Nearly Tk 33 out of every Tk 100 in loans disbursed by the country’s banking sector are now classified as non-performing, meaning that 33 per cent of loans are in default. By the end of June, non-performing loans (NPLs) had risen to more than Tk 600,000 crore (Tk 6 trillion). Even amid such a crisis, 13 private banks stand out as exceptions, with each reporting an NPL ratio of below 5 per cent.

Senior officials of these banks say that disciplined and independent loan approval processes, careful assessment of borrowers’ repayment capacity, and a focus not only on large corporate loans but also on small and medium-sized enterprises (SMEs) and consumer lending have helped keep NPLs under control.

According to the central bank’s latest data as of June, all 13 banks with NPL ratios below 5 per cent are from the private sector. The group includes both newer-generation banks and first-generation banks. The banks are Community Bank, BRAC Bank, Pubali Bank, Citizens Bank, Prime Bank, City Bank, Eastern Bank, Jamuna Bank, Bengal Commercial Bank, NCC Bank, Uttara Bank, Shahjalal Islami Bank, and Shimanto Bank.

According to the International Monetary Fund’s (IMF) Financial Soundness Indicators and the World Bank’s non-performing loan indicators, Bangladesh currently has the highest level of NPLs in the world. Banking-sector stakeholders say that despite Bangladesh having one of the highest levels of loan defaults globally, some banks in the sector continue to maintain good corporate-governance practices. As a result, these banks have strengthened their financial foundations and have also performed better in terms of profitability.

Banks that are ahead on various financial indicators are also seeing their deposits grow at higher rates than those of other banks. At the same time, these banks have relatively lower levels of non-performing loans.

13 banks with low non-performing loans

According to Bangladesh Bank data, Community Bank has the lowest rate of non-performing loans (NPLs) in terms of percentage. The total amount of loans disbursed by this new-generation bank is also relatively low. As of the end of last June, out of the bank's total disbursed loans of Tk 1,633 crore (Tk 16.33 billion), Tk 5 crore (Tk 50 million) was non-performing. This puts the bank's NPL ratio at 0.33 per cent.

BRAC Bank holds the second position, with an NPL ratio of 2.05 per cent. As of last June, the bank's total disbursed loans stood at Tk 75,621 crore (Tk. 756.21 billion) of which Tk 1,548 crore (Tk 15.48 billion) was classified as non-performing. BRAC Bank is currently the top profit-earning institution among locally-owned banks. Recently, BRAC Bank was featured in US magazine Forbes’ list of the world''s top 500 best-performing banks.

When asked, Tareq Refat Ullah Khan, Managing Director (MD) of BRAC Bank, said: "In credit risk management and loan approval, good governance and proper risk assessment are the main tasks. This is the key to maintaining the quality of BRAC Bank's loans. Loans have been extended by assessing borrowers'' repayment capacity in a completely neutral manner without any unethical pressure. As a result, we have been able to keep non-performing loans under control."

Pubali Bank ranks third on the list of banks with the lowest level of non-performing loans (NPLs) in the country. At the end of last June, the bank’s NPL ratio stood at 2.46 per cent. By then, out of the bank’s total outstanding loans of Tk 72,576 crore (Tk 725.76 billion), Tk 1,789 crore (17.89 billion) was classified as non-performing.

Speaking to Prothom Alo, Pubali Bank Managing Director Mohammad Ali said, “No loan at this bank has been granted based on the sole advice or personal recommendation of me or any senior official. Loans are approved through a fully institutional and systematic assessment process. The borrower’s personal or political identity is also not taken into consideration when granting loans.”

Mohammad Ali further said, “Most of the bank’s large loans have been provided to essential business sectors such as food and food products, education, healthcare, housing, and garments. As a result, a relatively small proportion of our loans have become non-performing. We are now increasing our focus on consumer lending.”

Citizens Bank, a new-generation bank that ranks fourth on the list, had an NPL ratio of 2.65 per cent at the end of last June.

Prime Bank ranks fifth. At the end of last June, the bank’s NPLs amounted to Tk 948 crore (Tk9.48 billion), equivalent to 2.74 per cent of its total loans.
Prime Bank is followed by City Bank in sixth place. At the end of last June, City Bank’s non-performing loans (NPLs) amounted to Tk 1,514 crore (Tk 115.14 billion), equivalent to 2.79 per cent of the bank’s total outstanding loans.

Speaking to Prothom Alo, City Bank Managing Director Masrur Arefin said, “City Bank’s independent loan approval process and diversified lending portfolio have enabled us to keep the NPL ratio under control. SME and consumer lending are providing us with significant comfort. Banks that are placing greater emphasis on SME and consumer lending are performing well.”

Eastern Bank ranks seventh in terms of the lowest NPL ratio. At the end of last June, the bank’s NPLs stood at Tk 1,520 crore (Tk 15.20 billion), representing 3.28 per cent of its total outstanding loans.

From eighth to 13th place are, respectively, Jamuna Bank, Bengal Commercial Bank, NCC Bank, Uttara Bank, Shahjalal Islami Bank, and Shimanto Bank. Among them, the NPL ratio was 3.35 per cent at Jamuna Bank, 4.07 percent at Bengal Commercial Bank, 4.19 per cent at NCC Bank, 4.36 per cent at Uttara Bank, 4.82 per cent at Shahjalal Islami Bank, and 4.88 per cent at Shimanto Bank.
72pc of non-performing loans concentrated in 10 banks

According to Bangladesh Bank data, the total amount of non-performing loans (NPLs) in the country’s banking sector stood at Tk 606,555 crore last June. This represented 32.78 per cent of the banks’ total outstanding loans. Of this amount, Tk 439,526 crore in NPLs was concentrated in 10 banks, accounting for 72 per cent of the total non-performing loans.

Islami Bank, a private-sector bank, had the highest amount of NPLs. The bank had NPLs of Tk 98,914 crore, (Tk 989.14 billion) equivalent to 52.15 per cent of its total loans. Janata Bank, a state-owned bank, had the second-highest amount of NPLs, at Tk 75,728 crore (Tk 757.28), representing 75.05 per cent of its total outstanding loans.

The merged banks have the highest NPL ratios. Among them, 97.08 per cent of First Security Islami Bank’s loans, 96.78 per cent of union Bank’s loans, 78.15 per cent of Social Islami Bank’s loans, and 70.81 per cent of EXIM Bank’s loans are currently classified as non-performing.

At National Bank, 65.74 percent of loans are classified as non-performing, compared with 63.38 per cent at IFIC Bank and 56.4 percent at AB Bank. In addition, 43.98 per cent of the loans at state-owned Agrani Bank are now classified as non-performing.

Anis A Khan, former chairman of the Association of Bankers, Bangladesh (ABB) and former managing director of Mutual Trust Bank (MTB), spoke to Prothom Alo about the overall situation regarding non-performing loans in the country’s banking sector. In his view, “Despite the high level of NPLs in the banking sector, the banks that are performing well continue to follow good corporate-governance practices. Even a look at the composition of the boards of directors of these banks shows what they are like.

"Customers now take such factors into consideration when deciding where to deposit their money. At the same time, these banks have skilled bankers working with them. This is why their levels of non-performing loans are lower.”

Stocks edged out a gain last week as renewed buying interest in beaten-down shares, improved expectations for industrial gas supplies and regulatory engagement with leading brokers helped the Dhaka Stock Exchange (DSE) recover from a prolonged downturn.

The DSEX, the benchmark index of the DSE, gained 16 points over the week to close at 5,532, while the blue-chip DS30 rose nearly five points to 2,101.

Despite the modest gains in the indices, market breadth remained weak, with 213 issues declining against 147 advancing, while 26 remained unchanged.

Daily average turnover edged up 0.11% to Tk554 crore, indicating little change in overall trading activity.

Meanwhile, the market capitalisation fell by around Tk700 crore during the week.

EBL Securities said the market started the week on a weak note as persistent concerns over the nationwide energy crisis and renewed geopolitical tensions in the Gulf region kept investors cautious. The DSEX briefly fell below the 5,400-point threshold as investors focused on limiting portfolio losses amid heightened uncertainty.

However, investor sentiment improved in the latter half of the week following government assurances to address industrial gas supply constraints and regulatory engagement with leading brokers. The developments encouraged investors to accumulate beaten-down stocks, helping the benchmark index advance for three consecutive session.

"Broader investors' perspective improved" following the policy-level developments, EBL Securities said in its weekly assessment, while cautioning that domestic challenges and geopolitical uncertainties continued to weigh on investor confidence and could limit the scope for a sustained recovery.

Sheltech Brokerage also attributed the market rebound to renewed buying interest and improving investor sentiment. The brokerage said expectations surrounding the regulator's engagement with leading brokerage firms, reports of improving gas supply conditions and Moody's revision of Bangladesh's economic outlook from negative to stable contributed to the recovery.

The market had remained under strong selling pressure early in the week amid heightened tensions in the Middle East and concerns over energy supplies. However, buying interest strengthened from the middle of the week following the regulatory meeting and reports of better gas availability, extending the recovery for three consecutive sessions.

