United News of Bangladesh

Finance Minister Amir Khosru Mahmud Chowdhury on Sunday informed Parliament that the total amount of default loans in nine state-owned banks stood at Tk 188,701.75 crore as of May 31 this year. Replying to a question from reserved seat Jamaat-e-Islami MP Sabikun Nahar during the question-answer session, the minister said the figure was based on data submitted by the banks to the Credit Information Bureau (CIB) database of Bangladesh Bank. The minister said the nine state-owned banks are Agrani Bank, Janata Bank, Rupali Bank, Sonali Bank, BASIC Bank, Bangladesh Development Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and Probashi Kallyan Bank. He said reducing the high level of default loans is essential to restoring discipline in the country's banking sector. Responding to a question from Jamaat MP Golam Rasul, the finance minister said the government's total outstanding debt stood at Tk 2,206,462 crore as of December 31. Of the total, external debt amounted to Tk 959,311 crore, while domestic debt stood at Tk 1,247,151 crore. Answering another question from Jamaat MP Shahjahan Chowdhury, Amir Khosru said the government repaid foreign loans worth US$4.65 billion during the 2025-26 fiscal year. Of the total, US$3 billion was repaid as principal and US$1.65 billion as interest. In reply to a question from Jamaat MP Mahbubul Alam, the minister said Bangladesh Bank has taken several initiatives to provide easier access to loans for young entrepreneurs. He said the central bank has increased the refinancing fund for new entrepreneurs in the cottage, micro and small enterprise sector from Tk 100 crore to Tk 500 crore. Under the scheme, new entrepreneurs can obtain collateral-free loans of up to Tk 10 lakh at a maximum interest rate of 7 percent, while loans of up to Tk 35 lakh are available against collateral. Replying to a question from reserved seat MP Nilufar Chowdhury Moni, the minister said outstanding customs duties and taxes on imported goods collected by various customs houses under the National Board of Revenue over the past five years amounted to Tk 25,504.3 crore. He added that out of Tk 3,912 crore payable by Bangladesh Petroleum Corporation, Chattogram Custom House had recovered Tk 590 crore by June this year. Responding to a question from Dhaka-18 MP SM Jahangir Hossain, the finance minister said the government had decided to waive agricultural loans of up to Tk 10,000, including interest, for farmers across the country covering crops, livestock, fisheries and other agricultural activities. Under the programme, banks had received Tk 1,352.74 crore from the government by July 2 to settle dues for 1,434,482 farmers, he said. In reply to Nilphamari-4 MP Abdul Muntakim, the minister said Bangladesh Bank's regulations stipulate that a bank's fixed assets cannot exceed 30 percent of its paid-up capital. As Sonali Bank's fixed assets are already significantly higher than the prescribed limit, the bank is currently unable to purchase additional fixed assets or construct new buildings, he added. Answering a question from Cumilla-9 MP Abul Kalam, the finance minister said discussions between the Economic Relations Division and the World Bank are underway to prepare the financing pipeline for the 2026-27 fiscal year. He said budget support remains one of the World Bank's financing instruments for Bangladesh, and the government's requirement and target for such support in FY2026-27 will be determined following consultations with the relevant stakeholders. The government will decide the sectors in which any budget support funds will be utilised based on national priorities.

In a major move to curb irregularities in foreign exchange operations and stamp out illicit financial flows, Bangladesh Bank (BB) has launched a comprehensive special inspection targeting some commercial banks, central bank sources revealed. The central bank has formed six separate inspection teams to intensely scrutinize the treasury and information technology (IT) divisions of the selected commercial institutions. The banks currently under oversight are state-owned Sonali Bank, Janata Bank, and Agrani Bank, alongside private sector lenders BRAC Bank, Prime Bank, and HSBC Bangladesh. The regulatory intervention follows recent allegations of foreign payment discrepancies at a state-owned commercial bank. Central bank investigators discovered instances where foreign currency payments were dispatched to clients through overseas "Nostra accounts," but the corresponding domestic liabilities or loans were suspiciously omitted from the banks' internal ledger records. To ascertain the depth of this systemic vulnerability, Bangladesh Bank is auditing Nostra account balances, transactional deposits, foreign outbound transmissions, and swift settlements. Investigators are cross-checking all suspicious high-value international transactions to see if standard protocols were bypassed to harbor covert loan facilities. Moving forward, Bangladesh Bank has affirmed that it will aggressively continue unexpected, sudden visits to the Nostra accounts and monitor the foreign currency transmission frameworks of commercial banks. The central bank views these unannounced, real-time interventions as critical to tightening corporate governance and detecting trade-based money laundering or capital flight before the funds disappear into foreign jurisdictions. Commenting on the development, a senior executive from a private bank under inspection noted that while the central bank possesses full authority to conduct sudden audits at any given time, the lack of immediate loan creation following a Nostra account payout is highly irregular under standard operating practices, warranting a deeper and strict administrative probe.

