United News of Bangladesh

The depositors of five crisis-hit Shariah-based banks in Bangladesh will have to forgo profits on their savings for two years as the central bank moves to stabilise the lenders ahead of a planned merger. Bangladesh Bank has ordered a ‘haircut’ on profits accrued during 2024 and 2025, meaning depositors will not receive any returns for that period and will see their account balances reduced. The directive follows what the regulator described as international resolution practices for distressed banks. Institutional deposits to be converted into shares as Bangladesh Bank finalises 'Sammilito Islami Bank' merger The decision was conveyed on Wednesday through letters sent to administrators of First Security Islami Bank, Global Islami Bank, Union Bank, Exim Bank and Social Islami Bank. The five banks have been merged into a single entity, ‘Sammilito Islamic Bank PLC’. Under the instruction, all deposit accounts must be recalculated based on their status as of December 28, 2025. Any profit credited between January 1, 2024 and December 28, 2025 must be removed, with the final balance determined after applying the prescribed haircut. “To ensure the balanced implementation of the Resolution Scheme, all deposit accounts must be recalculated,” the central bank said in its letter, adding that the process should be completed swiftly. Bank Merger: 'Sammilita Islami Bank' receives final approval Bangladesh Bank officials said the lenders incurred heavy losses over the two-year period, leaving them unable to distribute profits to depositors. Prior to the directive, the banks had offered profit rates ranging from 7 percent to 9 percent on deposits. According to central bank data, the five banks collectively serve about 7.5 million depositors and hold roughly Tk142,000 crore in deposits. Their total outstanding loans stand at around Tk193,000 crore, a large portion of which is classified as defaulted. The move means depositors will lose not only two years of expected earnings but will also experience a direct reduction in their account balances — an unusually severe step in Bangladesh’s banking sector. It follows an earlier decision in which the share value of the five banks was declared zero, wiping out investments held by sponsors and shareholders. Exim Bank was previously controlled by Nazrul Islam Mazumder, former chairman of the Bangladesh Association of Banks. The remaining four lenders were controlled by Saiful Alam, head of the S. Alam Group. Now a writ on the 5 banks' merger filed with HC Both were widely known as close associates of ousted Prime Minister Sheikh Hasina and allegedly held significant shareholdings while securing large loan facilities through various entities. The merger marks one of the most sweeping banking restructurings undertaken by Bangladesh Bank as it seeks to contain systemic risk and restore confidence in the Islamic banking segment.  

Bangladesh’s private sector risks a tightening credit environment as government borrowing from the banking system has surged to nearly Tk 60,000 crore in the first half of the current fiscal year, raising concerns about reduced lending capacity for businesses. According to Bangladesh Bank data, the government’s net borrowing from banks reached Tk 59,756 crore between July 1 and January 4 of FY2025–26. The amount accounts for more than 57 percent of the full-year borrowing target of Tk 1.04 lakh crore, surpassing the halfway mark well before the fiscal year’s midpoint. The pace of borrowing marks a sharp escalation from a year earlier. In the same period of FY2024–25, the government’s net bank borrowing stood at Tk 8,312 crore, meaning the current figure represents an increase of 619 percent. Read more: Govt exceeds IMF-set limit on external borrowing: Dr Salehuddin Although the government initially repaid a small portion of its bank liabilities at the start of the fiscal year, borrowing accelerated rapidly amid mounting fiscal pressures. Economists cite a combination of revenue shortfalls, declining foreign aid and rising expenditure commitments as key drivers behind the shift. “The government is not meeting its revenue targets, and expected foreign loans are not arriving on time,” said Towfiqul Islam Khan, economist and additional research director at the Centre for Policy Dialogue (CPD). "Consequently, the government is forced to lean on the domestic banking sector to cover the deficit," he said. Bangladesh Bank data show the government’s total outstanding debt to the banking system has climbed to Tk 6.10 lakh crore. Of the borrowing undertaken so far this fiscal year, Tk 35,750 crore has come from commercial banks, while Tk 24,006 crore has been taken from the central bank. Read more: IMF limits Bangladesh’s foreign borrowing Business leaders warn that heavy public-sector borrowing risks crowding out private investment by absorbing a significant share of available bank liquidity. Reduced access to credit could delay investment decisions, constrain production capacity and slow job creation, they say. Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank Limited, said the banking sector has been navigating a difficult period amid a broader erosion of confidence. He noted that while the economy and banking system have stabilised, growth has slowed due to the impact of “severe mismanagement of the macroeconomic situation”. “Excessive government borrowing reduces the capacity of banks to support the private sector,” said Abdul Haque, a prominent business leader and former director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). “This hampers employment and has a negative ripple effect across the entire economy," he said. Read more: NPL crisis chokes private credit growth, endangers Bangladesh's economic recovery: Experts Analysts caution that unless revenue collection improves and public spending is managed more effectively, continued reliance on bank financing could undermine private-sector activity and weigh on Bangladesh’s longer-term economic growth.