The banking sector played a notable role in supporting the benchmark, with BRAC Bank, Pubali Bank, IFIC Bank and Dutch-Bangla Bank among the major index contributors. LafargeHolcim Bangladesh also helped lift the index.

Investors were most active in textile stocks, which accounted for 25.7% of total turnover, followed by general insurance at 15.6% and banks at 11.1%. Sectoral performance was mixed. Cement led the gainers with a 1.7% rise, followed by general insurance at 1.5% and banking stocks at 1.1%.

On the other hand, life insurance declined 1.3%, while miscellaneous and mutual fund sectors each fell 1.2%.

Envoy Textile topped the weekly turnover chart, followed by Sharp Industries, Saiham Textile, Eastern Bank and Paramount Textile, reflecting strong trading interest in textile and banking counters.

Al-Haj Textile emerged as the biggest gainer, soaring 20.6% over the week. Bangladesh National Insurance gained 18.4%, Information Services Network 17.5%, Meghna PET 16.4% and Apex Spinning 10%.

BD Thai Food was the biggest loser, falling 15.9%, followed by Saif Powertec with a 10.3% decline, Fareast Life Insurance 10.1%, CAPM BDBL Mutual Fund 8.9% and Midas Finance 7.8%.

The US and China are discussing a plan to reduce or eliminate China's tariffs on American LNG as part of a broader package of energy and agriculture agreements that could be announced when Chinese President Xi Jinping visits Washington next week, according to two people briefed on the discussions.

The potential relief on US exports of liquefied natural gas is being discussed alongside a broader framework under which the US and China would each cut tariffs on about $30 billion of goods, the people said.

China imposed a 15 percent tariff on US LNG in February 2025 in retaliation for President Donald Trump's duties on Chinese goods. That effectively halted the US-China LNG trade, with the last significant cargoes arriving early that year.

American LNG producers are seeking new markets to absorb a wave of new export capacity being built along the US Gulf Coast, with years of trade tensions with China having made one of the world's biggest LNG markets less accessible.

The discussions are part of efforts to stabilize trade ties ahead of a September 24 meeting between Trump and Xi and are not final, the people said. Neither the White House nor the Chinese embassy in Washington responded to requests for comment.

The American LNG industry is entering a major expansion phase, with export capacity set to grow by roughly 10 billion cubic feet per day through 2027 as new and expanded facilities ramp up, with projects involving Cheniere Energy, Venture Global, Sempra, NextDecade and Exxon Mobil among those adding capacity.

The return of Chinese buyers would give US producers another major destination for their gas just as geopolitical upheaval is reshaping global energy flows, potentially helping underpin demand for projects now under construction and those seeking financing and long-term customers.

Of the almost 100 million metric tons of LNG capacity under construction in the US, 24.5 million metric tons have not yet been contracted to long-term customers, according to industry estimates and Reuters analysis.

GLOBAL LNG FLOWS

After Russia's 2022 invasion of Ukraine disrupted Europe's access to Russian pipeline gas, US LNG cargoes that might otherwise have gone to Asia were increasingly drawn to Europe.

The ongoing conflict in the Middle East between the US and Iran, meanwhile, has created another shift in global energy flows, with disruptions to supplies increasing competition for LNG cargoes in Asia.

China is the world's largest LNG importer and the US is the world's largest LNG exporter, giving the two countries an economic incentive to restore a trade relationship that was rapidly expanding before the tariff dispute.

US LNG exports to China fell from 64 vessels in 2024 to effectively zero in 2025 after Beijing imposed the tariff, according to US government data.

In 2021, the number had reached a record 131 vessels, reflecting the rapid growth of the US LNG trade with China after large-scale exports from the Lower 48 states began in 2016.

US LNG shipments to China fell to just two vessels in 2019 during Trump's first-term trade dispute with Beijing, before rebounding sharply in 2020 and 2021.

In recent months, several US cargoes that left Gulf Coast export terminals have arrived in China or are headed there, according to LSEG shipping data, suggesting Chinese buyers had started to return to the US market even as the tariff remained in place.

US LNG exports averaged 17.4 bcf/d in the first half of 2026, up 23 percent from a year earlier, according to the Energy Information Administration.

Implementation of international best practice of accounting, IFRS 9, in the banking sector would be challenging amid the huge non-performing loans and the sector’s current state, according to investment experts.

Although countries like Pakistan, Nepal and Sri Lanka have already implemented IFRS 9 — a move from provisioning based on incurred losses to forward-looking expected credit losses before default — it is difficult for Bangladesh as many banks are already struggling, according to the CFA Society Bangladesh.

The association of chartered financial analysts (CFAs) presented the findings at an event on financial analysis of the banking sector organised by the CFA Society Bangladesh and the Capital Market Journalists’ Forum (CMJF) today at the CMJF auditorium in the capital.

Syed Mahbubur Rahman, a former chairman of the Association of Bankers, Bangladesh (ABB), said it is essential to assess the actual risk of bank loans and maintain adequate provisions in line with international standards.

However, implementing IFRS 9 could pose “a major challenge” for banks under pressure from high non-performing loans and capital shortages.

Therefore, while adhering to international standards, IFRS 9 should be implemented gradually, taking into account the current realities of the country’s banking sector, he said while speaking at the event as the chief guest.

Bangladesh is going to follow IFRS 9 in banking accounts partly on a pilot basis in the current year. Full application for credit will be implemented from 2028.

Referring to the fact that non-performing loans in the banking sector have exceeded 32 percent, Rahman, also managing director and CEO of Mutual Trust Bank, said such a high level of bad loans is putting pressure on banks’ earnings, provisioning and capital.

To restore the capacity of banks, liquidity, capital, lending and non-performing loans must all be considered together. Banks need to be made effective not merely as deposit-taking institutions but as the primary channel for financing productive sectors of the economy.

He said reforms in the banking sector should be undertaken gradually, taking into account the realities on the ground. A sudden major change could put pressure not only on banks but also on depositors and businesses.

Minhaz Zia, chairman of North Star Investments, proposed that at least 50 percent of the boards of commercial banks should comprise independent directors to improve the banking sector. He also said that no member of a bank’s board of directors should be allowed to sit on its credit committee.

Loan approvals should be handled by a completely independent credit team, while an internal control committee comprising only independent directors should oversee internal controls.

He also stressed the need to modernise the bankruptcy law, or Bankruptcy Act.

At the event, Mahtab Osmani, president of the CFA Society, and Md Munir Hossain, president of the CMJF, also spoke.

Md Iqbal Hossain, chief financial officer of Sonali Bank PLC; Sakib Chowdhury, head of research at UCB Stock Brokerage, and S M Galibur Rahman, head of research at Shanta Securities, gave presentations.

In the presentations, they said banks in Bangladesh will need at least Tk 2,000 crore in paid-up capital to be eligible to pay cash dividends, although this is an uncommon practice in any neighbouring country.

A comparison with other South Asian and Asian banking systems also shows that many jurisdictions principally use risk-based capital, asset quality, distributable earnings and regulatory compliance when determining whether banks can distribute dividends.

The analysis illustrates the distinction by comparing BRAC Bank and National Bank. As of June 30, 2026, National Bank had about 41 percent more paid-up capital than BRAC Bank. Yet National Bank’s shareholders’ equity, excluding non-controlling interests, was negative Tk 46.7 billion, while BRAC Bank’s stood at positive Tk 113.1 billion.

The securities regulator will adopt the pure Dutch Auction Method for market-based valuation of primary shares, replacing the existing mechanism under the book-building method.

Under the current system, 40 per cent of shares are allotted to eligible investors (EIs) at the cut-off price, even if many of them have bid above that price. The new valuation mechanism will require EIs to receive shares at their respective bidding prices.

"The existing method of share allotment does not reflect fair valuation of shares. That's why the provision will be scrapped to help facilitate careful bidding by EIs," said Masud Khan, chairman of the securities regulator.

Under the book-building method presently followed, bids are opened with a 25 per cent price band on the indicative price of the shares of a company that is in the process of going public.

That means institutional bidders can quote prices within 25 per cent below or above the indicative price approved by the regulator.

Take, for example, Tk 100 as the indicative price. Bidders would then be allowed to bid between Tk 75 and Tk 125 for the shares of the company seeking to get listed. During the bidding process, if the 40 per cent quota for EIs gets exhausted at Tk 75, all EIs will receive shares at the cut-off price of Tk 75, even if many bidders have quoted prices above the cut-off price, up to Tk 125.

According to the changed rules that the securities regulator seeks to put in place, EIs will receive shares based on their own valuation of the company that is going to be listed.

The present system is also called the Dutch Auction Method, but it will be replaced by the pure Dutch Auction Method, said Mahmud-Ur-Rashid, chief business officer at Shanta Equity.

"The provision of receiving shares at their own bidding prices will compel eligible investors to think 10 times before quoting a price in the bidding," Mr Mahmud said. The existing system has allowed EIs to overvalue shares.

EIs will bid responsibly to avoid losses under the revised share valuation mechanism, which will rule out the possibility of unjustified prices.

