A delegation from the Export-Import Bank of China (China Exim Bank) is scheduled to meet Bangladesh Bank today to discuss the possibility of Bangladesh joining China's Cross-Border Interbank Payment System (CIPS) and issuing Panda Bonds, according to central bank officials.

The discussions come as China seeks to expand the use of its financial infrastructure and currency in cross-border transactions, while Bangladesh explores options to diversify payment channels and financing sources.

A senior Bangladesh Bank official told The Business Standard that the Chinese delegation would present proposals on the two initiatives before the central bank assesses their feasibility and potential implementation.

"The China Exim Bank delegation is expected to arrive today. They want to discuss Panda Bonds and the Cross-Border Interbank Payment System (CIPS). They will present their ideas, and the central bank will then consider whether these can be implemented," the official said.

The delegation is also expected to hold meetings with the Finance Division, the Bangladesh Investment Development Authority (Bida) and the Bangladesh Economic Zones Authority (Beza).

China has previously proposed that Bangladesh join its payment network, particularly amid growing complexities in international financial transactions following Western sanctions on Russian banks and broader shifts in the global economic landscape.

In March 2024, Yao Wen discussed the CIPS initiative with the then-governor of Bangladesh Bank.

According to Bangladesh Bank sources, CIPS could become the second major international payment network used by Bangladesh after the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system, which dominates global financial messaging.

Sources said Bangladesh Bank has already opened a nostro account with China's central bank. A nostro account is a bank account held by a domestic bank in a foreign bank in the currency of the country where the account is maintained.

Although some Bangladeshi banks maintain nostro accounts in China, their use remains limited because most international trade transactions are still conducted in US dollars.

What is a Panda Bond?

Panda Bonds are yuan-denominated bonds issued in China's domestic bond market by foreign governments, international financial institutions or multinational corporations.

The instruments allow foreign issuers to raise funds directly from Chinese investors. The bonds are denominated in Chinese yuan (RMB), while investors are primarily Chinese institutions, although foreign investors may also participate in certain cases.

Bida meeting to focus on investment issues

Nahian Rahman Rochi, executive member and head of business development at Bida, said the Chinese delegation has a scheduled meeting with the investment promotion agency.

"Various investment-related issues will be discussed during the meeting. However, CIPS and Panda Bonds are primarily on the agenda for discussions with Bangladesh Bank and are not directly under Bida's purview," he said.

Economists view China's CIPS initiative as a potentially strategic alternative payment channel for Bangladesh, although they caution that its practical benefits will depend largely on bilateral trade and financial flows.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), said alternative payment systems could serve as an important long-term strategic option for Bangladesh.

"These initiatives can be positive for Bangladesh, but their actual benefits will depend on the volume and direction of trade and financial transactions between the two countries," he told TBS.

Razzaque noted that Bangladesh imports significantly more from China than it exports, meaning that introducing yuan-based transactions alone would not automatically generate substantial benefits.

He argued that greater Chinese investment, loans and project financing would be necessary to make cross-border settlements under CIPS more effective.

"If China increases investment in economic zones, infrastructure projects and industrial sectors, or extends financing in yuan, those inflows could facilitate cross-border settlements. Otherwise, Bangladesh may still need to rely on the US dollar for a large share of its transactions," he said.

"It opens up a new possibility, but the extent of the real benefits will depend on the future trajectory of economic relations and transaction flows between the two countries," he added.

এ সময় দেশের পুঁজিবাজারের নিয়ন্ত্রক সংস্থাটির নতুন প্রধানের হাতে ফুলের তোড়া তুলে দেয়া হয়। লংকাবাংলা ক্যাপিটাল মার্কেটের এক সংবাদ বিজ্ঞপ্তি গতকাল এ তথ্য জানানো হয়।
সাক্ষাৎকালে আরো উপস্থিত ছিলেন লংকাবাংলা সিকিউরিটিজ পিএলসির প্রধান নির্বাহী কর্মকর্তা (সিইও) ও পরিচালক খন্দকার সাফ্ফাত রেজা এবং প্রধান আর্থিক কর্মকর্তা (সিএফও) ও কোম্পানি সচিব খাইরুন্নেছা; লংকাবাংলা ইনভেস্টমেন্ট লিমিটেডের সিইও ইফতেখার আলম ও লংকাবাংলা অ্যাসেট ম্যানেজমেন্ট লিমিটেডের সিইও মো. সায়মন ইবনে মুজিবসহ ঊর্ধ্বতন কর্মকর্তারা।

Startups and IT-based businesses may no longer have to pay turnover tax from the next fiscal year, as the government looks to encourage entrepreneurship and innovation.

Around 5 lakh freelancers and individual content creators are also likely to be exempt from the existing 7.5 percent source tax in the 2026-27 national budget.

In addition, the government is considering reducing source tax on mobile network services, such as phone calls, text messages and data packages, from 12 percent to 10 percent.

“A zero turnover tax provision is likely to be applicable for innovative startups, marking one of the most notable fiscal relaxations for the sector in recent years,” said a finance ministry official, seeking anonymity.

A startup is a newly established business, usually small, built around an innovative idea, product or service. Under tax law, annual turnover must be below Tk 100 crore to qualify in this category. Some well-known local startups include Pathao, Shohoz.com and Chaldal.com.

According to industry estimates, Bangladesh now has more than 1,200 active startups, directly and indirectly employing around 15 lakh people. These small businesses currently pay a 0.1 percent turnover tax -- a tax levied on the gross sales of a business regardless of expenses or profitability.

On the other hand, an IT-based business is any company that mainly uses information technology to deliver products or services, ranging from Facebook pages selling goods to mobile financial services such as bKash.

Regarding the budget boost for the telecom sector, finance ministry officials said the government plans to impose 15 percent VAT on SIM cards instead of the existing flat fee of Tk 300.

They said these measures are designed to support the country’s rapidly expanding digital economy at a time of intensifying global competition in the tech sector.

