United News of Bangladesh

Bangladesh Bank Governor Md. Mostaqur Rahman has assured depositors of Islami Bank Bangladesh PLC that the central bank is taking immediate measures to resolve the bank's liquidity challenges, including providing emergency liquidity support. "Depositors will not face any inconvenience. They will be able to withdraw their money at any time," the Governor said while responding to questions from journalists regarding the banking sector at a post-budget press conference for FY2026-27 held at the Osmani Memorial Auditorium in Dhaka on Friday. BB appoints observer to Islami Bank to restore discipline, protect depositors He stated that the central bank has a number of regulatory tools at its disposal to manage the situation, and some of these collective measures will be implemented within the coming days. The Governor's remarks come at a time of heightened concern over mounting liquidity pressures at the country's largest Shariah-based commercial bank, which has sparked growing anxiety among depositors regarding regular access to their funds. Governor Rahman explicitly confirmed that any necessary emergency liquidity support required to stabilize Islami Bank will be fully provided by the central bank to safeguard public deposits and maintain overall financial sector stability.

Finance Minister Amir Khosru Mahmud Chowdhury has said the government expects inflationary pressures to ease gradually through structural reforms aimed at reducing the cost of doing business, improving efficiency and strengthening supply chains. “Inflation in Bangladesh is not a short-term phenomenon but the result of several years of accumulated pressures, compounded by global conflicts, rising import costs and weaknesses in the banking sector,” he said today (Friday), while addressing a post-budget press conference at the Osmani Memorial Auditorium. The finance minister, who presented his first budget yesterday, noted that inflation has remained above 9 percent for the past three years. External factors, including conflicts in the Middle East, have pushed up global commodity prices, while capital shortages in banks caused by loan defaults, fraud and money laundering have increased the cost of funds. He said that imported goods had become more expensive due to global developments and that Bangladesh had limited control over such external inflationary pressures. However, the government could reduce domestic inflation by lowering business costs through deregulation, administrative reforms and improved efficiency, he said. According to Amir Khosru, businesses in Bangladesh face excessive costs due to lengthy approval processes, bureaucratic delays, high borrowing costs, inefficiencies at ports and weaknesses in taxation and regulatory systems. “Inflation cannot be controlled by deploying police, regulatory agencies or government officials in markets. It has to be managed through sound policies and efficient administration,” he said. The newly elected BNP government's first budget set an inflation target of 7.5% for the next fiscal, against a GDP growth expectation of 6.5%. Khosru said the government would focus on improving ease of doing business, reducing unnecessary regulations and ensuring greater transparency across public institutions. He added that reforms in ports, logistics and procurement systems would also help lower costs. The finance minister stressed the need for long-term procurement planning, saying Bangladesh should maintain strategic reserves of fuel, food and fertiliser to reduce vulnerability to global market shocks. Referring to energy imports, he criticised past reliance on spot purchases and said the government intended to pursue longer-term procurement arrangements to secure better prices and ensure energy security. On the government’s decision to increase salaries for public servants, Khosru said the move was necessary to address rising living costs after years without significant adjustments. “When people face financial hardship, the tendency towards corruption increases. Improved salaries should help reduce that pressure while ensuring a better standard of living for government employees,” he said. The finance minister also highlighted employment generation as a central objective of the budget, saying investments in education, skills development and private-sector growth would help create jobs both at home and abroad. He said the government had placed particular emphasis on vocational education, reskilling and upskilling programmes to improve employability, especially among young people and educated jobseekers. “Investment means employment. Our focus is on creating demand for jobs through increased investment and improved skills,” he said. Khosru said the budget represented a shift from traditional approaches and reflected changing global economic realities. He reiterated the government’s commitment to reducing dependence on