The Bangladesh Securities and Exchange Commission (BSEC) has instructed the Dhaka Stock Exchange (DSE) to ensure that stockbrokers and merchant banks submit quarterly reports on negative equity, unrealised losses and related provisioning.

The move follows the discovery that several margin lenders failed to comply with a regulatory order issued in November, requiring quarterly submissions alongside board-approved action plans.

According to BSEC data, the total provisioning deficit against negative equity and unrealised losses stood at Tk9,367 crore as of May.

Under the November directives, stockbrokers, dealers and merchant banks must continue submitting the reports until the issue is fully resolved.

During the provisioning period, no new securities may be purchased through Beneficiary Owner (BO) accounts with negative equity, although existing holdings may be sold at fair market value for adjustment.

Lenders are also barred from charging interest on margin loans or portfolio management fees on such accounts and, during the extended period, may not declare or distribute cash dividends.

BSEC sources said some lenders obtained deadline extensions after submitting action plans, while others failed to do so and were required to complete full provisioning by December 2025.

In a letter issued last week, the commission asked the DSE to ensure all stockbrokers and merchant banks submit the prescribed quarterly reports within 10 days of the end of each calendar quarter.

BSEC Spokesperson Abul Kalam told The Business Standard, "We asked the bourses to take measures to ensure proper submission of reports to the commission."

Sumit Podder, secretary general of the Bangladesh Merchant Bankers Association (BMBA), said, "Negative equity and unrealised losses are a long-standing problem that will not be solved easily."

"Despite that, we have improved a lot in terms of maintaining provisions, as the majority of institutions received deadline extensions," he said, adding, "If the capital market performs well in the future, we hope all the lenders currently bearing these woes will be able to overcome them."

Tk10,978cr in negative equity

BSEC documents show total negative equity stood at Tk10,978 crore at the end of May. Negative equity arises when the market value of assets securing margin loans falls below the outstanding loan balance.

Of the total, Tk7,820 crore was principal and Tk2,726.87 crore accrued interest, indicating that continued interest charges significantly contributed to the problem. Although many loans remained unrecovered, lenders continued charging interest until BSEC barred the practice for BO accounts with negative equity.

Against the total negative equity, stockbrokers and merchant banks maintained Tk3,668.46 crore in provisions, leaving a Tk7,309.61 crore shortfall.

Among them, 102 DSE trading right entitlement certificate (TREC) holders extended Tk6,033 crore in margin loans, comprising Tk4,935 crore in principal and Tk1,116 crore in interest, while maintaining Tk1,810.22 crore in provisions. Merchant banks kept Tk1,855 crore in provisions against their Tk4,920 crore in negative equity.

Tk2,058cr deficit in unrealised losses

BSEC documents show unrealised losses reached Tk4,042 crore as of May. Unrealised losses occur when an asset's market value falls below its purchase price without being sold.

Portfolio managers are required to maintain provisions against such losses, but prolonged market volatility has eroded portfolios and weakened their ability to meet provisioning requirements.

Against the Tk4,042 crore in unrealised losses, brokerage houses and merchant banks maintained Tk1,984 crore in provisions, leaving a Tk2,058 crore deficit.

The Dhaka Stock Exchange (DSE) staged a robust recovery yesterday, with the benchmark index gaining 41 points to settle at 5,898, just a fraction away from the psychological threshold of 5,900.

This rebound follows a brief period of corrective momentum and was primarily fuelled by renewed investor optimism regarding potential favourable revisions to the proposed margin lending rules, according to market insiders.

Market participation saw a healthy spike as total turnover jumped by 17% to reach Tk1,129 crore, indicating that liquidity is flowing back into the secondary market with renewed vigour.

According to the daily market review by EBL Securities, the capital bourse maintained a firm upward trajectory from the opening bell. The surge was driven by sustained buying interest and strengthening investor participation, which led to broad-based price appreciation across the majority of traded scrips, it said.

A significant highlight of the day was the stabilisation of the insurance sector, which had faced heavy selling pressure in recent sessions, said EBL Securities. Investors appeared to be banking on potential regulatory easing regarding marginable criteria for insurers, while simultaneously rotating their interest toward non-bank financial institution (NBFI) stocks in anticipation of short-term gains, it added.

Sheltech Brokerage Limited noted that the session's performance was shaped by this renewed buying interest following the recent correction. Early momentum pushed the DSEX to an intraday high of 5,915.68 points.

Although orderly profit-taking led to a moderate pullback in the mid-session, the underlying buying pressure remained sufficiently strong to absorb the sell-offs, allowing the benchmark index to ultimately retain most of its early gains, it said.

The upcoming half-year earnings season is also serving as a psychological catalyst, prompting investors to take positions in fundamentally strong stocks, said Sheltech Brokerage.

On the sectoral front, the textile sector dominated market activity, accounting for 18.4% of the total turnover, followed by the pharmaceutical and banking sectors.

Market breadth was overwhelmingly positive, with 294 issues advancing compared to only 58 that declined, while 41 remained unchanged.

Almost all sectors posted positive returns, with mutual funds leading the gains at 4.5%, followed by financial institutions at 3.6% and the tannery sector at 2.4%. In contrast, only the services and pharmaceutical sectors faced marginal corrections of 0.5% and 0.1%, respectively.

Individual stock performance was highlighted by National Polymer, which topped the gainers' list with a 9.94% jump. It was followed by several mutual funds, including IFIC Bank 1st Mutual Fund, Exim Bank 1st Mutual Fund, and MBL First Mutual Fund, all of which saw robust price appreciation.

On the liquidity front, Queen South Textile Mills emerged as the most-traded stock, followed by Malek Spinning, LankaBangla Finance, IPDC Finance, and Dragon Sweater.

On the losing side, Islami Insurance and ACI Formulation were among the few scrips that faced notable corrections.

The bullish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the key indices also settled in green territory. The broad CASPI index rose by 60 points to settle at 15,798, while the Selective Categories' Index (CSCX) gained 37 points. Trading activity at the port city bourse saw a significant 71% jump, reaching a turnover of Tk19 crore.

Bangladesh has decided to participate in 50 international trade fairs across 27 countries in the current fiscal year, prioritising exhibitions featuring products from 12 sectors as part of efforts to attract more international buyers.

The decision was taken at a meeting of the Export Promotion Bureau (EPB) at its office in Dhaka.

The meeting also fixed January 1 as the opening date for the 31st edition of the Dhaka International Trade Fair (DITF) next year, according to a statement released by the commerce ministry yesterday.

Many businesses, especially small and medium-sized enterprises, do not have the financial capacity to explore foreign trade opportunities, Commerce Minister Khandakar Abdul Muktadir said at the meeting.

Participation in international trade fairs will help improve the business networking opportunities for these entrepreneurs, he said.

Leather and leather goods, light engineering. and agro-processing have the potential to achieve double-digit export growth, Muktadir said.

Today’s large companies started out as small businesses, so new entrepreneurs and startup founders should be provided with opportunities to grow in the future, he said.

The minister also reiterated that the government has been working to cut red tape and create a business- and investment-friendly environment in the country, the statement said.

The Chittagong Stock Exchange (CSE) has restructured its benchmark CSE-30 Index, adding four companies and dropping four others following its semi-annual review, with the revised index set to take effect on 30 July 2026.

In a statement issued today (21 July), the bourse said the rebalancing was based on an assessment of listed companies' financial performance and market-related indicators.

The four companies newly included in the index are Grameenphone, Jamuna Bank, LafargeHolcim Bangladesh, and Paramount Textile PLC.

The companies dropped from the index are Crown Cement, National Credit and Commerce (NCC) Bank, Square Textiles, and Uttara Bank PLC.

Following the latest revision, the CSE-30 comprises Bangladesh Shipping Corporation, Bangladesh Steel Re-Rolling Mills (BSRM), Bangladesh Submarine Cables, Beximco Pharmaceuticals, BRAC Bank, British American Tobacco Bangladesh Company, BSRM Steels, City Bank, DBH Finance, Delta Life Insurance Company, Eastern Bank, Eastern Housing, Grameenphone, IDLC Finance, IT Consultants, Jamuna Bank, Jamuna Oil, LafargeHolcim Bangladesh, Meghna Petroleum, MJL Bangladesh, Olympic Industries, Padma Oil, Paramount Textile, Pioneer Insurance Company, Prime Bank, Sonali Paper & Board Mills, Square Pharmaceuticals, The ACME Laboratories, Unique Hotel & Resorts, and Walton Hi-Tech Industries PLC.

According to the CSE, the reconstituted CSE-30 Index represents about 44.69% of the total market capitalisation of all listed companies. On a free-float basis, its constituents account for around 43.13% of the market's total free-float capitalisation.

How companies are selected

Under the CSE's index methodology, the CSE-30 is a rules-based, free-float market capitalisation-weighted index reviewed every six months. Constituents are selected through a two-stage screening process.

In the first stage, companies must meet basic eligibility criteria, including a minimum market capitalisation of Tk600 million, at least 20% free-float shares, trading on at least 70% of trading days during the six-month review period, positive retained earnings, dividends declared in at least one of the previous two years, and no "Z" category classification.