Finance Minister Amir Khosru Mahmud Chowdhury is expected to formally propose the measures while presenting the national budget in parliament on June 11. Officials said the proposals have already received in-principle approval from Prime Minister Tarique Rahman at a high-level meeting last month.

Industry people said removing the turnover tax could help new startups survive the critical early years, when many businesses struggle with cash flow and operational sustainability.

Former BASIS president AKM Fahim Mashroor said the decision would particularly benefit early-stage firms, allowing them to reinvest initial revenues into growth rather than tax payments, and that easing fiscal pressure could improve survival rates among early-stage companies.

Raisul Kabir, founder and chief executive officer of Brain Station 23, one of Bangladesh’s largest software firms, also welcomed the move, saying tax burdens often weigh heavily on businesses in their early stages.

Kabir said simplifying the tax structure would allow entrepreneurs to focus more on building products and scaling operations.

While welcoming the zero turnover tax proposal for startups, Pathao chief executive officer Fahim Ahmed said the eligibility criteria must be designed in a non-restrictive way so that companies generating meaningful revenues can also benefit.

He said previous proposals placed undue restrictions on operational duration and maximum turnover when determining eligibility.

Ahmed also called for a reduction in withholding tax and VAT withholding at source for startups and tech-enabled firms, saying most operate in informal sectors where vendors often do not have a tax or VAT footprint.

“The requirement to withhold taxes and VAT from such vendors results in a cost increase for such startups and ultimately limits scalability or risks passing such cost burden to the customers,” he said.

In the next budget, the government is also considering exempting income from annual turnover of up to Tk 50 lakh for SME entrepreneurs, and up to Tk 70 lakh for women entrepreneurs and entrepreneurs with disabilities.

To promote industrial decentralisation, it may introduce accelerated depreciation benefits for investment in plant, machinery and equipment for manufacturing, tourism and sports facilities outside the Dhaka and Chattogram city corporation areas.

The proposed incentive would allow businesses to claim depreciation at 60 percent in the first year and 40 percent in the second year.

Officials said the measures are aimed at boosting private investment, supporting small businesses and creating jobs across the country.

Bangladesh’s economy appears to have expanded at a faster pace in May than in the previous month, supported largely by stronger activity in the manufacturing and services sectors, as the Bangladesh Purchasing Managers’ Index (PMI) climbed 8.2 points from April to 62.8 in May.

Meanwhile, the construction sector returned to expansion, while growth in the agriculture sector slowed, according to the May PMI report released by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB).

“The May PMI shows that the Bangladesh economy moved onto a stronger expansionary path, with manufacturing, construction and services recording faster growth compared with April,” said M Masrur Reaz, chairman and CEO of PEB.

“Although the Middle East conflict has continued to raise energy costs, disrupt supply chains and sustain inflationary pressures, stronger domestic demand and increased business activity ahead of Eid appear to have supported broader-based expansion across major sectors.”

The PMI is a pioneering initiative designed to provide timely and accurate insights into the country’s economic health, helping businesses, investors and policymakers make informed decisions.

It was developed by MCCI and Policy Exchange, with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM).

According to the report, the agriculture sector recorded its ninth consecutive month of expansion, albeit at a slightly slower pace.

Business activity and employment posted stronger growth, while new business and input costs expanded at a slower rate. However, the order backlogs index remained in contraction.

The manufacturing sector registered faster expansion, marking its second consecutive month of growth. The stronger performance was driven by robust increases in new orders, new exports, input purchases and employment.

Growth in factory output and input prices moderated. Contractions in finished goods persisted, although supplier deliveries contracted at a slower pace. Both imports and order backlogs returned to expansion.

The construction sector returned to growth after three consecutive months of contraction. New business, construction activity and employment all reverted to expansion.

Input costs expanded at a faster pace, while the growth of order backlogs slowed.

The services sector expanded for the 20th consecutive month and at a faster pace than in April. Business activity, employment and input costs all recorded stronger growth, while new business returned to expansion. However, order backlogs contracted at a faster pace.

Respondents across Bangladesh’s major economic sectors said business conditions remained challenging in May 2026 due to persistent electricity and energy shortages, rising fuel prices, increasing labour costs and higher transportation expenses.

Many firms reported that electricity disruptions continued to affect productivity and production schedules, while escalating input costs further squeezed profit margins.

Several respondents expressed concerns over the potential economic impact of ongoing geopolitical tensions in the Middle East, particularly the risk of higher fuel prices, supply-chain disruptions and weaker export demand.

Agricultural businesses highlighted weather-related uncertainties affecting seed sales and production planning. Some firms also raised concerns about imported rice, high bank interest rates and the broader slowdown in domestic economic activity.

Despite these challenges, a number of respondents remained cautiously optimistic, expecting business conditions to improve if the energy situation stabilises, economic conditions strengthen and supportive policy measures are introduced for businesses, particularly SMEs.

The Bangladesh Bank has launched four refinance schemes worth a combined Tk 19,000 crore to ease financing constraints on small businesses and farmers, stimulate green investment, generate employment and reduce the country’s heavy dependence on the readymade garment sector for export earnings.

The central bank announced the funds through separate circulars issued on June 7 and June 8, covering a Tk 5,000 crore working capital fund for cottage, micro, small and medium enterprises (CMSMEs); a Tk 3,000 crore export diversification scheme; a Tk 10,000 crore agricultural refinance scheme; and a Tk 1,000 crore green industries and factories fund.

Under all four schemes, participating banks may obtain refinancing from Bangladesh Bank at rates ranging from 2 to 4 percent and lend to customers at maximum rates between 5 and 9 percent, depending on the scheme.

Funds for the CMSME and the export diversification schemes will be drawn from the surplus liquidity of scheduled banks, while the agriculture and green factory schemes will be funded from Bangladesh Bank’s own resources.

The announcements come as businesses continue to struggle with high borrowing costs, liquidity shortages and weak demand, while policymakers seek to broaden the country’s export base and strengthen food security amid growing global competition.

