The Bangladesh Bank has lowered its private sector credit growth target to 6.8% for December under its Monetary Policy Statement for the first half of FY2026-27.

The central bank unveiled the new monetary policy on its website today (30 June).

Private sector credit growth stood at 5% in May, well below the 8.5% target set for the whole of FY2025-26. Despite the shortfall, the central bank expects lending to recover to 6.8% by December.

The policy also sets the domestic credit growth target at 10.5%.

A Bangladesh Bank deputy governor told the media that the central bank would maintain its current policy rate while reintroducing a 4% cap on the spread between banks' lending and deposit rates to prevent excessive lending charges.

"We will maintain the current policy rate. At the same time, the 4% cap on the lending-deposit rate spread will ensure banks cannot charge excessive interest. We expect private sector credit growth to reach 7% by December and around 8% by next June," the deputy governor added.

According to the Monetary Policy Statement, the central bank said Bangladesh's economy is passing through a fragile recovery marked by elevated inflation, sluggish investment, employment pressures, energy supply uncertainty, high non-performing loans (NPLs) and growing global economic risks.

It noted that geopolitical tensions in the Middle East could disrupt oil and fertiliser supply chains, increasing import costs and intensifying domestic inflationary pressures.

The MPS said prolonged global shocks – including the Covid-19 pandemic, the Russia-Ukraine war and the ongoing Middle East conflict – have weakened the taka, raised import costs and eroded the working capital of many manufacturing firms and cottage, micro, small and medium enterprises (CMSMEs), leaving many factories operating below capacity.

The central bank also said commercial banks have become increasingly cautious in extending loans due to rising loan defaults and higher government borrowing, resulting in surplus liquidity being channelled into government securities instead of private sector investment.

Despite these challenges, Bangladesh Bank expects economic growth and investment to recover gradually in the coming months, supported by the FY2026-27 budget, targeted credit support and reforms in the financial sector.

However, it warned that energy shortages, structural inflation, financial sector stress and external uncertainties remain key downside risks to the outlook.

The World Bank will phase out its lending to China by 2031, according to the organization's new country partnership framework, a source familiar with the matter told AFP on Tuesday.

The source confirmed an earlier report of the development by the Financial Times.
"China has made significant development advances over the past several decades -- progress that the World Bank and others have supported," said a World Bank official familiar with the matter, speaking on condition of anonymity."Now we are reaching a new phase of our relationship, reflecting that reality."

World Bank lending to China -- the world's second-largest economy -- has steadily declined in recent years as the Asian giant saw explosive growth and a reduction in poverty indicators.

In his first term in office, US President Donald Trump demanded that the World Bank stop lending to China entirely, as he adopted a more aggressive approach to Washington's chief economic rival.

Trump has maintained that tone in his second term, but has not specifically repeated that demand.

World Bank lending to China peaked at $2.42 billion in 2017, but has fallen since then, reducing to $750 million in 2025.

China also contributes funds to the World Bank's International Development Association (IDA) pool for the world's least developed countries, with its $1.5 billion under the latest replenishment round making Beijing the fifth-largest donor.

"The World Bank's role is shifting from lender to knowledge partner, in line with China's development trajectory," said the World Bank official.

On June 16, the World Bank announced a similar plan for Poland, planning to reduce loans to zero by 2031 while maintaining technical assistance.

The government has proposed removing the minimum share offload requirement for companies to qualify for a corporate tax rebate upon listing on the stock market, aiming to encourage more businesses to go public.

Speaking during the budget discussion in parliament today (29 June), Finance Minister Amir Khosru Mahmud Chowdhury proposed a 2.5% reduction in corporate tax for any company immediately after it lists on a stock exchange, regardless of the percentage of shares offered to the public.

Under the existing tax regime, companies must offload at least 10% of their shares to qualify for the rebate.

The finance minister also proposed an additional 2.5% corporate tax rebate for companies that float at least 10% of their shares through an Initial Public Offering (IPO), Direct Listing, Rights Issue or Repeat Public Offering (RPO).

The proposed budget also includes a further 2.5% tax incentive for both listed and non-listed companies that conduct all business transactions through banking channels.

If implemented, listed companies that transact entirely through banks and float at least 10% of their shares would enjoy a total corporate tax reduction of 7.5 percentage points compared with non-listed firms.

The budget also proposes reducing the tax rate on dividend income to 20% for corporate taxpayers and 15% for individual investors.