Financial institutions on Bangladesh Bank's watchlist and companies penalised under securities laws in the past two years are also excluded.

In the second stage, eligible firms are ranked based on financial and market indicators, including net asset value (NAV) per share, earnings per share (EPS), dividend rate, price-to-earnings (P/E) ratio, dividend yield, free-float ratio, price-to-book (P/B) ratio, trading frequency, number of contracts, and the length of continuous inclusion in the CSE-30. The top 30 companies are then selected.

As a free-float market capitalisation-weighted index, the CSE-30 assigns weights based only on publicly tradable shares, excluding holdings of sponsors, directors, the government, strategic investors and shares under lock-in restrictions.

The CSE has followed this methodology since 2013, aligning the index with international benchmark standards used by major global index providers such as MSCI, FTSE and S&P.

Bangladesh has the potential to achieve in a much shorter period the level of economic development that the Republic of Korea attained over the past 70 years, Kim Ji-Joon, the newly appointed South Korean ambassador to Bangladesh, said yesterday.

He made the remarks at a reception hosted by the Korea-Bangladesh Chamber of Commerce and Industry (KBCCI) at Hotel Amari in Dhaka to welcome him, according to a press release.

Kim said Bangladesh could accelerate its path to sustainable economic growth by drawing lessons from South Korea’s development experience while avoiding the mistakes it made along the way.

Highlighting the long-standing friendship between the two countries, he stressed the importance of deepening economic ties to ensure their shared long-term prosperity. He called for greater bilateral cooperation in trade, investment, technology transfer and joint ventures.

Speaking at the event, KBCCI President Shahab Uddin Khan reaffirmed the chamber’s commitment to strengthening bilateral trade, investment and economic cooperation between Bangladesh and South Korea. Welcoming the new ambassador, he expressed confidence that Kim’s tenure would mark a new chapter in bilateral relations and help deepen the economic partnership between the two friendly nations.

Md Nazrul Islam, secretary (bilateral) at the Ministry of Foreign Affairs, said the economic and commercial relationship between Bangladesh and South Korea had continued to strengthen over the years.

He emphasised the need to further expand cooperation through industrialisation, technology transfer, investment promotion and human resource development, while commending the KBCCI for its role in enhancing economic ties between the two countries.

During the programme, Kim presented a certificate of merit, signed by South Korean Foreign Minister Cho Hyun, to Shahab Uddin Khan in recognition of his contribution to strengthening economic cooperation, promoting bilateral trade and supporting South Korea’s diplomatic activities in Bangladesh.

Ambassadors and high commissioners from various countries, senior government officials, members of the diplomatic corps, business leaders and KBCCI members also attended the event.

The Bangladesh Bank (BB) has allowed National Bank to lease out its under-construction Twin Tower building in Dhaka’s Panthapath area, which was originally planned to become the private lender’s headquarters.

In a notification issued yesterday, the central bank said it has exempted the bank from the relevant provision of the Bank Companies Act until 2031, allowing it to lease the property.
The NBL Twin Tower was intended to become the bank’s head office. As per the law, such a building cannot normally be leased out.However, after years of losses, National Bank received the special facility, which is expected to support the efforts to improve its financial position.The bank has posted losses every year since 2022. Its accumulated losses reached nearly Tk 8,900 crore, driven by a high volume of non-performing loans and financial irregularities.National Bank began construction of the 12-storey Twin Tower in Panthapath nearly a decade ago after the Sikder family, owners of the Sikder Group, took control of the bank in 2009. The family has faced allegations of financial irregularities, including approving loans in breach of rules and regulations.Construction was suspended for several years after a 2015 accident in which the shore pile bracing and retaining wall collapsed.

According to the bank’s financial statements, work resumed in 2020 after the necessary approvals were secured from the relevant authorities.The structural work on both towers has now been completed up to the 12th floor. The bank said the 11kV electricity connection had already been installed.

It added that approval has also been obtained for water and sewerage connections.According to the bank, the floor plans and layouts have been completed, while network installation and internal power connection work are under way. It said the interior decoration of the second floor of one tower has already been completed, and the Card Division and several other divisions would be moved there soon.

National Bank posted a loss of Tk 2,431 crore in the 2025 financial year, up 42 percent from about Tk 1,700 crore a year earlier, according to its financial statements.The Daily Star sought comment from the bank’s Managing Director Adil Chowdhury, but he did not answer phone calls or respond to messages.

The government is preparing an ambitious five-year trade and investment strategy to support a smooth transition from least developed country (LDC) status, targeting a 75% rise in per capita income to $5,000 by 2031 through higher investment, stronger export competitiveness, and wide-ranging regulatory reforms.

It also hopes to make significant progress in reducing economic vulnerability while improving human assets and social development indicators under the plan.

The targets are outlined in the Country Programme Document 2026-2031, prepared by the commerce ministry with financial support from the World Trade Organisation (WTO).

The programme aligns with the BNP's election manifesto and the "Smooth Transition Strategy" prepared during the previous Awami League administration.

Under the plan, Bangladesh aims to increase services exports to $10 billion within five years while expanding the number of exportable products by 60%. It also seeks to raise export-oriented investment from 0.65% of GDP to 1%.

The strategy comes at a time when Bangladesh's financial sector remains under pressure, private sector investment growth is at its lowest level on record, and many businesses are unable to start production despite making investments because of energy shortages.

The plan also follows decades of limited progress in export diversification and efforts to improve the investment climate.

The Country Programme places strong emphasis on modernisingtrade infrastructure, attracting FDI and reducing Bangladesh's heavy dependence on the ready-made garments sector.

Prepared jointly by the Ministry of Commerce and the WTO's Enhanced Integrated Framework (EIF), the report stresses the need to make the business and investment environment simpler and more modern, alongside wide-ranging regulatory reforms.

The programme has initially identified 52 projects to help achieve its objectives. It also outlines the expected financial and technical support from development partners, alongside the respective roles of the government and business organisations.

Investment constraints

Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said higher public, private and foreign investment would be essential if Bangladesh was to achieve its 2031 targets.

"Private investment is currently at its lowest level in history. This is due to the gas and electricity crisis, infrastructure bottlenecks and high bank lending rates," he told The Business Standard after reviewing the programme.

"If reliable gas and electricity supplies cannot be ensured and lending rates are not brought down to single digits, investment will not increase and these targets will remain beyond reach."

Implementation key to success

The commerce ministry held a validation workshop on Sunday to finalise the five-year programme.

At the event, Commerce Secretary Md Ataur Rahman Khan said preparing policies and research reports alone would not be enough, stressing that successful implementation would determine whether the programme achieved its objectives.

Former additional secretary and EIF consultant Md HafizurRahman said development partners would provide financial and technical assistance to support implementation. "If the government takes the right decisions at the right time and implements them effectively, achieving these targets will become much easier."

The programme also states that Bangladesh's progress will be assessed against various international benchmarks to measure both the implementation of reforms and improvements in the country's overall capacity.

Preparing for post-LDC challenges

Government reports have warned that once Bangladesh graduates from LDC status, it will gradually lose duty-free and quota-free market access, simplified rules of origin and flexibilities under the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), with potential implications for exports and investment.

Bangladesh is officially set to graduate from its LDC status on 24 November 2026.

However, citing global economic uncertainty and persistent structural vulnerabilities, the government has sought a three-year extension of the preparatory period until 2029. The request has been endorsed by the UN Committee for Development Policy (CDP) and is awaiting final approval from the UN General Assembly.

To address the challenges, the government plans to sign free trade agreements (FTAs) or economic partnership agreements (EPAs) with nine countries over the next five years.

Bangladesh currently has an EPA only with Japan. Negotiations are under way with India, China, South Korea, Singapore, Indonesia, the United Arab Emirates, the European Union and several other trading partners.

The action plan targets an increase in per capita income from $2,820 in 2026 to $5,000 by 2031. It also aims to double services exports from $5 billion to $10 billion.

The document also describes Bangladesh's services export earnings as disappointing.

"More than 56% contribution in the GDP is coming from service sectors. But the exports in these sectors are minimal; they are not more than $7 billion. Product-based export earnings have limits to be explored," it says.

"Poor logistics efficiency, inadequate tourism infrastructure and limited strategic foreign investment in service industries reduce competitiveness. As Bangladesh transitions from LDC status, the service sector will face stronger international competition, making regulatory reform, skills upgrading, digital transformation and a long-term service trade development roadmap critical for sustainable growth," it adds.

Export diversification, reforms

The programme places strong emphasis on export diversification, noting that Bangladesh currently exports around 500 products worth more than $1,000 each. It aims to increase that number to 800 within five years.

The commerce ministry also plans to raise export-oriented investment from 0.65% of GDP to 1%.

The report says Bangladesh is currently utilising only 71% of the trade preferences available to it as an LDC because of limited export diversification. The government aims to increase that utilisation rate to 80% over the next five years.

Alongside trade and investment targets, the programme gives priority to regulatory reforms.

