The Bangladesh Securities and Exchange Commission (BSEC) has relaxed a stringent rule regarding the transfer of shares held by sponsors and directors of "Z-category" companies, shifting administrative authority directly to stock exchanges.

In a commission meeting held today (1 September), the regulator decided that its prior approval will no longer be required for specific equity security transactions involving these troubled firms.

According to the amendment, the commission has specifically waived the need for direct BSEC permission in cases involving the confiscation of shares due to loan defaults and the transmission of shares following a shareholder's death.

This decision follows a thorough review of a previous directive issued on 20 May 2024, which had imposed a blanket restriction on all forms of share transactions – whether on the trading platform or off-market – for sponsors and directors of non-financial companies listed in the junk category.

Under the revised framework, the country's bourses will now be empowered to facilitate and execute such transfers in accordance with existing listing regulations.

Market analysts believe this shift toward deregulation will eliminate unnecessary bureaucratic hurdles and expedite legal processes, particularly for lenders seeking to recover defaulted dues or legal heirs managing inheritance matters.

The 2024 directive was originally implemented to prevent sponsors and directors of poorly performing or non-compliant companies from dumping their holdings without regulatory oversight. While monitoring remains intact, the commission aims to streamline operations by delegating specific responsibilities directly to the stock exchanges.

The move marks another step in the commission's broader push to simplify market operations and reduce excessive intervention, according to officials.

The Bangladesh Securities and Exchange Commission (BSEC) has approved a draft regulation allowing qualifying companies to get listed on stock exchanges directly, without going through an Initial Public Offering (IPO), by offloading a portion of existing shareholders' holdings.

The decision was taken at the 1,027th commission meeting held on Tuesday at the BSEC office, chaired by its Chairman Masud Khan.

Under the draft “Bangladesh Securities and Exchange Commission (Direct Listing of Securities by Stock Exchange) Rules, 2026”, companies will be able to list through direct listing by offloading at least 10 to 20 percent of shares held by existing shareholders, instead of raising fresh capital through an IPO.

Eligible companies include those wholly or majority owned by the government; companies where the government holds at least 10 percent of paid-up capital directly or indirectly; companies majority owned by foreign shareholders; BTRC-approved telecom and ICT service or infrastructure companies with a minimum paid-up capital of Tk 300 crore; scheduled banks, financial institutions and insurance companies with at least three years of commercial operation; and companies with an annual turnover or total assets of at least Tk 500 crore.

Companies will also need to fulfil additional conditions set by the respective stock exchange, depository and central counterparty as prescribed by the commission.

The draft rules will be published in newspapers and on the BSEC website shortly for public opinion, the commission said in a press release.

The Bangladesh Securities and Exchange Commission (BSEC) has relaxed dividend compliance requirements for foreign investors, tying the remittance deadline to the issuance of a Double Taxation Avoidance (DTA) certificate by the National Board of Revenue (NBR).

The decision was finalised at a commission meeting held today (1 September), according to a press release.

Under the revised guidelines, listed companies must remit declared or approved dividends to non-resident foreign shareholders within 30 days of receiving the DTA certificate from the NBR.

However, the remittance must still be completed within the relevant financial year.

The move is expected to ease a key compliance challenge listed companies have faced in distributing dividends to overseas shareholders.

The BSEC has also revised the timeline for dividend compliance reporting by listed companies. After completing dividend distribution to domestic shareholders, companies will now be required to submit a Preliminary Dividend Compliance Report.

Following the remittance of dividends to foreign shareholders, companies will then have to submit a final Dividend Compliance Report to the BSEC and the respective stock exchange within 30 days of the remittance.

The revised framework is intended to improve transparency while providing companies with greater flexibility to complete dividend payments to non-resident investors.

Previously, listed companies faced difficulties meeting fixed dividend remittance deadlines because obtaining DTA certificates from the NBR could take time. Such administrative delays created a mismatch between the regulatory deadline for dividend payment and the actual availability of the required tax documentation.

By starting the 30-day remittance period from the date of receiving the DTA certificate, the BSEC has sought to align the compliance requirement with the actual process of obtaining tax relief documentation.

Market analysts believe that by linking the 30-day deadline to the receipt of the NBR's tax certificate, the BSEC is providing a more realistic and enforceable timeline for companies.

This clarity is being seen as a positive signal to global fund managers, suggesting that Bangladesh is moving toward international best practices in dividend processing and capital repatriation.

The country's premier bourse returned to positive territory today (1 September), providing a much-needed respite to the capital market after a prolonged downturn.

Driven by aggressive bargain hunting and renewed optimism over structural reforms, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) surged by 39 points, or 0.70%, to settle at 5,637.

Market participation saw a healthy spike as total turnover on the DSE jumped by 25% to reach Tk596 crore, compared to the previous session. The day's trading was characterised by overwhelming bullish dominance, with the market breadth showing 300 issues advancing, 50 declining, and 38 remaining unchanged.

According to EBL Securities' daily market review, the ailing capital market got some relief as investors viewed prevailing prices as attractive entry points. Bargain hunters stepped in to accumulate beaten-down stocks, particularly in sectors that had undergone sharp corrections.

The market opened on an optimistic note, supported by favourable remarks from regulators on the capital market's long-term development. Although selling pressure emerged intermittently after mid-session, it was not enough to wipe out the morning gains, with buyers remaining in control until the close, it added.

Sheltech Brokerage Limited observed that the rally was driven mainly by renewed buying interest and optimism over the Bangladesh Securities and Exchange Commission's (BSEC) recent market-development initiatives. The benchmark index climbed to an intraday high of 5,674.16 points, but late-session profit-taking erased much of the gain.

The index eventually closed near its intraday low of 5,624 points as some investors opted to book quick profits amid persistent domestic challenges, it also said.

On the sectoral front, the textile sector dominated the floor, accounting for 27.9% of the total turnover, followed by the banking and pharmaceutical sectors at 12.2% and 12.0%, respectively.

Nearly all sectors posted gains, led by mutual funds, which rose 4.2%, followed by general insurance at 2.2% and information technology at 2.0%. Cement was the only laggard, declining marginally by 0.4%.

Among individual stocks, First Finance was the top gainer, rising 8.88%, followed by First Janata Bank Mutual Fund and PHP First Mutual Fund, both up 8.82%.

On the flip side, Jute Spinners was the top loser, falling 3.61%, followed by Meghna Condensed Milk and Nurani Dyeing. IPDC Finance, Saiham Textile and Saiham Cotton were among the most actively traded stocks.

The bullish sentiment was stronger at the Chittagong Stock Exchange (CSE), where the Selective Categories' Index (CSCX) gained 37 points to 9,237, while the All Share Price Index (CASPI) rose 60 points to 15,130. Trading activity surged 207%, with turnover reaching Tk51 crore.

The Dhaka Stock Exchange (DSE) plans to introduce financial derivatives by January 2028 after the Bangladesh Securities and Exchange Commission (BSEC) approved its action plan for launching the new asset class.

According to a BSEC press release issued after a commission meeting on today (1 September), the bourse will initially introduce index futures, with contracts based on the blue-chip DS30 index expected to be the first products.