domestic bank borrowing, which he said often crowded out private-sector lending. He noted that planned borrowing from local banks had already been reduced compared with the previous fiscal year and that the government would continue this trend in the coming years. The minister also defended the budget’s emphasis on social protection programmes, saying the largest investments were being made in initiatives designed to support low-income and vulnerable groups. Programmes such as the Family Card, support for farmers, universal healthcare and preventive healthcare services were aimed at improving living standards while preparing beneficiaries for better employment opportunities, he said. Khosru placed special emphasis on the government’s proposed “creative economy” initiative, which seeks to integrate artisans, cultural workers, performers and rural entrepreneurs into the mainstream economy. He said the programme would provide financing, training, design support and market access to traditional craftsmen, weavers, potters, musicians and other creative workers whose contributions had long remained outside formal economic planning. The minister said the government had allocated Tk 800 crore to launch creative economy initiatives, including creative centres, cultural districts, tourism-linked projects and heritage restoration programmes. “Our objective is to monetise culture and creativity so that artists, craftsmen and performers can improve their livelihoods while contributing to economic growth,” he said. Khosru also said the government was reviewing outdated mouza land valuation rates, which are often significantly below market prices, to curb opportunities for whitening undisclosed income through property transactions. A committee has been formed to revise mouza rates and bring them closer to actual market values, although he acknowledged that the exercise would require a nationwide survey and could not be completed before the budget. Responding to concerns about implementation, the finance minister said the government would establish a high-powered task force and an online complaint platform to monitor reform measures and ensure accountability. “No one will be exempt from scrutiny if delays or violations occur. We are committed to implementation,” he said. Earlier, in his opening remarks, Khosru described the budget as an “inclusive” one prepared under exceptional circumstances within less than two months of the new government’s formation. He said the budget sought to move away from what he described as a patronage-based economic model and instead promote “economic democratisation” by extending opportunities to all sections of society. The minister said the government inherited an economy weakened by institutional erosion, financial mismanagement and global economic uncertainty, making budget preparation particularly challenging. He added that future public spending and development projects would be evaluated on four key criteria: value for money, return on investment, job creation and environmental sustainability. “The budget is for all Bangladeshis. No group, profession or community has been left outside its scope,” he said.

Bangladesh Bank Governor Md. Mostaqur Rahman on Friday issued a stern warning against financial fraudsters, declaring that those involved in money laundering will not be allowed to live in peace in Bangladesh. "We will not let those who have stolen the country’s money and smuggled it abroad stay in peace. The ongoing drive against money launderers will continue," the central bank governor said. He made the remarks while addressing journalists on contemporary economic issues, including money laundering and financial sector stability, in the post budget press conference. New Bangladesh Bank Governor outlines vision for investment-led growth The Finance Minister Amir Khosru Mahmud Chowdhury, Power and Energy Minister Iqbal Hasan Mahmud Tuku, NBR Chairman Abdur Rahman, Governor Md Mostaqur Rahman, many other ministers and secretaries of different ministries were present. Stating that those who have accumulated wealth through illicit financial flows will face rigorous accountability, the Governor added that the central bank, in coordination with relevant state agencies, is actively working to identify and track down stolen assets. Governor Rahman also assured that specific actions, including legal measures and international cooperation, are being leveraged to bring back the laundered money and penalize the perpetrators. The central bank chief emphasized that ensuring discipline and transparency in the banking sector remains a top priority for the regulatory body, and no concessions will be made for those involved in rampant corruption and financial irregularities. About the liquidity crisis of different banks including Islami Bank, the governor said that the central bank is taking steps to resolve the problem as soon as possible.