Tk 5,000cr FOR CMSMEs

CMSMEs remain a key driver of Bangladesh’s economy through job creation, support for local industries and production of import-substituting goods. Yet many such enterprises struggle to secure adequate working capital, preventing them from operating at full capacity.

The revolving fund will stay operational for three years. It will cover working capital loans and investments extended to CMSMEs that cannot run at full capacity due to working capital shortages.

Renewed working-capital facilities will also qualify. Borrowers classified as defaulters in the Credit Information Bureau (CIB) database will not be eligible.

The central bank said the objective of the fund is to help businesses increase production capacity, strengthen economic activity and create both direct and indirect employment opportunities across the country.

Tk 3,000cr FOR EXPORTS

The export refinance scheme targets non-garment sectors, with the BB citing the economy’s heavy concentration in RMG as a vulnerability to sector-specific shocks and shifts in global demand.

Refinancing support will be available for industries listed under the highest-priority and special development sectors in the Export Policy 2024-27. Priority will go to producers and exporters using domestically sourced raw materials, particularly in jute and leather.

Financing will be in the form of term loans or investments in local currency. The scheme will run for three years and may include a grace period of up to six months, BB stated in the circular.

Borrowers must maintain a satisfactory credit record. Defaulters will not qualify, and applications will be rejected if export proceeds are not repatriated through the formal banking channel.

Participating banks will also be required to collect updated CIB reports before applying for refinancing support.

According to the BB, many export-oriented industries possess strong growth potential but have failed to expand because of inadequate access to financing. The refinance facility is expected to address this gap and encourage fresh investment in emerging export sectors.

Tk 10,000cr FOR AGRI AND LIVESTOCK

The scheme, the largest of the four, is aimed at boosting agricultural production, strengthening national food security and generating employment in rural areas.

Scheduled banks participating in BB’s agricultural and rural credit programme will receive refinancing at 4 percent and may lend to farmers and entrepreneurs at a maximum of 8 percent.

The five-year fund, financed from the central bank’s own resources, will be managed by its Agricultural Credit Department-1.

The scheme covers crop cultivation, fisheries, livestock, agricultural machinery, irrigation equipment and other income-generating agricultural activities.

Small and marginal farmers may obtain loans of up to Tk 5 lakh for crop production without collateral, against crop hypothecation.

Loan ceilings have been set at Tk 30 lakh for crop production; Tk 15 lakh for livestock and other agricultural activities; Tk 20 lakh for agricultural machinery; and Tk 1 crore for fisheries and livestock projects.

Banks will be required to maintain separate accounts, submit regular reports and ensure proper monitoring of loan utilisation and recovery under the scheme.

Tk 1,000cr FOR GREEN INDUSTRIES AND FACTORIES

The fund is designed to accelerate investment in green industries and environmentally sustainable factory buildings, in support of Bangladesh’s climate and sustainable development goals.

Under the scheme, banks and financial institutions will be able to access refinance support at a 2 percent interest rate -- the lowest rate among the four schemes -- and lend to eligible borrowers at a maximum of 5 percent.

The scheme’s tenure will range from three to 10 years, with a grace period of up to one year. The fund, sourced from Bangladesh Bank’s own resources, will take immediate effect.

The facility will finance the establishment of green industries and factory buildings certified or pre-certified under internationally recognised standards, including LEED, EDGE, BEEER and GreenARCH.

A single borrower may receive up to Tk 100 crore, with projects required to maintain a minimum debt-equity ratio of 70:30. Defaulted borrowers will not be eligible.

Participating banks and financial institutions must comply with the BB’s sustainable finance, environmental and social risk management, and climate risk management and disclosure guidelines.

MONITORING

To access any of the four facilities, scheduled banks must sign participation agreements with the BB and meet all relevant risk management and regulatory requirements.

The central bank will monitor fund utilisation through reporting requirements and on-site inspections. Misuse of funds, submission of inaccurate information or non-compliance with scheme conditions could result in cancellation of refinancing facilities and financial penalties.

After more than a decade of delays due to administrative, financing and implementation hurdles, the proposed Chinese Economic and Industrial Zone in Chattogram's Anwara upazila is finally moving towards implementation.

The Bangladesh Economic Zones Authority (Beza) is working to complete the developer agreement and secure approval for the project's supporting infrastructure before Prime Minister Tarique Rahman's scheduled four-day visit to China starting on 23 June.

As part of that effort, a Tk4,189.46 crore infrastructure development project for the economic zone will be placed before the Executive Committee of the National Economic Council today (9 June).

The project has been initiated by the Prime Minister's Office, while Beza will serve as the implementing agency.
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According to sources, a delegation from the Export-Import Bank of China (China Exim Bank) is scheduled to meet Beza tomorrow to discuss financing arrangements, infrastructure development and implementation mechanisms.

"We hope to complete the developer agreement with the Chinese company within this month," Beza Executive Chairman Ashik Chowdhury told The Business Standard yesterday.

"Our target is to finalise the agreement before the prime minister visits China," he added.

The Chinese economic zone is being developed on nearly 800 acres in Anwara under a government-to-government initiative between Bangladesh and China. Although the two countries reached an understanding on the project in 2014, progress remained stalled for years due to complications surrounding developer selection, financing arrangements and administrative procedures.

Initially, China Harbour Engineering Company Limited was expected to develop the project, but failure to finalise an agreement led to years of delays. In 2022, the Chinese government nominated China Road and Bridge Corporation as the new developer.

Officials said preparation and approval of the Development Project Proposal also took considerable time. While Beza is responsible for off-site infrastructure such as roads, gas, electricity and water connections, the developer will carry out internal development works. Lack of coordination between the two components slowed implementation.

According to Beza, all required land acquisition has already been completed and infrastructure construction can begin once the developer agreement is signed.

Under the revised development project proposal submitted to Ecnec, the project includes construction of a multipurpose jetty with a capacity of 20,000 deadweight tonnes, a jetty access road and bridge, four-lane roads, a 25-million-litre central effluent treatment plant, power substations and transmission lines, gas supply facilities, water reservoirs, boundary walls and other supporting infrastructure.