The approved roadmap covers regulatory reforms, trading and other infrastructure, clearing and settlement systems, and risk management measures. BSEC will also monitor the DSE's progress in implementing the plan.

A senior DSE official said the bourse also plans to introduce exchange-traded fund-type instruments under the new segment. Unlike conventional share trading, derivatives allow investors to trade contracts linked to the future price movements of underlying assets.

The DSE will procure a new multi-asset trading engine by 2028 to handle derivatives and multiple clearing systems. Its existing Nasdaq-provided trading engine, which mainly supports equity trading, is scheduled to expire in 2027.

In preparation, the DSE will conduct feasibility studies, workshops and seminars for market participants.

The introduction of derivatives is expected to deepen the capital market and give local and foreign investors additional tools for hedging and risk management.

With a view to tightening regulatory oversight and enforcing strict supervision, the Bangladesh Securities and Exchange Commission (BSEC) constituted an 8-member standing joint inspection panel to conduct surprise inspection of stock brokers and stock dealers across the country.

The eight-member inspection panel is comprising of members from the regulatory body, stock exchanges and central depository of Bangladesh Limited (CDBL), according to official order of the commission.

On Monday, BSEC Chairman Masud Khan, speaking at an open discussion titled "The Current State of the Bangladesh Capital Market and Way Forward", organised by the DSE Brokers Association of Bangladesh (DBA) said, "Much has been discussed about surveillance of brokers. A broker may have several types of problems. Some are regulatory in nature, while another is a shortfall in the CCA, which has accumulated over many years.

"When irregularities occur, the commission imposes fines, which is a regular measure. But when there is a major shortfall, simply imposing a fine is not enough. A fine leads to a certificate case, which can continue for a long time.

"We need to adopt a risk-based approach and conduct surprise visits. In some cases, CCA shortfalls were detected, the money was returned, and then withdrawn again. The commission and the DSE have agreed to conduct visits on a regular basis."

Considering past incidents where brokerage houses embezzled client funds using duplicate servers to display fake information, the regulator aims to prevent further misappropriation through surprise inspections.

Capital market investors usually deposit their hard-earned money through brokerage houses into listed shares of the capital market.

These funds are kept separately in Consolidated Customers' Accounts (CCA), which can only be used to buy and sell shares on behalf of the investors.

However, recent cases show that some brokers embezzled funds from these accounts for personal use, creating severe client deficits.

This embezzlement has severely damaged investor confidence and discouraged further capital market investment, leading to a steady decline in active investors.

So, now the capital market regulator planned to increase surveillance in to the stock brokers, who were licensed to work for the investors for buying and selling shares of the listed companies also for the its own account.

The joint panel

As decided by the capital market regulator, a standing eight-member joint inspection panel will be formed, comprising two representatives each from the Bangladesh Securities and Exchange Commission (BSEC), Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), and Central Depository of Bangladesh (CDBL).

Each institution will nominate two members to represent them.

Once formed, the panel will conduct unannounced inspections of brokerage houses to review Consolidated Customers' Accounts (CCAs), regulatory compliance, margin lending rules, and other related issues.

Through a letter to the respective institutions, the reglator sent seprate letters asking nomination of two members in the standing joint inspection panel.

In the letter, the BSEC stated that the Commission has decided to constitute a standing Joint Inspection Panel for conducting spot/surprise inspections/visits of stock brokers and stock dealers.

The initiative aims to tighten regulatory oversight, enforce strict compliance with securities laws, and safeguard general investors' interests.

According to previous news of TBS, on the day of an inspection, officials will meet at the BSEC office in the morning and select a brokerage from a list of firms identified as potentially risky based on suspicious activities, possible irregularities and other risk indicators.

The inspection team will then be sent to the vicinity of the selected firm before the inspection notice is issued.

The BSEC will subsequently send a spot inspection letter to the firm's head, after which the team will arrive at the office and begin the inspection.

The procedure is intended to minimise the time available for firms to alter records, manipulate software or conceal irregularities.

The securities regulator is set to finalise the direct listing framework within a month, allowing well-governed private companies, state-owned enterprises and multinational firms to enter the stock market by bypassing the need to float an IPO.

"The draft direct listing rule is almost complete and will be placed for approval at the commission meeting tomorrow (Tuesday)," said Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan on Monday.

The draft will be published for public opinion this week before being finalised within the next month, he added.

Mr Khan made the remarks at an open discussion titled "The Current State of the Bangladesh Capital Market and Way Forward", organised by the DSE Brokers Association of Bangladesh (DBA) at the DSE Tower in Dhaka.

Currently, only state-owned entities can use the direct listing mechanism to list by floating at least 25 per cent of their shares.

Once the direct listing framework is finalised, the Central Depository Bangladesh Limited (CDBL), the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) will be listed, said the BSEC chief.

The initiative is expected to encourage quality companies to enter the market, particularly large private firms, state-owned enterprises and multinational companies that are otherwise reluctant to raise funds by issuing primary shares.

The commission is also pursuing a series of structural reforms, including a hybrid IPO mechanism, T+1 settlement, activation of the Central Counterparty Bangladesh Limited (CCBL), development of the bond market and introduction of an extended audit for issuers.

Listing of "public interest companies"

The BSEC is also working on a framework to bring certain companies to the capital market.

Referring to Section 20A of the Securities Act, Mr Khan said the commission has the authority to direct companies to come to the market when it considers such listing necessary in the public interest.

A new regulation would define "public interest companies", and they would be required to list, Mr Khan said.

The BSEC is also seeking to shorten the IPO approval process by introducing an "extended audit" to cover a company's assets, land, machinery, receivables and liabilities in greater detail than a conventional statutory audit.

Under the proposed system, an issuer would submit its IPO application to the stock exchanges, with a copy to the BSEC. The exchanges would conduct the initial scrutiny and raise necessary queries with the issuer, while the commission would give the final approval.

Acknowledging the current weak investor confidence, Mr Khan said the regulator would not interfere in the normal movement of the capital market or seek to artificially support it.

"The market will run on its own strength," he said.

The commission would investigate unusual trading or price movements and take action if irregularities are detected, he said.

Mr Khan said the regulator's role was not to increase the market index or turnover, but to ensure a fair, transparent and orderly market and protect investors.

He said structural reforms, quality listings and modern market infrastructure were essential to restoring confidence among local and foreign investors.

The BSEC chief also said the board of the Central Counterparty Bangladesh Limited (CCBL) is expected to be reconstituted within a month, paving the way for the long-delayed launch of its operations as a clearing company. He said he expected the CCBL to become operational within a year and that it would strengthen risk management and automate clearing and settlement processes.

The regulator is also targeting the introduction of T+1 settlement by the end of this year. A roadmap has been prepared following discussions with the Dhaka Stock Exchange (DSE), the Chittagong Stock Exchange (CSE), the Central Depository Bangladesh Limited (CDBL) and foreign custodian banks.

Moreover, the securities regulator is looking to expand the bond market by reducing fees and encouraging issuers to list bonds on the main board.