Asian stock markets posted strong gains on Friday while oil prices fell after US President Donald Trump said progress had been made in efforts to end the Iran war, boosting investor confidence across global markets. US stock futures also moved slightly higher following sharp gains on Wall Street. South Korea's Kospi index surged 7.8 percent to 8,370.82, recovering much of the losses linked to recent sell-offs in artificial intelligence-related stocks. The benchmark index has nearly doubled over the past six months, though it remains below its record closing high reached on June 2. Shares of Samsung Electronics jumped 11.2 percent, while chipmaker SK Hynix gained 7.2 percent. Japan's Nikkei 225 advanced 3.5 percent to 66,442.95, led by technology stocks. SoftBank Group rose 2 percent and semiconductor equipment manufacturer Tokyo Electron soared 10.3 percent. Hong Kong's Hang Seng index climbed 1.8 percent to 24,689.32, while China's Shanghai Composite gained 1.6 percent to 4,050.51. Australia's S&P/ASX 200 rose 1.9 percent to 8,798.10. Taiwan's Taiex added 2.6 percent and India's Sensex increased 1.2 percent. Investor sentiment improved after Trump said on Thursday that he had cancelled planned military strikes against Iran and claimed the United States had reached a significant understanding to end the conflict. He also suggested that an extension of the fragile ceasefire between the two sides could be agreed within days, although he provided few details. Markets had come under pressure earlier this week as tensions between Washington and Tehran intensified. Rising oil prices have fueled inflation concerns worldwide, particularly as the Strait of Hormuz, a crucial route for global oil and gas shipments, remained largely closed. Analysts at ING said there appeared to be more encouraging signs surrounding a possible agreement this time, although they cautioned that any ceasefire extension remained uncertain and could still prove fragile. Oil prices retreated as hopes for a diplomatic breakthrough increased. Brent crude, the international benchmark, fell 1.7 percent to $88.87 per barrel, while US benchmark crude dropped 1.6 percent to $86.33 per barrel. Both remained significantly above pre-war levels of around $70 a barrel. On Thursday, Wall Street recorded broad-based gains. The S&P 500 rose 1.8 percent to 7,394.30, the Dow Jones Industrial Average climbed 1.9 percent to 50,848.75, and the Nasdaq Composite gained 2.5 percent to 25,809.66. Technology and AI-related stocks have experienced heightened volatility in recent days amid concerns that rapid share price increases and heavy investment spending could signal a market bubble. Marvell Technology jumped 11.1 percent, while Oracle fell 8.5 percent despite reporting stronger-than-expected quarterly earnings, as investors worried about its growing spending commitments. Investors were also watching the highly anticipated Wall Street debut of SpaceX, Elon Musk's rocket company, which is expected to become the largest initial public offering on record with plans to raise about $75 billion. In currency trading, the US dollar strengthened to 160.22 Japanese yen from 159.93 yen, while the euro slipped slightly to $1.1574 from $1.1578.

Dhaka Stock Exchange (DSE) Chairman Mominul Islam on Thursday welcomed the capital market-friendly measures in the proposed FY2026-27 budget, expressing gratitude to Finance Minister Amir Khosru Mahmud Chowdhury for prioritising the sector's development and investor confidence restoration. In a statement, the DSE chairman said the budget reflects the government's sincere commitment to modernising the capital market through policy support and institutional reform, adding that stakeholders' expectations and proposals have been given due consideration in the budget. Noting that the appointment of a special assistant for capital market affairs, a first in the country, has generated fresh optimism among market participants, Islam said the finance minister's repeated emphasis on the sector in public statements has further reinforced positive expectations. The DSE chairman specifically welcomed the initiative to simplify the Non-Resident Investor's Taka Account (NITA) operation process, saying it would play a significant role in attracting both domestic and foreign investment and deepening the market. He also highlighted DSE's ongoing initiative to transition from the existing T+2 settlement system to T+1, and eventually T+0, saying the shift would make trade settlement faster, safer and more efficient while helping build an internationally benchmarked market infrastructure. Mominul expressed confidence that the government's reform-oriented stance would help place the country's evolving capital market on a more dynamic, deep and investor-friendly footing in the long run. DSE reaffirmed its commitment to building a modern, transparent and sustainable capital market for future generations through innovation, good governance and enhanced institutional capacity.