In another move to support the capital market, the government has proposed removing the existing Tk5 lakh investment ceiling for claiming tax rebates on investments in mutual funds.

The finance minister also proposed continuing the tax exemption on income earned from zero-coupon bonds.

Speaking in parliament, Amir Khosru said the proposed fiscal measures are intended to strengthen the capital market by encouraging more quality companies to list and by facilitating long-term investment for industrialisation.

He said investor confidence in the stock market had shown signs of improvement, reflected in recent gains in market indices, adding that the government would continue implementing structural and fiscal reforms to deepen the capital market.

The exchange rate of the US dollar against the taka rose further today as banks faced increased payment pressure and settled letters of credit (LCs) ahead of the June-end closing.

Today, City Bank bought the US dollar at Tk 122.60 and sold it at Tk 123.60. A day earlier, the bank's buying rate was Tk 122.40, while its selling rate was Tk 123.40.

Similarly, Eastern Bank bought the US dollar at Tk 122.60 and sold it at Tk 123.60 today. A day earlier, its buying and selling rates stood at Tk 122.50 and Tk 123.50, respectively.

Meanwhile, the weighted average exchange rate of the US dollar rose to Tk 122.85 today from Tk 122.75 two days earlier, according to data from Bangladesh Bank.

Bankers said the dollar appreciated mainly due to payment pressure ahead of the June-end closing.

At the same time, remittance inflows have slowed compared with the two Eid months, creating a slight shortage of US dollars in the market.

During the first 28 days of June, Bangladesh received $2.58 billion in remittances, up just 1.8 percent from the same period a year earlier, according to Bangladesh Bank data.

In May, however, remittance inflows reached $3.42 billion, marking a 15.34 percent year-on-year increase as migrant workers and Bangladeshis living abroad sent more money home ahead of Eid-ul-Azha.

The treasury head of a private commercial bank told The Daily Star that banks are currently busy settling LCs for government imports and debt servicing before the June-end closing, which has pushed up demand for the US dollar.

He, however, said the increase in the dollar's exchange rate is unlikely to be sustained, as remittance inflows are expected to pick up in the coming days.

Bangladesh Bank (BB) has instructed banks to maintain the average gap between loan and deposit interest rates within a specific limit, setting the maximum interest rate spread at 4 percent.

The newly imposed ceiling will be applicable to all types of loans, except for credit cards and consumer credit, reports UNB.

The Banking Regulation and Policy Department (BRPD-1) of the central bank issued a circular in this regard on Monday, sending it to the managing directors and chief executive officers of all banks for immediate execution.

According to the circular, the previous directives regarding the interest rate spread were withdrawn on November 29, 2023, following the introduction of the SMART (Six-Month Moving Average Rate of Treasury Bill) and margin-based interest rate system.

Later, on May 8, 2024, a fully market-driven interest rate mechanism was launched without any regulatory ceiling on the intermediation spread.

However, the central bank noted that several banks have recently been setting interest rates on loans significantly higher than their deposit rates, leading to an abnormal expansion of the weighted average interest rate spread.

This trend has escalated the cost of borrowing for trade, industry, and production sectors, creating a negative impact on overall economic activities and investment.

Against this backdrop, BB issued the new directive to keep borrowing costs logical across various sectors. However, the 4 percent limit will not be applicable to credit card loans and consumer credit.

Bangladesh Bank rolls out its next monetary policy today (Tuesday) amid indication that the central bank will maintain its tight stance for another six months to rein in inflation and stabilise the exchange rate.

The Monetary Policy Statement (MPS) for the first half (July-December) of the imminent fiscal year (FY2026-27) is set for the announcement by BB Governor Md. Mostaqur Rahman at a press conference at the central bank headquarters in Dhaka at 3:00pm, officials have said.

This will be the first monetary policy statement by the governor after he took charge of the central bank leadership on February 25 last. The banking regulator is going to announce the half-yearly MPS at a very critical period of time when inflationary pressure keeps rising notwithstanding the central bank maintaining a tight monetary-policy stance since October in 2024.

On the other hand, businesspeople have requested the central bank to take immediate measures to lessen higher lending rate amid persisting economic sluggishness.

Under such circumstances, the MPS will become a crucial one in the current macroeconomic context.

BB officials have said all policy rates are likely to remain unchanged as the central bank aims to closely monitor inflation trends over the next couple of months before deciding on its next course of action.

"We have formulated our latest monetary policy with top priority given to curbing inflationary pressure in the economy while keeping the exchange rate stable," a senior BB official told The Financial Express, replying to a query.