Mr Khan said BRAC Bank was planning to issue a Tk 10-billion social bond on the condition that it would be listed on the DSE main board.

"We want every bond to be listed on the main board," he said.

He expressed optimism that a significant number of bonds will be listed on the main board over the next year, creating investment opportunities for mutual funds, merchant banks and other institutional investors.

Surprise inspections

The regulator will strengthen surveillance of brokerage houses through risk-based and surprise inspections rather than relying on penalties.

"Surprise inspection is very important. Both the DSE and we believe that surprise inspections should be conducted regularly, not after five years," Mr Khan said.

The regulator will also examine whether large orders or repeated transactions are being used to manipulate stock prices. Mr Khan said placing a large order by itself was not illegal, but a series of transactions aimed at influencing prices could constitute an offence.

DSE Chairman Mominul Islam said the market had long been considered "overly regulated," preventing it from developing according to its own dynamics. The exchange is working to introduce scrip netting and bring technological changes to its matching engine and order management system, he said. The DSE is also preparing to launch trading in open-ended mutual funds and upgrading its website to attract institutional and foreign investors.

DSE Managing Director Nuzhat Anwar said much remained to be done to improve governance among listed companies, adding that the DSE and the BSEC were working in coordination on investor protection, margin requirements, Consolidated Customer Accounts and IPOs.

DSE Director Richard D'Rozario stressed the need for stronger surveillance to detect irregularities at an early stage.

DSE Director Minhaz Mannan Emon said global economic uncertainty, including the oil market crisis, was affecting Bangladesh's capital market among other factors. He called for coordinated efforts among the regulator, exchanges and market participants to address the challenges facing the secondary market.

Between fiscal year 1995-96 and fiscal year 2021-22, Bangladesh experienced an average inflation rate of 6.3 percent over the 26 years. There were episodic divergences during FY2012 and FY2013 from this long-term trend, but they were corrected quickly. This stability of the price level has been a big win for Bangladesh, playing a major role in boosting investment and protecting the incomes of the poor and lower-income groups.

By contrast, Bangladesh has experienced an average inflation rate of 9.3 percent over the past four years, from FY2023 to FY2026, and the inflation rate remains stubbornly high. This unusually high pace of inflation has hurt investment and the incomes of the poor and lower-income groups. Even the middle class is now feeling the pain of rising prices that continue to outstrip income growth for most households. Inflation control is arguably the biggest economic challenge facing the government today.
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When the current episode of inflationary pressure first emerged in FY2023, most people believed it was a temporary phenomenon caused by the combined effects of Covid-19-related disruption to global supply chains and the trade disruption caused by the Ukraine war. There was therefore a belief that this external-shock-related inflationary episode would pass once the world adjusted to these events and the surge in global commodity prices and global inflation subsided. While global commodity prices have normalised and the global inflation rate has sharply declined, inflation in Bangladesh remains stubbornly high. Indeed, the average inflation rate in most countries has come down, including in India, Thailand, Malaysia, Indonesia and Vietnam, but not in Bangladesh.
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Sadiq Ahmed

Many explanations have been provided for why the inflation rate remains persistently high, including holding profiteers and syndicates responsible. In my own write-ups, I have argued that the inflationary spiral was ignited by Covid-19-related expansionary monetary and fiscal policies and then accentuated by a deep supply shock resulting from a sharp fall in the GDP growth rate, especially in the manufacturing sector, and unprecedented import cutbacks. Unfortunately, the inflationary effect of the supply crunch is not yet well understood or adequately reflected in policymaking. In particular, the adverse effects of the import crunch on domestic prices are still not well appreciated.

The country’s total import volume has fallen by 31 percent since FY2022. This is the outcome of trade and exchange restrictions and the fall in import demand for capital goods owing to the sharp slide in public and private investment rates. Some researchers may argue that FY2022 was an abnormal year. The cutbacks remain deep if, instead, the base-year values of FY2021 are used. Imports fell by 14 percent between FY2021 and FY2026. The import cutbacks were broad-based, although the deepest reduction happened in capital goods, which fell by 41 percent. Intermediate goods and consumer goods also saw substantial cutbacks, declining by 7 percent and 9 percent respectively.

With an average GDP growth rate of 5 percent and an empirically verified income elasticity of demand of 1, imports should have grown by 25 percent between FY2021 and FY2026 instead of falling by 14 percent. The import supply shock is obvious. Additionally, given the crunch in domestic supply, reflected in the sharp slowdown of GDP growth, especially in the manufacturing sector, the adverse effects of the import cutbacks on domestic prices and inflation are magnified.

The axe on imports is the bluntest instrument that policymakers tend to use to respond to a balance of payments crisis. Its temporary use is understandable to avoid an unsustainable run on reserves. But import control is a poor instrument for achieving a sustainable balance of payments position over the longer term. It is also inconsistent with GDP growth and price stability objectives.

Moving forward, to manage inflation, the government must pursue policy reforms that help increase both domestic and import supply. Since recovery of the domestic economy will take time in view of the deep-seated problems plaguing the Bangladesh economy, including the fragile banking sector, the crisis in the energy sector and the severe fiscal constraint, the fastest way of lowering the inflation rate is to allow a rapid recovery of imports, especially consumer goods, including food items. All import restrictions in terms of margin and licensing requirements must be eased. Import duties, including supplementary and regulatory duties, must be cut to the maximum extent possible, at least for a limited duration until domestic supply recovers and inflation is brought down to the 4-5 percent level.

The adverse BoP effects of rising imports should be tackled through export diversification and greater mobilisation of remittances. The exchange rate should be fully flexible and market-based, without intervention from Bangladesh Bank. A fully flexible, market-based exchange rate is essential to diversify and boost exports and mobilise remittances without the need for fiscal subsidies, which are in any case unsustainable in an environment of severe fiscal constraint.

Sadiq Ahmed is vice-chairperson of the Policy Research Institute of Bangladesh (PRI). He can be reached at sadiqahmed1952@gmail.com.

Factory activity in China contracted in August for a second straight month, official data showed Monday, as soft demand weighs on the world's second-largest economy.

Leaders in Beijing are seeking to maintain pace despite hurdles including trade frictions with Washington and an entrenched property-sector crisis that has spooked consumers.

The manufacturing purchasing managers' index (PMI) came in at 49.8 in August, according to the National Bureau of Statistics, slightly below the 50 mark separating expansion from contraction.

Still, the reading was higher than the 49.5 forecast in a Bloomberg survey of economists, and an improvement on the 49.2 recorded in July.

NBS statistician Huo Lihui said in a statement it showed an "expansion in both production and market demand in the manufacturing sector".

Certain sectors saw "weak market activity", Huo added, including steel production and chemical materials.

The non-manufacturing PMI, which measures activity in other areas including services and construction, came in at 49.0, the data showed.

That was unchanged from July but missed the Bloomberg forecast of 49.4.

Huo noted "weak" activity in wholesale, retail and capital market services in August, which were all "below the critical point".

"The rise of commodity prices may have benefited some firms in the upstream manufacturing sector, as both input and output price indexes rose last month," wrote Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

"But this is driven by supply rather than demand," he added.