The Foreign Investors' Chamber of Commerce and Industry (FICCI) has welcomed the government's strategic Three-R (Recovery, Restoration and Reconstruction) framework underpinning the proposed Finance Bill 2026 and the budget for FY2026-27, while raising concerns over provisions that could weigh on Bangladesh's regional competitiveness. In a statement on Thursday, FICCI described the Finance Bill as a positive, progressive and business-friendly initiative, citing the government's commitment to bringing greater clarity, simplification, predictability and digitalisation to the tax, VAT and customs regime. Among the measures it commended, FICCI highlighted the reclassification of Tax Deducted at Source (TDS) as advance tax rather than minimum tax, a move it said aligns with international standards and will significantly ease working capital pressure on businesses. The chamber also welcomed the proposed automated, faceless refund mechanism; the removal of a provision that disallowed legitimate business expenses for non-deduction of tax at source; higher ceilings on perquisites and promotional expenditure; accrual-based interest expense allowances; and a reduction in disputed tax liability at the appeal stage. On the VAT front, FICCI praised the option of quarterly return filing in place of monthly submissions, saying it would substantially reduce compliance burdens and administrative costs. Lower withholding tax rates on raw material imports, foreign loan interest and machinery leasing were also welcomed, alongside the launch of the 'BanglaBiz' platform and simplified procedures for repatriating capital and profits. However, the chamber flagged several concerns. It cautioned that without a long-term roadmap for reducing corporate tax rates, Bangladesh risks falling behind regional competitors in attracting foreign direct investment. It also warned that the abrupt mandatory rollout of e-VAT for large and multinational taxpayers, without adequate transition time or ground-level preparation, could create serious operational difficulties. FICCI expressed concern over the proposed increase in the top personal income tax rate to 35 percent, saying it would raise the cost of engaging skilled foreign professionals. It also pointed to a lack of clear guidelines on allowable deductions amid global inflation, which could inflate compliance costs for multinationals. The chamber strongly urged withdrawal of the proposed 0.2 percent Advance Income Tax (AIT) collection at the retail level, describing its implementation as impractical and operationally burdensome. It further called for extending cashless transaction incentives to private limited companies and restoring investment tax rebates for individual taxpayers to encourage domestic savings. FICCI stressed that all fiscal measures should be applied prospectively, warning that retrospective implementation creates market uncertainty and discourages long-term investment. On the fiscal framework, FICCI noted that the proposed budget of Tk 9.38 lakh crore, equivalent to 13.7 percent of GDP, represents a substantial increase over the previous year. Major allocations for human development include Tk 1,36,606 crore for education and Tk 69,409 crore for health. However, the chamber described the total revenue target of Tk 6.95 lakh crore as overly ambitious, requiring revenue growth of between 23 and 42 percent over last year's target, a level it considered unrealistic under current economic conditions. Financing a Tk 2.43 lakh crore budget deficit will require mobilisation from both domestic and external sources. The chamber said the ultimate success of Finance Bill 2026 would depend on effective implementation, policy consistency, stronger institutional capacity and continuous improvement in the ease of doing business.

The Institute of Chartered Accountants of Bangladesh (ICAB) on Thursday broadly welcomed the national budget for fiscal year 2026-27 as a business-friendly framework, while raising concerns about the heavy reliance on bank borrowing to finance the development budget. ICAB President NKA Mobin, in a statement, congratulated the government for presenting what he described as a strategic and forward-looking budget. Budget 2026-27: Govt unveils Tk 10,533 cr plan to boost water resources sector He also acknowledged Finance and Planning Minister Amir Khosru Mahmud Chowdhury for tabling the Tk 9,38,000 crore budget, equivalent to 13.7 percent of GDP, amid significant domestic and global economic headwinds including the Iran-Israel conflict, energy crisis, high inflation, and sluggish business investment. While welcoming the Tk 3,16,075 crore development budget, of which Tk 3,00,000 crore falls under the Annual Development Programme (ADP), ICAB cautioned that an estimated 35 percent of the development outlay, or Tk 1,12,000 crore (46 percent of the total deficit financing of Tk 2,43,000 crore), is expected to be met through bank borrowing. The institute warned this could constrain credit availability for the private sector and dampen private investment. ICAB also flagged that a 0.2 percent tax on retail trade and a 0.5 percent tax on certain agricultural products could add to inflationary pressures. Revenue Measures On broadening the tax net, ICAB said the Document Verification System (DVS), a joint initiative with the National Board of Revenue (NBR), would significantly support revenue mobilisation. The institute also commended NBR for involving ICAB in digitising corporate tax returns. Among income tax changes, ICAB welcomed the five-year lock-in of tax rates as a facilitator of long-term investment planning. It also praised the abolition of the “minimum tax” provision to lower effective tax rates for entities, new provisions for advance income tax adjustment and carry-forward, and universal self-assessment return filing to speed up tax processing. ICAB additionally welcomed startup tax incentives, including exemptions from sections 55 and 56 and a zero percent turnover tax during growth years, along with mandatory withholding identification numbers (WIN) for source-tax entities, and a reduction in tribunal appeal deposit from 10 percent to 3 percent of disputed amounts. However, the institute urged reconsideration of: a 10 percent surcharge on listed companies distributing less than 30 percent of post-tax profit as dividend, arguing it could limit capital retention by asset-heavy companies; mandatory advance tax collection of 0.2 percent on direct sales to retailers; and sector-based minimum turnover taxes that could burden low-margin businesses. VAT and Customs On the VAT front, ICAB welcomed the exclusion of “labour” from the definition of inputs, removing disputes over input tax credits for manpower services, VAT exemptions for content creators and freelancers, reduction of VAT appeal deposits from 10 percent to 1 percent, and a cap on penal interest to 24 months for pre-July 2022 disputes. On customs, the institute praised the introduction of the “Importer on Record” definition for clearer legal accountability, new free trade zone (FTZ) provisions with operational flexibility, reduction of appeal security from 10 percent to 1 percent, and a general order mechanism to determine assessable value based on internationally recognised reference prices. ICAB did flag concern over a 2 percent pre-deposit requirement for High Court customs appeals, calling it a potentially disproportionate barrier in large-value disputes. “The budget is broadly business-friendly and should help Bangladesh transition from a developing to a developed economy,” Mobin said, expressing hope that ICAB's recommendations, including those aimed at revenue growth and reducing legal ambiguity would contribute positively to employment generation and economic progress.