According to data with Bangladesh Bureau of Statistics (BBS), the headline inflation rose to 9.42 per cent in May 2026. The inflation rate was 9.04 per cent in the previous month of April.

The central banker, however, hints at a slight upward revision in the private-sector-credit-growth projection for the H1, despite a declining trend in recent months.

The Bangladesh Bank (BB) expects inflation to ease further in the coming months, saying its tight monetary policy has kept real interest rates positive and close to their estimated natural level, even as subdued private investment and mounting external uncertainties weigh on growth.

The findings are part of the central bank’s Monetary Policy Review 2025-26, which compared the current policy stance with a model-based estimate of the natural rate of interest.
The review comes as BB is set to unveil the Monetary Policy Statement (MPS) for the July-December period at 3:00pm today at its headquarters, with the rate widely expected to remain unchanged at 10 percent, according to officials.BB has kept the policy rate, the rate at which commercial banks borrow from the central bank, unchanged at 10 percent since October 2024, following 11 consecutive hikes between May 2022 and October 2024.“To curb persistent inflation, stabilise the foreign exchange market, and preserve the resilience of the external sector, Bangladesh Bank maintained its contractionary monetary policy stance by keeping the policy rate at 10 percent throughout the January 2025–June 2026 period,” BB Governor Md Mostaqur Rahman said in the report.

The report credited improving domestic supply conditions, together with its restrictive stance, for helping bring down inflation after more than two years of persistent price pressure. Point-to-point headline inflation fell to 8.49 percent in December 2025, from 10.89 percent a year earlier, though it remained above BB’s 7 percent target ceiling.

More recent data, however, suggest that progress has partly reversed.In the report’s foreword, BB Governor Md Mostaqur Rahman said inflation stood at 9.42 percent in May 2026, up from 8.48 percent in June 2025.He said Bangladesh’s economy had shown resilient signs of recovery in FY26 despite domestic structural challenges and dual global headwinds, including escalating geopolitical tensions and reciprocal tariff measures.The review noted that the global economy performed better than expected in 2025, supported by strong demand, resilient trade, fiscal stimulus in major economies, and increased investment in technology and artificial intelligence.However, it cautioned that growth prospects remain constrained by weak private investment, slowing export momentum, and external headwinds arising from external headwinds.

As per the report, geopolitical tensions in the Middle East continue to pose significant short-term risks. Global inflation is also expected to edge up in 2026 due to disruptions in energy supplies, higher commodity prices, renewed exchange-rate pressures, and rising transportation costs.

As a commodity-importing economy, it said, Bangladesh remains exposed to global energy and food price shocks that could push up import costs and strain the external sector.

Despite these challenges, BB remains optimistic that government social protection programmes, continued support for productive sectors, and its Tk 60,000 crore stimulus package would boost domestic consumption, encourage private investment, and support exports.

The central bank said it would continue to closely monitor both domestic and external developments to maintain price stability and safeguard macroeconomic stability.

The governor expects Bangladesh’s economic outlook to improve significantly, supported by the successful implementation of ongoing initiatives, structural and institutional reforms undertaken by the current government, and well-coordinated monetary and fiscal policies.

Corporate-tax incentives are broadened in the Finance Act 2026 by extending a 2.5-percentage-point rebate for a slew of businesses while retaining the existing 20-percent tax on dividend incomes of corporates.
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No taxing of retailers and no black-money-whitening scope either in the new budget while income-tax threshold rises to Tk0.4 million at the prime minister's request as parliament Monday passed the Finance Bill with such major amendments.

The Finance Bill, which ratifies government's fiscal proposals, expands the scope of the tax rebate for companies that conduct all their business transactions through the banking system.

Previously, the cut-down corporate-tax rate was available only to certain listed companies. The benefit now extends to other eligible businesses.

"The move is aimed at encouraging businesses to use formal banking channels and mobile financial services (MFS) in order to improve financial transparency and promote digital financial transactions," says tax-expert Lutful Hadee, a noted accounting professional.

However, he notes that the condition requiring all business transactions to be routed through banks may be difficult for many enterprises to meet because of the country's still-developing digital-payment infrastructure.

He suggests allowing a reasonable proportion of cash transactions while retaining the tax benefit as he thinks such flexibility would make the incentives more practical and effective.