China's economy has been supported by a historic boom in exports that has shown no sign of stopping in recent months.

It has also been helped by the global artificial-intelligence frenzy that has increased demand for its tech products.

With storm clouds building elsewhere, economists argue that Beijing needs to shift towards a model powered more by household consumption than traditional growth drivers including infrastructure investment and property.

John Ternus takes over as Apple’s chief executive on Tuesday, inheriting a company that towers over the smartphone market but trails its rivals in artificial intelligence.

One of his biggest challenges will be balancing the company’s dependence on China while parrying acute political pressure from the White House.

The handover ends Tim Cook’s 15-year run, replacing the operations specialist who built Apple’s supply chain with the engineer who built its hardware.

Ternus, 51, joined Apple’s design team in 2001 and worked his way up to senior vice president of hardware engineering, reporting to Cook.

He leads the engineering teams behind Apple’s entire product lineup, including the iPhones that generate most of the company’s revenue.

He gets barely a week to settle in, with Apple holding its annual iPhone event on September 9, where it is expected to unveil its first foldable handset.

“Tim Cook left the house in phenomenal order,” said Dan Ives, partner and senior managing director at investment firm Yorkville Ives & Co.

“But now it’s about Ternus defining the AI chapter.”

Ives expects the new chief executive to lean into what he knows.

“There’s no reason to fix what’s already working,” he said, predicting Ternus will concentrate on hardware innovation while leaving Cook’s supply chain intact.

Some analysts had argued software chief Craig Federighi was the more logical pick for a company scrambling to catch up on AI.

Carolina Milanesi, an analyst at Creative Strategies, said that misreads how consumers actually adopt technology.

“Consumers are still buying hardware first, and it’s going to be like that for a long time,” she said. “You’re not going to discover the value of AI if you’re not interested in the hardware.”

Ternus earned a bachelor’s degree in mechanical engineering from the University of Pennsylvania and worked as an engineer at Virtual Research Systems before joining Apple.

Inside the company he is credited with driving a push to make products more durable, reliable and resilient, and with design work that cut their carbon footprint.

The harder question is what kind of leader he becomes.

“Even people that know him now don’t know him as a CEO,” Milanesi said.

“You might know him as the head of engineering, but once you’re CEO, things change. Your responsibility is bigger, your power is bigger. You’re dancing a different kind of dance.”

Nowhere is that gap wider than in the geopolitical role Cook excelled at, courting both Beijing and Donald Trump’s White House to protect a supply chain that runs largely through China.

Apple’s manufacturing operation is among the most complex in corporate history, a web of hundreds of suppliers and assembly lines that Cook painstakingly built over decades.

Cook in recent years began shifting some of the work elsewhere -- iPhone assembly to India, other production to Vietnam -- but the diversification has been gradual with China, one of Apple’s biggest consumer markets, still anchoring the system.

Complicating matters, Trump has repeatedly demanded Apple build iPhones on American soil, threatening tariffs on those made overseas.

Cook avoided the heaviest blows of Trump’s trade war by cultivating the president directly, making US investment commitments and political donations -- all while also keeping Beijing onside.

The tricky political terrain will be new for Ternus.

“He knows Apple Park like the back of his pocket in terms of hardware,” Ives said of Ternus. “But on the global stage -- that’s probably one of the biggest areas where he’s going to have to learn on the job.”

Cook is not going far. He becomes executive chairman of Apple’s board on the same day, with a mandate the company has said includes engaging policymakers around the world.

“That was really clever,” said Milanesi, arguing the arrangement frees Ternus from a role Cook has handled alone for years.

The September 9 iPhone event will be the first public measure of the handover.

A foldable iPhone would be the most significant redesign in years, and Ternus will be its face -- eight days into the job.

“This is a moment that they created for him,” Milanesi said.

The dollar inched lower on Monday, but remained near a roughly two-week high, as markets ramped up bets on a rate hike after hawkish remarks from Federal Reserve Chair Kevin Warsh and renewed Gulf tensions, while the yen traded near the closely watched 160-per-dollar level.

The US central bank will “have work to do” if policymakers do not get the confidence they need that inflation is heading down to 2 percent, Warsh said on Friday, in his clearest indication yet that further tightening may be needed to curb price pressure. The comments fuelled bets on a September rate hike.

Markets raised the implied probability of a move next month to 58 percent, while yields on interest-rate-sensitive 2-year US Treasury notes held just below a more than one-month high.

“Warsh’s prepared remarks seemed designed to lift rate-hike expectations, rebalance the September debate towards the hawks and rebuild his inflation-fighting credibility,” Elwin de Groot, head of macro strategy at Rabobank, said.

“Warsh delivered an important signal: the Fed is not relying on tighter financial conditions alone and remains willing to tighten further if underlying inflation stalls,” he added.

Investors are now turning their focus to upcoming US data, particularly Friday’s nonfarm payrolls report and next week’s consumer inflation figures, both of which could shape expectations ahead of the September Fed meeting.

The euro edged up roughly 0.11 percent to $1.1597, while sterling inched higher to $1.3543. Both currencies remained on track for their second consecutive monthly gains.

The dollar index , which measures the US currency against six major peers, was down 0.11 percent to 99.53 after hitting 99.73 on Friday, its strongest since August 17.

Even so, the index was still on track for a second consecutive monthly decline, as US Treasury bond-buyback plans earlier in the month revived debasement trades.

Elsewhere, renewed tensions in the Gulf drove oil prices higher, with Brent crude futures last up 2.5 percent on the day to $90.21 a barrel. US forces struck Iran’s Larak Island on Sunday, marking the first known American strikes on Iran since late July.

US President Donald Trump said in a social media post that Iran’s energy hub of Kharg Island is being “blown to smithereens” although there was no evidence that the island was under attack.

Oil prices rose more than 3.5 percent on Monday after the US attacked an Iranian island in the Strait of Hormuz and Tehran said it had retaliated, as their conflict extended into its sixth month.

Brent crude futures were up $3.15, or 3.58 percent, to $91.25 a barrel at 0903 GMT, while US West Texas Intermediate crude was up $2.96, or 3.55 percent, to $86.36.

US forces struck two launchers on Iran’s Larak Island in the Strait of Hormuz on Sunday, the first known American strikes on the country since late July.

In response, Iran attacked two US air bases in Jordan, Iranian media reported on Monday, citing Iran’s Revolutionary Guards.

“Renewed military strikes in the Middle East and concerns of further oil supply disruptions have lifted oil prices,” said UBS analyst Giovanni Staunovo, adding that markets will now focus on whether the situation de-escalates or not.

US President Donald Trump said in a social media post on Sunday that Iran’s energy hub of Kharg Island was being “blown to smithereens”, but there was no evidence the island was under attack.

The post, which included an AI-generated video, provided no further details. Iran denied any attack on the island and said oil operations were continuing.

Efforts to negotiate an end to the conflict remain stalled as mediators seek to reopen the Strait of Hormuz, through which a fifth of global oil supplies passed before the war began at the end of February.

Part of the sharp market reaction reflected thin trading volumes due to a UK public holiday, said Saxo Bank analyst Ole Hansen.

