Trade through Bangladesh’s 10 Shariah-compliant banks is dwindling, with loans surpassing deposits, creating liquidity challenges. Exports facilitated by these banks dropped by almost 39% in Q2, contrasting the nation’s overall export growth of 7%.

Imports through Islamic banks also declined by 47%. Despite a year-on-year deposit growth of 0.85%, loan disbursements increased by 8.73%, causing an imbalance. Allegations of irregular lending contribute to a crisis of confidence among businesses, affecting deposits. Excess liquidity in these banks fell by nearly 91% to Tk1,073 crore compared to the previous year.

Remittances, however, saw surprising growth, up over 39% year-on-year in Q3, attributed to outstanding import bills and competitive remittance rates. Irregularities and negative attitudes pose challenges, signaling potential difficulties in meeting long-term liabilities for Islamic banks.

US investors have been pulling out of Bangladesh’s stock market over the last three fiscal years, as seen by the US portfolio investment falling to $629.71 million at the end of FY23, down 21.20% from FY22. The total amount of foreign portfolio investments decreased by more than 20% year over year to $2.33 billion in FY23 from $4.5 billion in FY19.

The decrease is ascribed to problems with governance, the depreciation of Taka, and the implementation of a floor price. Chemicals and pharmaceuticals led investments by industry. The market experienced no notable improvement despite the Bangladesh Securities and Exchange Commission’s roadshow efforts in the US; foreign investors appeared to be discouraged by things like currency devaluation and the recent jump in US interest rates, which made the stock market less alluring.

The National Board of Revenue (NBR) has lowered land registration source tax by Tk30,000 per katha in undeveloped areas of Dhaka, Gazipur, Narayanganj, and Chattogram districts. The statutory regulatory order, effective from November 30, 2023, reduces the maximum source tax per katha in specified Dhaka Upazilas to Tk20,000 from Tk50,000.

Similarly, areas in Chattogram, Narayanganj, and Gazipur also see reductions in maximum source tax per Katha. The move aims to boost land registration, following a previous two-fold increase in source tax during the fiscal year 2023-24 budget. This adjustment aligns with the NBR’s strategy to stimulate land registration, which is crucial for economic activities and real estate transactions in these regions.