Income Tax Policy First Secretary Md Jafor Imam says the facility would be available to companies currently taxed at rates ranging from 22.5 per cent to 27.5 per cent, meant for publicly-listed and non-listed companies both.

"However, companies enjoying special tax rates on the basis of nature of their businesses will not be eligible for the rebate," he adds.

On abolition of the existing 20-percent tax on dividend income earned by corporate entities, Mr Hadee says the current tax treatment will remain unchanged, easing concerns among institutional and corporate investors who had opposed the proposed revision in the bill.

The legislation also expanded tax incentives for listed companies by bringing Repeat Public Offerings (RPOs) under the existing tax-benefit framework, alongside Initial Public Offerings (IPOs) and Direct Listings.

Under the revised provision, listed companies raising capital through RPOs will be eligible for the tax incentives if they increase public shareholding to at least 10 per cent of their paid-up capital. The measure is expected to encourage greater free float and help deepen the country's capital market.

The government has also introduced a flat 15-percent tax on dividend incomes of individual taxpayers.

Finance Minister Amir Khosru Mahmud Chowdhury moved the Finance Bill 2026, which was passed by voice vote, with Speaker Hafiz Uddin Ahmad, Bir Bikram, in the chair.

Under the Finance Bill, placed in parliament on June 11 along with the 2026-27 national budget, such dividend income was proposed to be taxed at a flat rate instead of being added to total taxable income and taxed according to the applicable income-tax slabs.

The new measure is expected to reduce the tax burden on individual investors and encourage greater investment in the stock market. Other major amendments to the Finance Bill include the withdrawal of the proposed specific VAT for small and retail businesses, a reduction in the tax rate for private universities to 5.0 per cent and withdrawal of the proposed mandatory requirement for obtaining Taxpayer Identification Number (TIN) to open bank accounts.

The bill also provides for tax exemptions on salary income for indigenous communities living in the three hill districts and the plains both, in addition to existing exemptions on income from business, agriculture, and other economic activities.

Furthermore, customs duty, regulatory duty, supplementary duty, and VAT on imported shrimp feed, probiotics, vitamins, minerals, other essential inputs, and related machinery have been withdrawn.

The government has also reduced the import duty on PVC and PET resin-widely used industrial raw materials-from the proposed 10 per cent to 5.0 per cent, providing relief to domestic manufacturers.

Shoeniverse Footwear Ltd, an export-oriented footwear manufacturer under the National Polymer Group, has signed an issue management agreement with LankaBangla Investments for its proposed initial public offering (IPO).

The agreement was signed by Riad Mahmud, managing director of Shoeniverse Footwear, and Iftekhar Alam, chief executive officer of LankaBangla Investments. The signing ceremony was attended by Syed Ahmed, chief financial officer of National Polymer Group, Estiuque Uddin, head of primary market services at LankaBangla Investments, along with senior officials from both organisations.

Established in 2017, Shoeniverse operates a green manufacturing facility in Mymensingh with a production area of around 231,718 square feet and a workforce of more than 2,700 employees. The company manufactures synthetic footwear for export markets, focusing on quality, innovation and sustainable production.

Riad Mahmud also serves as president of the Bangladesh Association of Publicly Listed Companies (BAPLC).Financial Planning Tools

The company is undertaking a major capacity expansion programme to increase production and strengthen its competitiveness in the global footwear market amid rising export demand.

Subject to approval from the Bangladesh Securities and Exchange Commission (BSEC), the proposed IPO is expected to support Shoeniverse’s expansion plans, enhance its production capacity and reinforce its position in Bangladesh’s growing footwear export industry.

LankaBangla Investments is one of the country’s leading investment banks and has been actively involved in managing IPOs and other capital market transactions.

Gold prices eased on Monday as recent US-Iran strikes in the Gulf pushed oil prices higher, while expectations of US Federal Reserve interest rate hikes further weighed on the non-yielding metal.

Spot gold was down 0.7 percent at $4,061.51 per ounce, as of 0747 GMT. US gold futures for August delivery lost 0.5 percent to $4,076.20. The metal was headed for a fourth consecutive monthly loss of 10.5 percent.“US and Iran were at it again over the weekend, with fresh military strikes reported from both parties, which casts further doubt over how long oil can stay at these subdued levels and therefore over the broader inflation and interest rate outlook,” said Tim Waterer, chief market analyst at KCM Trade.Oil prices rose after Iran launched missiles and drones at US military sites in Kuwait and Bahrain early on Sunday, shortly after US President Donald Trump threatened to wipe out the Iranian leadership if they did not stick to the agreement to end their war.