Currently, a company is required to offload at least 10 per cent of shares compared to its paid-up capital. It has to hold a roadshow and receive valuations from at least 45 EIs — 15 from portfolio managers, 15 from stock dealers and 15 from asset managers — which proves to be a challenging task before fixing the indicative price.

The Bangladesh Securities and Exchange Commission (BSEC) has considered scrapping the mandatory provision of collecting valuations from EIs.

A new provision will be incorporated, allowing the issue manager and the issuer company to set an indicative price, supported by absolute and relative valuation as mentioned in the public issue rules. The indicative price will be verified by the stock exchanges and the securities regulator. If the price is accepted by the regulator, bidding will occur within a 25 per cent price band on the approved price.

The company will need to hold roadshows to present its financial position and projections. EIs will receive shares at the prices they have bid, while general investors will get shares at the cut-off price.

Another major change to be brought to the public issue rules is a mandatory "extended audit" for companies seeking to go public. This audit will have to be conducted by independent auditors based on terms of reference (ToR) set by the securities regulator.

BSEC officials said such an audit would significantly reduce IPO processing time.

The stock exchanges and the securities regulator will no longer verify the authenticity of the submitted papers after an extended audit of the issuer. They will simply focus on checking whether the company's valuation and overall condition are appropriate for listing.

The Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025 came into effect in December last year after an amendment to the Public Issue Rules, 2015. The amendment was executed by the previous securities commission.

However, no company has been listed under the 2025 rules.

In fact, the market has seen no issue since the approval of the IPO proposal of Techno Drugs in March 2024.

The securities regulator has allowed Central Depository Bangladesh Ltd. (CDBL) to work as the custodian of mutual funds (MFs).

To this effect, the depository authority this week received a consent letter from the Bangladesh Securities and Exchange Commission (BSEC). CDBL's Managing Director Md. Abdul Mutaleb confirmed this to the FE.

To expand its portfolio, the depository authority, which so far has provided only depository services, applied for a licence to work as the custodian of MFs.

The development comes at a time when MF custodians are facing heavy criticism for their failure to prevent scams in fund management.

Mr Mutaleb said they would exercise professionalism in securing the interests of unitholders of pooled funds.

"Some asset management companies have talked to us to engage us as the custodian of their funds," he said.

As per the latest rules for MFs, an organisation will not be allowed to play more than one role in the management of MFs.

Some organisations, including the Investment Corporation of Bangladesh (ICB), are working both as trustee and custodian. They will have to reduce their responsibility in those funds. CDBL is expecting to take over the charge.

Meanwhile, CDBL's operating profit has endured a sharp decline, a reason why the company seeks to expand its portfolio through custodianship of MFs.

The company receives Tk 25 for every settlement of listed securities worth Tk 0.1 million. The lower the daily transactions in the capital market, the lower CDBL's earnings from securities settlements.

Moreover, income from the maintenance of each BO (beneficiary owner's) account has been reduced to Tk 50 from Tk 100. As a result, the company's annual income from BO account maintenance fell to Tk 70 million in FY25 from more than Tk 130 million the previous year.

Consequently, CDBL's operating profit eroded by more than 17 per cent year-on-year to Tk 522 million in FY25, prompting the company to explore a new line of operation to recover lost income.

Under the revised rules, a custodian's role includes safekeeping funds' assets, maintaining accounts of unitholders and funds, and managing bank transactions.

CDBL was incorporated in August 2000, sponsored by the country's nationalised commercial banks, the Investment Corporation of Bangladesh (ICB), private commercial banks (PCBs), and the Dhaka and Chittagong stock exchanges, among others, in collaboration with the Asian Development Bank (ADB).

CDBL officials said the securities regulator wanted them to take on the new role due to a lack of efficient custodians.

Custodians' efficiency has been questioned after funds worth Tk 2.07 billion were embezzled from three open-ended funds managed by Universal Financial Solutions (UFS) without any resistance from the custodian, the Investment Corporation of Bangladesh (ICB).

UFS Managing Director Syed Hamza Alamgir left for Dubai in October 2022 with the money.

Custodians have said that the previous rules defining their role did not enable them to secure investors' interests in pooled funds.

At the end of last year, BRAC Bank, which serves as custodian for more than 60 MFs, expressed its intention to withdraw its custodianship from a large number of funds, saying the role lacked adequate authority in fund management.

At the time, a custodian's role was limited to ensuring the protection of assets purchased by asset management companies (AMCs), while cash funds and transactions remained under the control of asset managers.

The revised MF rules, which came into effect in November last year, empowered custodians to oversee bank transactions.

The MF industry comprises 68 licensed AMCs, 136 mutual funds, nine trustees, and nine custodians. The number of custodians will now rise to 10 following the regulatory approval granted to CDBL.

The National Board of Revenue (NBR) has moved to subscribe to internationally -recognised commodity databases to reduce long-standing disputes between importers and customs officials over the valuation of imported goods.

The customs authority is considering subscriptions to databases such as S&P Global Platts, the London Metal Exchange (LME), Shanghai Metals Market (SMM) and Independent Commodity Intelligence Services (ICIS).

At a recent meeting at Chattogram Customs House, chaired by Finance Minister Amir Khosru Mahmud Chowdhury, the authorities decided to subscribe to at least one international database by this month, according to the meeting minutes obtained by the Financial Express.

A committee of the NBR's customs wing was formed to assess the pros and cons of subscribing to such databases. The committee has recommended subscribing to the S&P Global Platts in the first phase.

S&P Global Platts is a leading independent provider of information and benchmark prices for commodity and energy markets. Since 1909, Platts has provided information and insights to help clients make sound trading and business decisions and enable markets to operate with transparency and efficiency.

Trade economist Dr Zaidi Sattar, chairman of the Policy Research Institute (PRI), said arbitrary valuation should be stopped immediately by incorporating artificial intelligence into the ASYCUDA World system.

Subscription to global databases would also help minimise the hassles faced by importers, he said.

The databases could be linked to the existing ASYCUDA system, developed under the United Nations Conference on Trade and Development (UNCTAD), to improve automated valuation, Dr Sattar added.

He said Bangladesh is currently utilising only around 25 per cent of the system's capacity.

The complex tariff regime has been allowed to continue, creating scope for underhand dealings at the import stage, Dr Sattar said, stressing the need for greater automation.

Officials said customs would accept the valuation data submitted by importers until the database system becomes fully operational. The decision was also taken at the meeting chaired by the finance minister.

Currently, the NBR does not subscribe to international databases that can be used to cross-check the declared values of imported goods.

Md Fazlul Huq, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said subscribing to one or two databases would not be sufficient unless the NBR also ensures access to databases covering major import markets.

Products bought from different markets can have different prices and varying quality, he argued.

Citing a recent import for a new production unit, Fazlul Huq said 100 per cent polyester fabric was imported at $2.35 per unit, while customs assessed its value at $4.0.

The same product, however, may be priced at $4.0 in some countries, he said, adding that country-specific sources and databases should therefore also be included to reduce disputes over valuation.

Importers have long complained that customs officials often question the values declared in invoices and other documents and impose higher assessed or preset values for calculating duties and taxes.

Despite several assurances and directives from senior NBR officials, importers say the practice of disputed or arbitrary valuation persists at customs houses.

Chittagong Chamber of Commerce and Industry (CCCI) President Amirul Huq told the meeting that customs officials often assess imported goods at values higher than their purchase or invoice prices.

"For plastic chips imports, the actual purchase value and invoice value was $8,000-9,000 per tonne, but customs assess it at $12,000 to fix payable duties and taxes," he said, sharing his experience.

At the meeting, Chattogram Customs Commissioner Md Mahbubur Rahman said importers who submit purchase data from global platforms along with their invoice values are considered to have provided correct information.

For some imported goods, however, customs needs to verify the values against international databases, but it currently does not subscribe to those platforms, he said.

The government is considering issuing licences for digital banks soon, as digital banking is expected to become part of Bangladesh's digital economy and financial inclusion agenda, Finance Minister Amir Khosru Mahmud Chowdhury said today (19 September).

"Digital banking is going to happen very soon. I have no doubt about it because this is very much part of our digital economy and financial inclusion," he said while speaking at a dialogue titled "Financial Inclusion: Policy Goals, Transactions Ecology and Sustainable Roadmap", organised by the Power and Participation Research Centre (PPRC) at a hotel in the capital.

The minister said digital banking should be rolled out gradually, with particular attention to cybersecurity, digital infrastructure and the integration of credit information.

He also said digital banking should not be treated as a standalone service but as part of a wider financial ecosystem covering reliable internet connectivity, digital payments, financial services and access to formal banking.

He further said strong digital infrastructure was needed before expanding digital financial services.

Digital banking could widen access

Amir Khosru said the new system could bring people currently outside the formal financial system into banking, particularly low-income households, farmers and other underserved groups.

He cited government-backed payment programmes as an example, saying regular digital transactions could encourage people without bank accounts to enter the formal financial system.

Many Family Card beneficiaries, particularly housewives, do not have bank accounts, he said. Regular payments through formal channels could encourage them to open accounts.