Shipping data showed the number of visible commodity vessels transiting the strait over the weekend fell to five a day, highlighting caution among operators concerned about attacks on shipping.

The United Kingdom Maritime Trade Operations agency said on Sunday that a tanker had been struck by a projectile while entering the strait on Saturday.

US Treasury Secretary Scott Bessent told Reuters on Sunday that the US was likely to impose new secondary sanctions on Iran every week.

Despite Monday’s rally, Brent and WTI were still on track to post modest losses for August after falling more than 4 percent last week, their first weekly declines in three weeks.

Trump also said on Sunday that oil secured under a recently struck deal with Venezuela would be used to replenish the US Strategic Petroleum Reserve, which has fallen to near its lowest level in 44 years.

India's economy grew 7.8% year-on-year in the April-June quarter of 2026, beating market expectations and the Reserve Bank of India's 7% forecast, government data showed today (31 August).

Growth in the first quarter of the 2026-27 financial year, however, moderated from a revised 8.6% in the previous quarter. Strong investment and manufacturing activity helped offset weakness in the mining sector.

The latest figures were released by India's Ministry of Statistics and Programme Implementation (MoSPI).

India's exemplary GDP growth of 7.8% during Q1 of FY 2026-27 is a herculean feat.

The collective strength of our people ensured India delivered such growth despite oil price shocks and supply chain issues in the midst of global uncertainties.

Doomsayers were doomed and India…

— Narendra Modi (@narendramodi) August 31, 2026
Gross value added (GVA), which excludes indirect taxes and subsidies, rose 8.2% during the quarter. Manufacturing grew 9.2%, while financial services expanded 12.1%, supported by strong bank credit growth.

Investment increased nearly 12%, while private consumption grew 7.1%.

The data underline the resilience of India's domestic economy despite global economic uncertainty, high energy prices and geopolitical tensions linked to the conflict in West Asia.

The pace of expansion keeps India among the world's fastest-growing major economies. Analysts have also raised their full-year growth forecasts to around 7% amid stronger investment, easing inflation and resilient domestic demand.

Prime Minister Narendra Modi described the 7.8% growth in the first quarter as a "herculean feat".

In posts on X, Modi said the performance reflected the "collective strength and resilience" of the Indian people despite oil price shocks, supply chain disruptions and global uncertainties.

In another post, he wrote: "Doomsayers were doomed and India bloomed…yet again!"

The Bangladesh Financial Intelligence Unit (BFIU) has decided to form an inter-agency steering committee involving public and private sector stakeholders to strengthen efforts to prevent trade-based money laundering (TBML).

The decision was taken at a meeting organised by the BFIU on Sunday with representatives of relevant government agencies and 15 scheduled banks, according to a press release.

The proposed committee will identify TBML risks, improve information sharing and inter-agency coordination, and support investigations into suspected cases.

Representatives of the BFIU, Bangladesh Bank's Foreign Exchange Policy Department and Foreign Exchange Operation Department, the National Board of Revenue's Central Intelligence Cell and Customs Intelligence and Investigation Directorate, several customs houses, the Criminal Investigation Department, Anti-Corruption Commission and 15 scheduled banks attended the meeting.

Participants shared their experiences and discussed existing challenges, emerging risks and measures needed to curb TBML. They observed that TBML techniques are becoming increasingly complex and evolving continuously, underscoring the need for coordinated action, effective information-sharing mechanisms and stronger risk-analysis frameworks.

The meeting stressed closer cooperation among regulatory and law enforcement agencies, scheduled banks, customs authorities and other private-sector stakeholders, alongside institution-specific monitoring.

The proposed steering committee will review existing risks and challenges, assess ongoing measures, strengthen information-sharing mechanisms and determine future actions. It will also hold regular meetings to review the activities of relevant agencies and provide necessary guidance, the BFIU said.

The financial intelligence agency expects the committee to improve the identification of potential TBML activities, monitoring of suspicious transactions, analysis of relevant information and coordination of investigations.

Customers of Sammilito Islami Bank can withdraw the full amount held in their fixed deposit receipts (FDRs) at once, but they will not receive any profit if they do so. FDR account holders must remain under the Bank Resolution Scheme to receive profits.

Meanwhile, depositors with current and savings accounts will be able to withdraw their principal amount in full at once, along with the applicable profit.

The Banking Regulation Department of Bangladesh Bank issued a circular on the matter today (31 August).
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Sammilito Islami Bank is set to begin returning the principal deposits of individual customers from 7 September. Initially, customers will be allowed to withdraw or encash their entire principal amount in a single transaction. However, they will not receive any profit in this case. The bank's branches will start accepting applications for this from today.

According to Bangladesh Bank's announcement, normal transactions for individual customers are scheduled to resume from today.

However, several days are needed to complete preparations, including sending cash requisitions to branches and sub-branches, ensuring the supply of cash from Bangladesh Bank and establishing secure cash-management arrangements. As a result, the bank has decided to begin the full-scale return of depositors' funds from 7 September.

The government is approaching Muslim-majority countries and Islamic institutions to find a strategic partner for Sammilito Islami Bank, formed by merging five troubled private banks plagued by irregularities and corruption during the Awami League government.

Qatar has already been approached to invest in the state-owned bank. During his recent visit to Qatar, Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir formally proposed that the country become a strategic partner of Sammilito Islami Bank.

"We have already proposed that Qatar become a strategic partner. Discussions were held there, but nothing has been finalised yet," Titumir told The Business Standard.

"Further discussions will take place with Qatar, and we will also approach other Muslim countries and organisations to become strategic partners of Sammilito Islami Bank," he said.

Titumir said the government had cancelled its earlier decision to impose a "haircut" on depositors and decided to repay their deposits in full.

"There are two ways to repay depositors – providing money from the treasury or bringing a foreign country or organisation into the bank's ownership as a strategic partner," he said. "The government is therefore seeking strategic investors from Muslim countries"

A strategic partner in a bank typically contributes to long-term growth, technology upgrades and business expansion, while playing an active role in management and decision-making.

Such partners can also strengthen a bank's capital base through substantial long-term funding or equity investment and provide financial support during crises.

FDR account holders must remain under scheme to receive profits

The Banking Regulation Department of Bangladesh Bank in a circular yesterday (31 August) said customers of Sammilito Islami Bank can withdraw the full amount held in their fixed deposit receipts (FDRs) at once, but they will not receive any profit if they do so.

FDR account holders must remain under the Bank Resolution Scheme to receive profits.

Meanwhile, depositors with current and savings accounts will be able to withdraw their principal amount in full at once, along with the applicable profit.

Sammilito Islami Bank is set to begin returning the principal deposits of individual customers from 7 September. Initially, customers will be allowed to withdraw or encash their entire principal amount in a single transaction. However, they will not receive any profit in this case. The bank's branches will start accepting applications for this from today.

According to Bangladesh Bank's announcement, normal transactions for individual customers are scheduled to resume from today.

However, several days are needed to complete preparations, including sending cash requisitions to branches and sub-branches, ensuring the supply of cash from Bangladesh Bank and establishing secure cash-management arrangements. As a result, the bank has decided to begin the full-scale return of depositors' funds from 7 September.