However, Tehran and Washington agreed to halt recent hostilities in the Gulf and renew talks regarding their dispute over the Strait of Hormuz, a US official said on Sunday.

Elevated crude oil prices can fuel inflation and chances of interest rate hikes, and while gold is typically seen as an inflation hedge, it loses its appeal as a non-yielding asset in a high-interest-rate environment.

Traders expect three Fed rate hikes this year and are pricing in an about 80 percent chance of a December increase, according to the CME FedWatch Tool.

Investors are now looking out for June’s ADP employment data and the US nonfarm payrolls data, both due later this week, to further gauge the Fed’s monetary policy stance.

“Gold could see the $5,000 level again this year but this would be based on further de-escalation, oil having a sustained move to pre-war levels to dull the inflationary impact of the conflict, and a softer dollar,” said Waterer.

A delegation from the Chittagong Stock Exchange PLC (CSE) held a meeting with Bangladesh Bank (BB) Governor Md Mostaqur Rahman on Monday to discuss strengthening the capital market to support private sector financing and sustainable economic growth.
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CSE Chairman AKM Habibur Rahman led the delegation at the meeting that took place at the central bank headquarters in the afternoon.

During the meeting, the BB governor emphasised that private sector credit and investment growth need to gradually rise to 10 percent to achieve the country’s desired economic growth.

To attain this goal, he highlighted the critical importance of building a strong, deep, and dynamic capital market alongside the banking sector.Bangladesh Investment Opportunities

“An expanded capital market will enhance long-term equity financing opportunities for entrepreneurs, reduce excessive dependence on bank loans, and create an effective alternative source to meet the growing financing demands of the private sector,” Mostaqur Rahman said.

He expressed optimism that if the capital market can increase its market capitalisation by at least Tk20,000 crore in the fiscal year 2026-27, Tk25,000 crore in FY28, and Tk 30,000 crore in FY29 with the trend continuing in subsequent years, it will evolve into a powerful source of private sector financing.

The BB governor said this expansion will alleviate pressure on bank loans, broaden long-term investment avenues, and facilitate sustainable economic growth through targeted credit expansion.

Addressing foreign investment, he noted that Bangladesh Bank recently amended the regulations regarding Non-Resident Investor’s Taka Accounts (NITA) to ease the repatriation process of sale proceeds from shares and securities for foreign portfolio investors.

According to the revised guidelines, sale proceeds will now be deposited directly into the respective NITA accounts, and authorised dealer banks will ensure the deduction and deposit of applicable capital gains tax into the government treasury.

This policy update aims to make the process smoother, faster, and more cost-effective for foreign investors.

The CSE delegation also included Managing Director M Shaifur Rahman Mazumdar, and General Managers Md Mortuza Alam and Mohammad Monirul Haque.

The government has withdrawn a provision that would have allowed taxpayers investing unaccounted money in the real estate sector to do so without scrutiny over its source, following widespread criticism.

The amendment was passed in parliament today (29 June) through the Finance Bill.

Earlier, the government had proposed that if a taxpayer disclosed actual investment beyond the declared deed value in previous real estate transactions, no authority would question the source of that additional money.
Critics argued that such an indemnity provision would effectively enable the whitening of illicit funds, as it removed the requirement to explain the origin of undeclared wealth.

The Centre for Policy Dialogue (CPD) had also criticised the proposal, warning that it could open the door for legitimising black money.

Under the revised framework, unreported income can still be invested under existing rules by paying regular tax rates along with an additional 10% penalty.

However, unlike the scrapped provision, this route will not offer immunity, meaning authorities can still question the source of funds.

Officials said this effectively closes the scope for unrestricted investment of undisclosed income in real estate, while retaining a regulated disclosure mechanism with penalties.

The government has raised the tax-free income threshold by Tk 25,000 to Tk 400,000 for the next tax year, departing from its original budget proposal to keep the exemption limit unchanged.

As a result, individuals earning up to Tk 400,000 between July 2025 and June 2026 will not have to pay income tax, reports bdnews24.com.

The change came after Prime Minister Tarique Rahman proposed an amendment during discussions on the national budget in parliament on Monday.

The government has proposed cutting corporate tax rates by 2.5 percentage points for companies that conduct all their transactions through banking channels, responding to longstanding calls from the business community for lower corporate taxes.
Finance and Planning Minister Amir Khosru Mahmud Chowdhury announced the proposal during his closing speech at the budget session in parliament on Monday.