A similar process was taking place among farmers receiving payments through the Farmer Card, he added.

"Once people receive payments through a formal system, they have an incentive to enter the banking system," he said.

Stakeholders flag Bangla QR misuse

Participants at the dialogue raised concerns over the removal of the minimum merchant discount rate (MDR) and interchange reimbursement fee (IRF), saying the move had disrupted the business model of mobile financial service (MFS) providers.

They called for stronger regulatory monitoring of Bangla QR, alleging that some agents were diverting MFS funds into bank accounts to take advantage of the zero-fee payment facility.

MDR is a fee paid by merchants to banks and payment service providers for processing digital transactions.

IRF is an interbank service charge paid by the institution providing Bangla QR to the institution whose app is used to complete a payment.

Industry experts warned that if MDR and IRF remain at zero, MFS providers may eventually seek to recover their costs through other charges, including cash-in fees, which could undermine financial inclusion.

'Bangla QR must be embraced, but abuse prevented'

Former Bangladesh Bank governor Ahsan H Mansur said Bangla QR was an important initiative but required safeguards to prevent misuse.

"Bangla QR is something we have to embrace, but at the same time we have to prevent its abuse," he said.

He said addressing the challenges would require several measures rather than a single solution.

"There's no single solution to this issue. It has to be addressed piece by piece," he said.

Mansur said that during his tenure, local governments had been instructed to require businesses seeking new or renewed trade licences to have a Bangla QR facility.

He also highlighted the importance of maintaining a single national QR standard accessible to all institutions and customers.

However, he said this raised the question of whether customers should be required to have smartphones to use the system.

Mansur also said the digital bank initiative had stalled.

"Everything was done during my time. The list was prepared, the criteria were identified, and the process was laid out. But since then, it has never moved forward," he added.

PPRC seeks sustainable roadmap

PPRC Executive Chairman Hossain Zillur Rahman said Bangladesh needed a sustainable roadmap for implementing Bangla QR, incorporating the views of all relevant stakeholders.

He said building a functional digital financial ecosystem required coordinated action across multiple areas and that stakeholders were prepared to contribute to the process.

"The system has to match through a sustainable roadmap approach. It requires a much, much bigger discussion," he added.

Around 5,000 workers at Chattogram Port's General Cargo Berth (GCB) are facing sharp income losses as container traffic allocated to six private berth operators has remained about 40% below indicative tender volumes, the operators said.

They have sought an urgent review of cargo allocation, saying the prolonged decline in workload has left many workers idle while operators continue to bear fixed costs for wages, equipment and maintenance.

The six operators are FQ Khan and Brothers at Jetty 6, Fazlisons at Jetty 9, Bashir Ahmed and Company at Jetty 10, A & J Traders at Jetty 11, Everest Port Services at Jetty 12 and MH Chowdhury at Jetty 13.

In separate letters to the Chittagong Port Authority (CPA) on 14 September, the operators said actual container allocation remained substantially below the indicative volumes used to assess their five-year contracts, making operations financially difficult to sustain.

"Only 800 workers are permanent in GCB berths. More than 5,000 workers are productivity-based. Here, no vessel means no work and no pay," Taslim Uddin Selim, general secretary of Chattogram Dock Jatiyatabadi Sramik Dal, told The Business Standard.

"As a result, most of the workers remain idle when there is no vessel to handle at the berths. It becomes very difficult for them to earn bread and butter for their families when the number of vessels falls," he said.

Fazle Ekram Chowdhury, managing director of Fazlisons and president of the Bangladesh Berth Operator Association, said the decline in vessel allocation had directly affected workers whose earnings depend on port operations.

"Almost half of the people remain idle when the number of ships falls. Their income has fallen completely," he told TBS.

He said operators continued to retain some workers and pay minimum wages even when there was insufficient work.
Infographics: TBS
Infographics: TBS

Tk25,000 welfare payment

Fazle Ekram questioned whether the Tk25,000 welfare payment provided to registered port workers could compensate for income losses caused by reduced workload.

He said workers could have earned that amount in a month or two if vessel handling had remained at normal levels, while the welfare payment is made only once a year.

"If a worker's duty had increased, they could have earned Tk25,000 more in a month or two months. Giving Tk25,000 once a year cannot compensate for that loss," he said.

He also warned that continued pressure on workers could lead to dissatisfaction.

"If the port authority thinks Tk25,000 can suppress workers' dissatisfaction, that would be a wrong expectation. If the situation explodes, it will not remain within my control," he said.

40% gap in cargo allocation

The operators said their financial commitments were based on the indicative container volumes included in the tender documents.

Fazlisons said it handled 437,596 boxes between October 2022 and August 2026 against an indicative benchmark of 721,356 boxes for the same period, leaving a shortfall of 283,760 boxes.

The operator handled 60.7% of the indicative volume and estimated that the shortfall had left around Tk8.61 crore in fixed operational costs unrecovered.

Fazlisons was awarded the contract in September 2022 after quoting Tk76.91 crore. The agreement for operating Lot 2, Berth 9 at GCB was signed on 25 September that year.

The tender estimated a five-year volume of 920,875 boxes, or around 15,348 boxes a month, according to the company.

Fazlisons said it did not consider the tender volume a guaranteed minimum, but argued that the projection was a key basis for determining manpower, equipment, investment and pricing when it submitted its bid.

The company currently incurs around Tk46.36 lakh in fixed monthly expenses for manpower, equipment, maintenance, insurance and other operational costs, it said.

NCT, CCT handle more containers

The operators have also questioned the distribution of container vessels among GCB, New Mooring Container Terminal (NCT) and Chattogram Container Terminal (CCT).

They cited July 2026 data showing NCT handled 126,722 boxes and CCT 46,029, while Fazlisons handled 7,963 boxes at its GCB berth.

Fazlisons acknowledged that the contractual scopes of the three terminals are different, but said the disparity warrants a transparent review of vessel and cargo allocation.

The company referred to a CPA board decision of 28 March 2023 that called for reasonable allocation of vessels among CCT, NCT and GCB if the number of container vessels calling at Chattogram Port was insufficient.

The operators said their association had repeatedly raised the issue with the CPA through representations submitted in February 2023, February and December 2024, December 2025 and January 2026.

Operators seek review, not rate hike

The operators said they would prefer increased vessel and cargo allocation over a higher handling rate.

"If sufficient container vessels can reasonably and safely be allocated to GCB, we would much prefer to earn our revenue by performing the work rather than seeking any financial adjustment," Fazle Ekram said.

He claimed turnaround times at NCT, CCT and GCB were broadly comparable and alleged that GCB had not received what operators consider a reasonable share of container traffic.

The operators have asked the CPA to provide or jointly review vessel-wise and operator-wise allocation data and sought a contractual review under the General Conditions of Contract and relevant provisions of the Public Procurement Act and Rules.

They said they were not seeking automatic compensation or a rate increase because of lower traffic, instead proposing measures including contractual variation, adjustment of operational obligations, or rationalisation of fixed manpower and equipment requirements if the CPA cannot ensure a reasonable workload.

Fazlisons proposed a review involving the CPA's traffic, terminal, procurement, finance and legal departments and said it was ready to submit records of operational costs, manpower, equipment, insurance and bank liabilities.

Fazle Ekram also said local operators had proposed an investment plan worth around Tk700 crore to improve GCB facilities but had received no response from the CPA or the Ministry of Shipping.

He alleged that foreign companies were receiving faster responses from the authorities while local investors were being ignored.

The operators have urged the CPA to take an early decision, saying the continued decline in workload is putting their businesses and thousands of workers' livelihoods under pressure.

No response from CPA

The Business Standard contacted CPA Director (Traffic) Golam Md Sarwarul Islam by phone for comments, but he did not answer.

The CPA secretary was later contacted and sent specific questions on the issues raised by the berth operators. Although he assured TBS that he would respond, he neither provided answers nor returned the call.

Bangladesh is set to join the global nuclear-power community with the first unit of the Rooppur Nuclear Power Plant now moving into commissioning. The Russian-built VVER-1200 reactor is designed to produce 1,200MW of gross capacity, while the two-unit plant will eventually have 2,400MW.

Where does Bangladesh rank? It does not yet have a meaningful ranking among nuclear-power producers because Rooppur has only just entered commissioning and has not established a record of commercial electricity generation. Once operational, Bangladesh will join the group of 31 countries that currently operate nuclear power reactors.

The latest IAEA (International Atomic Energy Agency) statistics list 417 reactors operating in those 31 countries, with total net capacity of about 380GW, according to pris-stats.iaea.org.

The leading nuclear-power countries are very different in scale. The United States has more than 90 operating reactors, France more than 50, China more than 50, Russia more than 30, South Korea more than 25 and India more than 20, according to the IAEA's reactor database. Bangladesh will begin with two reactors.

The nuclear map is nevertheless expanding. According to the World Nuclear Association, about 35 countries are considering, planning or starting nuclear power programmes, and a further 20 or so countries have at some point expressed an interest in doing so.

The World Nuclear Association currently counts about 80 reactors under construction and another 120 planned worldwide.
Is nuclear power expensive?