Bangladesh recorded a historic $17.17 billion in inward remittances during the first six months and seven days of fiscal year 2025–26, underscoring the resilience of overseas earnings and providing crucial support to the country’s foreign exchange reserves amid global trade headwinds. The inflow marks a strong year-on-year increase from the same period of FY2024–25, when remittances totalled about $14.31 billion. The latest figure represents an additional $2.86 billion, or nearly 19.9 percent growth, building on momentum from FY25, a record year in which annual remittances crossed the $30 billion threshold for the first time. Bangladesh Bank Executive Director and Spokesperson Arif Hossain Khan attributed the sustained growth to a combination of structural and policy-driven factors. Read more: Bangladesh sees $1.12bn in remittances in first 10 days of January He cited restored confidence in formal remittance channels following the political transitions in late 2024, which prompted a shift away from the illegal “hundi” system. Improved transparency and a growing sense of economic patriotism among expatriates have encouraged greater use of banking channels, he said. The stabilisation of the taka against the US dollar has also played a critical role, reducing speculative behaviour. With a market-based exchange rate now in place, remitters are no longer delaying transfers in anticipation of sudden currency depreciation. Government incentives remain another key driver, with the continued 2.5 percent cash incentive encouraging low-income migrant workers to send money through official platforms. Besides, expanded digital remittance services, including mobile financial services and fintech solutions, have made transfers faster and more accessible, particularly for workers in the Middle East and Southeast Asia. Bangladesh received $2.47 billion in remittances in July, $2.42 billion in August, $2.68 billion in September, $2.56 billion in October, $2.88 billion in November, and $3.22 billion in December. The data show an average monthly inflow of more than $2.42 billion over the past six months. This strong remittance performance is influencing policymakers to reconsider borrowing from the International Monetary Fund under stringent conditions. Professor Mustafizur Rahman, Distinguished Fellow of the Centre for Policy Dialogue (CPD), told UNB that the remittance surge is offsetting recent weakness in the export sector, which showed a slight contraction in December 2025. According to the Asian Development Bank (ADB) and local economists, robust remittance inflows are expected to be a key driver of consumption and GDP growth in 2026. As of early January 2026, Bangladesh’s gross foreign exchange reserves have benefited significantly from the inflows, standing at around $33 billion under traditional calculation, providing the government with added fiscal space to manage external debt obligations and import costs, he said. Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank Limited (MTB), said confidence in the banking system has been restored, prompting expatriates to remit funds through formal channels. He noted that exchange rate stability and a normalised curb market have reduced the appeal of hundi transactions, which deprive remitters of the 2.5 percent incentive or more. Read more: Remittance inflow exceeds $632 million in first six days of December “In such a situation, sending remittance through illegal hundi is a loss for remitters,” he said. Mahbubur Rahman added that Bangladesh Bank’s policy measures have further encouraged migrant workers and non-resident Bangladeshis to send their hard-earned money through legal channels.

Bangladesh Bank announced plans to issue the ‘Bangladesh Government Special Sukuk-1’, a Shariah-compliant bond worth Tk 10,000 crore, to finance selected national infrastructure and welfare projects. The decision was finalised after meetings held last week by the central bank’s Shariah Advisory Committee under the Debt Management Department, which were presided over by Bangladesh Bank Deputy Governor Dr Md Kabir Ahmed. According to the central bank, the Sukuk will have a tenure of 10 years and carry an annual profit rate of 9.75 percent. Read more: Dhaka’s skyline transforms as flat owners reach 3.5 lakh The bond will be issued based on the ‘Ijarah’ (leasing) method, a Shariah-compliant financing structure approved by the committee. Proceeds from the issuance will support seven housing projects for government employees constructed by the Public Works Department. Besides, the funds will be used for specific rail services operated under Bangladesh Railway, underscoring the government’s focus on both housing and transport infrastructure. The ‘Special Sukuk-1’ is scheduled for issuance on January 14, 2026, through a private placement in favour of Sammilito Islamic Bank PLC. The Sukuk represents part of Bangladesh’s ongoing efforts to leverage Shariah-compliant financing instruments to fund public projects while providing investors with profit-generating opportunities that align with Islamic finance principles. Read more: House Rent Issues in Dhaka: A Growing Concern