Abdur Rahman Khan, immediate past chairman of the National Revenue Board (NBR), is likely to become the next alternate executive director representing Bangladesh at the World Bank headquarters in Washington, DC. The official process is currently underway, and the official gazette notification is likely to be issued soon, according to an official of the Ministry of Finance. Abdur Rahman will succeed Sharifa Khan, the former senior secretary of the Economic Relations Division (ERD), who is currently serving in the position. Sharifa Khan was appointed to the post for a three-year term in March 2024. A highly accomplished civil servant, Abdur Rahman recently concluded his tenure as the head of the country's revenue administration. Known for his extensive experience in financial administration, public policy, and macroeconomic management, his transition to the global financial institution is seen as a strategic move to strengthen Bangladesh's representation and partnership with international lending bodies. As the alternate executive director, he will work out of the World Bank's main headquarters, looking after the interests of the constituency that includes Bangladesh. The position is vital for steering multilateral development funds, policy dialogues, and structural assistance programs tailored to Bangladesh's macroeconomic goals.

Modernizing trade finance operations and improving asset quality are essential to ensuring sustainable banking in Bangladesh, experts said at a workshop held at Bangladesh Institute of Bank Management (BIBM) on Wednesday. According to the BIBM study, the NPL rate specifically related to trade finance in troubled banks currently hovers between 40 and 50 percent. More alarmingly, in banks that already suffer from high overall NPLs alongside substantial trade exposure, the trade-specific default loan rate exceeds 80 percent. Islami Bank customer forum announces fresh protests demanding restoration of previous ownership Senior bankers, policymakers, regulatory officials, and researchers noted that trade finance portfolios face visible asset-quality pressures, with specific segments experiencing alarmingly high non-performing loans (NPLs). The observations were made during a review workshop titled "Trade Services Operations of Banks" organized by the BIBM at its campus in Mirpur, Dhaka. Presenting the keynote paper on behalf of the research team, Dr. Shah Md. Ahsan Habib, Professor (Selection Grade) at BIBM, revealed that the pressure on asset quality in trade-related loan portfolios is now starkly visible, particularly among banks with significant trade exposures. The study highlighted that the forced conversion of non-funded liabilities into funded loans is a primary driver behind this spike in trade defaults. This trend is most prominent in import finances involving capital machinery, raw materials like cotton, essential commodities such as sugar and fertilizer, fuel, and scrap vessel imports. The research paper also identified critical structural vulnerabilities in export financing. A survey conducted among industry professionals showed an overwhelming consensus among bankers that the misuse of back-to-back Letters of Credit (LCs) without legally enforceable sales contracts is directly fueling default loans in export finance. "Back-to-back LCs are meant to secure raw materials against confirmed export orders," the study noted. "However, if the underlying contract is weak, disputed, or legally unenforceable, the entire financing process falls into jeopardy. When export proceeds are delayed or unrealized, the self-liquidating nature of trade finance breaks down, turning these exposures into forced loans and multi-folding the credit risk for banks." Presiding over the workshop, BIBM Director General Dr. Md. Ezazul Islam stressed the urgent need to establish a modern legal and digital infrastructure for electronic trade documents to facilitate faster, secure, and paperless international trade. He also called for more stringent measures to combat trade-based money laundering (TBML) and terrorism financing without compromising the quality of customer service. "We need to expand trade finance opportunities for small and medium enterprises (SMEs) through innovative financial products and risk-sharing mechanisms," Dr. Islam said. He further emphasized the need to strengthen product-specific data collection, risk management, and rigorous asset-quality monitoring through closer coordination among Bangladesh Bank, scheduled banks, customs authorities, and all relevant stakeholders. The comprehensive research paper was jointly prepared by a team comprising BIBM faculty members Dr. Shah Md. Ahsan Habib, Tofayel Ahmed, Rahat Banu, and Rajib Kumar Das, alongside Mohammad Arafat Ali, Additional Director of the Foreign Exchange Policy Department-1 at Bangladesh Bank, and ATM Nesarul Hoque, Executive Vice President of Mutual Trust Bank PLC. The workshop also featured expert discussions from Md. Ali Hossain Pradhania, Supernumerary Professor at BIBM and Chairman of NRBC Bank PLC; Mahmudur Rahman, Deputy Managing Director of Islamic Bank Bangladesh PLC; Syed Sajjad Haider Chowdhury, Deputy Managing Director of Prime Bank PLC; and Faruk Ahmed, Deputy Managing Director of City Bank PLC.

