Beyond the Pen-Down: Understanding the Power Struggle within Bangladesh's NBR

 

The ongoing crisis within Bangladesh's National Board of Revenue (NBR) has reached a critical juncture, with a prolonged pen-down strike by tax, VAT, and customs officials severely impacting the nation's economic vital signs. Government revenue collection has slowed to a trickle, and essential business operations, particularly in the import and export sectors, face unprecedented disruption.

At the Heart of the Unrest:

The root cause of this debilitating standoff lies in a controversial ordinance proposing the dismemberment of the NBR into two distinct entities: the Revenue Policy Division and the Revenue Management Division. While the government champions this structural overhaul as a necessary step to enhance efficiency, mitigate conflicts of interest, and broaden Bangladesh's notoriously narrow tax base, NBR officials stand in staunch opposition. Their primary concern revolves around a contentious clause within the ordinance that would permit officers from the general administration cadre to lead these new divisions, igniting fears of professional marginalization for seasoned revenue cadre officials.

Further exacerbating the already simmering tensions were recent "punitive" transfers of protesting officials, the denial of designated meeting spaces, and the conspicuous exclusion of certain officers from the very committee tasked with amending the contentious ordinance. This perceived mishandling of the reform process has undeniably eroded trust between the NBR leadership and its dedicated workforce.

Proposed Paths to Resolution:

The government, acting through the Chief Adviser's office and the finance ministry, firmly asserts that the NBR's restructuring is paramount for modernizing the national tax system and bolstering revenue collection, aligning Bangladesh with international best practices. While an earlier press release clarified that the NBR itself would not be dissolved, the finance ministry has more recently pledged to introduce necessary amendments to the "Revenue Policy and Revenue Management Ordinance 2025" by July 31, 2025. These amendments, they state, are specifically designed to safeguard the interests of BCS (tax) and BCS (customs and VAT) cadres, a move they hope will quell the ongoing protests.

Conversely, the protesting NBR officials, united under the banner of the NBR Reform Unity Council, are demanding the immediate repeal of the contentious ordinance. They further insist on the public disclosure of the NBR reform committee's final report and a firm commitment to an inclusive, consultative, and sustainable reform process. A more recent and significant demand is the immediate removal of the current NBR Chairman. The officials underscore that their opposition is not to reform itself, but rather a plea for transparency, fairness, and the rightful inclusion of experienced revenue officers in any restructured framework. The business community and economic analysts alike are vociferously urging for immediate dialogue to resolve this deepening crisis, highlighting its severe repercussions on both trade and the broader national economy.

Sri Lanka's Pharmaceutical Future: Bangladesh Collaboration and Investment Opportunities

Sri Lanka is actively pursuing investment from Bangladesh to bolster its domestic pharmaceutical manufacturing capabilities. This initiative stems from a significant imbalance between the nation's demand for medicines and its current production capacity, alongside a strategic push to strengthen economic ties within the region. At a recent high-level business forum in Colombo, Sri Lankan officials and industry representatives extended a strong invitation to Bangladeshi entrepreneurs, acknowledging Bangladesh's well-developed and globally competitive pharmaceutical sector.

 

Sri Lanka presently relies heavily on imported medications, with an estimated 85% of its pharmaceutical requirements fulfilled by international suppliers. In 2021, imports of medical and pharmaceutical products were valued at approximately USD 763 million. This substantial dependence on foreign sources exposes the island to vulnerabilities in global supply chains and currency fluctuations, a challenge acutely felt during its recent economic downturn, which led to crucial medicine shortages. Local production facilities currently meet only about 15-20% of the country's pharmaceutical needs, highlighting a considerable shortfall that must be urgently addressed to ensure healthcare security and reduce the national import bill.

 

In contrast, Bangladesh has emerged as a dominant force in pharmaceutical production. Specializing in generic drugs, Bangladeshi firms have largely satisfied their domestic market's demand and have also become significant exporters, including to nations like the United States. This success is largely attributable to robust government backing, a skilled labor force, and efficient, cost-effective manufacturing processes. Bangladesh already has a notable track record of exporting pharmaceuticals to Sri Lanka, indicating an established trading relationship in this industry.

 

The appeal for Bangladeshi investment aligns perfectly with Sri Lanka's long-term objective of increasing local drug production and achieving greater self-reliance in the pharmaceutical sector. The Sri Lankan government is actively promoting foreign direct investment in this area, providing various incentives and developing specialized export processing zones specifically for pharmaceuticals and medical devices. These zones are designed to offer the necessary infrastructure and regulatory support for establishing new manufacturing plants.