Sammilito Bank's status

Sammilito Islami Bank was formed by merging First Security Islami Bank, Social Islami Bank, Global Islami Bank and Union Bank, all of which were controlled by the S Alam Group.

The fifth bank, Exim Bank, was controlled by businessman Nazrul Islam Mazumder, who was considered close to the Awami League.

The five banks had struggled to return depositors' money amid severe financial distress. The interim government subsequently merged them into a single state-owned bank.

According to Bangladesh Bank data, the merged banks have around 76 lakh depositors with deposits totalling Tk1,42,000 crore. Individual depositors hold around Tk15,000 crore in savings accounts.

Of the five banks' combined loans of Tk1,92,000 crore, around 86% are now classified as non-performing, while their capital shortfall exceeds Tk150,000 crore.

The state-owned Sammilito Islami Bank began operations in November last year. It has authorised capital of Tk40,000 crore and paid-up capital of Tk35,000 crore.

The government has provided Tk20,000 crore of the paid-up capital, while the remaining Tk15,000 crore is to be issued as shares to depositors.

The National Board of Revenue has exempted businesses and companies with annual turnover of up to Tk2 crore from minimum turnover tax, easing a tax burden that applies regardless of profitability.

NBR issued an order in this regard today (31 August) with effect immediately.

Under the revised structure, businesses with annual turnover of up to Tk2 crore will pay no minimum turnover tax. Those with turnover above Tk2 crore and up to Tk4 crore will pay a minimum tax of 0.50%, while businesses with turnover above Tk4 crore will continue to pay 1%.
Previously, a 1% minimum turnover tax was imposed regardless of whether a business made a profit or incurred a loss.

The business community has welcomed the move while calling for further reform of the system.

The Federation of Bangladesh Chambers of Commerce and Industry sent a letter to the finance minister on 24 August, urging the government to gradually move away from the 1% minimum turnover tax imposed on businesses and companies.

Md Fazlul Hoque, administrator of the business body, recently told TBS that taxation should ultimately be based on actual income, urging the abolition of the minimum turnover tax system in favour of taxation based on actual profits.

Until FY25, most companies, with some exceptions, were subject to a minimum turnover tax of 0.60% of annual turnover. Non-company businesses with annual turnover above Tk4 crore were subject to a 0.25% minimum turnover tax.

The 2025 budget raised the minimum turnover tax rate to 1% for both categories, raising concerns among businesses with low profit margins and loss-making firms, which were required to pay tax despite having no profits.

The latest exemption is expected to provide some relief to smaller businesses, NBR officials hope.

The government yesterday (31 August) approved the 9th National Pay Scale, raising public servants' salaries by up to 142% – at a time when the country is grappling with energy crisis-driven production disruptions, weak revenue collection and years of high inflation.

Implementing the new structure will cost an additional Tk105,580 crore. Once all allowances take effect in January 2028, annual government spending on salaries and allowances will reach nearly Tk200,000 crore – roughly half of the revenue collection last fiscal year.

Under the new scale, basic pay for the lowest, 20th grade – where employees with Class VIII education are recruited – will rise 142%, from Tk8,250 to Tk20,010. This represents a 388% increase over the past 17 years.

Employees will also receive a house rent allowance of 50-60%, along with medical, education, transport and mobile phone allowances. Including these benefits, total monthly remuneration for a 20th-grade employee will reach around Tk35,000.

Grade 9 is the entry level for BCS cadre officers and first-class non-cadre officials. Their basic pay, which rose from Tk11,000 in 2009 to Tk22,000 under the 2015 pay scale, will double again to Tk44,000 under the new structure – a 300% increase from 2009.

Private sector employees in similar stages receive much less salary.

At the top of the hierarchy, Grade 1 basic pay will double to Tk156,000 from Tk78,000. Secretaries generally fall under this grade. Their basic pay was Tk40,000 in 2009, meaning it will have risen 290% over the period.

The new basic salaries will be introduced in three phases from 1 July this year to 1 July 2027, with all allowances taking effect simultaneously from 1 January 2028. Public servants retiring from July this year onwards will also receive pensions calculated under the structure.

Cabinet Secretary Nasimul Gani told journalists after the Cabinet meeting that the scale was approved considering the government's financial capacity, the broader economic situation, inflation, living costs, public servants' living standards, and the need for a balanced and rational pay structure.

However, sources said several ministers opposed implementation amid the government's financial constraints and difficulties in financing higher energy import costs. Prime Minister Tarique Rahman approved the proposal after hearing the ministers' views, they said.

Gani was also asked whether MPO-listed teachers would be covered by the new pay scale. He replied, "I cannot say at this stage. A decision will come when the matter is settled."

Asked whether the government had any plans regarding journalists' salaries, he said the issue had been discussed, but it was too early to say what decision would follow.

Government-appointed FBCCI administrator Md Fazlur Rahman said the phased implementation would not put significant pressure on private-sector wages or fuel inflation.

"Private-sector employees know their companies are stagnant. As the new pay structure will be implemented gradually, it will not significantly fuel inflation or force private firms to raise wages," he told TBS.

In a press release, the Cabinet Division said the new pay scale would strengthen public servants' financial security and motivation while helping build an efficient, dynamic and people-oriented administration.

When the 8th National Pay Scale was introduced in 2015 with a 100% increase in basic salaries, then finance minister Abul Maal Abdul Muhith said higher pay would curb corruption and restore dynamism to the administration.

Mahbub Ahmed, finance secretary at the time, told TBS yesterday that corruption had instead increased after the pay hike. "Corruption cannot be directly linked to whether a new pay scale should be introduced. Many officials are honest and shouldn't remain on the same pay scale for 11 years," he said.

One rank, one pension

The new pay structure also proposes a "one rank, one pension" system for military and civilian personnel, in line with the BNP's election manifesto.

Currently, military officers appointed to civilian organisations can receive pensions from both positions, with the same provision applying to civilian officials.

The dual-benefit system will be abolished and replaced with one-rank, one-pension. As data on civilian retirees before 2019 are unavailable, the system will be phased in by 2030.

The government will also raise pensions for long-retired public servants who receive much less than those retiring today from equivalent positions.

Pensions of up to Tk9,000 will be doubled; those of Tk9,001-20,000 will rise 75%; Tk20,001-30,000 by 65%; Tk30,001-40,000 by 60%; and pensions above Tk40,000 by 55%.

Employees with children with disabilities will receive Tk3,000 a month for each child with special needs. Mobile phone allowances, previously available only to officials up to Grade 5, will now be extended to all government employees.

From dearness allowance to new pay scale

Following the fall of the Hasina government, the interim government announced a dearness allowance amid protests by public servants. It later dropped the plan after facing criticism for raising VAT on more than 100 products to boost revenue.

The interim government subsequently formed a pay commission, despite no fresh demand from public servants. The commission recommended a new structure days before the election, proposing salary increases of 100% for Grade 1 and up to 142% for Grade 20.

The interim government left office without implementing the recommendations, leaving the elected government to do so and creating pressure for their adoption.