The proposed national budget for FY2026-27 is business and investment-friendly but its real test lies in achieving ambitious revenue targets and translating announced reforms into action, the Dhaka Chamber of Commerce & Industry (DCCI) said on Thursday. "The actual success will depend on achieving the ambitious revenue targets and ensuring the effective implementation of the announced reforms," DCCI President Taskeen Ahmed said at the chamber's initial reaction programme on the proposed budget, held at the DCCI Auditorium. The Tk 9,38,000 crore budget, 19.04% larger than the previous fiscal year, targets 30.34% revenue growth, which Taskeen described as "highly challenging under the current economic circumstances." He also cautioned that heavy reliance on borrowing to finance the deficit could strain the banking sector and crowd out private-sector credit. The proposed Annual Development Programme (ADP), set at BDT 3,00,000 crore, a 30% jump over last year, drew measured praise, though the DCCI flagged that the current fiscal year's ADP implementation rate of just 36.19% exposed deep execution weaknesses. Emphasis should be placed not only on larger allocations but also on ensuring effective implementation, the chamber said. On taxation, DCCI welcomed several measures, including the treatment of withholding tax as advance tax, a longstanding business demand, the reduction of withholding tax on industrial raw materials to 4%, a 0.5% withholding tax on 60 essential commodities, and a five-year advance tax structure for healthcare, renewable energy and electric vehicle sectors. However, the chamber expressed disappointment that the tax-free income threshold remained unchanged despite persistent inflation and took issue with the top personal income tax rate being set at 35%. DCCI called on the government to raise the tax-free threshold to Tk 5,00,000. For smaller businesses, the chamber praised the exemption of turnover tax for SME entrepreneurs with annual turnover up to BDT 50 lakh, extendable to Tk 70 lakh for women entrepreneurs and persons with disabilities, along with the introduction of e-loans of up to Tk 50,000 under Bangladesh Bank's Tk 60,000 crore stimulus package. On energy, DCCI welcomed EV-related incentives, including VAT exemption until 2030 and zero-duty import facilities for EV charging equipment, but said measures for gas exploration and well drilling fell short of the country's growing demand. It urged the government to develop a long-term energy pricing framework through stakeholder consultation, warning that short-term subsidies without a clear pricing structure could encourage inefficiency over investment. Other measures drawing DCCI's appreciation included mandatory single-window service implementation, seven-day work permit issuance, 10-day investor visas, and the halving of withholding tax on foreign loan interest payments from 20% to 10%. DCCI Senior Vice President Razeev H. Chowdhury, Vice President Md. Salem Sulaiman and other board members were present at the event.