The government has unveiled one of the most comprehensive fiscal packages for Bangladesh's capital market in recent years, cutting taxes on dividend income, removing investment limits for mutual fund tax rebates and easing listing requirements in a bid to attract fresh investment and deepen the market.

The reforms, incorporated in the finance bill passed in parliament today (29 June), are expected to benefit retail investors, institutional investors, asset managers and companies seeking to raise funds through the stock market.

At the heart of the reforms is a major overhaul of dividend taxation, a move designed to encourage a long-term, dividend-centric investment culture.

Under the new law, the tax rate on dividend income for individual retail investors has been slashed to a flat 15%, which will now be treated as a final tax liability, according to the official of the National Board of Revenue (NBR).

Previously, while tax was deducted at source at 10-15%, investors were often subject to additional payments during their final income tax assessments based on their respective tax slabs. This complexity often led to higher effective tax burdens and discouraged investors from holding high-yield stocks.

By making the 15% deduction final, the government has simplified the process and increased the "take-home" returns for ordinary shareholders, said a senior officer of an asset management company.

Corporate investors have also received a reprieve, with the tax rate on their dividend income lowered to 20%. This provides a massive sigh of relief for market intermediaries such as merchant banks and brokerage firms, who were previously facing corporate tax rates as high as 37.5% on their dividend earnings.

Earlier, the finance minister withdrew the 20% tax on dividend income for corporate in his budget proposal. Following the criticism over this issue, he scrapped the decision.

Furthermore, all income derived from zero-coupon bonds will remain 100% tax-free, ensuring that fixed-income instruments remain a competitive component of a diversified portfolio.

The mutual fund industry, which has long struggled under restrictive investment caps, is set for a major revival as the government has completely scrapped the Tk5 lakh investment ceiling required to qualify for tax rebates.

Industry insiders believe this is a game-changer that will allow larger pools of institutional and individual capital to flow into the asset management sector.

Shahidul Islam, chief executive officer of VIPB Asset Management Company Limited, told TBS that this change is one of the most awaited reforms for the industry.

He noted that the withdrawal of the threshold, combined with the new dividend tax structure, will significantly boost investor appetite for mutual funds.

For corporate entities, the budget has introduced a "triple-tier" incentive structure that could reduce a company's tax burden by up to 7.50%. In a fundamental departure from previous policy, the government has removed the mandatory requirement to offload a minimum of 10% shares to qualify for a listing tax rebate. Now, any company can enjoy an immediate 2.5% corporate tax cut simply by joining the stock exchange.

To encourage greater public ownership, an additional 2.5% rebate is offered if a company offloads 10% or more of its shares. A final 2.5% "transparency rebate" is available to any firm – listed or non-listed – that executes all business transactions through banking channels.

Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, described these measures as a clear signal of the government's positive intentions. He emphasised that the cumulative tax benefits would make public listing an irresistible proposition for many top-tier private firms.

Adding to this sentiment, Ashequr Rahman, managing director of Midway Securities, noted that the simplification of dividend tax assessments removes a significant layer of mental and financial "hassle" for the investing public.

Thanking the government and NBR for the reforms, Minhaz Manna Emon, a shareholder director of the Dhaka Stock Exchange (DSE), observed that previous administrations failed to understand how small fiscal friction points could undermine the foundation of the stock market.

"This budget treats even the smallest issues with great importance," Minhaz said.

"The structural changes to the tax framework will create a sense of comfort and trust among investors. By removing the Tk5 lakh cap on mutual funds and lowering the dividend tax, the government has effectively widened the doors of the market, ensuring that small and large investors alike can participate with renewed enthusiasm."

Bangladesh Bank (BB) has directed banks to keep the weighted average spread between deposit and lending rates within 4%, in a move aimed at reducing borrowing costs and boosting industrial growth.

The Banking Regulation and Policy Department (BRPD) issued a circular today (29 June), saying the decision was taken several banks were increasing borrowing costs and constraining investment. The directive takes immediate effect.According to Bangladesh Bank, the banking sector's average spread between lending and deposit rates has widened to 5.72%, while some banks have been charging spreads as high as 7-9%.
Business leaders have long argued that such wide spreads have made bank financing more expensive, particularly for productive sectors.In November 2023, Bangladesh Bank withdrew the earlier 4% spread ceiling as part of reforms linked to the abolition of the SMART (Six-Month Moving Average Rate of Treasury Bills) mechanism in May 2024. Since then, banks have been allowed greater flexibility in pricing loans and deposits, with no specific cap on interest spreads.