Yes — but the answer depends on which cost is being discussed. Nuclear power requires exceptionally high upfront investment. The IEA says nuclear projects are difficult to finance because of their scale, capital intensity, long construction periods and technical complexity. Delays and cost overruns can substantially increase financing costs.

Rooppur's original contract with Russia was worth $12.65 billion, including the first few years' nuclear fuel, with Russia financing 90% through a state loan. Bangladesh was responsible for the remaining 10%.

But the project's cost has since increased. In January 2026, the government approved an additional Tk255.92 billion, taking the project's approved cost from about Tk1.14 trillion to Tk1.39 trillion. The increase is being financed through additional project loans.

Nuclear projects require sophisticated safety systems, specialised buildings and equipment, emergency-response arrangements, trained personnel, security systems, regulatory institutions, radioactive-waste management and, eventually, decommissioning. The World Nuclear Association says these costs should be included when assessing the lifetime cost of nuclear electricity.

Some safety expenditure is visible separately in Bangladesh. For example, the physical-protection system for Rooppur was contracted at about $287.5 million, and TBS reported that this was outside the main project expenditure.

Safety, therefore, is not simply an additional "cost" that can be minimised. It is a fundamental part of a nuclear programme. The World Bank says a credible nuclear programme requires a strong legal and regulatory framework, an independent regulator, skilled personnel, emergency preparedness, long-term waste-management arrangements and robust safety and security systems.

The IAEA's 2025 safety review of Rooppur found good practices, including simulator-based staff training, but also recommended improvements in fire safety, operational supervision and equipment preservation before operation.

The economic attraction of nuclear power comes later: once the plant is built, fuel and other variable operating costs are relatively low and stable. Thus, nuclear is essentially a trade-off between very high upfront capital and financing costs and potentially decades of relatively stable, large-scale electricity generation.

For Bangladesh, the real test therefore begins after the inauguration: whether Rooppur can operate safely, reliably and at high utilisation for decades, while the country manages its debt obligations, nuclear regulation, waste, decommissioning and the substantial institutional infrastructure that a nuclear-power programme requires.

Merging weak banks with other lenders alone will not resolve the ongoing crisis in the banking sector, said Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank.

The full extent of this sector's financial distress has yet to emerge, as non-performing loans, capital shortages, provisioning requirements, liquidity pressures and governance weaknesses need to be addressed simultaneously, he said.

"Giving fresh capital or merging a bank does not automatically make a weak bank sustainable," he said at a discussion, "Financial Condition of the Banking Sector", jointly organised by the Capital Market Journalists Forum and CFA Society Bangladesh in Dhaka today (19 September).

Mahbubur, former chairman of the Association of Bankers, Bangladesh (ABB), said the volume of non-performing loans in the banking sector was around Tk28,000 crore in 2008 but has now exceeded Tk600,000 crore, accounting for more than 32% of total loans.

Many rescheduled loans could also become classified again in the future, he warned.

According to a CFA Society Bangladesh analysis based on Bangladesh Bank data, the banking sector's NPL ratio stood at 32.8% in June 2026. As of December 2025, the top five banks accounted for 51.87% of total NPLs, while the top 10 accounted for 73.63%.

Mahbubur said implementing International Financial Reporting Standard (IFRS) 9 could provide a clearer picture of banks' credit risks and provisioning requirements, potentially putting additional pressure on the capital positions of some banks.

"There is no such thing as giving Tk50,000 crore today and fixing a bank tomorrow," he said.

On the government's initiative to merge five weak banks, he said a merger between a strong bank and a weak or specialised bank could create operational synergies, but merging one weak bank with another weak bank may not deliver the expected benefits.

After a merger, overlapping branches, employees and management structures need to be reduced to lower operating costs and improve efficiency, he said, adding that simply changing ownership or the name of a bank while retaining the existing structure would not deliver the real benefits of consolidation.

The CFA Society analysis showed that deposits grew 10.74% in June 2026, while private-sector credit increased only 4.47%. Meanwhile, banks' investments increased 30.3%. In 2025, investment in government securities reached 14.1% of total banking-sector assets.

Mahbubur said the rise in investment in government securities while loans and advances were declining at many banks could generate income in the short term, but could not replace banks' core business.

"The core business of a bank is to lend and take deposits. Therefore, a decline in net interest income is a bad sign for banks and the banking industry as a whole," he said.

The sector's net operating profit increased 116% to Tk32,108 crore in 2025, but provisioning against bad loans rose to Tk249,600 crore.

The sector's overall capital adequacy ratio also fell to negative 2.64% at the end of 2025, against the regulatory minimum of 10%. However, 42 banks met the requirement, representing 60.51% of total sector assets.

Mahbubur said banks need to increase low-cost deposits, particularly CASA, and use technology to reduce operating costs. Rather than indiscriminate layoffs, banks should improve productivity through technology and efficiency.

He said stronger governance, accurate assessment of banks' financial condition, adequate provisioning and compliance with international accounting standards are essential for restoring stability.

"To make the banking sector sustainable, we need more than mergers. We need targeted restructuring where necessary and structural reforms across the sector," he said.

Over the last couple of years, businesses have raised concerns over high interest rates on loans and urged the Bangladesh Bank (BB) to cut its policy rates to reduce the cost of funds.

The central bank cut its policy rate by 0.5 percentage points to 9.5 percent, effective from August.

Offering the rationale for the cut, BB said tight monetary policy, in place since the first half of fiscal year 2023-24, was doing more harm than good to Bangladesh’s economic recovery while controlling prices.

The impact of the policy rate cut is yet to become clearly visible. However, overall interest rates had begun to decline months before the move.

Data show the weighted average interest rates on deposits and advances rose to 6.42 percent and 12.16 percent respectively in September 2025, the highest levels in at least three years.

Since then, interest rates have gradually fallen. In July, the weighted average deposit and lending rates were 6.21 percent and 11.81 percent respectively.

Yields on treasury bills and bonds, as well as call money rates, also declined in June 2026 from a year earlier, reflecting easing liquidity in the banking sector, the key source of finance in Bangladesh.

Nevertheless, the private sector appears to remain indifferent.

Credit growth to the private sector has remained sluggish, growing by 4.47 percent in June this year, the lowest in 33 years. In July, credit growth picked up slightly to 4.62 percent, still well below BB’s target of 6.8 percent by December this year.

But why is the private sector not borrowing money?

Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI), said falling interest rates alone cannot revive private-sector borrowing without restoring investor confidence and operational viability.

“The reason behind lower interest rates is to encourage borrowing, but businesses will invest only when they see sufficient demand, stable conditions, and a reasonable return on investment,” he said.

Taskeen, who has been vocal about bringing down the high cost of borrowing, said cheaper credit looks attractive on paper, but entrepreneurs cannot commit capital when high operating costs and weak consumer demand are squeezing profit margins.

“In addition to this, persistent gas and electricity shortages continue to idle factory capacity, while banking sector turmoil, high NPLs, political transition anxieties, and global geopolitical conflicts have severely shaken business sentiment. As a consequence, businesses have shifted into cash-preservation mode,” he said.

Asif Ibrahim, vice-chairman of Newage Group and treasury chief of a private bank, echoed the view.

Beyond interest rates, he said, businesses are concerned about energy shortages, geopolitical turmoil, rising fuel costs and the risk of supply-chain disruptions.

“Many businesses are reluctant to take fresh loans because they are uncertain about future demand, energy supplies and the overall economic outlook. Businesses are not confident that they will be able to generate enough returns from new investment to cover the cost of borrowing,” he said.

At the same time, banks are becoming more cautious about extending fresh credit as non-performing loans rise and vulnerabilities in the financial sector deepen.

The decline in interest rates may itself partly reflect subdued credit demand, according to Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh. When businesses are reluctant to borrow, banks have less incentive to compete aggressively for deposits.

“Falling interest rates should therefore not automatically be interpreted as evidence of improving economic conditions. Although lower rates can ease financing costs for existing borrowers, persistently weak investment risks slowing job creation, productivity growth and economic recovery,” said the economist.

“Cheaper loans cannot compensate for uncertainty about reliable energy supplies, market access and future returns. This is fundamentally a problem of business confidence and structural weaknesses in the investment climate,” he added.

Reviving investment requires reliable energy, greater political and policy predictability, and credible reforms to improve the business environment, not simply cheaper credit, he said.

Deen Islam, professor of economics at Dhaka University, said the bigger concern is what the low credit growth says about investment sentiment.

“If businesses continue to hold back, lower interest rates by themselves will not generate much new investment. Weak borrowing will eventually mean slower expansion of productive capacity, fewer new jobs and weaker productivity growth,” he said.

So, he said, the policy challenge is not simply to make credit cheaper. Businesses also need to feel confident that demand will recover, energy will be available, the exchange rate and regulatory environment will be reasonably predictable, and the banking system will remain stable.

“In that sense, the current situation seems to be less about the price of money and more about whether firms believe that investing now will actually pay off,” added the professor.