Bangladesh currently scores 25.7 on the Regulatory Quality Index. The government aims to raise that score to 40 within five years, saying the target is achievable because of strong political commitment at the highest levels to implement regulatory reforms.

The government also plans to improve the country's score on the Investment Facilitation Index from 65.6 to 80 over the next five years through its reform agenda.

According to the Global Economic Diversification Index, Bangladesh scored 95 on the Trade Diversification Index in 2025. The programme aims to raise that score to 130 by 2031 by encouraging greater private sector diversification and higher value addition.

The board of directors of Rupali Life Insurance Company Limited has recommended a 12% cash dividend for the year ended 31 December 2025, maintaining shareholder returns despite reporting an underwriting deficit in the first half of 2026.

The recommendation was disclosed today (21 July) through the Dhaka Stock Exchange (DSE). The insurer paid a 10% cash dividend for 2024.

Shareholders will vote on the proposal at the company's annual general meeting (AGM), scheduled for 24 September 2026 at 10:00am on a digital platform. The record date has been set for 20 August 2026.

In line with stock exchange regulations, the company's shares traded without a price limit yesterday following the dividend declaration. The share price of the insurer rose 1.21% to Tk91.70 on the DSE.

The dividend recommendation comes despite continued pressure on the insurer's core underwriting business.

According to its life revenue account, Rupali Life posted a Tk7.09 crore deficit in the January-March quarter of 2026, improving from a Tk15.05 crore deficit a year earlier.

The trend, however, reversed in the April-June quarter, when the company reported a Tk8.11 crore deficit, compared with a Tk0.15 crore surplus in the same period of 2025.

As a result, the insurer recorded a first-half cumulative deficit of Tk15.21 crore, slightly higher than the Tk15 crore deficit in the corresponding period last year.

Despite the underwriting losses, Rupali Life continued to strengthen its policyholders' fund. Its Life Insurance Fund stood at Tk486 crore as of 30 June 2026, up from Tk480 crore a year earlier, an increase of Tk5.76 crore.

The fund had reached Tk494 crore at the end of March 2026, compared with Tk480 crore a year earlier, reflecting steady growth in long-term policyholders' assets despite fluctuations in quarterly operating performance.

Life insurers in Bangladesh typically determine dividends based on their overall financial position, including actuarial valuation, investment income, accumulated life fund and regulatory capital requirements, rather than quarterly underwriting performance alone.

As a result, temporary deficits in the life revenue account do not necessarily prevent dividend payments if regulatory requirements are met and the insurer remains financially sound.

The final dividend is subject to shareholders' approval at the AGM.

The EU on Monday slapped a 550-million-euro ($630 million) fine on online retailer AliExpress for allowing the sale of illegal products, including unsafe toys and cosmetics.

The European Union said AliExpress also did not do enough to stop the sale of counterfeit products and that when the platform detected illegal goods were on sale, many remained online for several weeks.

The EU found some of the products sold on the platform did not meet the bloc’s strict environmental and safety standards during its investigation into AliExpress launched in March 2024.

“Risks must be identified and addressed systematically to ensure consumers can safely shop online. Today, we are holding AliExpress to this standard and request it to take action,” EU tech chief Henna Virkkunen said in a statement.

EU said AliExpress failed to adequately stop counterfeit sales and many detected illegal products remained online for several weeks after being identified there
It is the largest fine ever imposed under the EU’s powerful Digital Services Act (DSA), part of the bloc’s legal armoury to police big tech that entered into force in 2022.

Elon Musk’s X social media platform received a 120-million-euro fine in December last year, while the EU slapped e-commerce giant Temu with a 200-million-euro fine in May.

AliExpress criticised the “disproportionate” fine, saying in an updated statement that the EU’s decision “ignores our sound risk management framework and the significant, proactive enhancements we have made”.

The company added it would appeal the fine.

The EU said the amount took into consideration the nature of the violations, the impact on Europeans and the duration of the infringements.

AliExpress is the biggest Chinese e-commerce platform in the EU with 193 million users, while Asian fashion giant Shein and retailer Temu respectively have 156 million and 130 million users.

The EU is AliExpress’ biggest market, a senior European official said.

Under the DSA, the world’s most popular digital platforms including social media networks and online retailers must evaluate what risks they pose and take measures to tackle the dangers.

The EU said AliExpress’ “overestimated the effectiveness of its system in detecting and removing illegal products”.

Millions of products would also reappear, the EU official said. And many illegal products would be recommended to users before they were removed.

Those selling illegal goods were still able to remain active on AliExpress.

The platform also did not “adequately” stop the sale of counterfeit products because its mandatory “brand authorisation” system “proved ineffective and understaffed. Therefore, traders easily bypassed this”, the EU found.

The DSA is part of a strengthened legal weaponry to rein in what the EU views as Big Tech’s excesses, and fines can go as high as six percent of a company’s total worldwide annual turnover.

The EU official said the global turnover of Alibaba, AliExpress’ parent company, was 122 billion euros last year, but the fine was well below six percent of that.

AliExpress has to now pay the fine and present a plan to the EU by October 20 that includes what action it will take to tackle the breaches.

If it does not comply, AliExpress risks periodic penalty payments.

Virkkunen told reporters AliExpress was “cooperating very actively” with the European Commission, the EU’s digital watchdog.

The EU has stepped up its efforts in recent years to combat what it says is unfair competition from Chinese retailers, including slapping a levy of three euros this month on cheap parcels entering the 27-nation bloc.

But Virkkunen insisted the EU did not target platforms based on their origin.

“We are investigating several online platforms. So a big part of them are from the USA, many of them are from China and also from Europe,” she said.

State-owned Biman Bangladesh Airlines is set to sign another multibillion-dollar agreement with European aerospace giant Airbus by 31 August to purchase 10 aircraft, adding a second major order to its recent $3.7 billion deal with US manufacturer Boeing.

"The government has decided to proceed with the acquisition of 10 Airbus aircraft," State Minister for Civil Aviation and Tourism M Rashiduzzaman Millat told The Business Standard. "We hope to sign the agreement by 31 August."

"However, the Airbus aircraft will not be delivered immediately. Deliveries are expected to begin from 2031. Therefore, until the new aircraft arrive, we will have to strengthen the fleet by leasing aircraft," he added.

Millat said details of the procurement, including the price and other terms and conditions, would be disclosed after the agreement is finalised, adding that negotiations are going on.

Talks advance at Farnborough Airshow

The proposed deal gained momentum at the Farnborough International Airshow 2026 in the United Kingdom, where Airbus and Biman officials met yesterday to discuss the timeline for signing the agreement, according to Airbus sources.

"The meeting at the Farnborough Airshow discussed the progress of the proposed agreement and the next steps in the timeline," an Airbus spokesperson based in South Asia told TBS.

He said the national flag carrier had sent a letter to Airbus this week expressing its intention to sign the agreement by 31 August.

"This is the first time we have received a clear commitment from Biman," the spokesperson said.

Biman Managing Director and Chief Executive Officer Kaizer Sohel Ahmed, accompanied by four senior officials from flight operations, engineering and corporate planning, travelled to the UK on 19 July to attend the airshow.

Airbus Vice President Edward Delahaye also recently met Civil Aviation and Tourism Minister Afroza Khanam, State Minister Millat and senior Biman officials in Dhaka to advance discussions on the proposal.

Fleet expansion plans

The proposed purchase comes as the government reviews a long-term roadmap to expand Biman's fleet to 47 aircraft by the fiscal 2034-35 as part of efforts to modernise the flag carrier, strengthen international connectivity and establish Bangladesh as a regional passenger and cargo hub.

Biman currently operates 19 aircraft, 14 of which are manufactured by Boeing. With the addition of the Boeing and Airbus orders, the fleet would expand to 43 aircraft.

Because neither manufacturer is expected to deliver new aircraft before 2030, Biman plans to lease 10 aircraft by next year to address its fleet shortage.

Industry insiders said Bangladeshi airlines are expanding their fleets in anticipation of rising passenger demand and additional capacity following the expected opening of Hazrat Shahjalal International Airport's Third Terminal later this year.

Board approval still pending

Although the government has publicly expressed its interest in purchasing Airbus aircraft, the deal still requires internal corporate and government approvals, according to Airbus.

"Although Biman's Board had earlier given policy approval on certain aspects, the issue of the down payment has not yet been finalised. Therefore, the proposal will have to be placed before the Board again before the agreement can be signed," the Airbus spokesperson said.

He added that advance payments are standard international practice in aircraft procurement, with around 1% of the total contract value typically paid upfront, although the amount may vary depending on negotiations.

Biman acting spokesperson Md Mohiuddin confirmed that the government approval process is underway.

Asked about the price of the aircraft, the Airbus spokesperson said: "We cannot make the price public because of legal obligations. However, the customer may disclose it after the agreement is signed."

According to aviation news portal Simple Flying, Airbus's flagship A350-900 wide-body aircraft had a list price of $317.4 million in late 2023, while the larger A350-1000 was listed at $366.5 million. The A320ceo carried a list price of $101 million, while the A320neo was priced at $110.6 million.

