced between Tk200 and Tk500 have an 8.75% limit. The allowable price movement gradually declines with higher-priced shares, reaching 3.75% for securities trading above Tk5,000.

Separately, the BSEC decided to relax dividend distribution requirements for open-ended mutual funds, allowing them to retain and reinvest earnings instead of distributing them as dividends if trustees approve proposals from asset managers in the interests of investors and the market.

At present, open-ended mutual funds are required to distribute at least 70% of profits under fixed-income schemes, 30% under growth schemes and 50% under other schemes.

Abul Kalam said the move would benefit investors because cash dividends are subject to a 15% tax, whereas gains realised through unit redemption are not. Retaining earnings would also increase the asset base of the funds, potentially generating higher long-term returns for investors.