Finance Minister Amir Khosru Mahmud Chowdhury on Wednesday assured that depositors of the country's troubled five banks will receive their money back in full, along with interest, and categorically ruled out any "haircut" on deposits. Responding to a notice from BNP reserved-seat MP Rahana Akter Ranu, he acknowledged the hardship faced by millions of depositors, describing the banking crisis as "a heartbreaking situation" inherited by the government. "I have already said in Parliament that all depositors will get their deposits back with interest, Insha-Allah. However, they will have to be a little patient," the minister said. He said the affected banks are operating at heavy losses, making it difficult to repay depositors immediately while also paying interest. "These banks are all running at a loss, and those losses are increasing every day. You have to understand how difficult it is for a loss-making bank that cannot even return deposits to also pay interest. Even so, an elected government is committed to protecting the interests of the people," he told the House. Khosru gave an unequivocal assurance that depositors will not face any reduction in the value of their savings. "There will be no haircut. The question of a haircut does not arise," he said, responding to concerns raised by the BNP lawmaker. He acknowledged the severe human suffering caused by the crisis, noting that many depositors are unable to pay for medical treatment or arrange family necessities because their savings remain inaccessible. "I know people cannot afford to wait. Some are dying without treatment, while others cannot arrange their daughters' marriages. I face these problems every day," the minister said. He, however, cautioned that resolving the crisis will require a medium- to long-term approach. "It will take some time, but I can assure you that depositors will receive their money back with interest," he added. Khosru outlined the government's banking sector recovery strategy, saying a comprehensive resolution framework has been established under the Bank Resolution Act, 2026 to restore stability in the financial sector. Under the framework, five troubled Islamic banks – Export Import Bank of Bangladesh (EXIM Bank), First Security Islami Bank, Global Islami Bank, Social Islami Bank and Union Bank – have been merged into a new entity named Combined Islami Bank PLC, which he described as the most significant resolution measure undertaken so far. The minister said the merger has protected the interests and claims of all depositors of the five banks. He also noted that the Deposit Protection Act, 2026 has doubled the insured deposit limit from Tk 100,000 to Tk 200,000 and extended deposit protection to finance companies, which were previously outside the scheme. According to Khosru, depositors of banks under resolution are already receiving their money in phases in line with Bangladesh Bank's resolution scheme. He said special forensic audits are underway to identify those responsible for loan irregularities in the five banks, with asset recovery measures to follow based on the audit findings. The minister added that Section 57 of the Bank Resolution Act empowers Bangladesh Bank to seize and control assets, income and property acquired through misappropriated bank funds, enabling authorities to recover money through asset sales and auctions. He also said the government has launched civil as well as criminal proceedings to recover defaulted loans and repatriate funds allegedly laundered abroad. Around 30 affected banks have initiated the process of appointing nine international legal firms on a "no win, no fee" basis after signing non-disclosure agreements to pursue recovery of overseas assets, Khosru said. Among 11 priority cases, civil proceedings have already begun against business groups and individuals, including S Alam, Beximco, Sikder Group, Nassa Group and Orient Group, he added. During the debate, Rahana Akter Ranu welcomed the government's commitment but expressed concern that auctioning domestic assets alone will not be sufficient, claiming those responsible had siphoned off amounts many times greater than the value of their assets in Bangladesh. She also urged the government to formally withdraw any proposal for a "haircut" on deposits, arguing that the burden of bank fraud should not fall on innocent depositors who had trusted the banking system with their savings. The BNP lawmaker referred to demonstrations by depositors outside the finance minister's residence in Chattogram and said about 75 lakh customers were anxiously waiting for the return of their money. She demanded that those responsible for looting banks be brought back to Bangladesh and compelled to repay the stolen funds.