Of the total project cost, Tk1,722 crore will come from government funds, while Tk2,467 crore is expected from China's Preferential Buyer's Credit facility.

Explaining the rationale behind the site selection, Beza said the upazila was chosen for the project due to its strong geographical and economic advantages, making it a strategically important location.

The area is situated close to key national infrastructure, including Chittagong Port, Karnaphuli Tunnel, Shah Amanat International Airport, and several industrial hubs in the port city.

Beza estimates the economic zone will generate at least 100,000 direct and indirect jobs and attract around $500 million in foreign investment. The zone is expected to draw investment in textiles, pharmaceuticals, light engineering, information technology and other manufacturing sectors.

Major General (retd) Md Nazrul Islam, executive member (Planning and Development) at Beza, told TBS that the project would be implemented over five years if approved by Ecnec and is scheduled for completion by 31 December 2031.

"Although five years have been allocated for the entire project, we expect to prepare at least 60% of the factory-ready industrial plots within the first three years," he said.

Bangladesh on Monday sought Spain’s support at the United Nations General Assembly (UNGA) for its smooth graduation from the Least Developed Country (LDC) category.

The appeal was made when Spanish Ambassador to Bangladesh Gabriel María Sistiaga Ochoa de Chinchetru called on State Minister for Foreign Affairs Shama Obaed Islam at the foreign ministry here, said a ministry’s press release.

During the meeting, the state minister highlighted the importance of strengthening bilateral and multilateral cooperation and sought Madrid’s backing for Bangladesh’s post-LDC transition efforts.

Shama also reiterated the need for stronger and sustained international attention and support to resolve the protracted Rohingya crisis.

The Spanish envoy congratulated Bangladesh on its election to the presidency of the 81^st session of the United Nations General Assembly (UNGA) for the term 2026-2027.

Both sides underscored the importance of a Free Trade Agreement (FTA) between Bangladesh and the European Union to boost trade and economic cooperation.

The two sides reaffirmed their commitment to advancing the mutually beneficial partnership between Bangladesh and Spain and explored avenues for expanding cooperation in trade, investment, supply chains, railway connectivity, education, skills development, migration, sports, culture and people-to-people exchanges.

They also discussed the possibility of holding bilateral consultations and arranging high-level visits to further strengthen bilateral relations.

The discussions also covered regional and global developments, with both sides emphasizing the importance of peace, stability and enhanced international cooperation.

Bangladesh Bank (BB) on Monday launched a Tk 50 billion (Tk 5,000 crore) revolving refinance fund for the Cottage, Micro, Small and Medium Enterprise (CMSME) sector to ease working capital shortages, boost production and support employment generation.

The central bank introduced the fund through an SMESPD circular issued by its SME and Special Programmes Department, utilizing surplus liquidity of scheduled banks. The scheme will remain effective for three years from the date of issuance.

According to the circular, the fund aims to strengthen production activities, revive economic momentum and create direct and indirect employment opportunities by providing working capital support to active CMSMEs facing financial constraints.

Under the scheme, Bangladesh Bank will provide refinance to participating banks at an interest or profit rate of 4 percent, while banks may charge a maximum interest or profit rate of 9 percent to end borrowers.

The revolving nature of the fund will ensure continued liquidity as repayments are recycled into new financing. Interest will be calculated quarterly in March, June, September and December.

Borrowers will be eligible for a grace period of three to six months before repayment of installments begins.

The circular directs Shariah-based banks and Islamic banking windows of conventional banks to provide financing under approved Shariah-compliant models while maintaining the maximum profit rate of 9 percent and complying with all conditions of the scheme.

Active CMSMEs experiencing production or service disruptions due to working capital shortages will be eligible for financing under the fund. Refinance facilities will also be available against renewed working capital loans.

However, borrowers classified as defaulters by the Credit Information Bureau (CIB) will not qualify for the facility.

Bangladesh Bank said clients already benefiting from other refinance schemes may also be considered for financing under the new fund, subject to banks’ assessment and credit limits.

All scheduled banks will be eligible to participate after signing a Participation Agreement with Bangladesh Bank’s SME and Special Programmes Department.

Banks maintaining an advance-to-deposit ratio (ADR) or investment-to-deposit ratio (IDR) above 70 percent will receive priority in accessing the fund, although they must remain within overall regulatory limits.

The central bank said participating banks would bear full responsibility for loan recovery and would be required to repay Bangladesh Bank regardless of whether funds are recovered from borrowers.

To mitigate credit risk, banks may obtain collateral from clients but will not be allowed to charge any fees beyond the approved Schedule of Charges.

Bangladesh Bank expects the fund to contribute to income growth, employment generation and the development of import-substituting products and services, while supporting small entrepreneurs and stimulating industrial activity.

Issued under Section 45 of the Bank Company Act, 1991, the circular takes immediate effect. Bangladesh Bank also reserved the authority to inspect loan utilization and seek relevant documents from participating banks to ensure compliance with the scheme’s provisions.

The central bank has found the Section 18(a) of the Bank Resolution Act, which provides for ownership return of the merged troubled banks not 'maintainable' and has recommended its deletion.

Bangladesh Bank Governor Md Mostaqur Rahman expressed such view Monday as Editors' Council in a meeting with him expressed deep concern over the impugned section of the act and stressed the need for its further scrutiny for the sake of the banking sector.

The apex body of editors of the country's leading print-media outlets raised the concern and also listed other financial-sector problems during the meeting with the BB Governor at the central bank's headquarters in Dhaka.

Explaining reasons for suggesting removal of the section, the BB governor said, " There is no scope for application of the provision. The government has already invested nearly Tk. 520 billion in five merged Islamic banks, namely, Sammilita Islamic Bank. These banks in total have Tk. 1.32 trillion depositors' money, Tk. 320 billion performing loans and Tk. 1.64 trillion non-performing loans. It might be possible to recover Tk.200--Tk.300 billion. Thus. There will be a gap of at least Tk 650 billion. None, it seems, would come to reclaim ownership. Already two months have elapsed since adoption of the law. None has showed interest until now."