The BNP had pledged a new pay scale in its election manifesto. Given the government's limited financial capacity, the Cabinet, chaired by Prime Minister Tarique Rahman yesterday, decided to implement it in four phases over two years.

Lessons from the 2015 pay scale

In 2015, a pay commission headed by Dr Farashuddin recommended doubling public servants' salaries and introducing a 5% annual increment.

It also recommended no further pay commissions, with annual increments to be adjusted for inflation whenever it exceeded 5%. The commission proposed scrapping the time-scale and selection-grade systems and automatically promoting officials to the next grade after 10 years without promotion.

Mahbub Ahmed, who was the finance secretary when the 2015 pay scale was implemented, told TBS yesterday that the government had planned a Finance Division wing to calculate inflation and recommend annual increments accordingly.

"But that did not happen. I can't remember why," he said.

As inflation rose amid the Russia-Ukraine war, the then Awami League government introduced an additional 5% incentive on top of the regular 5% annual increment after the 2024 election. The interim government later raised the incentive to 15%, which remains in effect. Public servants will lose the incentive once the new pay scale takes effect.

New pay scale justified amid inflation, but funding a challenge

-Fahmida Khatun, Distinguished Fellow, Centre for Policy Dialogue

The government pay structure has remained unchanged for a long time. During this period, inflation has risen significantly. As a result, the real income and purchasing power of employees, particularly those in lower and middle grades, have declined. Therefore, there is a reasonable case for increasing their salaries.

However, the key consideration is how the increase is implemented.

A salary increase does not necessarily lead to higher inflation. Its impact will depend on how it is financed, the scale of the increase, the availability of goods and services in the market, and coordination between monetary and fiscal policies.

If the increase is financed through bank borrowing, money creation or cuts in development spending rather than higher tax revenue, it could put additional pressure on the economy.

Higher incomes for government employees will increase consumption and aggregate demand. The government should therefore take steps to increase the supply of food, housing, transport, and goods and services to contain any resulting inflationary pressure.

Another important consideration is fairness. If government employees receive significant salary increases while the incomes of employees in autonomous institutions, state-owned enterprises, project-based and outsourced positions, as well as teachers, journalists and private-sector workers, remain unchanged, disparities and dissatisfaction among different professional groups could widen.

Although mechanisms exist to determine wages in different sectors, including the Wage Board for journalists, they are often irregular, outdated and weakly implemented. Salaries in the public and private sectors cannot be determined in the same way.

Nevertheless, there should be reasonable alignment among minimum wages, Wage Board decisions and the cost of living.

Financing the new pay structure will be a major challenge. The government already faces a budget deficit, which could widen significantly as a result of the additional expenditure. The budget, however, already includes an allocation for implementing the new pay structure.

Another key issue is whether higher salaries will be matched by improvements in the efficiency and capacity of government employees. If productivity does not improve, the country and the economy will receive little return from the additional expenditure.

On the other hand, if greater efficiency among government officials speeds up project implementation and reduces waste and corruption, the government could save money. In that case, the impact of the pay increase on inflation may be limited.

The government is introducing the new pay structure to improve the welfare of its employees, but it also has responsibilities towards workers in other sectors, particularly the private sector. It should take effective measures to prevent the new pay structure from widening the wage gap between public- and private-sector employees.

Salary was supposed to be inflation adjusted, can't recall why it didn't happen

-Mahbub Ahmed, Former finance secretary

The Pay Commission formed in 2015 under the leadership of Dr Farashuddin Ahmed had recommended that no new pay commission should be formed. Instead, government employees were to receive a 5% annual increment every 1 July.

If the inflation rate in any year was higher, the increment would also be adjusted in line with inflation.

A small wing comprising three or four officials under the Finance Division was supposed to be set up to calculate inflation and determine the appropriate rate of annual increments. But that never happened. I do not remember now why it was not done.

Even after salaries were doubled in 2015, corruption did not decline. Rather, it increased.

But it would not be right to compare corruption with whether or not a new pay structure is introduced. There are many honest officials in the administration. Those who do not engage in corruption should not have to remain on the same pay structure for 11 years.

At the same time, there are some positions where, if the salary offered is specified, many people would be willing to take up those jobs.

Government employees have been receiving salaries under the same pay scale for 11 years. Although they receive annual increments, those increases have not kept pace with inflation and the rising cost of living over this period.

A proposal has now been made to increase the salaries of peons by 100% and set their pay at Tk20,000. How can a family live in this country on less than that?

But the question is: where will the money for implementing a new pay structure come from?

The additional spending will ultimately put pressure on ordinary people. Government employees also pay taxes and VAT, so the burden will fall on them as well.

When the eighth pay structure was implemented in 2015, we conducted a study and found that the new pay structure did not cause a significant increase in inflation.

This was because the amount of money spent as a result of the new pay structure was not very large compared with the amount of money already circulating in the market.

But Bangladesh's financial problems have now become two-pronged. Whichever way you go, there is a problem. The revenue collection situation is not favourable. The target set in the budget is unlikely to be achieved.

As a result, a budget deficit is inevitable. Although funds have been allocated in the current fiscal year's budget to implement the new pay structure, there would be a budget deficit even without this additional expenditure.

Bangladesh's budget is equivalent to 15% of GDP, but actual spending stands at 12% to 14% of GDP. As a developing country, the budget should be around 25% of GDP. But this is not possible because of weak revenue collection.

Therefore, the government needs to focus on increasing revenue collection both to keep the economy dynamic and to implement the new pay structure.

Inflation will rise, putting pressure on private sector

-Anwar-Ul Alam Chowdhury Parvez, President, Bangladesh Chamber of Industries

It was not the right time to announce the new pay scale for government employees as the country is already facing persistent inflationary pressure.

The announcement could further fuel inflation in the market, which may have a negative impact on private-sector employees as well as industries, particularly labour-intensive sectors.

It will become difficult for private-sector employees to make ends meet. As a result, they are likely to demand higher salaries, which is understandable. However, given the current situation, does industry have the capacity to accommodate such wage increases?

The industry is already facing multiple challenges, including severe shortages of gas and electricity, high lending rates and an unstable law-and-order situation.

In this situation, if companies are forced to raise salaries, they will lose competitiveness as their production costs increase. They may struggle to sell their products, ultimately having a significant negative impact on industry.

The cabinet has approved the National Pay Scale 2026, with basic salaries of government employees set to be implemented in three phases between 1 July 2026 and 1 July 2027, while various allowances will take effect simultaneously from 1 January 2028.

The weekly cabinet meeting, with Prime Minister Tarique Rahman in the chair, began at the Secretariat around 5:30pm, according to a press release issued by the Prime Minister's Office.

The new pay scale will retain the existing 20 grades for government employees. The minimum starting basic salary for Grade 20 has been set at Tk20,000, while the maximum prescribed salary for Grade 1 will be Tk1,56,000.

The government said the new structure was approved after considering its financial capacity, the overall economic situation, inflation, the cost of living and the need for a balanced and rational pay structure.

Under the new scale, the ratio between the salaries of the lowest and highest grades will be reduced from the existing 1:1.945 to 1:1.78.