Bangladesh Bank (BB) has issued comprehensive guidelines for scheduling banks to access its newly formed Tk 20,000 crore revolving pre-finance scheme, aimed at revitalising closed and capital-starved units in the country’s large industry and service sectors, particularly export-oriented ones. The central bank's Banking Regulation and Policy Department-3 (BRPD-3) issued a circular for the managing directors and chief executive officers of all scheduled banks on Tuesday, detailing the operational modalities. BB issues new directives on appointing audit firms for cash incentives According to the circular, the three-year revolving fund titled “Closed Industry and Service Sector Facilitation Pre-finance Scheme” will be sourced from the surplus liquidity of scheduled banks. To participate in the scheme, interested banks must execute a "Participation Agreement" with the BRPD-3. After obtaining approval from their respective boards of directors, banks can apply for the pre-finance facility using a designated format, complete with necessary documentation, before disbursing the loans to end-borrowers. The central bank stipulated that borrowers who are already availing working capital facilities from other BB re-finance or pre-finance schemes must undergo a thorough review of their requirements before a fresh application is submitted. To ensure transparency and prevent financial irregularities, Bangladesh Bank has mandated that participating banks must collect specific declarations and reports from applicants alongside standard documentation. These include a declaration from the borrower confirming that they have never been involved in money laundering, forgery, fund diversion, or loan misuse, a certification verifying the client’s production or service delivery capability, sales and revenue reports from the beneficiary entities, a commitment from banks to conduct quarterly factory inspections and submit inspection reports. Reporting and Compliance Participating banks will be required to submit quarterly statements on loan disbursement and recovery to Bangladesh Bank by the 10th of the month following the end of each quarter.

The 'Islami Bank Sachetan Grahak Forum' (Islami Bank Conscious Customers Forum) on Monday announced a fresh series of protest programs demanding the restoration of the bank's ownership to its original owners, and the formation of a new board of directors comprising honest and professional individuals. The forum also demanded the recovery of looted funds from Islami Bank Bangladesh PLC, trial of those responsible, and full security for depositors' money. Leaders of the forum raised the demands at a press conference held at the Islami Bank Tower premises in the capital's Dilkusha on Monday afternoon, where the forum's convener, Professor Nurunnabi Manik, read out a written statement. Professor Manik highlighted that Islami Bank is not just a financial institution but the country’s first Shariah-based bank and a symbol of trust for millions of customers. "It handles a major portion of the country's remittance inflow, SME financing, and public savings. Therefore, its stability is vital for the national economy," he said. He noted that since May 24, customers have been continuously protesting through human chains, memorandums, press conferences, and meetings with the Bangladesh Bank Governor to ensure good governance and depositor security. The forum also reiterated its demand to reinstate former Managing Director Omar Faruk Khan. While acknowledging that Bangladesh Bank has removed former Chairman Khurshid Alam and that central bank liquidity support has brought some relief to depositors, the forum leaders noted that structural changes are still lagging. They highlighted that a previous announcement to repeal Section 18/A of the Bank Company Act has not yet been formally codified into law. The customer forum outlined a 7-point charter of demands, which include forming an honest and professional board, returning ownership to genuine stakeholders, setting up a special tribunal to try bank looters, recovering stolen assets, an confiscating the wealth of the corrupt. To press home their demands, the forum announced a fresh agitation schedule: July 9: A protest march from Islami Bank Tower to the National Press Club. July 14: Sit-in programs in front of various bank branches across district towns. July 18: A grand rally of depositors in front of the National Museum in the capital's Shahbagh. Forum Member Secretary Motasim Billah and a large number of bank customers were present at the press conference.

Bangladesh Bank (BB) on Sunday announced export incentives and cash assistance rates for 43 sectors for the fiscal year FY2026-2027, aimed at encouraging the export trade. The new rates will be applicable to products shipped between July 1, 2026, and June 30, 2027, according to a circular issued by the Foreign Exchange Policy Department (FEPD) of the central bank. Bangla QR records Tk 22.02 crore transactions in 48 hours: Bangladesh Bank  The highest incentives have been allocated for frozen shrimp, furniture, diversified jute products, agro-processed products, potato, leather goods, light engineering products and halal product exports. According to the circular signed by BB Director Md. Harun-Ar-Rashid, cash assistance applications submitted by exporters must undergo periodic audits by external audit firms in compliance with the central bank’s guidelines. All other existing conditions regarding foreign exchange circulars will remain effective. As per the newly issued matrix, the highest incentive rate of 10 percent has been set for several high-priority sectors. These include diversified jute products, leather goods, agricultural and agro-processed products, potatoes, light engineering products, 100 percent halal meat and processed meat products, and accumulator batteries. Meanwhile, the readymade garments (RMG) and textile sectors will continue to receive tailored assistance. Alternative cash assistance for the export-oriented domestic textile sector in lieu of customs bond and duty drawback has been fixed at 1.50 percent. Exporters of textiles to the Eurozone will receive additional special assistance of 0.50 percent. Small and Medium Enterprises (SMEs) within the export-oriented RMG sector (knitwear, woven, and sweaters) will enjoy an extra benefit of 3.0 percent. Special cash assistance of 0.30 percent has also been designated for the overall RMG sector. For new products or expansion into new markets (excluding the USA, Canada, EU, and UK), the textile sector will receive a 2.0 percent incentive. Among other major sectors, an 8.0 percent incentive has been allocated for furniture, carbon made from jute sticks, jute particle boards, seeds of crops and vegetables, agar and attar, and frozen shrimp (with up to 20 percent ice capping). Software, hardware, and IT-Enabled Services (ITES) exports will receive a 6.0 percent incentive, while individual-level freelancers exporting software and ITES will get 2.50 percent. Active Pharmaceuticals Ingredients (API) will receive 5.0 percent, and pharmaceutical products will enjoy a 6.0 percent cash incentive. The circular also specified fixed subsidy rates for companies located in Specialized Zones, including BEZA, BEPZA, and Hi-Tech Parks. Processing agricultural products under Type-A and Type-B enterprises in these zones will receive a 2.0 percent subsidy, while other designated sectors will receive incentives ranging from 0.30 percent to 2.0 percent.