Members of the council, led by its president and New Age Editor Nurul Kabir, discussed a range of issues affecting the country's banking sector with the leadership of the banking regulator.

The council members also shared their concerns over the challenges facing the banking sector, particularly the rising volume of non-performing loans, the need to establish good governance in banks, the security of depositors' funds, and the current situation on the foreign- exchange market.

Emerging from the meeting, Nurul Kabir said the governor informed them about various reform initiatives and plans undertaken by the central bank to address the sector's problems and assured them that necessary measures would be taken.

The meeting also discussed the recent instability surrounding Islami Bank Bangladesh PLC as well as issues related to inflation control, investment and employment conditions, and various aspects of the proposed new national budget.

The Editors' Council emphasised the need for effective measures to ensure transparency, accountability and stability in the banking sector.

In a press release, the central bank stated that the BB governor briefed the editors on its ongoing reform agenda aimed at strengthening the country's banking sector. Key issues discussed included the management of non-performing loans (NPLs), governance reforms, oversight on weak banks, foreign-exchange market stability, digital transformation, and measures to ensure overall financial-sector stability.

Governor Mostaqur Rahman updated them on the merger progress of financially weak banks, noting that some administrative and management-related changes have already been completed. "The process is expected to gain a momentum following upgradation of the banks' Core Banking Systems (CBS)."

Addressing the challenge of default loans, the governor informed that the amendment and changes in the existing money loan court to ensure faster settlement of the cases linked to defaulted loans got underway.

"Simultaneously", it says, "the governor told them that distressed-asset- management company act will also be formulated to deal with unrecoverable assets more effectively."

The editors have also been informed that the BB's stolen asset-recovery moves helped freeze laundered assets worth $25 million in the United Kingdom (UK), which will be brought back soon.

Emphasizing the importance of "depoliticizing" the banking sector, the governor said the central bank's reform programme "is focused on ensuring professionalism, accountability, and good governance in bank management and lending practices".

Participants were also informed about regulatory measures taken in several large banks, including Islami Bank Bangladesh PLC, involving board restructuring, management changes, and initiatives aimed at protecting depositors' interests.

The governor also disapproved of the owning of any bank by any political party, saying that people from all walks of life should have confidence in the operations of a bank.

On digital transformation, Mr. Rahman said the central bank was working to build an integrated digital financial ecosystem. Planned initiatives include expanding digital-payment services, introducing AI-based credit-assessment systems, broadening agent-banking services, and implementing the "One Citizen, One Identity, One Wallet" concept to enhance access to digital financial services.

The governor further notes that wider adoption of Bangla QR could accelerate cashless transactions, improve transaction security, and contribute to higher government revenue collection.

In cases where patients require foreign currency exceeding the approved limit for medical treatment abroad, the governor said the regulator is providing approval as quickly as possible upon application through the bank concerned.

"In addition, the interest rate on funds used for bill discounting under the UPAS (Usance Payment at Sight) facility has been reduced, which is expected to help lower the prices of goods," the BB statement says.

Other council members who attended the meeting are Editor of The Financial Express Shamsul Huq Zahid, Editor of Bonik Barta Dewan Hanif Mahmud, Editor of Manabzamin Matiur Rahman Chowdhury, Editor of Prothom Alo Matiur Rahman, Editor of Daily Inqilab AMM Bahauddin, Editor of The Daily Samakal Shahed Mohammad Ali and Editor of Agamir Somoy Mustafa Mamun.

Bangladesh's trade deficit widened significantly during the first 10 months of the current fiscal year as import growth outpaced exports despite the fact that robust financial inflows helped keep the overall balance of payments (BoP) in surplus.

The trade deficit rose to $22.2 billion during the July-April period of FY26.

Exports fell by 1.5 per cent year on year to $36.02 billion, while imports spiked by 6.2 per cent to $58.2 billion, during the period under review.

The rise in imports was largely driven by higher purchases of fuel and food grains.

The imports of petroleum products climbed 72 per cent to $7.64 billion, while wheat imports surged by 49 per cent to $1.96 billion.

The increased fuel imports reflected higher domestic demand as well as elevated global energy prices amid the ongoing geopolitical tensions in the Middle East over the US-Israel attack on Tehran, now on a ceasefire.

The current account deficit, another key component of the BoP, widened to more than $1.0 billion during the July-April period from $586 million in the July-March period of this fiscal year.

The capital account, however, posted modest growth, increasing by more than 9.0 per cent year-on-year to $325 million.

The financial account recorded a sharp improvement as it rose to $4.47 billion during the period from $1.13 billion in the corresponding period a year earlier.

Net foreign direct investment (FDI) inflows stood at $1.14 billion, down more than 20 per cent from a year earlier.

Portfolio investment, which reflects foreign investment in capital market instruments, remained negative, recording a net outflow of $132 million during the period under review.

Data also showed that medium- and long-term (MLT) loan disbursements declined by around 20 per cent, while MLT loan amortisation payments increased by more than 19 per cent.

Despite the wider current account deficit, the overall balance of payments remained in surplus at $3.74 billion, indicating that foreign currency inflows exceeded outflows during the period.

The surplus helped the Bangladesh Bank strengthen its foreign exchange reserve position amid huge import payments.

Dr Zahid Hussain, an independent economist, says the country's external sector remained in a favourable position despite the widening current account deficit mainly due to strong inflows through both financial account and remittances.

"The positive development is that the imports of capital machinery increased by 6.1 per cent during the period, suggesting continued expansion of manufacturing activities and investment in productive sectors," he said.

BD Thai Food & Beverage Limited, a listed company on the stocks exchanges, has inked a manufacturing agreement with Sajeeb Group and Evergreen Beverage to produce carbonated soft drinks by ensuring full utilisation of its production capacity.

According to a stock exchange disclosure issued yesterday, Sajeeb Group and Evergreen Beverage will jointly utilise 70% of BD Thai Food's carbonated soft drink production capacity, while BD Thai Food will use the remaining capacity to manufacture its own beverages.