Birupaksha Paul, professor of economics at the State University of New York at Cortland, said businesses are reluctant to borrow because borrowing costs remain high while economic growth is weak, making new investment less attractive.

He said many mills and factories are also concerned about political exclusion, which is undermining business and investment confidence.

Unlike the ruling BNP’s previous terms in office in 1991 and 2001, when businesses had greater clarity about the political environment, the current government’s political strategy appears less clear, he added.

Without greater political inclusivity and clarity, he said, businesses are unlikely to regain the confidence needed to increase investment.

DCCI’s Taskeen, meanwhile, said the biggest concern is that delayed investment can weaken productive capacity, reducing future exports and job creation. In addition to cheaper loans, sustained reductions in business costs are needed.

“We believe the bigger challenge over the next one to two years will be how to sustain the private-sector investments already in the country, rather than attracting new investment,” he said.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank PLC, said private sector credit demand has weakened as weaker exports, high inflation and an energy crisis continue to constrain businesses.

Speaking at a discussion titled “Business and Beyond” at The Daily Star on September 10, he said Bangladesh was facing a “double whammy” from global and domestic economic shocks.

Global disruptions, including tariff impositions, the Covid-19 pandemic, the Ukraine war and the Middle East crisis, have hurt exports, particularly to the US and European markets, he said.

He said inflation, although easing from double-digit levels, remained high at around 8.26 percent and had reduced consumers’ purchasing power. As a result, many manufacturing plants that once operated at 80 percent capacity were now running at 40 percent or even 30 percent.

“This naturally has an impact. So, the demand for credit lines has also declined,” he said.

Mahbub identified the energy crisis as a bigger constraint on investment than borrowing costs.

Bangladesh Jewellers Association (BAJUS) has raised gold prices again, increasing the price of 22-carat gold by Tk1,691 per bhori to Tk2,34,621, including VAT.

BAJUS announced the new prices in a notice today, saying the price of tejabi gold (pure gold) had increased in the local market. Considering the overall market situation, the association revised the prices, which came into effect from 10am today (19 September).

Under the new rates, one bhori (11.664 grammes) of 21-carat gold has been set at Tk2,24,065 per bhori, 18-carat gold at Tk1,92,398 and traditional-method gold at Tk1,57,172.

BAJUS said the new prices will remain effective at all jewellery shops until further notice. However, labour charges will apply depending on the design of the jewellery.

As VAT is included in the selling price of gold and silver jewellery, jewellers cannot collect VAT separately from customers. BAJUS's previous rules will remain in place for jewellery exchange and purchase, excluding specified VAT, labour charges and the price of stones.

BAJUS last adjusted gold prices on 12 Sept, when it raised the price of 22-carat gold by Tk1,050 per bhori to Tk2,32,930, including VAT.

So far in 2026, gold prices in the country's market have been adjusted 116 times. Prices have been raised on 58 occasions, lowered on 57 occasions, and VAT adjusted once.

Meanwhile, silver prices have also been increased. The price of 22-carat silver has been raised by Tk116 per bhori to Tk5,132, including VAT.

The price of 21-carat silver has been set at Tk4,957 per bhori, 18-carat silver at Tk4,257 and traditional-method silver at Tk3,208.

Silver prices have been adjusted 70 times so far in 2026, with prices increased on 36 occasions and reduced on the remaining 34 occasions.

Bangladesh and Turkey have discussed ways to expand bilateral cooperation in the energy sector, particularly in renewable energy, mineral resources and LNG-related infrastructure.

The discussions also covered pipeline connectivity linking Bangladesh's offshore and island facilities with the mainland.

The issues were discussed at a recent meeting between Turkey's Energy and Natural Resources Minister Alparslan Bayraktar and Bangladesh Ambassador to Turkey M Amanul Haq at the Ministry of Energy and Natural Resources in Ankara.

According to the Bangladesh Embassy, the two sides explored potential areas of practical cooperation in the energy and mineral resources sectors and discussed opportunities to further strengthen bilateral collaboration.

During the meeting, Ambassador Haq handed over an invitation letter from Bangladesh Foreign Minister Khalilur Rahman, inviting Minister Bayraktar to visit Bangladesh at a mutually convenient early date.

Baraktar warmly accepted the invitation and expressed his intention to visit Bangladesh by the end of this year.

The Turkish Minister also instructed his officials to prepare a Memorandum of Understanding (MoU) for signing at the next possible opportunity, the Bangladesh Embassy said.

Ambassador Haq also handed over a proposed draft MoU between Bangladesh's Ministry of Power, Energy and Mineral Resources and Turkey's Ministry of Energy and Natural Resources, aimed at establishing a framework for enhanced bilateral cooperation in the energy sector.

The meeting was attended from the Bangladesh side by Deputy Chief of Mission Shahanoor Alam and Commercial Counsellor Akram Hossain of the Bangladesh Embassy in Ankara.

Senior officials from Turkey's Ministry of Energy and Natural Resources also attended the meeting.

The Federal Reserve yesterday (16 September) raised interest rates by 0.25 percentage points from 3.50-3.75% to 3.75-4.00% as inflation has become a concern. With this rate hike, the Fed aims to reduce borrowing and spending, cool demand, and bring inflation under control.

Inflation in the USA remains above the Federal Reserve's 2% target. As of July 2026, inflation was 3.7%. Higher energy prices, import tariffs, and strong investment and demand have continued to push prices higher.

With higher interest rates, loans are expected to become more expensive for households and businesses. This generally discourages consumption and investment and gradually eases price pressures.

Although the Fed raised US interest rates, its impact extends to the global economy through multiple channels. Higher rates make dollar-denominated investments more appealing, which encourages international investors to shift funds to the USA. This increases demand for dollars and strengthens the dollar, while currencies in developing countries come under downward pressure.

For governments and companies, borrowing dollars also becomes more expensive. Developing countries that seek new international financing may have to accept higher interest rates. Their repayment conditions could also become more difficult. Countries with large external debts, limited foreign-exchange reserves, or high levels of short-term borrowing are more likely to face increased pressure.

Global commodity markets may have an indirect impact. If rising US interest rates curb worldwide economic growth, demand for oil and other commodities could fall, lowering prices. This might benefit import-dependent countries like Bangladesh.

However, this relief remains uncertain because geopolitical tensions, conflicts, and supply disruptions can still affect global energy prices.

Besides, a stronger US dollar might offset some declines in international commodity prices. Since Bangladesh pays for most imports in dollars, a weaker taka could limit the benefits of moderate drops in oil, gas, fertiliser, or food prices for Bangladeshi consumers and businesses. The overall impact will hinge on changes in global commodity prices and the USD/BDT exchange rate.

In Bangladesh, a key issue is the increased pressure on the Bangladeshi Taka (BDT). A stronger dollar would raise the local cost of imported fuel, food, fertiliser, machinery, and industrial raw materials.

This could lead to higher inflation, increased production costs, and reduced household purchasing power. Businesses that rely heavily on imported inputs may face profitability challenges and may pass some of these costs on to consumers.

In such situations, Bangladesh Bank may feel compelled to sell dollars from its foreign-exchange reserves to curb excessive exchange-rate volatility. Some intervention may be necessary to prevent disorderly swings and sudden market instability.

However, consistently drawing on reserves to keep the exchange rate artificially stable is unsustainable. The BDT should be allowed to adjust gradually and transparently in line with market conditions. A credible exchange-rate system helps reduce uncertainty for importers, exporters, foreign investors, and remittance senders.

Bangladesh's external debt costs could rise as USD interest rates increase. Government agencies and private companies with variable-rate or dollar-denominated loans could face higher interest payments. Additionally, if the taka depreciates, repayment costs will rise further, as borrowers will need more taka to buy each dollar.

New foreign borrowing for infrastructure, power, energy, and private investment could become more expensive. Therefore, projects should be selected carefully. Foreign loans should be directed to economically viable projects that can generate sufficient economic returns or foreign exchange earnings. Projects with poor financial prospects could strain the budget and external debt repayment obligations.

The USA is the biggest market for Bangladesh's ready-made garments (RMG). If high interest rates curb US consumer spending, demand for clothing and other non-essential products might decline. Bangladeshi exporters could see fewer orders, face increased pressure from buyers to lower prices, and experience thinner profit margins. Smaller factories, with less ability to absorb rising financing, energy, and input costs, may be especially at risk.

However, a quarter-percentage-point hike alone probably would not lead to a sharp drop in garment demand. The overall effect will depend on factors like the US labour market strength, consumer confidence, inflation, and economic growth.

Bangladesh's competitiveness will also be affected by exchange-rate changes in countries such as Vietnam, India, China, and Pakistan. If their currencies depreciate faster than the taka, Bangladeshi exporters may face increased competition.

As a remittance-receiving country, Bangladesh may also feel the impact. However, the impact on remittances could be mixed. A stronger dollar boosts the taka value of remittances for Bangladeshi families, supporting household spending.

Still, formal remittance inflows will remain robust only if banks offer competitive exchange rates and the gap between formal and informal rates stays narrow. The government must encourage migrant workers to use official channels through transparent, market-driven exchange rates, faster transfer services, and lower costs.