Bangladesh Bank has relaxed import rules for liquefied petroleum gas, permitting importers to use credit facilities of up to 270 days, a move aimed at easing dollar liquidity pressure and ensuring steady LPG supplies in the domestic market. Under the new arrangement, LPG imports will now be treated as industrial raw materials, enabling businesses to import LPG on deferred payment terms through suppliers’ credit or buyers’ credit for a maximum period of 270 days, according to a circular issued by the central bank on Monday. The circular, sent to all scheduled banks by the Foreign Exchange Policy Department of Bangladesh Bank, noted that LPG is primarily imported in bulk and subsequently bottled for distribution. Considering the multiple stages involved in processing and marketing, the central bank has decided to categorise LPG as an industrial raw material. Earlier, a circular issued on December 29 allowed a 270-day usance period — the timeframe for deferred payment — for industrial raw material imports. With the latest decision, LPG importers will now enjoy the same facility. Besides, importers will be allowed to obtain buyers’ credit from foreign banks or financial institutions. They may also access bill discounting facilities through offshore banking units (OBUs) of local banks. Bangladesh Bank said that after import, LPG requires a considerable amount of time for storage, bottling and marketing. The extended credit period has been granted to support importers’ cash flow and accelerate the import of this essential energy commodity. The move comes amid a severe LPG supply crunch in the domestic market that has persisted for over two weeks. During this period, LPG prices have surged sharply, with a 12kg cylinder being sold at nearly double the government-fixed price. A cylinder officially priced at TK 1,300 is now selling for as high as Tk2,500 in some areas. Titas low pressure chokes gas supply across Dhaka; residents struggle Similarly, the price of a 35kg LPG cylinder has risen to Tk5,000, compared to its regulated price of Tk3,200, causing widespread hardship for consumers. LPG traders attributed the crisis to a shortage of vessels, complications in opening letters of credit (LCs), and the temporary shutdown of several LPG plants. Industry insiders expressed optimism that the special facilities provided by Bangladesh Bank would play a crucial role in normalising LPG supply in the market in the coming days.

The remittance from Bangladeshi expatriates continued its upward momentum in January, with the country receiving more than US$1.12 billion in the first 10 days of the month. Bangladesh received $17.39 billion in inward remittances from July to January 10, 2026, in the current fiscal year, FY 2025-26. It was 14.49 billion in the same period of the previous FY2024-25, saw a growth of 20 percent. Blessings on the remittance, the gross forex reserves of Bangladesh cross $33 billion. As per the IMF standard BPM6, the forex reserves stood at $29 billion plus. Read more: Remittance inflow exceeds $632 million in first six days of December Arif Hossain Khan, Executive Director and spokesperson of Bangladesh Bank (BB), said the expatriates have sent $1.12 billion in the first 10 days of January 2026, which was $7.17 million in the same period of January 2025. It means the remittance earnings grew by 57.2 percent in this time. The growth is attributed to several factors, including incentives offered for sending money through legal banking channels, increased encouragement for using the formal system, and the active role of exchange houses. In the FY2025-26, Bangladesh received $2.47 billion in remittances in July, $2.42 billion in August, $2.68 billion in September, $2.56 billion in October, $2.88 billion in November, and $3.22 billion in December. The data showed an average inward remittance of over $2.42 billion in the past six months, prompting Bangladeshi policymakers to favour remittance inflows over borrowing from the IMF with stringent conditions. Read more: Remittance fighters deserve more than just appreciation: Singer Asif Akbar

Bangladesh Bank Governor Dr Ahsan H Mansur on Sunday said the central bank is promoting digital and QR code-based payments, even at small shops, to foster a cashless and corruption-free society. Speaking at the rebranding inauguration of Islami Bank Bangladesh PLC’s mobile financial service mCash in Dhaka, Dr Mansur said the government could earn an additional Tk1.5-2.0 lakh crore from a fully digital payment ecosystem. “Bangladesh spends around Tk20,000 crore annually to manage cash—the highest globally. Digital payments can significantly reduce this cost,” he added. Governor Mansur expressed optimism about mCash, citing Islami Bank’s roughly 3 crore customer accounts—the largest for a single bank in the country. He said mobile financial services are indispensable for expanding the digital payment system and that Bangladesh Bank is working to ensure smooth interoperability among services. The Governor cautioned that Islami banks must operate in line with Shariah principles, highlighting that some, including S. Alam, have faced risks due to non-compliant lending. A draft law for Shariah-compliant operations has been completed by the central bank. Microcredit Bank to operate as non-profit social business under Bangladesh Bank oversight: CDF Dr Mansur urged mCash to leverage Islami Bank’s 400 branches, 271 sub-branches, and about 2,800 agent outlets, including its remittance flows. He stressed the importance of long-term planning, customer trust, and incentives like cashback to drive adoption. “Encouraging digital transactions in retail and the SME sector via QR codes will reduce corruption and increase revenue,” he said. Professor Dr M Zubaidur Rahman, Chairman of Islami Bank, presided over the event.