Airbus revises proposal

According to Airbus and Biman sources, the European manufacturer has revised its proposal, reducing its earlier offer from 14 aircraft to 10 following Biman's agreement with Boeing in April.

The latest proposal, submitted to Biman's techno-finance committee, includes four A350-900 wide-body aircraft and six A321neo narrow-body jets.

The revised offer comes less than three months after Biman signed a $3.7 billion agreement with Boeing on 30 April to purchase 14 aircraft, including eight Boeing 787-10 Dreamliners, two Boeing 777-9 aircraft and four Boeing 737 MAX aircraft.

Airbus and Boeing have competed for a place in Biman's future fleet for several years, attracting considerable diplomatic and commercial interest from both the United States and Europe.

Debate over a mixed fleet

Former Civil Aviation Authority of Bangladesh chairman Air Vice Marshal (retd) M Mafidur Rahman said he supports a mixed fleet comprising both Boeing and Airbus aircraft.

According to Rahman, reliance on a single manufacturer exposes airlines to operational risks if one manufacturer's aircraft encounter technical or regulatory problems.

However, he cautioned that operating aircraft from two manufacturers would increase maintenance costs, training requirements and technical complexity.

"A mixed fleet certainly involves additional costs. But with proper planning, it also offers strategic advantages. The most important thing is that Biman prepares a comprehensive commercial and operational plan so that the government and the public clearly understand the benefits expected from this investment," he said.

Rahman added that Biman has significant opportunities to expand revenue and strengthen its international competitiveness, but that achieving those goals would require professional management, policy continuity and a long-term strategy.

Europe's long campaign

Industry insiders said Airbus scaled back its original proposal as part of a strategic effort to remain competitive in Bangladesh's long-term fleet expansion programme.

The company had earlier proposed supplying 14 aircraft, including 10 A350 wide-body jets and four A320neo narrow-body aircraft.

Diplomats from France, the United Kingdom and Germany have repeatedly encouraged Bangladesh to consider Airbus aircraft as part of a balanced procurement strategy.

Airbus's campaign gained momentum in 2023 following French President Emmanuel Macron's visit to Bangladesh and references in the Bangladesh-UK Joint Statement to the possible acquisition of 10 Airbus A350 aircraft, including freighters.

On 4 November last year, the ambassadors and high commissioners of France, Germany, the United Kingdom and the European Union publicly urged Biman to diversify its Boeing-heavy fleet, arguing that a more balanced mix would improve operational resilience and competitiveness.

According to people familiar with the matter, at least two high-level meetings involving European envoys and senior officials from Bangladesh's aviation sector were held this month to discuss the proposal.

The United States is set to impose new tariffs that could hit dozens of countries soon, trade envoy Jamieson Greer signaled Tuesday, with President Donald Trump's temporary global levies due to expire this week.

The Trump administration has prepared fresh tariffs targeting 60 trading partners over their alleged failures to act against forced labor, as officials push to rebuild the US leader's trade agenda after legal setbacks.

"We expect to see some action soon," Greer told CNBC when asked if new duties were incoming. He did not specify a timeline.

Trump imposed a 10-percent global duty this year after a swath of his tariffs were struck down by the Supreme Court in February, but this levy expires on Friday.

US proposes new tariffs on Bangladesh, 59 others over forced labour concerns

Analysts expect that new tariffs over forced labor concerns -- set between 10 percent and 12.5 percent -- would replace these temporary duties.

They come as Trump makes a renewed push to use tariffs as leverage against US trading partners, sparking fears of retaliation and diplomatic tensions.

Washington announced a fresh 25-percent duty on certain Brazilian goods last week, and on Monday unveiled a 50-percent levy on many Canadian products to take effect in 30 days.

Canadian Prime Minister Mark Carney said Tuesday that he was looking at "all options," adding that he and Trump had agreed to "intensify discussions" in the coming weeks on a possible deal.

On Tuesday, Trump announced a new 100 percent sector-specific tariff on imported generic drugs to take effect from August 2028, with that level rising to 200 percent in 2029.

For now, the US leader said the tariff on generic drugs would be cut to zero from August 2026, in an effort to build a window for the onshoring of such pharmaceutical production to the United States.

Forced labor concerns

Greer said Tuesday that new action on forced labor will cover the majority of US trade, with the moves likely to reignite trade tensions.

A 10-percent tariff rate would hit US imports from partners including Canada, the European Union, Mexico, Taiwan and the United Kingdom. They were found to have taken steps against forced labor.

Goods from over 40 other major economies like China, India and Japan face a 12.5 percent levy.

The EU previously said that it considers tariffs imposed on these grounds "unjustified."

Canada pressure

Washington's planned 50-percent tariff on Canada also comes as US-Mexico talks over a North American free trade pact intensify.

Washington recently declined to extend the accord in its current form.

Greer is set to travel to Mexico from Wednesday to Friday for discussions linked to a joint review of the US-Mexico-Canada Agreement (USMCA).

But negotiations with Canada have proceeded at a slower pace. Carney on Tuesday did not suggest that he would head to Washington for talks.

Some lawyers see Trump's use of an untested legal provision -- Section 338 of the Tariff Act of 1930 -- as a means to gain leverage over Canada in USMCA negotiations.

Trade lawyer Dave Townsend of Dorsey & Whitney added that higher tariffs "appear to be aimed at encouraging an agreement between Canada and the United States, or in retaliation for the failure to reach such agreement, or both."

The question, he said, is whether both sides will start a "cycle of escalation and retaliation."

Crucially, Trump's latest salvo will not exempt affected Canadian products entering his country under the USMCA.

Trump told reporters Tuesday that the Canada tariffs were unrelated to his earlier threats over wildfire smoke that descended into the United States.

Brazil tensions

US plans for a 25-percent tariff on Brazilian goods over accusations of unfair trade practices have separately drawn a sharp rebuke from the Latin American giant.

The levy is due to take effect Wednesday, while shaping up as a major campaign flashpoint just months before Brazil's presidential election.

A range of products like beef, coffee and certain aircraft parts will be exempted, as will some goods that the United States does not produce.

Still, the American Chamber of Commerce for Brazil recently warned that Washington's measure places Brazil among countries "facing the most restrictive conditions for access to the US market," affecting more than $11 billion in exports.

Pressures of climate-change impacts on Bangladesh's balance-of-payments (BoP) situation haunts their mind as an International Monetary Fund (IMF) team begins diagnosing in-depth the country's climate policy before framing a new lending package, sources say.

In the previous US$5.5-billion credit programme for Bangladesh, the IMF had earmarked US$1.3 billion under the Resilience and Sustainability Facility (RSF) arrangement.

However, the Fund had disbursed funds totaling $887 million under the RSF before Bangladesh new administration announced the scrapping of the programme while seeking a new lending arrangement.

Officials have said a six-member team of the IMF, led by Senior Economist Suphachol Suphachalasai, is now in Dhaka on a two-week mission and having discussion with the officials of different ministries and divisions concerned on the climate issues.

As part of the spadework, they are assessing Bangladesh's climate-policy framework, climate-related fiscal arrangements, adaptation and mitigation policies, disaster-risk financing, and climate-finance architecture to develop findings and recommendations for the authorities concerned.

"Like the previous loan programme, impacts of climate change on Bangladesh's overall economy and steps for mitigation will get priority in the proposed new programme," a senior finance division official told The Financial Express Tuesday.

He said the IMF team, thus, is now diagnosing the overall climate-related measures Bangladesh now pursues to fight its impacts.

Finance officials say Bangladesh is one of the most vulnerable countries to the adverse impacts of climate change, even though it accounts for less than 0.43 per cent of global greenhouse-gas emissions.

The country's climate-relevant budgetary allocation is rising every year to cope up with the impacts of climate change. In the current fiscal year, the government has allocated some Tk 517 billion in favour of 25 ministries and divisions for taking measures to fight climate-related challenges, up from the previous year's allocation of Tk 469 billion.

Data show while adaptation continues to receive the largest share of climate financing, with allocations coming to Tk 389 billion in the current fiscal year, the country is also spending a significant amount of Tk 99.25 billion for mitigation efforts.

According to different estimations, climate change costs Bangladesh between $3.0 billion and $4.0 billion each year in direct disaster-related damages. The economic losses reach up to $24 billion per annum when taken into account the extreme heat and reduced labour productivity that severely impacts agriculture and informal labour sectors.

"The significant budgetary spending to fight the impacts of climate change puts severe pressures on Bangladesh's economy, minimising scopes to finance development works of the country," another finance official said.

Sources have said at the meetings with the finance division officials this week the IMF team took stock of climate-and disaster-related works, status of Bangladesh Climate Development Partnership (BCDP), National Strategy for Disaster Risk Financing, the considerations of climate-related risks in macro-fiscal planning, budgeting and allocations of climate- and disaster-related spending, and subsidies on fossil fuels, electricity, and water supply.

At the National Board of Revenue, they inquired about tax policies related to electricity, fossil fuels, and petroleum products, and tax policies on natural and mineral resources, source said.