In the circular, the central bank said recent observations revealed that many banks were setting lending rates significantly higher than deposit rates, resulting in what it described as "excessive" intermediation spreads.

It said the new ceiling is intended to ensure that interest rates remain at a rational level across sectors, particularly for productive industries.

However, the 4% cap will not apply to credit cards and consumer finance, where lending risks are comparatively higher.

The directive has drawn mixed reactions from bankers and economists.

A managing director of a private commercial bank said the central bank's method of calculating gross spreads does not accurately reflect the realities of individual banks.

He argued that lending and deposit rates should be determined by market conditions rather than regulatory limits.

Economists also remain divided over the effectiveness of the measure. Some warn that capping spreads could discourage lending, particularly to small and medium enterprises (SMEs), which typically carry higher credit risks and borrowing costs than large corporate clients.

Former Bangladesh Bank governor Ahsan H Mansur said imposing a rigid spread ceiling could further weaken already sluggish credit growth and make SME financing more difficult.

Instead of administrative controls, he suggested that reducing non-performing loans would naturally narrow spreads by lowering banks' operating and risk costs.

The central bank's latest intervention underscores its efforts to balance market-based interest rate reforms with the need to ensure affordable financing for businesses amid ongoing economic challenges.

India has announced lifting of the temporary restrictions on the sale of petrol and high speed diesel with effect from 1 July following easing of the supply situation.

The curbs were imposed earlier this month to prevent local fuel shortages amid disruptions to global supply chains caused by the conflict in the Middle East.

In an order issued yesterday (29 June), the Oil and Natural Gas Ministry said it had reviewed the prevailing supply situation of petroleum products and concluded that the restrictions were "no longer necessary in the public interest".
The curbs had barred industrial, commercial and institutional consumers from purchasing petrol and diesel from retail fuel stations, requiring them to source fuel from authorised bulk suppliers instead.

During the period of disruptions arising from the Middle East crisis, the government continued to shield retail consumers from the sharp increase in international fuel prices by maintaining stable retail prices of petrol and diesel.

This led to a significant price difference between retail fuel prices and those applicable to bulk consumers. Consequently, certain industrial, commercial and institutional consumers began procuring fuel through retail outlets, leading to instances of diversion, hoarding and black marketing, which affected the equitable distribution of fuel.

To address this situation, the temporary regulatory measures, introduced on 12 June, prescribed a temporary limit of 200 litres of high speed diesel per customer/vehicle per day at retail outlets and required industrial, institutional and commercial consumers to procure fuel through designated consumer pumps instead of retail outlets.

The measures were aimed at preventing black marketing, hoarding and diversion of diesel while ensuring uninterrupted availability of petrol and diesel to retail consumers.

"Following a review of the supply situation of petroleum products in the country, the government has concluded that the temporary regulatory measures are no longer required in the public interest," the order said.

The temporary measures helped ensure adequate availability of petrol and diesel across the country while safeguarding the interests of retail consumers, the order said.

Listed non-bank financial institution (NBFI) First Finance Limited has recommended no dividend for the year ended 31 December 2025 as mounting losses, negative shareholders' equity and a weakening financial position continued to weigh on the company.

The decision was approved at a meeting of the company's board of directors today (29 June), according to a price-sensitive information disclosure filed with the Dhaka Stock Exchange (DSE).

Following the declaration, the company's shares traded without a price limit. Despite this, the NBFI's stock fell 2.44% to Tk4 on the DSE.

According to the financial statements, First Finance reported a loss per share (EPS) of Tk6.66 for 2025, compared with a loss of Tk5.88 a year earlier, reflecting a further deterioration in its financial performance.

Its net asset value (NAV) per share also worsened, falling to negative Tk46.01 at the end of 2025 from negative Tk37.86 a year earlier, indicating a further erosion of shareholders' equity.

Meanwhile, net operating cash flow per share remained under pressure, standing at negative Tk0.74 for 2025 compared with negative Tk0.69 in the previous year.

The company's financial performance remained weak in the first quarter of 2026 as well.

For the January-March period, First Finance posted a loss per share of Tk1.87, compared with a loss of Tk1.27 in the corresponding period of 2025. Its net operating cash flow per share improved marginally to negative Tk0.06 from negative Tk0.09 a year earlier.