The government has proposed raising the tax-free income ceiling for individual taxpayers to Tk 3.75 lakh in the national budget for fiscal year 2026-27, up from the existing threshold of Tk 3.5 lakh. Finance Minister Amir Khosru Mahmud Chowdhury made the proposal while unveiling the budget in Parliament on Thursday, affirming that the revised limit will remain in effect for the next two consecutive fiscal years, extending through FY2027-28. The adjustment builds upon the previous decision by the former interim government's finance adviser Dr Salehuddin Ahmed, who had initially increased the ceiling. The newly elected government has decided to maintain and advance this trajectory, a move analysts believe will provide much-needed breathing room for low-income and middle-class families hit hard by inflation. Special Categorised Exemptions Expanded: Following past conventions, the proposed budget offers higher tax-free thresholds for several specific categories of taxpayers. The threshold for women and senior citizens (65+) has been fixed at Tk 4.25 lakh, third gender and physically challenged taxpayers at Tk 5 lakh, gazetted freedom fighters and injured July uprising warriors Tk 5.25 lakh, and parents/legal guardians of persons with disabilities an additional Tk 50,000 exemption per child or dependent over their applicable personal threshold. Currently, Bangladesh has approximately 1.28 crore Taxpayer Identification Number (TIN) holders, out of whom only 40 lakh to 42 lakh individuals file income tax returns annually. New Tax Slabs: 5% Rate Abolished In a significant structural overhaul, the government has eliminated the lowest 5 percent tax bracket entirely, a move that may increase the tax burden on mid-to-high-income earners. Under the new layout, once the initial Tk 3.75 lakh tax-free buffer is crossed, the remaining income will be taxed under the following reconfigured slabs: Next Tk 3 Lakh: 10 percent Next Tk 4 Lakh: 15 percent Next Tk 5 Lakh: 20 percent Next Tk 20 Lakh: 25 percent Remaining Income: 30 percent Starting from the upcoming fiscal year, taxpayers will be allowed to submit their income tax returns throughout the entire year, moving away from rigid deadlines. However, the system introduces a tiered reward-and-penalty mechanism based on timing: Submission Period | Fiscal Benefit / Penalty: First Quarter (July-September)- Rebate: 5 percent of payable tax or Tk 25,000 (whichever is less). Second Quarter (October-December)-Standard: Regular tax applies; no incentives or penalties. Third Quarter (January-March) Penalty: Additional 2 percent of payable tax or Tk 3,000 (whichever is higher). Fourth Quarter (April-June) Penalty: Additional 5 percent of payable tax or Tk 5,000 (whichever is higher). | Erosion of Real Income and Persistent Inflation: The tax-exempt ceiling was last raised from Tk 3 lakh to Tk 3.5 lakh in the 2023 budget. Over the subsequent three years, the threshold remained stagnant despite persistent economic headwinds. Bangladesh has experienced a gruelling average inflation rate of around 10 percent annually over this period. According to the latest data from the Bangladesh Bureau of Statistics (BBS), inflation in May hit 9.42 percent, marking a 16-month high. Economists point out that this prolonged inflationary pressure has severely diminished the real purchasing power of citizens, leaving those sitting just above the tax-free line struggling to balance escalating living costs with their statutory tax obligations.

In a major financial intervention, the government has earmarked Tk 40,000 crore in the proposed national budget for FY 2026-27 to bail out and stabilize the struggling banking sector. The massive financial package comes as a desperate measure to salvage several weak and distressed commercial banks and Non-Bank financial Institutions (NBFIs) currently grappling with severe liquidity crunches, rising non-performing loans (NPLs), and eroded capital adequacy. According to Ministry of Finance sources, the allocation will be utilized to inject fresh capital, stabilize liquidity frameworks, and restore public confidence in the financial system. Economists and sector experts view this as one of the largest state-backed banking rescue operations in the country’s history. The decision arrives at a critical juncture for Bangladesh’s economy. Recent central bank evaluations have flagged multiple commercial banks—particularly state-owned entities and several state-connected private sector Islami banks—as heavily "vulnerable." According to financial reports, gross non-performing loans (NPLs) across the banking sector have spiked significantly over the past couple of years, bringing the system-wide Capital Adequacy Ratio down to precariously low levels. This capital erosion has effectively crippled the lending capacity of weaker banks, forcing the government to step in with taxpayer-funded fiscal support. While the exact operational modalities are still being finalized, the broad framework outlines a phased recapitalization plan. The funds are expected to be routed through Bangladesh Bank to provide targeted capital injections and emergency liquidity lines to commercial institutions categorized under the "weak bank" list. "The fundamental goal is to protect the interests of ordinary depositors and prevent a systemic collapse of the financial sector," said in the budget speech. "However, this cash injection will be tied to strict conditionalities, including institutional restructuring and aggressive loan recovery targets,” according to the budget document.