As a result, the starting basic salary for the lowest grade will increase by 142%, while the prescribed salary for the highest grade will increase by 100%.

Basic pay to be implemented in three phases

Although the National Pay Scale 2026 will be effective from 1 July 2026, the government has decided against implementing the entire pay structure at once because of its financial implications and potential impact on overall inflation.

The basic salaries will be implemented in three phases between 1 July 2026 and 1 July 2027 across the 2026–27 and 2027–28 fiscal years.

Employees in Grades 10 to 20 will be given priority in implementation, considering their relatively lower incomes.

The government has also decided to introduce all allowances simultaneously from 1 January 2028.

The same phased approach will apply to increases in net pensions.

Lower pensioners to get higher increases

The government has postponed full implementation of the "One Rank One Pension" (OROP) system until 2030.

According to the Finance Ministry, full implementation at present would involve substantial financial costs, while the government lacks data on civilian employees who retired before 2019.

As an interim measure, the government has approved slab-based increases in net pensions, with lower-paid pensioners receiving higher percentage increases.

Under the new formula, net pensions of Tk9,000 or less will increase by 100%, while those between Tk9,001 and Tk20,000 will rise by 75%. Pensions ranging from Tk20,001 to Tk30,000 will increase by 65%, those between Tk30,001 and Tk40,000 by 60%, and pensions of Tk40,001 or more by 55%.

The government said the measure will particularly benefit pensioners who retired many years ago and currently receive relatively low net pensions.

Mobile allowance expanded to all grades

The government has also decided to expand mobile allowance coverage to employees across all 20 grades.

Previously, the allowance was available only to employees up to Grade 5. The expansion takes into account the growing use of internet and digital communication in government offices.

Tk3,000 allowance for children with disabilities

For the first time, the government will introduce a monthly allowance for government employees with children with special needs.

An employee will receive Tk3,000 per month for each child with special needs.

Around 33 lakh people to benefit

The new pay scale is expected to benefit around 24 lakh military and civilian employees, as well as more than 9 lakh retired employees and other eligible beneficiaries.

The government estimates that implementation will require an additional annual expenditure of around Tk1,05,580 crore. The required funds have been earmarked in the budgets for the relevant fiscal years under the Medium-Term Budget Framework.

Meanwhile, a separate committee has been formed for the judicial service. Based on its recommendations, a separate Bangladesh Judicial Service pay scale will be approved and implemented in phases from 1 July 2026 in line with the National Pay Scale 2026.

The Finance Division will issue the necessary gazettes, orders and instructions to implement the new pay scale, detailing the procedures for salary fixation, allowances, pensions and other post-retirement benefits.

The government said phased implementation would help ease pressure on inflation while improving the financial security and motivation of government employees and contributing to a more efficient and people-oriented public administration.

As Bangladesh prepares to graduate from the least developed country (LDC) category, private-sector leaders have demanded detailed, sector-specific action plans for SMEs, agriculture, pharmaceuticals and other key industries, rather than broad and generic reform pledges.

Speaking at a consultation organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) in the capital today (31 August), business leaders warned that plans alone mean little without disciplined implementation and continuous monitoring to ensure real outcomes.

Chaired by FBCCI Administrator Md Fazlul Hoque, the meeting also called for stronger entrepreneurial capacity, skills development, greater investment in research and innovation, wider technology adoption, affordable financing, and upgraded logistics, along with an uninterrupted energy supply, all of which business leaders say are essential for industries to remain competitive once LDC-related trade benefits expire.
At the beginning of the meeting, FBCCI Secretary General Md Almgir presented a report on the challenges and opportunities associated with Bangladesh's LDC graduation.

The report noted that Bangladesh is expected to lose duty-free market access and trade preferences such as the Generalised Scheme of Preferences (GSP) and Everything But Arms (EBA) in the European market, one of its major export destinations, following graduation.

Stricter intellectual property rights (IPR) regulations will also pose challenges to several industries, including the pharmaceutical sector, the report said.

Against this backdrop, the report stressed the importance of ensuring private-sector participation in the government's reform initiatives.

During the open discussion, private-sector entrepreneurs said the benefits of LDC graduation would not materialise unless the action plans were realistic and implementable.

They proposed collecting accurate data and information from the grassroots level to identify the priority needs of different sectors and formulate strategies accordingly.

Dhaka Chamber of Commerce and Industry (DCCI) Senior Vice President Rajib H Chowdhury said Bangladesh lacks sufficient negotiation capacity and needs to strengthen it.

"Bangladesh's negotiation capacity needs to be enhanced. At the same time, the National Single Window must be made fully operational," he said.

Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers and Exporters Association, said a large portion of the country's plastic industry produces copycat products.

After LDC graduation, intellectual property issues would become a major challenge for the sector, much like the pharmaceutical industry, he said.

He called for urgent government-private sector action plans to protect industries such as plastics, light engineering and cottage, micro, small and medium enterprises.

Ismat Jarin Khan, president of the Patuakhali Women Chamber of Commerce and Industry, urged the FBCCI to ensure that strategies for sustainable LDC graduation do not remain focused only on industries based in Dhaka.

She also called for easy-term loans, skills development and logistics support for women entrepreneurs at the grassroots level.

K S M Mostafizur Rahman, president of the Bangladesh Agro-Chemical Manufacturers Association (BAMA), said Bangladesh would face major challenges regarding intellectual property rights after LDC graduation.

The pharmaceutical, agriculture and agro-chemical sectors would be among those affected, he said, urging the government to expedite the registration of products manufactured in Bangladesh that fall under patent protection.

Attending the meeting Md Munir Chowdhury, national trade expert of the Bangladesh Regional Connectivity Project-1 under the Ministry of Commerce, said private-sector stakeholders must clearly identify the challenges facing their respective sectors.

He suggested forming councils involving the government and private sector to address those challenges and adopting results-based action plans.

At the meeting, FBCCI Administrator Md Fazlul Hoque urged all district chambers and sector-based associations to submit their specific proposals in writing to the FBCCI, so that these could be analysed and placed before policymakers, and said that the additional three years Bangladesh had received must be utilised properly.

He added that if the private sector's capacity could be enhanced, the country's competitiveness in international markets would also increase, and sought cooperation from all district chambers and sector-based associations to this end.

Former FBCCI Administrator Md Hafizur Rahman, International Trade Expert of the Support to Sustainable Graduation Project Nesar Ahmed, members of FBCCI's support committees, former FBCCI directors, FBCCI Secretary General Md Almgir, BGMEA Director Sheikh Hossain Mohammad Mustafiz, BKMEA Vice President Mohammad Rashed, BJMA Chairman Abul Hossain, BTMA Director Sajid Ishraq, Bangladesh Women Chamber of Commerce and Industry President Sangeeta Ahmed, Bangladesh Jute Diversified Products Manufacturers and Exporters Association President Md Rashedul Karim Munna, and leaders of various chambers and associations also attended the meeting. Representatives from the Ministry of Commerce, Ministry of Industries, Bangladesh Standards and Testing Institution (BSTI) and ICT Division were also present.