The IMF team at the Power Division discussed power-sector policies and strategies, renewable energy and energy efficiency, power-sector performance and reform roadmap, electricity subsidies, including capacity charge, electricity-tariff structure, and electric vehicle-sector development and implications.

At the ministry of environment, the visiting team discussed climate-related strategies, laws, and policies, NDC 3.0 and NAP implementation, status of Bangladesh Climate Development Partnership (BCDP), Bangladesh Climate Change Trust Fund, Bangladesh Climate Change Resilience Fund and sustainable forest management.

Sources said at the meeting with central bank officials, they also took updates on climate-related financial-sector policy and initiatives, sustainable financing and climate finance, role of banks and financial institutions in climate-and disaster-risk management, and financial-sector resilience and climate-stress testing.

The Bangladesh Securities and Exchange Commission (BSEC) has drafted new rules to make margin lending easier, allowing investors to borrow money from their brokerage to buy shares, using shares they already own as collateral.

The draft has been published for stakeholder comment. BSEC argues that rules brought in by the previous commission made these loans too hard to get.

Under the new proposal, whether a stock qualifies for margin lending would depend on things like the company’s book value and how regularly it has paid dividends.

The real question is whether relaxing these rules will actually help the market. While it may inject some liquidity into the stock market in the short term, could it also create greater risks over the longer term?

It is worth recalling that the previous commission’s primary justification for tightening the flow of margin loans was that many investors had borrowed money to purchase shares but failed to manage their leveraged positions properly, resulting in significant losses.

That’s the basic danger of a margin loan. The money has to be paid back no matter what happens to the share price. If the price falls far enough, the broker is supposed to sell the borrower’s shares automatically to recover the loan -- this is called “forced selling.”

When many investors are in this position at once, forced selling by one can push prices down further, which triggers more forced selling elsewhere, and the whole market slides.

The aftermath of the 2011 stock market crash -- one of the worst in Bangladesh’s stock market history -- offers an important lesson. At that time, brokerage houses were not allowed to execute forced sales of clients’ shares.

Many brokers ended up owing more than their clients’ accounts were worth -- what’s called “negative equity” -- and some still haven’t recovered. The episode also placed the capital market under prolonged stress.

So, what is the solution? Margin loans exist in stock markets all over the world, and normally that’s fine. However, in a market like Bangladesh, where there is a shortage of fundamentally strong listed companies and investors often speculate on manipulated stocks, borrowing money to invest in equities is extremely risky. Borrowing to invest in that kind of market doesn’t only put individual investors at risk but it can also leave brokerages and other institutions exposed if they cannot force-sell in time.

The real problem, hence, becomes the question about whether forced selling can actually be executed if market conditions warrant it. In Bangladesh, the pattern has been that investors take margin loans to buy speculative stocks, and when prices fall and their shares are due to be sold off, they often take to the streets to protest instead.

In a market investors hold such a mindset, margin lending isn’t just a risk-management issue, it can turn into a political headache for the government, since forced selling has a history of triggering street protests. So why is BSEC moving to ease it?

There seem to be two justifications. One is that it should be up to lenders and borrowers to weigh their own risk before extending or taking a loan. But that only works if investors act rationally. Irrational, herd-driven investing is one of the well-known weaknesses of Bangladesh’s stock market.

The second argument could be that easier loans mean more money flowing into the market, which should boost trading activity. However, the local capital market’s problem isn’t a shortage of money, it’s a shortage of good companies to invest that money in. Pumping in more borrowed cash without more solid companies to absorb it is unlikely to produce sustainable benefits. In the long run, it may not serve anyone’s interests.

The proposed framework for which stocks qualify for margin loans -- book value, dividend history -- raise another concern: how reliable are those financial indicators? After all, investors relied on the published financial statements of several Islamic banks when purchasing their shares over the last decade. Some of these banks were classified as Category A companies, consistently paid attractive dividends, and reported strong earnings per share. Later, it turned out the banks’ financial statements had been inflated, and the real value of those shares collapsed.

In such an ecosystem, why should capital market intermediaries also be exposed to additional risks by extending margin loans?

To be fair, plenty of listed companies do report genuine, trustworthy profit and book-value figures, and those numbers are still useful. But they shouldn’t be the only test for whether a stock is safe to buy on margin. Other checks are needed too.

Most importantly, until Bangladesh’s financial reporting and credit rating systems are more reliable, margin loans shouldn’t be made easier for small investors to get.

There’s also the matter of financial literacy. Many retail investors in Bangladesh don’t fully understand what they’re signing up for when they take a margin loan, which is part of why forced selling triggers protests instead of acceptance.

The problem extends beyond investors alone. In a country where the finance minister himself instructed market participants in 2012 not to execute forced sales even when portfolio equity fell below the prescribed threshold, and where the BSEC also discouraged forced selling, it is legitimate to question whether margin lending is an appropriate product for the country’s capital market.
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More than half the companies listed on Bangladesh’s stock exchanges fall into the two lower-quality tiers -- Category B and Category Z. Making margin loans easier to get in a market this heavy with weaker companies is unlikely to do much long-term good. It’s more likely to generate business for brokers and other intermediaries while adding risk to the system as a whole.

A better policy focus for the government would be attracting more genuinely strong companies to list on the stock exchange in the first place. Once high-quality companies are listed, investors will naturally return, and liquidity will improve without artificial stimulus. Capital naturally flows to opportunities where sustainable returns are available.

Equity investment should ideally be financed through personal savings rather than borrowed money. If equity investments are increasingly funded by debt, the very nature and purpose of equity financing become distorted.

It’s true that easing margin loans could give the market a short-term lift. But, from the long-term perspective, keeping margin lending as limited as reasonably possible is likely to be a healthier policy for a market like Bangladesh.

Lastly, since stocks are volatile assets, that volatility, if it moves upward, allows for rapid wealth creation through margin loans. However, when the market becomes in a falling trend, investment can evaporate very fast. Are our investors ready for that?

The upbeat remarks came after official General Administration of Customs figures showed a sharp turnaround in bilateral trade in goods. After slumping 18.7 percent year-on-year in the first quarter, China-US goods trade rebounded to post a 13.7 percent year-on-year gain in the second quarter.

This trade recovery aligns with fresh bilateral moves to stabilize economic relations. The Ministry of Commerce confirmed that during the latest round of China-US economic and trade consultations held in May, the two sides reached an agreement to negotiate a reciprocal tariff cut framework via a newly established trade council. The deal would cover goods valued at $30 billion or more from each country.

Although neither side has released a final product list, trade analysts expect the tariff cuts to cover textiles, footwear, consumer goods, electronic components, industrial machinery parts, chemicals, plastics and agricultural products, while excluding sectors such as advanced semiconductors and strategic resources.

Diao Daming, a professor of international relations at the Beijing-based Renmin University of China, said recent progress in the China-US economic and trade talks has helped bolster business confidence across the world and is creating conditions for more predictable trade and investment.

Yu Xinding, a professor of international trade at the University of International Business and Economics in Beijing, said that once implemented, the new tariff framework will support further growth in China-US trade while setting a positive example for resolving trade disputes through dialogue.

“Faced with multifaceted costs triggered by tariffs, this move offers a practical solution to help reverse trade distortions created by previous tariffs,” said Yu. “The initiative goes far beyond lowering tariffs on selected goods. Equal consultations will improve market access, ease corporate burdens and restore bilateral trade to market-oriented, mutually beneficial dynamics.”

Though modest relative to overall China-US trade, the planned tariff relief targets products with clear market demand and practical benefits, delivering early, verifiable results that can strengthen confidence in two-way economic ties, she added.

While the recent rebound in bilateral trade points to improving momentum, analysts cautioned that the relationship remains subject to structural challenges and external uncertainties, despite the progress made through dialogue.

Ma Xue, a researcher at the Institute of American Studies at the China Institutes of Contemporary International Relations, said that strategic competition between China and the US in high-tech sectors will continue to intensify, while tighter controls on semiconductors, artificial intelligence and critical minerals, alongside geopolitical tensions, could weigh on the bilateral trade climate.

“Overall, institutionalized consultations and differentiated management of disputes could help offset short-term political disruptions,” Ma said. “Although disagreements and periodic bargaining will persist, structured cooperation, accompanied by occasional friction in specific sectors, is likely to become the new normal in bilateral economic ties.”

Data from the General Administration of Customs also showed that China-US goods trade reached 2 trillion yuan ($295 billion) in the first half of the year, accounting for 7.9 percent of China’s total foreign trade.

James Zimmerman, chairman of the American Chamber of Commerce in China, said he hopes this year will be a productive one for China-US relations, noting that current China-US trade policy is increasingly characterized by a “managed trade” approach centered on reciprocity.

Saying that engagement is in the best interest of the US, Zimmerman reiterated that China brings real value to US consumers and benefits Washington’s long-term economic interests.

Similar views were expressed by Jim Sutter, CEO of the US Soybean Export Council. “The recent announcement on tariff reductions is a positive signal. We hope the commitments made during the talks will soon be translated into concrete policy measures,” he said.