Highlighting a significant momentum in the country’s push toward a cashless society, the nationwide mandatory rollout of the unified "Bangla QR" payment standard recorded 77,165 transactions amounting to Tk22.02 crore over a span of just two days, central bank data showed. The transactions were registered on June 30 and July 1, 2026, marking the official eve and day of the central bank's deadline for financial institutions to fully transition to the standardized system. According to Bangladesh Bank, the introduction of the standardized, interoperable Quick Response (QR) code aims to fundamentally restructure retail payment infrastructure, phase out cash dependencies, and foster a more efficient digital financial ecosystem. Unified Payment Standard for Small and Large Merchants: Developed by the central bank under the National Payment Switch Bangladesh (NPSB) platform, Bangla QR serves as a single "one country, one QR" payment mechanism. The primary technological advantage is its low-cost infrastructure. Instead of expensive Point of Sale (POS) card terminals, merchants—ranging from large retail malls to roadside micro-vendors and street hawkers—only require a printed QR code sticker to receive digital payments. Previously, merchants had to display multiple QR codes issued by individual banks or Mobile Financial Service (MFS) providers. The new mandatory guidelines ensure complete interoperability, allowing a customer using any participating bank app or MFS wallet (such as bKash or Nagad) to scan a single universal code. Cost Caps and Consumer Security: To further incentivize the digital transition and promote affordable access, Bangladesh Bank issued a fresh circular on July 1, capping the maximum Merchant Discount Rate (MDR) at percent (including VAT) for transactions channelled via Bangla QR. This fixed rate applies across bank accounts, debit, credit, or prepaid cards, and MFS platforms. Addressing social media speculation regarding additional operational expenses, Bangladesh Bank spokesperson Arif Hossain Khan clarified that the payment service is entirely free for consumers.  "Consumers can make purchases through Bangla QR without paying any charge. The transaction fee applies strictly to merchants and cannot be legally passed down to the customers," the spokesperson stated, adding that asking buyers to pay extra violates official payment guidelines. The central bank expects that moving retail trade into recorded digital channels will gradually reduce the informal footprint of the economy, improve financial transparency, mitigate risks associated with physical cash handling or card cloning, and significantly boost the country's tax-to-GDP ratio.

BRAC Bank has unveiled a range of exclusive offers for the valued customers, marking its 25th anniversary, celebrating the trust and loyalty of the millions of customers who have been part of the bank’s long journey. As part of its silver jubilee celebrations, the bank is offering a 25% waiver on SME loan processing fees for all eligible SME loan applications submitted throughout July 2026. Selected debit and cardholders will also enjoy a premium dining campaign featuring an exclusive “Buy 1, Get 3 Free” buffet dinner offer at leading hotels, including Crowne Plaza Dhaka Airport, InterContinental Dhaka, Radisson Blu Chattogram Bay View, Sheraton Dhaka and The Westin Dhaka. The offer will be available from 3 July to 5 July 2026 on selected BRAC Bank cards. The anniversary initiatives have been designed to thank customers by creating meaningful value while celebrating a significant milestone in the bank’s journey, according to a press release. Managing Director and CEO of BRAC Bank Tareq Refat Ullah Khan described the silver jubilee as a celebration of the trust customers have placed in them over the past 25 years. “These special offers are a small token of our appreciation for their enduring partnership as we continue our journey of delivering innovative, inclusive, and customer-centric banking.”