As far as investment is concerned, higher returns on safer US assets might make foreign investors more cautious about Bangladesh, though significant portfolio outflows are unlikely. Investment decisions are strongly influenced by challenges such as energy shortages, regulatory uncertainty, exchange-rate risk, and difficulties repatriating profits.

These internal limitations may matter more than short-term portfolio shifts. Therefore, Bangladesh must strengthen its domestic investment environment, which is particularly crucial now.

Bangladesh Bank decreased policy rates on 30 July 2026 by 50 basis points, from 10% to 9.5%. This move aimed to bolster economic growth, promote private investment, and enhance credit flow following a lengthy period of restrictive monetary policy.

It also reflected concern over sluggish economic activity and subdued private-sector credit growth. Currently, Bangladesh Bank's room to lower domestic interest rates further is limited, given that inflation remains high.

While affordable credit is essential to support investment and employment, hastily lowering rates could weaken the taka, increase dollar demand, and fuel inflation. Therefore, Bangladesh's domestic policy should balance controlling inflation, maintaining exchange-rate stability, safeguarding financial sector health, and ensuring access to productive credit.

Overall, the consequences of the Fed's interest rate hike will depend more on the future path of US rates than on this single increase. Bangladesh should maintain a flexible, stable exchange rate, safeguard reserves, promote remittances through formal channels, restrict costly foreign borrowing, and monitor companies' foreign-currency risk.

At the same time, stronger fiscal discipline, better debt management, and improved banking governance are essential. In the medium term, Bangladesh needs to diversify exports and markets, enhance energy security, boost productivity, and increase investor confidence. These actions would help the economy withstand higher US interest rates and future external shocks.

Fahmida Khatun is a distinguished fellow at the Centre for Policy Dialogue (CPD).

US factory production unexpectedly fell in August and higher oil prices and rising interest rates could offset some of the support from an artificial intelligence buildout, likely keeping activity moderate for the rest of the year.

The decline in output, reported by the Federal Reserve on Friday, followed seven straight months of increases. The US central bank on Wednesday raised interest rates for the first time in three years and flagged further increases in borrowing costs in the months ahead. Oil prices are hovering above $100 a barrel with no end in sight to the US-Israeli war with Iran.

"Looking ahead, we think manufacturing output will rise a little further over coming months, but will fail to match the pace set in the first half of this year," said Samuel Tombs, chief US economist at Pantheon Macroeconomics.

"Some manufacturers likely will find that demand softens as they pass on higher energy prices to consumers."

Manufacturing output dropped 0.3 percent last month following an unrevised 0.2 percent rise in July. Economists polled by Reuters had forecast production would increase 0.3 percent. Output advanced 0.9 percent on a year-over-year basis in August, a modest increase that, according to some economists, indicated the Trump administration's aggressive trade policy had not had the desired effect of rejuvenating the nation's industrial base.

Production in the sector, which accounts for about 9.4 percent of the economy, received a boost in prior months as businesses rushed orders to avoid shortages and higher prices from the escalation of the war in the Middle East.

The decline in August was led by a 0.5 percent drop in the production of long-lasting manufactured goods. Motor vehicles and parts production decreased 1.2 percent, notching a second straight monthly decline. Output of computers and peripheral equipment fell 1.4 percent, but was up 5.5 percent on a year-over-year basis.

Production of communications equipment increased 0.8 percent. Though the output of semiconductors and related electronic components dipped 0.1 percent, this category was up 12.4 percent from a year ago.

The AI spending spree has cushioned the blow from import tariffs on manufacturing. Some economists are still betting on a strong manufacturing performance this year, despite a sharp rise in longer-dated US Treasury yields in recent weeks and the Fed's decision to raise its benchmark overnight interest rate by 25 basis points to the 3.75 percent-4.00 percent range.

POSSIBLE TAILWIND FROM HIGHER DEFENSE SPENDING

"We still look for manufacturing activity to pick up through next year, and the AI infrastructure buildout is a key reason for our sanguine outlook," said Bernard Yaros, lead U.S. economist at Oxford Economics. "The demand case for AI still seems strong enough to shrug off higher-for-longer rates and increased geopolitical risk. Greater defense spending will also act as another tailwind."

Restocking by businesses that have run down inventories for five straight quarters to meet robust demand could also provide a lift to manufacturing, though some economists argued that trend could be overshadowed by the drag from rising costs.

Production of nondurable goods was unchanged after falling 0.4 percent in July. Rises in output at textile mills as well as for apparel and leather products were offset by declines in the production of plastics and rubber goods, and petroleum and coal.

"Factory output shows the first signs of a slowdown which could worsen if the geopolitical headwinds intensify and diesel fuel prices do not come back down," said Christopher Rupkey, chief economist at FWDBONDS. "Soaring energy prices are costly for industry and higher diesel prices may start to chip away at the manufacturing renaissance picture painted by White House economic officials."

Mining production edged up 0.1 percent last month, matching the rise in July. Oil and gas well drilling increased 0.9 percent after accelerating by 5.2 percent in July.

Utilities production shot up 1.8 percent after climbing 0.5 percent in July. Overall industrial production was unchanged last month after gaining 0.2 percent in July. Industrial output advanced 1.4 percent on a year-over-year basis in August.

Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, was unchanged at 76.3 percent in August. It is 3.1 percentage points below its 1972–2025 average.

The operating rate for the manufacturing sector fell 0.3 percentage points to 75.7 percent. It is 2.5 percentage points below its long-run average.

"There is no evidence here that tariffs or anything are generating an influx of new jobs in manufacturing and industry," said Carl Weinberg, chief economist at High Frequency Economics.

The government has once again provided major import tax relief on almost all solar equipment used for renewable energy generation.

According to an order issued by the Internal Resources Division (IRD) of the finance ministry on 16 September, all solar equipment imported for industrial use will be subject to a 1% duty, with the existing 15% VAT and 2% advance tax waived.

For non-industrial commercial importers, almost all solar equipment and components will also be eligible for import at a 1% duty, except for a few components that are manufactured locally.

Import taxes on those components had previously ranged from 23% to 64%.

The facility will remain in effect for six months, according to the order signed by Ahsan Habib, acting secretary of the IRD and chairman of the National Board of Revenue (NBR).

An NBR statement said the measure would reduce the cost of solar power projects, accelerate the expansion of new power-generation capacity, reduce dependence on fossil fuels, and further strengthen the country's energy security and sustainable economic development.

The Executive Committee of the National Economic Council (ECNEC) has approved 12 major development projects with an estimated total expenditure of Tk 1.689 trillion.
The approval was finalized during an ECNEC meeting presided over by the Prime Minister and ECNEC Chairperson.

Meanwhile, the ECNEC endorsed MRT-5 south project while MRT-5 north and MRT-1 have been revised at the ECNEC meeting today (Wednesday).

Out of the total budget allocated for these 12 projects, BDT 482.56 billion will be sourced from internal government revenues, while Tk 1.22 trillion will be managed through external project loans and foreign assistance, and Tk 577.1 million from the agencies' own fund.

The approved projects consist of 7 entirely new initiatives and 5 revised projects.

Bangladesh Bank has instructed banks, mobile financial service (MFS) providers and other payment service providers (PSPs) to immediately suspend payment services to operators of mobile apps involved in unauthorised online lending.

The banking regulator also requested the Bangladesh Telecommunication Regulatory Commission (BTRC) and other relevant authorities to remove mobile apps involved in unauthorised online lending from online platforms, including the Google Play Store, and permanently stop their use and operation.

The central bank issued separate letters to those authorities recently.

BB also asked banks to take effective measures to raise public awareness against such apps and report the steps taken to its Payment Systems Supervision Department.

In the letter, BB said some mobile apps operating on online platforms are providing loans at high interest rates, exposing borrowers to financial losses and harassment.

It said such apps can gain access to users’ phone contacts, personal and sensitive information, photos, videos and text messages without their knowledge.

Borrowers who fail to repay loans may then face blackmail, threats to publish sensitive information and photographs on social media, and other forms of harassment, it added.

Citing Section 15(2) of the Payment and Settlement Systems Act, 2024, Bangladesh Bank said no person can operate an online or offline platform involving investment collection, lending, fund custody or financial transactions without its approval.

As the lending activities of the identified apps are being conducted without Bangladesh Bank approval, they are illegal and constitute a punishable offence under Section 37(1) of the law, it said.

The central bank warned that operators of such apps are directly involved in a punishable offence. It also said scheduled banks, MFS, digital financial service and payment service provider institutions that facilitate transactions related to such lending could be considered involved in the offence as financial transaction channels.

Under Section 19(4) of the law, Bangladesh Bank therefore directed all institutions and individuals concerned, including the operators of the identified apps listed in an attachment, to immediately stop providing payment services to them.

Earlier, the Bangladesh Financial Intelligence Unit warned the public against taking loans through unauthorised mobile apps and digital platforms and named 30 illegal apps involved in extortion, data theft and financial fraud.