Such optimism also resonates with US industrial companies stepping up long-term investment and innovation in China. Lin Chunmei, president and general manager of Corning China, said that as AI reshapes the global industrial landscape and drives demand for advanced materials and computing infrastructure, the US industrial materials manufacturer has evolved from technology introduction to collaborative innovation in China.

Corning will deepen local innovation, support next-generation computing infrastructure and contribute to the upgrading of China’s industrial ecosystem, she said.

The company’s confidence also comes as China continues to strengthen its position in advanced manufacturing and high-tech exports. In the first half of 2026, the country’s exports of integrated circuits surged 88.7 percent year-on-year, while exports of electronic components rose 62.6 percent, statistics from the Ministry of Industry and Information Technology showed on Monday.

The overseas presence of Bangladesh's state-owned banks has suffered another setback, as four branches of Janata Bank in the United Arab Emirates face possible closure – four years after Sonali Bank's licence was cancelled in the United Kingdom.

The UAE central bank imposed restrictions on Janata Bank's operations over a capital shortfall and ordered the bank to prepare for a wind-down of its existing operations unless the deficit is addressed.

Under Central Bank of the UAE (CBUAE) regulations, Janata Bank's UAE operations are required to maintain paid-up capital of 400 million dirhams. The current paid-up capital is 100 million dirhams, leaving a shortfall of 300 million dirhams, or nearly Tk1,000 crore.

The UAE central bank has restricted withdrawals from the Janata Bank branches' accounts held with it, stopped them from opening new customer accounts and instructed them to prepare to gradually wind down existing operations.
According to Janata Bank officials, the measures were taken because the bank failed to maintain the minimum paid-up capital required under UAE banking regulations and due to concerns over the bank's overall financial condition in Bangladesh.

On 8 July, CBUAE Assistant Governor Ahmed Saeed Al Qamzi wrote to Janata Bank's UAE Chief Executive Officer Mohammad Kamruzzaman, directing him to inform the bank's board of directors and quickly communicate its decision.

The UAE central bank also informed Janata Bank Managing Director Mazibur Rahman and Bangladesh Bank's Off-site Supervision Department of its decision on 9 July.

The bank, in a board meeting on 14 July, decided that an emergency meeting involving the Financial Institutions Division, the Bangladesh Bank, the Ministry of Foreign Affairs and the bank's chairman and managing director was needed to address the situation.

Accordingly, the MD wrote to the secretary of the Financial Institutions Division on the same day requesting such a meeting.

Speaking to TBS on Saturday, Mazibur said that since 2016, all profits earned by the UAE branches have been retained there and added to paid-up capital – from 75 million dirhams to 100 million dirhams.

He said the bank had proposed increasing its paid-up capital in phases over three years.

Mazibur said that if the UAE central bank does not accept the proposal, they will try to increase the paid-up capital with government assistance.

Concerns over Janata's capital position

In its letter, the CBUAE said the regulatory measures had been taken because of concerns over Janata Bank's capital position and its failure to comply with minimum capital requirements.

It said withdrawals from the bank's accounts with the UAE central bank would be approved only in limited amounts to meet depositors' claims. It also instructed the bank to stop accepting new customers and focus on settling existing liabilities and business.

In a separate letter sent to the bank's head office on 9 July, UAE CEO Kamruzzaman sought guidance from the board on the next course of action.

Responding to concerns raised by the UAE central bank over Janata Bank's financial condition, Mazibur cited the country's banking sector's broader challenges, with more than 20% of loans nationwide classified as defaulted.

He said although around 70% of Janata Bank's loans had become defaulted, it continues to operate without relying on emergency borrowing.

In a separate letter dated 22 April, CBUAE's Qamzi pointed out the bank's audited 2024 financial statements that showed the capital of Janata's head office had also fallen below the minimum equivalent of 2 billion dirhams required under UAE regulations.

According to Bangladesh Bank data, Janata Bank's capital deficit stood at Tk52,891 crore at the end of December 2024. At the end of March this year, its provision shortfall was Tk50,131 crore, while defaulted loans totalled Tk74,996 crore, representing 73.94% of its outstanding loans.

Future of UAE branches uncertain

Janata Bank began operations in the United Arab Emirates in October 1976 with an initial paid-up capital of 12.7 million dirhams. It now operates four branches in Abu Dhabi, Dubai, Sharjah and Al Ain.

The branches primarily facilitate remittance services for Bangladeshi expatriates and provide banking services to non-resident Bangladeshis. They also handle import and export letters of credit, trade finance, guarantees, deposits and commercial lending.

According to bank documents, the UAE operations earned a profit of 32 million dirhams up to 2020, of which 25 million dirhams was added to paid-up capital.

A senior Bangladesh Bank official, speaking on condition of anonymity, said if the government does not provide the required capital, any closure of the UAE branches would have to follow the UAE central bank's regulations, taking into account the branches' paid-up capital, deposits and other liabilities.

He said such a process would also involve high costs for the bank.

Sonali Bank's trouble in UK

Sonali Bank began its UK operations in 1999 with the registration of Sonali Trade & Finance (UK) Ltd in London. In December 2001, it was renamed Sonali Bank (UK) Ltd and started operating as a full-fledged bank, providing accounts, remittance, and trade finance services to expatriate Bangladeshis and business clients.

Though initially popular, the bank soon faced a series of regulatory challenges. In 2016, the UK's Financial Conduct Authority fined it for weaknesses in anti-money laundering systems, while financial losses and irregularities also mounted.

Under increasing regulatory pressure, the UK's Prudential Regulation Authority cancelled the bank's licence in August 2022.

Following the licence loss, the entity was restructured and renamed Sonali Bangladesh (UK) Ltd on the same day, taking over the liabilities of the former company. The new entity no longer offers retail banking; instead, it focuses on trade finance, correspondent banking, and institutional transactions.

Sonali Bank later established an exchange house named Sonali Pay (UK) Limited and a non-banking financial institution named Sonali Bangladesh (UK) Limited in London. However, neither of these newly created entities is performing well, with both consistently running at a loss and requiring capital injections from Bangladesh to survive, according to Sonali Bank officials.

Performance of other banks' overseas operations

While state-owned Agrani Bank's exchange houses in Singapore and Malaysia currently play a vital role in remittance inflows, their internal governance and management have plunged into a severe crisis due to widespread financial irregularities and corruption uncovered in recent years.

An internal audit conducted by Agrani Bank, covering the period from 1 July 2017 to 31 December 2024, revealed that the officials in charge of these two entities engaged in numerous activities that were "completely contrary to banking policies, financial discipline, and good governance" – many of which amount to direct criminal offences.

According to Bangladesh Bank's latest Financial Stability Report 2024, the combined net profit of overseas branches and exchange houses of Bangladeshi banks dropped to $5.96 million in 2024, representing a 36.56% decline from the $9.40 million recorded in 2023.

Over the same period, the combined return on assets for these branches fell from 1.74% to 1.15%.

The report also noted that Sonali Bank and Janata Bank, alongside the private-sector AB Bank, operate a total of seven full-fledged foreign branches across the UAE and India. Furthermore, another 21 Bangladeshi banks are providing remittance collection services overseas through 21 dedicated exchange houses.

President Donald Trump unveiled 50% tariffs on a wide range of imports from Canada on Monday in response to what the US administration called its discriminatory treatment of American-made cars, alcohol and dairy goods, threatening a new front in a global trade war.

In slapping import taxes on goods ranging from wine to cement and ice hockey gear, Trump invoked Section 338 of the Tariff Act of 1930, which permits a president to impose punitive tariffs of up to 50% against trading partners deemed to have discriminated against US goods. That marked the law's first known usage in nearly a century of existence.

The new tariffs, set to take effect in 30 days, would also apply to dairy products, swimming pools, furniture, fishing rods, seeds, clothing and wigs, among other items.

"While the Administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the United States for its efforts to rebalance trade and protect US industry in national-security sensitive sectors," US Trade Representative Jamieson Greer said in a statement.

Canadian Prime Minister Mark Carney said in a statement that his government has made comprehensive proposals to resolve trade disputes with Washington, asserting that Trump's past tariffs violated the North American trade pact.

"This trade dispute has raised costs for families, particularly in the US," he said. "Canada stands ready to engage intensively to address outstanding issues with the US to the mutual benefit of our citizens."

The Trump administration has long complained that Canada and China implemented retaliatory measures in response to the barrage of tariffs Trump has tried to impose since returning to the White House last year.

Greer has pointedly left Canada out of negotiations under way with Mexico on changes the US wants in the US-Mexico-Canada Agreement on trade. He holds bilateral talks on USMCA in Mexico City this week.

When Trump and Carney met at the Fifa World Cup Final in New Jersey on Sunday, Trump demanded that Carney take action to contain wildfires that have sent smoke billowing across swathes of the US. The US president last week threatened to add the "incalculable cost" of dealing with the pollution to existing tariffs on Canadian goods.

First usage

The Tariff Act of 1930 and its Section 338 are better known for massive US tariff increases and subsequent retaliation that economic historians say worsened the Great Depression of the 1930s.