However, its net asset value per share deteriorated further to negative Tk47.88 as of 31 March 2026, compared with negative Tk39.13 in the same period of the previous year.

The company's annual general meeting (AGM) will be held on 17 September 2026 at 3pm through a hybrid format, allowing shareholders to participate both virtually and in person.

The physical meeting will take place at the Trading Corporation of Bangladesh (TCB) Auditorium in Karwan Bazar, Dhaka. The record date has been fixed for 22 July 2026.

Listed life insurer Meghna Life Insurance Company Limited has recommended a 15% cash dividend for the year ended December 31, 2025, matching the same payout made to shareholders the previous year.

The recommendation was approved at a meeting of the company's board of directors today (29 June), according to a price-sensitive information (PSI) disclosure filed with the Dhaka Stock Exchange (DSE).

The company's annual general meeting (AGM) will be held virtually on 20 August, 2026, with the record date set for 23 July, 2026. In line with stock exchange regulations, there was no price limit on the trading of the company's shares yesterday.

Despite the dividend announcement, the company's share price fell 2.30% to Tk59.50 on the Dhaka Stock Exchange today (29 June).

According to the disclosure, Meghna Life reported a negative net operating cash flow per share of Tk4.19 for the year ended 31 December 2025, compared with a negative Tk13.71 in the previous year. Although the figure remained negative, it marked a significant improvement in the company's operating cash flow.

The insurer also released its unaudited financial results for the first quarter of 2026, which showed that while the company remained in deficit, the shortfall narrowed substantially from a year earlier.

According to the consolidated life revenue account for the January-March 2026 period, the excess of total expenses, including claims, over total income stood at Tk45.91 crore, compared with Tk78.10 crore in the corresponding period of 2025.

The quarterly deficit thus declined by nearly Tk32.19 crore year-on-year, indicating an improvement in the company's operating performance, although expenses continued to exceed income.

Meanwhile, the company's Life Insurance Fund remained largely stable. As of 31 March 2026, the fund stood at Tk1,527.60 crore, compared with Tk1,527.30 crore a year earlier, reflecting a net increase of approximately Tk29.8 lakh.

However, operating cash flow weakened during the first quarter. Meghna Life reported a negative NOCFPS of Tk12.78 as of 31 March 2026, compared with a negative Tk10.39 in the corresponding period of the previous year.

For life insurers, the Life Insurance Fund is a key indicator of financial strength as it reflects the resources available to meet future policyholder obligations. While Meghna Life's fund remained stable, its continued operating deficit and negative operating cash flow suggest that the company is still facing financial pressures.

Nevertheless, the improvement in annual operating cash flow and the significant reduction in the first-quarter deficit indicate signs of a gradual recovery in the company's financial performance. The proposed 15% cash dividend will be subject to shareholders' approval at the AGM in August.

The government has decided to retain the tax exemption on income earned from zero-coupon bonds for individual investors, reversing a proposal in the FY2026-27 budget to withdraw the long-standing benefit.

Finance Minister Amir Khosru Mahmud Chowdhury announced the decision today (29 June) while delivering his concluding remarks before the national budget was passed in parliament.

The move comes as a relief for individual investors, whose income from zero-coupon bonds will continue to be excluded from taxable income.
A zero-coupon bond is a debt instrument issued at a discount to its face value and does not pay periodic interest. Investors earn returns by receiving the bond's full face value when it matures.

The tax exemption was introduced through the Finance Act for FY2007-08, effective from 1 July 2007, to encourage individual participation in the bond market and support the development of Bangladesh's debt market.

Under the sixth schedule of the Income Tax Act, income from zero-coupon bonds received by individuals, excluding banks, insurance companies and financial institutions, is exempt from income tax, subject to certain conditions.

To qualify, the bonds must be issued by a bank, insurance company or financial institution with prior approval from Bangladesh Bank or the Bangladesh Securities and Exchange Commission (BSEC), or by another institution with approval from either regulator.

According to the BSEC's annual report, 11 companies raised Tk6,675 crore through zero-coupon bond issuances in FY2023-24. However, the market slowed significantly in FY2024-25, with only one company raising Tk171 crore through the instrument.

Despite the slowdown, regulators continue to approve new issuances. In March, the BSEC approved City Sugar Industries to raise Tk1,300 crore and Akij Food and Beverage to raise Tk500 crore through zero-coupon bonds.

Market participants say retaining the tax exemption is expected to support investor confidence and help sustain interest in Bangladesh's corporate bond market.