Under the agreement, Sajeeb Group will manufacture its "Wings" brand soft drinks and Evergreen Beverage will produce "Suncrest" brand beverages using BD Thai Food's carbonated soft drink production line.

According to the disclosure, BD Thai Food will earn manufacturing fees, which will help cover utility costs, salaries and wages, factory overheads, and financing expenses.

The company said full utilisation of its carbonated soft drink production line would enable the factory to operate at 100% capacity, boosting profitability and safeguarding the interests of shareholders and other stakeholders.

BD Thai Food, which markets juices, carbonated beverages, hard and soft candies, lollipops, and chewing gum under the Nectar brand, reported a loss of Tk13.40 crore in FY25. Owing to the losses, the company did not declare any dividend for shareholders.

In the first nine months of the current fiscal year, the company incurred a loss of Tk5.94 crore, translating into a loss per share of Tk0.73 as of March 2026.

BD Thai resumes operations after robbery

In a separate disclosure yesterday, BD Thai Food said production has resumed smoothly after a major robbery at its factory on 10 February. The robbery resulted in the theft of valuable cables and other equipment, rendering the factory inoperable.

The company subsequently invested a substantial amount to restore its electrical substation, generator and power cable network, enabling normal operations to resume. Currently, factory's production is running smoothly.

Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) on Sunday approved BD Thai Food & Beverage's proposal to raise Tk15 crore through a fixed-price initial public offering.

The company had previously raised Tk15 crore through an IPO in 2021 at a face value of Tk10 per share to support business expansion.

Shares of BD Thai Food closed at Tk26.30 each yesterday on the Dhaka Stock Exchange (DSE).

Oil ​prices fell on Friday as traders gained confidence that renewed conflict between the US and Iran ‌was growing less likely.

Brent crude futures settled at $93.09 a barrel, down $1.94 or 2.04 percent. The previous session, Brent settled 2.84 percent lower.

US West Texas Intermediate crude finished at $90.54 a barrel, down $2.50, or 2.69 percent, following a 3.1 percent loss on Thursday.

“The market is not seeing ​escalation between the parties,” said Phil Flynn, senior analyst at Price Futures Group. “Even though we don’t ​have a deal, it seems the market is seeing a de-escalation.”

Petroleum Development Oman said operations at Mina al Fahal port were unaffected after three sources told Reuters that oil loading had been ​suspended following an explosion near its mooring berths. Oman exports 800,000 to 900,000 barrels per day of crude from the ​terminal.

Both contracts still looked set to post their first weekly gains in three weeks, with Brent up 1.18 percent and WTI around 3.64 percent.

The contracts rose earlier in the week after fighting flared in the Middle East as US-Iran war peace talks dragged ​on while traffic in the Strait of Hormuz, where a fifth of the world’s oil passes, remained limited.

“As ​hopes for an agreement between the US and Iran were dashed once again, the price of Brent crude and European ‌natural gas rose slightly this week,” Commerzbank analysts said on Friday.

However, Brent’s gains have been capped by oil inventories lasting longer than expected, rerouted exports and falling demand, Commerzbank added.

Hezbollah leader Naim Qassem rejected on Thursday a US-brokered agreement between Israel and the Lebanese government to halt the fighting. Iran has made a ceasefire in Lebanon a ​condition for any peace deal ​with Washington.US President Donald ⁠Trump said on Thursday he believed progress was being made between Israel and Lebanon and that Lebanon deserved to have peace.

“Any optimism remains heavily clouded by a ​tangled web of headlines and counter-headlines,” IG market analyst Tony Sycamore said in ​a note.

Opec is ⁠sticking to its oil demand growth forecast of 1.2 million bpd for this year, Secretary General Haitham Al Ghais said on Thursday, despite the Middle East conflict and closure of the Strait of Hormuz.

Iranian oil exports have fallen to their ⁠lowest level ​in six years mainly due to the US naval blockade, according ​to shipping data, although weak demand in China has depressed prices for the oil.

Bitcoin dropped below $60,000 on Friday, its lowest level since October 2024, just before Donald Trump’s election, which propelled it to a record high.

The currency fell by about 6 percent around 1615 GMT, to $59.7709, before paring its losses slightly.

The election of Trump, a staunch advocate of cryptocurrencies, to the White House for a second term in November 2024 sparked a wave of enthusiasm in the sector, sending the price of bitcoin soaring to nearly $110,000.

The current dip has been caused by factors including one corporate selloff, according to Emma Bernuau, a consultant at Eurosagency.

A surprise sale by Strategy -- one of bitcoin’s most prominent corporate holders -- rattled confidence. The firm revealed it had sold 32 BTC from its reserves, the first such disposal in several years.

“Although the amount was minimal, the symbolic significance is considerable,” Bernuau said.

“The market had generally considered that Strategy had no intention of selling its bitcoin and would continue accumulating regardless of market conditions.”

Bernuau said long-term investors could view the dip as a buying opportunity, and flagged several potential tailwinds including progress on US legislation to support the sector.

The benchmark index of the Dhaka Stock Exchange (DSE) rose sharply in early trading today (7 June), following the appointment of the new chairman of the Bangladesh Securities and Exchange Commission (BSEC), who assumed office on Thursday.

During the opening session up to 10:10am, the DSEX gained 73 points to reach 5,548, its highest level in the past three months.

The blue-chip DS30 index also posted strong gains, rising 29 points to 2,097.

Of the traded securities, 298 advanced, while 34 declined and 34 remained unchanged.

Turnover during the session stood at Tk213 crore.

Market insiders attributed the rally to renewed investor confidence following the appointment of the new BSEC chairman.

They expressed optimism that the newly appointed chairman, Masud Khan, would play an important role in restoring stability and confidence in the capital market.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) will hold an emergency board meeting today to review the persistent decline in garment exports.

The meeting, to be held at the BGMEA office in Uttara, Dhaka, will primarily focus on the export downturn, BGMEA Director Faisal Samad said. It will also discuss the recent closure of several garment factories and the factors behind them.