Section 338 was intended to ensure countries apply tariffs equally and don't give preferential rates to some countries at the expense of US exports, said John Veroneau, a US trade official in the President George W. Bush administration who has extensively researched the statute.

He said that some presidents, including Franklin D. Roosevelt, considered imposing tariffs under Section 338, but no record could be found of any president taking such action until Trump's proclamations on Monday.

"It is ironic, to say the least, to use this authority to impose tariffs to retaliate against tariffs that were imposed in response to actions taken by the US," said Veroneau, senior counsel with the Covington and Burling law firm.

"These tariffs may be lawful under Section 338, but they at a minimum violate the spirit of Section 338, which was to create a world where countries apply the same tariffs on the same goods to all countries," he said, adding Trump has moved away from this principle "in a maximalist way."

After World War Two, major countries created the "most-favoured-nation" tariff system through the General Agreement on Tariffs and Trade to try to prevent a return to the pre-war "beggar-thy-neighbour" economic policies marked by competitive trade restrictions and currency devaluations.

Trump's new levies are set to take effect on 19 August and apply regardless of whether goods qualify for tariff exemptions under USMCA, although Trump exempted a range of key goods including energy, potash, fish, critical minerals and products already covered by Section 232 tariffs.

Among grounds for the tariffs, the White House cited Canada's "protectionist" dairy supply management system as well as tariffs and quotas on cars imported to Canada from the US but not from other countries. Carney said that Canada "as is its right, merely matched" US tariffs on the auto sector that were in violation of the USMCA.

Washington also highlighted that most Canadian provinces have halted the sale of US alcohol, which they did in response to prior US tariffs.

The White House said Canadian imports of US motor vehicles dropped by 22% and of US alcoholic beverages by 81% over the past year.

Diamond Isinger, a former senior adviser to ex-Prime Minister Justin Trudeau on US-Canada relations, said Carney would have limited ability to compel provinces to start selling American alcohol again.

"Unless there are some sort of extraordinary measures invoked here, the premiers of those provinces are the ones who decide whether to restock alcohol," Isinger said.

The stock market regulator has proposed making it easier for investors to borrow money to buy shares, believing the move could increase trading and improve market liquidity.

However, market experts say that easier access to borrowing could encourage riskier investing and make the market more vulnerable to sharp swings later.

With the proposals, the Bangladesh Securities and Exchange Commission (BSEC) published draft amendments to the Bangladesh Securities and Exchange Commission (Margin) Rules last week and invited comments from stakeholders.

A margin loan is money borrowed from a broker or merchant bank to buy shares. Investors pay part of the purchase price from their own funds and borrow the rest, allowing them to buy more shares than they otherwise could.

Among the seven major changes proposed by the BSEC, one of the most significant is expanding margin loans to more B-category companies.

B-category companies generally pay lower dividends than A-category companies and are considered riskier investments.

Under the current rules, investors can obtain margin loans only to buy shares of B-category companies that pay at least a 5 percent dividend. The draft rules would remove that requirement, allowing investors to borrow to buy shares even if those companies pay less than a 5 percent dividend.

According to market experts, margin loans are generally intended for relatively stronger shares because borrowing magnifies both gains and losses. Extending margin finance to weaker companies could encourage speculation and increase risks for both investors and lenders.

Faruq Ahmed Siddiqi, a former chairman of the BSEC, said companies that pay very low dividends or are fundamentally weak should not be eligible for margin loans.

“Instead, the level of dividend payment could be incorporated as a criterion for determining the margin loan ratio,” he said.

In other words, companies that pay lower dividends should qualify for lower margin financing. There should be some form of restriction on companies with poor dividend records.

Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), said, “Under the proposed rules, even a company that pays only a 0.5 percent dividend would be eligible for margin lending; that should not happen.”

“While it is true that lenders will assess the risks before providing loans, such a provision should not exist in the first place. The proposal suggests that margin lending may be made more flexible,” he said.

The draft amendments also propose lowering the minimum investment required to qualify for a margin loan.

At present, investors must hold at least Tk 5 lakh worth of shares in their BO accounts for at least one year before they become eligible for margin finance. The proposed rules would reduce the threshold to Tk 3 lakh, allowing more investors to qualify.

The BSEC also wants brokers and other intermediaries to lend more.

At present, they can provide margin loans worth up to three times their core capital or net worth, whichever is higher. Under the proposed rules, that limit would rise to five times.

For example, a lender with Tk 100 in core capital can currently lend up to Tk 300. The proposed rules would allow it to lend up to Tk 500.

The draft amendments also seek to remove the minimum free-float requirement for companies whose shares qualify for margin loans.

Free float refers to the shares that are available for public trading. It excludes shares held by founders, sponsors and other long-term owners that are not normally traded.

Currently, a company must have at least Tk 50 crore in free-float market capitalisation for its shares to qualify for margin lending. The proposed rules would remove that requirement.

The BSEC has also proposed increasing the maximum exposure to a single stock to 20 percent from 15 percent. This would allow brokers to concentrate a larger share of their lending in one company.

Another proposed change would revise maintenance margin requirements. A margin call would be triggered when the value of an investor’s portfolio falls below 70 percent, compared with the current 75 percent threshold.

The compulsory forced-sale threshold would remain unchanged at 50 percent.

Former BSEC chairman Faruq said the regulator may be relaxing margin lending rules to support the capital market. One argument in favour of such a move is that the risks associated with margin lending should be borne by the lender and the borrower.

“However, this assumption holds true only if investors behave rationally.”

Given the investment behaviour typically observed in Bangladesh’s stock market, he said regulators need to exercise great caution when setting margin lending requirements.

“It is better for the rules to remain relatively stringent in the interest of investors.”

During a rising market, many investors become eager to borrow while intermediaries are equally willing to extend credit. But when the market corrects, excessive margin lending can create significant risks, he added.

DBA President Saiful said expanding the market through margin lending is not sustainable. Instead, it could create significant risks.

“In a market where a large number of companies are underperforming, using leverage to inflate the market would be suicidal. Greater use of leverage may be appropriate when the market is dominated by institutional investors, but in a retail-driven market, excessive reliance on margin loans is not desirable.”

Moreover, for the market to grow in a sustainable manner, the mutual fund industry needs to become much larger, he added.

The draft amendments also revise the valuation criteria for companies eligible for margin loans.

For most companies, the price-to-earnings (P/E) ratio must remain below 30. For banks and other financial institutions, lenders would instead use the price-to-book (P/B) ratio because book value is generally considered a more appropriate measure for financial companies.

As per the proposal, banks and financial institutions with a P/B ratio above 3 would not qualify for margin lending. For insurance companies, the limit would be 1.

Md Sayeed Ahmed, a veteran chartered accountant and former executive director of the Financial Reporting Council, said using the price-to-book ratio as the primary or sole valuation criterion for financial sector securities, while relying on earnings-based measures for other sectors, appears “inconsistent” with well-established valuation principles.

He said a going concern business derives its economic value primarily from its expected future earnings and cash-generating capacity rather than merely from the historical carrying value of its net assets.

Book value is fundamentally an accounting measure representing historical net assets after applying accounting standards. It does not necessarily reflect a company’s future profitability, competitive strength, franchise value, management quality, business model, technological capability, or long-term growth prospects, he added.

Agencies are groping in the dark in executing Family Card recipes as a huge sum is being handed out under this government's flagship social-protection programme sans designating real recipients amid data dearth, sources say.

This is also the ruling BNP's key electoral pledge that went for rapid execution through disbursing cash assistance to insolvent families across Bangladesh after its election to power.

To bridge the data gaps, the Department of Social Services (DSS) has proposed conducting a nationwide census within three months by recruiting more than 60,000 enumerators to identify eligible beneficiaries of the Family Card charity.

Economists and government officials, however, have questioned the feasibility of the proposal, arguing that completing a nationwide census within such a short timeframe is unrealistic, particularly as the DSS lacks experienced personnel, institutional capacity to conduct a census or large-scale survey, and the legal mandate to undertake such an exercise.

A senior official at Bangladesh Bureau of Statistics (BBS) has said any public or private agency could conduct surveys only in areas where the BBS does not already have its reach.

The government has allocated Tk145.0 billion under the Annual Development Programme (ADP) for the current fiscal year to provide Family Card to 4.1 million families, with each beneficiary family set to receive Tk 2,500 per month.

The DSS has proposed revising the ongoing 'Strengthening Social Protection for Improved Resilience, Inclusion and Targeting' project to implement the Family Card programme, incorporating the proposed census and several other components.

The project documents reveal that the pilot phase of the Family Card programme, launched in March this year, has been implemented successfully over the past few months, and the government planned to formally roll out the programme nationwide from July 1st.

The documents also state that the Cabinet Committee assigned the Ministry of Social Welfare for conducting the census and data-entry activities for the programme.

Since proposed in Parliament, 17 years have elapsed but a poverty database remains elusive.

While presenting the national budget in Parliament, then finance minister Abul Maal Abdul Muhith pledged to prepare a comprehensive database of hardcore poor, vulnerable elderly citizens, and persons with disabilities to ensure targeted government assistance.