The 30 unauthorised apps identified by the BFIU are: Sathi Loan, Pop Cash, FinCash, Quick Loan, Quick Taka, Dhaka Fin, LoanVibe, Dost Loan, Taka Cash Loan, KWANZA Loan, SSH Money, LoanBuddy, Cash-Hora, Alo Cash, Fast Loan, Easy Taka, Dhorjo Loan, Fin Dot Do, Taka Cash Loan, BongoCash, Asha Loan, Subidha Loan, Smart Loan BD, Online Loan BD, City Online Loan, BD Shohoj Loan, Cash Loan, Sonali, Loan Haat and Taka Nao.

Earlier, on August 24, The Daily Star published a report titled “Fake online loans lead borrowers into costly traps”.

The report said people are losing their hard-earned money to online scams that offer cheap loans and quick investment returns. It also said some unauthorised mobile apps are targeting people by offering digital loans.

Gas supply across the country has increased significantly following Prime Minister Tarique Rahman's directive, and the improvement is expected to continue in the coming days, said Prime Minister's Office (PMO) Spokesperson Mahdi Amin today (16 September).

"The implementation of what the prime minister said began within a very short time. Gas flow has increased significantly, and we can see visible improvement in the supply situation. InshaAllah, this positive trend will continue in the coming days," he said.

Mahdi made the remarks at a press conference at the PMO, marking seven months of the government led by Tarique Rahman.

He said the prime minister has recently held meetings with business leaders and the media personalities to address the gas supply crisis and directed the authorities to take the maximum possible steps to restore the situation based on reality and ensure that industries could resume normal operations.

"The objective was to ensure that industries become fully operational again and that Bangladesh's economy can continue on its potential and onward trajectory," the spokesperson said.

He said the government made "positive progress" in public welfare during its seven months in office, although it could not resolve all problems in such a short period.

Mahdi said the government is working with specific action plans and accountability, while tackling challenges ranging from foreign debt pressures and administrative reforms to corruption-free public services, education, healthcare and strengthening Bangladesh's position in diplomacy.

"From every step, the government's commitment to the country and its people is reflected," he said

The PMO spokesperson said the government is rebuilding Bangladesh from what he described as the "ruins" left after 17 years of the previous rule.

"It is difficult to solve all problems 100% within just seven months. But in the current elected and accountable government, whose only source of power is the people, the highest level of sincerity and goodwill is visible in every step," he said.

Mahdi called for unity beyond political and other differences to build a prosperous, self-reliant, humane, safe and people-oriented Bangladesh.

He said the government's measures over the past month could broadly be divided into seven areas: youth empowerment, education, information technology and innovation; overall public welfare and improvement of living standards; women's advancement, universal welfare and social protection; environment-friendly energy and climate-resilient industrialisation; modern health infrastructure and public health; transport infrastructure and traffic management; and institutional good governance, public diplomacy and foreign relations.

The spokesperson highlighted the approval of a new national pay scale for government employees, ranging from Tk20,000 to Tk1.56 lakh, as one of the measures taken to improve the financial well-being of public servants.

Other measures, he said, included extending institutional mobile allowances to government employees of all grades, increasing the maximum net pension of retired employees by up to 100% and providing a monthly allowance of Tk3,000 for their children with special needs.

Mahdi said the government also withdrew the requirement for prior Finance Division approval for recruitment and renewal of outsourced manpower to speed up official activities and took steps to prevent long-term postings of officials at the same workplace in the land administration sector.

He said the government passed legislation ensuring parents' lifetime possession and use of property even after transferring ownership through donation.

The spokesperson also mentioned initiatives to provide special national awards of Tk 1 lakh each to 100 meritorious teachers, increase grants to the Journalist Welfare Trust and expand programmes such as Family Card, Farmers' Card and regular government allowances for imams and muezzins.

On women's welfare, he said the government has taken an initiative to establish a joint institutional framework with an international cyber security network to prevent harassment and violence against women in cyberspace.

Mahdi said plans are also being formulated to provide universal stipends to all female students in primary and secondary educational institutions and ensure nutritious food at schools.

He said 20,000 tea workers in Sylhet, Moulvibazar and Habiganj will receive modern raincoats as part of measures to protect the health and safety of women working in the tea industry.

On the energy sector, the spokesperson said a programme to drill 150 new gas wells nationwide has begun as a medium-term measure to address the gas crisis, with another 150 wells planned in the next phase.

He said plans have been taken to increase the number of floating storage regasification units (FSRUs) from the existing two to five in phases, and efforts are underway to launch a third FSRU before 2028, if possible.

The government has also given in-principle approval to import 18 LNG cargoes through direct procurement from global suppliers, Mahdi said.

For long-term energy security, international financing of $1 billion has been secured for expansion of the Eastern Refinery in Chattogram, and work had begun, he said.

In the power sector, the spokesperson said 1,046.73 megawatts of electricity that remained suspended from the national grid due to technical problems have been restored.

He also highlighted plans for a 500MW power plant and a large fertiliser factory in Bhola, addition of 200MW of solar power to the national grid and a five-year plan to convert all diesel-powered irrigation pumps to solar energy.

Mahdi said the government has taken measures to ensure uninterrupted agricultural production, including maintaining a fertiliser stock of 5.155 million metric tonnes, 1.568 million tonnes above projected demand through February.

He said a central control room has also been planned to monitor fertiliser supply.

The spokesperson also mentioned the return to production of Chittagong Urea Fertiliser Limited after a six-month shutdown and initiatives to gradually reopen factories that had remained closed for various reasons.

In the health sector, he said the government plans to build 15-storey specialised general hospitals in Dhaka and the country's other eight divisional cities.

Mahdi said a policy decision has been taken to operate the newly built super-specialised hospital under a modern international corporate management model.

Plans are also underway to expand affordable dialysis services to every district and upazila and increase the number of beds at Bogura Shaheed Ziaur Rahman Medical College Hospital to 1,800, he said

The spokesperson mentioned the foundation-laying for an international-standard specialised burn and plastic surgery centre at Rangpur Medical College, plans for a national e-health platform and steps to restore the supply of essential medicines and modern medical equipment to community clinics.

He said 19.771 million children have been vaccinated against measles and rubella across the country over the past five months, exceeding the target.

Mahdi also referred to the government's three-month nationwide dengue prevention and cleanliness campaign, which began in the presence of the prime minister, as part of efforts to curb the spread of dengue.

He said a feasibility study and detailed design have been prepared for installing electric traction to operate electric trains on the Dhaka-Chattogram corridor.

Plans are also underway to construct a four-lane uninterrupted expressway from Dhaka to the City Gate in Chattogram and extend the Dhaka-Cox's Bazar intercity express train service, Mahdi said.

He also said the government directed the introduction of a fully cashless automated radio-frequency identification toll system within the next four months.

Among other measures, the spokesperson mentioned plans to relocate Karwan Bazar's wholesale kitchen market to Gabtoli and the Fulbaria bus terminal to Keraniganj to ease traffic congestion in Dhaka.

On governance, he said seven leaders of what he described as the "fascist organisation" have been sentenced to death by a court for genocide-related offences, while orders have also been issued to confiscate 50% of the movable and immovable property of five of those sentenced to death.

Mahdi said the government has also formally handed permanent appointment letters for government jobs to eligible members of 74 families of those killed in the July mass uprising.

He highlighted the formation of parliamentary standing committees, regular parliamentary oversight of ministries, the decision not to use honorific terms such as "Mahamanaya" or "Mananiya" before the president and prime minister in official documents, and the introduction of biometric attendance at land offices in phases.

Mahdi said the government has repaid $2.0476 billion, equivalent to Tk25,163 crore, in foreign loans and interest over the past five months.

He also cited a 13.1% increase in remittances over six months, initiatives to reopen the Malaysian labour market, progress in sending Bangladeshi workers legally to Italy and Oman, and progress in trade negotiations with the European Union.

The spokesperson said Bangladesh has successfully resolved 48 of 61 trade barriers identified by the EU.

He also mentioned a bilateral investment protection and promotion agreement with Hong Kong, financing of up to £2 billion under UK Export Finance for infrastructure development and procurement, and $1 million in emergency humanitarian assistance to Nepal following severe floods.

On defence and aviation, Mahdi said the government has begun the final process of procuring 20 J-10C fourth-generation fighter aircraft from China and is taking steps to equip the Border Guard Bangladesh with surveillance drones.

On fuel prices, the spokesperson said diesel is comparatively cheaper in Bangladesh than in many other countries, particularly neighbouring countries.

He said the government was providing a high level of subsidy on fuel to prevent additional pressure on the people.

At the briefing, Prime Minister's Press Secretary Saleh Shibly and Additional Press Secretary Atikur Rahman Ruman also highlighted various public welfare measures taken by Prime Minister Tarique Rahman.

PM's Speechwriter ASM Mahfuzur Rahman, Deputy Press Secretaries Jahidul Islam Rony and Md Suzauddhowla, Assistant Press Secretaries Md Nazmul Haque Khan, Abdullah Al Mahmud Shahriar,, Asrofa Emdad, Media Coordinator Tariqul Islam and PM's physician ANM Manowarul Kadir Bitu, among others, were present at the briefing.