The association will also engage with the government to address the challenges facing the garment sector and stem the decline in exports, he said.

Garment exports have been falling for nearly a year, Samad said, driven not only by tariff-related issues but also by geopolitical tensions, longer lead times and challenges associated with the country’s graduation from least-developed country (LDC) status.

In the July-May period of fiscal year 2025-26, garment exports totalled $35.31 billion, marking a 3.41 percent decline from $36.56 billion in the corresponding period of fiscal year 2024-25, according to data from the Export Promotion Bureau.

The meeting is also likely to discuss the US tariff issue, BGMEA President Mahmud Hasan Khan said, as it has created uncertainty among businesses.

A fund will also be created for members so that it can be used in emergencies, he said.

A major European clothing retailer operating in Bangladesh said, requesting anonymity, that the outlook for garment exports may not improve significantly in the next season due to continued volatility in the global market.

The longer lead time is a major problem in Bangladesh, he said. Shipments from Bangladesh take 30 to 40 days to reach Europe, and in some cases even longer. Longer lead times also increase operational costs, making it difficult for manufacturers to remain profitable on thin margins.

Bangladesh should sign a free trade agreement with the European Union or negotiate to secure GSP+ status, as preferential market access to the EU will end following the country’s LDC graduation, he suggested.

Two decades of state investment have transformed Turkey into a major exporter of drones and other military equipment, and the NATO member is now looking to build on that momentum as the West rearms and security alliances are reshaped.

Turkey, once heavily reliant on foreign arms makers, now supplies nearly 40 countries mainly in the Gulf, Africa, Asia and parts of Europe with weapons that many buyers see as cheaper, faster to deliver and more adaptable than alternatives.

As European governments reassess security dependencies following Russia's invasion of Ukraine and question the durability of US guarantees, many NATO allies increasingly see Turkey not only as a military bulwark on the alliance's south-eastern flank but also as a potential industrial partner.

Ankara hopes hosting US President Donald Trump and other NATO leaders at a summit next month will help expand arms sales and joint production in Western markets, particularly the European Union. There, Turkish firms face structural barriers including members-only defence initiatives and political resistance tied to broader diplomatic disputes.

A Reuters review of trade figures shows Turkish defence exports - including the high-profile armed drones used by Ukrainian forces - have more than tripled since 2021 to $10 billion last year, accounting for about 3.7% of total exports from the major emerging market economy.

Exports to Europe and the US almost quadrupled over the same period to $5.6 billion.

That growth reflects a maturing domestic defence industry that includes drone-maker Baykar, Turkish Aerospace Industries, and smaller firms such as Arca Defense and Kale.

Analysts say sustained state backing, flexible supply chains and a willingness to customise systems for buyers have allowed such firms to move quickly into markets where Western suppliers face capacity constraints or lengthy procurement cycles.

War threats and opportunities

Turkey aims to double defence exports in two years, its defence agency says, potentially generating vital revenues as it looks to pay down debt and fund further development.

Sitting between two major conflicts - Ukraine to the north and Iran to the south-east - Turkey's own security is also at stake, given its gaps in air defences and jet and tank engines that could be addressed through trade and technology deals.

Can Kasapoglu, senior fellow at the Hudson Institute, said Turkey's defence industry had made a "major leap" by exporting advanced systems, especially aerial drones.

The war in Ukraine, he said, underscored that modern warfare depended not only on cutting-edge platforms but also on industrial depth and sustainability - areas where Turkey has gained credibility.

Nato summit showcase

Turkey supplies about 65% of armed drones used worldwide and is a major exporter of ammunition. It also produces, or plans to produce, frigates, an aircraft carrier, air defence systems and armoured vehicles. Indonesia said last year it would buy 48 Turkish fighter jets currently under development.

Turkey's ambitions also carry political and reputational risks. Last month, it unveiled a prototype domestic intercontinental ballistic missile at a defence show in Istanbul, prompting criticism from some experts over feasibility and messaging after a promotional video depicted a hypothetical launch that appeared to target North America.

Turkish officials say the defence sector will be a focal point at the NATO meeting in Ankara on 7–8 July. Alliance chief Mark Rutte has said a planned defence industry forum there would be NATO's most comprehensive yet.

Bangladesh Bank (BB) on Sunday launched a Tk 30 billion (Tk 3,000 crore) export diversification refinance scheme aimed at strengthening production capacity and expanding the country’s export base beyond the ready-made garments (RMG) sector.

The Sustainable Finance Department of the central bank issued a circular in this regard, saying the scheme has been introduced to address product and market concentration risks arising from Bangladesh’s heavy dependence on RMG exports and to support the development of high-potential export sectors.

According to the circular, the refinance fund will be formed from the excess liquidity of scheduled banks and will operate as a revolving fund.

Bangladesh Bank will provide refinancing to participating financial institutions (PFIs) at an interest rate of 4 percent, while exporters will receive financing at a maximum rate of 7 percent.

The tenure of the facility has been fixed at three years, including a grace period of up to six months, with interest calculated under the reducing balance method.

The central bank said the scheme is designed to enhance export competitiveness, increase foreign exchange earnings, improve the country’s trade balance and create employment opportunities through the expansion of non-traditional export sectors.

Financing under the scheme will be available to industries identified as “Highest Priority” and “Special Development” sectors under the Export Policy 2024-27.

Preference will be given to exporters using locally sourced raw materials, while sectors such as jute and leather have been highlighted as key areas for export diversification.

The circular stipulates that exporters classified as loan defaulters in Credit Information Bureau (CIB) reports, businesses with overdue export proceeds and entities with a history of loan write-offs will not be eligible for financing under the scheme.

Banks and financial institutions willing to participate must sign a Participation Agreement with Bangladesh Bank’s Sustainable Finance Department.

Islamic banks will also be eligible to provide financing through Shariah-compliant investment modes, subject to compliance with the scheme’s pricing and tenure requirements.