In the following year's budget speech, he said the government had already started developing a database of social-safety-net beneficiaries to improve coordination among social-service programmes.

However, even after 17 years, Bangladesh has yet to establish an effective and functional poverty database.

The BBS's Tk7.27-billion project fails to deliver. Following the commitment, the Bangladesh Bureau of Statistics (BBS) initiated a project in 2013 to develop the National Household Database (NHD) with an estimated cost of Tk3.29 billion, aiming to identify beneficiaries of social-safety-net programmes through a database of 35 million households.

The project, originally scheduled for completion in 2017, was finally completed in 2022 after costs surged to Tk7.27 billion. However, the database remains inaccessible due to the failure to develop a Management Information System (MIS).

In a revised project proposal in 2024, BBS acknowledged that the poverty database remained unusable due to the absence of an MIS and application-programming interface (API).

Database gap fuels targeting failures in social-safety-net delivery. The lack of a comprehensive database has contributed to persistent targeting failures in social-safety-net programmes, with inclusion and exclusion errors remaining high, according to the social-security budget report for the current fiscal year.

Evidence shows that social transfers are still not reaching the poorest effectively. Only about half of poor households received social assistance in 2022, while around 22 per cent of total social benefits went to the richest 20 per cent of households, highlighting continued exclusion, inclusion errors and leakages in programme delivery.

Economist Prof Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), terms unfortunate the absence of a comprehensive database of poor people even after so many years.

He has said, "The lack of such a database results in misallocation of funds, with a significant share of benefits going to affluent groups while many poor people remain excluded."

He suggests creating a reliable database through a quality survey or census before launching the Family Card programme, noting that such exercises are usually conducted by the BBS and the DSS's capacity in this area remains untested. He also recommends involving all relevant stakeholders in the census process.

Shah Mohammad Mahboob, Director-General at the DSS, has said that although BBS conducts various surveys, the data generated from those surveys would not be sufficient to accurately identify beneficiaries for the programme.

He said the ministry was, therefore, was given the responsibility of conducting a census under the DSR framework. To carry out the exercise, a nationwide workforce will be recruited and monitoring teams will be formed.

"The census and beneficiary-selection process will be completed within three months by covering all households across the country," he said.

Md Firoz Sarker, secretary of the Statistics and Informatics Division, has said the DSS had not yet shared any plan to conduct a survey or census. "Instead, the department had shared a plan to conduct a Proxy Means Test (PMT) to assess people's socioeconomic condition using proxy indicators that reflect income levels."

He has expressed the hope the DSS would seek support from the BBS if it proceeds with any census or survey in the future.

British International Investment (BII), the UK’s development finance institution, has unveiled a new five-year strategy for Bangladesh, reaffirming its long-term commitment to supporting sustainable economic growth, private sector development and climate-focused investment in one of South Asia’s fastest-growing economies.

The 2026-2031 strategy, launched on Monday, builds on more than four decades of investment in Bangladesh and signals Britain’s intention to deepen its economic partnership with the country by supporting businesses that generate employment, improve resilience and accelerate the transition to a low-carbon economy.

BII, which has invested in Bangladesh since the early 1980s, currently manages a portfolio worth more than $270m in the country. Its new strategy prioritises investment in financial services, manufacturing, micro, small and medium-sized enterprises (MSMEs), digital infrastructure and renewable energy, while seeking to attract greater volumes of private capital into high-growth sectors.

The move comes as Bangladesh seeks to diversify its economy, strengthen industrial competitiveness and attract foreign investment amid global economic uncertainty and mounting climate challenges.

“Bangladesh has made remarkable economic progress over recent decades, underpinned by a dynamic private sector and entrepreneurial talent,” said Srini Nagarajan, managing director and head of Asia at BII.

“Through our new strategy, BII is reaffirming its strong commitment to Bangladesh’s long-term development and will build on more than 40 years of partnership in the country by backing businesses that expand opportunity, strengthen resilience and support the green transition.

“Our ambition is not only to invest, but to help mobilise greater pools of private capital into the sectors that will shape Bangladesh’s future growth.”

The institution said its future investments would place greater emphasis on job creation, gender inclusion and environmentally sustainable business practices.

Among its previous investments, BII highlighted its financing for Jinnat Textile Mills, which helped create more than 900 direct jobs, with women accounting for more than 44% of new recruits while also improving workplace standards and promoting more sustainable manufacturing.

It also pointed to its lending partnership with BRAC Bank, which has supported approximately 3,500 entrepreneurs, particularly MSMEs and women-owned businesses that often face difficulties accessing formal finance.

The strategy also aligns with BII’s broader commitment to frontier markets. The institution said at least 25% of the value of its new investments globally during the strategy period would be directed towards countries classified by the United Nations as Least Developed Countries, including Bangladesh.

British High Commissioner to Bangladesh Sarah Cooke said the initiative reflected the UK’s confidence in Bangladesh’s long-term economic prospects.

“The United Kingdom believes in Bangladesh’s economic future,” she said. “British International Investment’s new strategy will help create jobs, crowd-in private sector investment and support economic transformation.

“As a reliable, long-term economic partner, it demonstrates our commitment to a modern UK-Bangladesh partnership built on trade, investment, knowledge partnerships and shared prosperity.”

The announcement underscores Britain’s continuing effort to position itself as a long-term development and investment partner for Bangladesh, with a growing focus on mobilising private capital alongside public investment to support the country’s next phase of economic transformation.

Provisioning against negative equity surged by 36 per cent over the past 18 months to Tk 36.68 billion as of May 30, up from Tk 27.0 billion in October 2024, as brokerage houses and merchant banks are complying with regulatory directives to build stronger financial buffers against potential losses.

Market insiders point out that this reflects a gradual improvement in the financial health of brokerage firms, as many institutions have strengthened their balance sheets through higher provisioning and tighter risk management practices following regulatory directives.

The Bangladesh Securities and Exchange Commission (BSEC) last year granted market intermediaries additional time to complete provisioning for unrealised losses and adjust negative equity.

Depending on board-approved roadmaps, most institutions received one- to two-year extensions, while a few were granted deadlines stretching to 2030 or even 2032.

The regulator also instructed all institutions enjoying extended deadlines to submit quarterly progress reports until full compliance is achieved.Economics

The scale of the exposure

The latest progress report, prepared by the securities regulator as of May 30 this year, showed that 146 brokerage houses and merchant banks, operating under the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE), collectively extended Tk 160.41 billion in margin loans.

Of that amount, the industry's outstanding principal stood at Tk 78.20 billion, while accrued interest reached Tk 27.27 billion, taking the total outstanding exposure linked to negative equity to Tk 109.78 billion.

The report also showed that unrealised losses remained high at Tk 40.43 billion, reflecting the prolonged weakness of the stock market and the large number of defaulted margin accounts.

Despite the sharp rise in provisioning, outstanding negative equity has increased slightly from Tk 105.2 billion reported in October 2024. At that time, outstanding principal amounted to Tk 78.6 billion and accumulated interest stood at Tk 26.6 billion.

According to the latest data, the capital market had 1.41 million active beneficiary owner (BO) accounts, including 131,524 margin accounts. Among them, 36,610 accounts remained under negative equity, meaning the market value of pledged shares was lower than the outstanding margin loan balance.

Emergence of negative equityMaps

Before the 2010-11 stock market crash, lenders disbursed margin loans aggressively, boosting liquidity in the market. Some lenders exceeded regulatory limits and provided margin loans to artificially push certain stocks.

Stockbrokers and merchant banks provided margin loans using funds received from parent companies, most of which are banks.

The market surged in 2010 driven largely by margin loans and then crashed, causing massive erosion of asset values.

The problem, persisting since the 2010 debacle, has intensified over the past 16 years, becoming a heavy burden on the equity market and restricting its growth.

Over time, negative equity ballooned as lenders refrained from selling securities in margin accounts to make adjustments, hoping for a market rebound that never came.

Market operators said margin loans deepened financial distress and weakened intermediaries and banks, ultimately straining the entire capital market-even those who did not take margin loans.Exchanges

Previously, the securities regulator extended the deadline for negative equity adjustment at least six times, but most intermediaries failed to comply due to a prolonged bearish market.

As the market failed to recover as expected, unrecovered losses accumulated over the years, leaving brokers and merchant banks burdened with a large volume of negative equity.

Recognising the issue as one of the capital market's most persistent structural weaknesses, the BSEC in 2024 sought the intervention of the Financial Institutions Division under the Ministry of Finance to explore a permanent solution.

Nevertheless, the latest data indicate that market intermediaries have made substantial progress in strengthening their balance sheets through increased provisioning.

An analyst said the higher level of provisions would improve the industry's capacity to absorb potential credit losses and enhance the financial resilience of brokerage houses and merchant banks.

They, however, cautioned that the continued increase in outstanding negative equity underscores the need for sustained provisioning, recovery of long-overdue margin loans, prudent risk management and supportive policy measures to finally eliminate one of the country's longest-running capital market vulnerabilities.Economics