Bangladesh Bank has directed all banks to ensure that inward remittances are credited to customers’ accounts on the same day they are received, in a major move to improve service for expatriates and their families. The central bank issued a circular on Thursday (January 08, 2026), saying the directive aims to reduce delays, enhance efficiency in the payment process and improve the overall quality of customer service. According to the circular, the new instructions will take effect immediately. However, banks have been given time until March, 2026 to fully put in place the required technical infrastructure. Read more: Forex reserves hit 3-year high as December remittances cross $3bn Under the new guidelines, remittances received during banking hours must be credited on the same working day, while those received after banking hours must be credited no later than the next working day. To speed up processing, Bangladesh Bank advised banks to adopt Straight-Through Processing (STP) or other risk-based expedited methods. If essential information is available, banks are encouraged to credit the funds first and complete the remaining documentation or verification formalities later. In cases where post-credit review is not possible, banks must complete verification and settle the transaction within a maximum of three working days. To improve transparency, the central bank has also made it mandatory to use a Unique End-to-End Transaction Reference (UETR), which will allow digital tracking of remittances from receipt to final credit. In addition, Bangladesh Bank plans to strengthen digital foreign currency platforms to gradually eliminate manual paperwork, including Form C and Form C (ICT). The business community has welcomed the initiative, saying it will boost customer confidence and align Bangladesh’s remittance system with global best practices. Read more: Remittances hit $2.93 billion in 28 days of December Arif Hossain Kahan, Executive Director and spokesperson of Bangladesh Bank, said the move is a positive step towards modernisation. “There are many operational challenges during the transition but the focus on digital tracking and faster settlement is essential for the future of our economy,” he said.

Bangladesh Bank has launched a new Risk-Based Supervision (RBS) framework, marking a major shift in how the country’s banking and financial institutions are monitored as authorities seek to restore confidence among depositors after years of sectoral stress. The central bank on Sunday formally moved away from a traditional, compliance-driven oversight model to a system that prioritises supervision based on the specific risk profiles of individual institutions. Officials say the new approach will allow regulators to identify financial vulnerabilities earlier and respond more decisively. Under the RBS regime, Bangladesh Bank will abandon a “one-size-fits-all” model of supervision. Instead, banks and financial institutions will be assessed and monitored according to the level and nature of risks embedded in their operations, including governance, asset quality and liquidity exposures. To support the transition, the central bank has completed a major internal restructuring. Thirteen existing departments have been reorganised into 17 specialised units, including 12 bank supervision departments that will provide targeted oversight based on real-time data. Five additional specialised units have been created to focus on digital banking, data analytics, payment systems and policy formulation. A separate department has also been set up to monitor Anti-Money Laundering and Terrorist Financing activities, modelled on the Bangladesh Financial Intelligence Unit (BFIU), signalling a stronger regulatory focus on financial integrity. The launch of the framework had initially been scheduled for January 1 but was postponed following the declaration of state mourning over the death of former Prime Minister Begum Khaleda Zia. Arif Hossain Khan, Executive Director and spokesperson of Bangladesh Bank, said the reorganisation process has been completed and the full implementation of RBS officially began on Sunday. Bangladesh Bank buys $3.05 billion to stabilise forex market “This will be a far more rigorous supervisory regime,” he said, adding that oversight will be driven by data accuracy and proactive risk assessment rather than routine compliance checks. Central bank officials said the results of risk assessments under the new framework could trigger tough enforcement actions against weak institutions. These may include the removal of managing directors, dissolution of boards of directors and, where necessary, the application of the Bank Resolution Ordinance to deal with failing banks. The reform is seen as a cornerstone of the interim government’s broader effort to clean up the banking sector, curb mismanagement and rebuild public trust in the financial system after a period marked by loan defaults and governance failures.

The upward trend in remittances sent by expatriate Bangladeshis has continued into December, with the country receiving approximately US $632 million in the first six days of the month. According to the latest update from Bangladesh Bank (BB), the $632 million remittance figure for December 1-6 is an increase of approximately $38 million compared to the same period last year. In December of the previous year (2024), the country received around $594 million in the first six days. Read more: Expats send remittance over 5m times to bKash via Pubali Bank in 10-month The growth is attributed to several factors, including incentives offered for sending money through legal banking channels, increased encouragement for using the formal system, and the active role of exchange houses. Remittance inflow has shown robust growth throughout the current fiscal year (FY 2025-26). From July 1 to December 6, 2025, the total remittance inflow reached $13.67 billion. This represents an increase of $1.939 billion compared to the same period in the previous fiscal year (FY 2024-25), when the total stood at $11.732 billion. The year-on-year growth rate for the fiscal year to date is 16.5 percent. Read more: Bangladesh losing grip on Middle East remittance lifeline!