To obtain refinancing, PFIs will have to submit applications for each disbursement within 90 days along with required documents, including demand promissory notes, letters of continuity, debit authority letters and updated CIB reports.

A minimum debt-equity ratio of 70:30 will be maintained for all investments financed under the facility.

The central bank has also introduced strict monitoring and accountability measures. PFIs will be required to submit quarterly reports within 15 days of the end of each quarter, while Bangladesh Bank will conduct regular inspections to ensure proper utilization of funds.

Under the penalty provisions, PFIs found providing false information or allowing misuse of funds will be charged a five percent penalty interest in addition to the normal refinance rate.

The amount will be recovered directly from the institution’s current account maintained with Bangladesh Bank.

The circular further states that if a borrower becomes classified as a defaulter, the concerned PFI must immediately inform the central bank.

In such cases, Bangladesh Bank may recover the entire outstanding refinance amount from the institution’s current account through a one-time deduction.

The scheme has been introduced under the powers conferred by Section 45 of the Bank Company Act, 1991, as amended in 2023, and has come into effect immediately.

OpenAI is planning its biggest ChatGPT overhaul yet, aiming to turn it into a "superapp" with coding tools and AI agents to boost revenue ahead of a potential stock market listing, the Financial Times reported on Sunday.

The changes are part of a broader reorganisation at OpenAI, as it shifts resources to target lucrative enterprise clients and intensify competition with rival Anthropic, the report said, citing more than a dozen current and former employees.

Reuters could not immediately verify the report. OpenAI did not immediately respond to Reuters' request for comment.

The overhaul will give greater prominence and resources to OpenAI's coding product Codex and is set to roll out in the coming weeks, initially appearing as updates to ChatGPT's website and mobile apps, the FT said.

To drive uptake, OpenAI is redesigning ChatGPT's interface with new prompts and features steering users towards coding tools, image generation and partner services such as Canva and Booking.com, the report added.

Most Codex users are paying customers, while 2 million businesses account for about 40% of OpenAI's revenue, FT said, adding that the company expects that share to rise to 50% by year-end.

ChatGPT serves more than 900 million weekly active users, OpenAI said earlier this year, adding that it had surpassed 50 million consumer subscribers.

Reuters reported in May that OpenAI was preparing a confidential US IPO filing in the coming weeks. However, CEO Sam Altman has said the company is not focused on timing and will go public when it makes sense.

Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan said the regulator would take an aggressive approach to attract quality companies to the stock market, arguing that such a move is necessary to build a more stable and mature capital market.

Speaking at the 10th anniversary event of CFA Society Bangladesh at Sheraton Dhaka on Saturday, Khan said the market currently suffers from a shortage of quality stocks, while a significant share of trading remains concentrated in weak and speculative shares.

“We have to bring very good scripts into the market, very quickly,” he said, stressing that investors need access to more fundamentally sound companies.

The BSEC is exploring various incentives to encourage strong companies to go public. While tax incentives remain an option that would require discussions with the National Board of Revenue (NBR), he suggested several administrative measures that could make listing more attractive.

Among the proposals, Khan floated the idea of creating a separate tax administration framework for listed companies, arguing that compliant listed firms should face fewer regulatory burdens than unlisted entities.

Khan also highlighted the long-term benefits of listing, saying publicly traded companies tend to become stronger institutions through improved governance, professional management and succession planning.

He further revealed plans to promote direct listings, particularly for multinational corporations, well-governed banks, state-owned enterprises and reputable local companies.

According to him, direct listings could quickly increase the supply of quality shares in the market without requiring companies to raise fresh capital.

Noting that Bangladesh remains heavily reliant on retail investors, Khan emphasised the need to strengthen institutional participation in the stock market. He said deeper involvement by pension, provident and gratuity funds would help the market progress from frontier-market status towards emerging-market standards.

The chairman argued that stronger institutional investment, alongside the listing of quality companies, is essential for creating a more stable and mature capital market.

He also called for major regulatory simplification and digitisation, saying the existing regulations governing IPOs, margin loans and mutual funds have become unnecessarily complex. Applications for IPOs and rights issues should be fully automated, he said, adding that regulators should “regulate where necessary and simplify where possible.”

Asif Khan, president of the society, and M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, also spoke at the event.

Formal credit growth in the private sector remains almost static, reaching 4.75 per cent in April, signalling a deep slowdown in the country's business activities.

The low trend in credit demand from private enterprises is attributed to banks becoming more cautious amid rising non-performing loans (NPLs) and private borrowers losing their credit appetite due to multiple anti-business factors, including the energy crisis, higher lending costs, and external shocks stemming from the Middle East crisis.

The Bangladesh Bank's (BB) private sector credit growth data, available since 2003, shows April growth was the second-lowest after the previous month's count of 4.72 per cent.

According to the BB, outstanding loans taken by private sector entrepreneurs reached Tk 18.03 trillion by the end of April, up 4.75 per cent from Tk 17.22 trillion a year earlier.

In fact, private credit growth has hovered around single digits since August 2024, reflecting prolonged sluggishness in the $460 billion economy that is largely private-sector-led.

Seeking anonymity, a central bank official says the banking regulator continues its contractionary monetary policy stance, keeping the policy rate at 10 per cent as part of its inflation control measures despite criticisms from business circles.

"The higher lending rate, energy crisis, and external shocks stemming from the Middle East crisis are major reasons behind the plummeting credit demand," he says.

He mentions the half-yearly monetary policy statement (MPS) projection for private credit growth up to June next year is 8.50 per cent, but the current growth remains below that.

However, growth could pick up in the last quarter of FY26, he adds.

President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem says entrepreneurs are struggling to survive in the market under the extreme business and investment climate that prevails.

He cites multiple factors like the prolonged energy crisis, higher borrowing costs, and anti-business taxation policy, saying these are making it difficult for businesspeople to survive.

"Under such circumstances, who dares to think of business expansion? I do not know how the growth (4.75 per cent) has happened and who the borrowers are. Will they be able to repay the loans? I have enough doubts," he adds.