 

From a broader regional economic standpoint, this partnership offers mutual advantages. For Sri Lanka, investment from Bangladesh provides vital capital, technical expertise, and an opportunity to localize a crucial industry. For Bangladesh, it presents an expansion into a growing regional market, leveraging existing trade routes and further cementing its status as a pharmaceutical hub in South Asia. Both countries are also in discussions regarding a potential Free Trade Agreement (FTA). If implemented, an FTA would eliminate tariff barriers and significantly streamline trade and investment flows, thereby strengthening their economic partnership beyond just the pharmaceutical industry. This strategic collaboration has the potential to enhance Sri Lanka's healthcare resilience while opening new avenues for Bangladeshi industrial growth.

Liquidity Crunch and Government Borrowing Push Bangladesh 91-Day T-Bill Yield to Historic High

Bangladesh's financial sector is navigating a period of intense pressure, as evidenced by the 91-day treasury bill yield climbing to a historic peak of 12.10% in recent auctions conducted by the nation's central bank. This new high surpasses the 12.02% observed just a fortnight ago and represents a notable ascent from rates around 10% recorded a few months prior (April 2025). This escalating yield reflects considerable liquidity strain within the banking system and an increased reliance by the government on domestic funding.

 

Several interconnected factors are contributing to this significant rise. Firstly, commercial banks are contending with increasingly stringent liquidity conditions. This situation is partly attributable to a surge in non-performing loans (NPLs), which reached an unprecedented Tk 345,765 crore by the close of 2024. Furthermore, there's a clear trend of depositors shifting funds from financially weaker institutions to more robust banks, intensifying the liquidity crunch for the former.

 

Secondly, the central bank's methodical reduction of liquidity support mechanisms is a key influence. The cessation of the 28-day repurchase agreement (repo) facility and the impending discontinuation of the 14-day repo from July are compelling banks to manage their cash reserves with greater prudence and to lean more heavily on deposit-based funding. This diminished access to short-term central bank financing reduces banks' incentive to invest in lower-yielding government securities, thereby driving up the rates they demand.

 

Thirdly, the government's growing dependence on internal borrowing to finance its budget deficit is a major component of the issue. With tax revenue collection expanding by a mere 2.76% during the first nine months of FY2024-25, falling considerably short of the revised target of Tk 463,500 crore, the government is increasingly turning to the banking sector for funds. The adjusted budget for FY2024-25 sets the net bank borrowing target at Tk 99,000 crore. As banks face their own liquidity challenges, the government finds itself needing to offer more attractive interest rates to secure the necessary capital, pushing T-bill yields higher.

 

Finally, persistent elevated inflation, despite a slight moderation to 9.05% in May 2025 from 9.17% in April, remains a concern. The Bangladesh Bank's restrictive monetary policy, with the policy rate set at 10.00% since February 2025, aims to mitigate inflationary pressures. However, this tight money supply environment inherently leads to higher borrowing costs across the economy, including for government debt instruments.

 

The continued upward trend in T-bill yields will inevitably inflate the government's interest payment obligations, potentially diverting resources from crucial development initiatives. Addressing the fundamental liquidity challenges within the banking sector and bolstering revenue generation are imperative steps to stabilize the yield curve and foster broader macroeconomic stability.

Crystal Insurance Under Scrutiny: BSEC & ACC Link Abul Khayer to Share Scam

 

The intricate web of Bangladesh's capital market has once again drawn sharp attention to the actions of Md. Abul Khayer, a Deputy Registrar at the Department of Cooperatives, and his repeated involvement in share manipulation, particularly concerning Crystal Insurance Company Limited. Recent rulings by the Bangladesh Securities and Exchange Commission (BSEC) and an ongoing Anti-Corruption Commission (ACC) case highlight a pattern of alleged illicit activities that threaten market integrity and investor confidence.

 

The BSEC's Stance: Fines and Warnings

 

The Bangladesh Securities and Exchange Commission has consistently taken enforcement actions against Abul Khayer and his associates for their alleged role in share price manipulation across various listed companies, including Crystal Insurance. A recent BSEC ruling, as reported on June 16, 2025, saw Abul Khayer and his associates slapped with fines totaling Tk 24.6 million for manipulating the share price of Crystal Insurance. This isn't an isolated incident; similar penalties have been levied against them in the past for infractions involving other companies such as Fortune Shoes, Delta Life Insurance, NRB Commercial Bank, and Sonali Paper & Board.

 

Specific BSEC findings indicate a coordinated effort to artificially inflate the share price of Crystal Insurance. For instance, an investigation revealed that between July 16, 2023, and September 21, 2023, Crystal Insurance's share price skyrocketed from Tk 41.20 to Tk 132.50, an abnormal increase of 194% without any corresponding material information or business developments to justify such a surge. The BSEC's detailed inquiry reports illustrate that manipulators utilized multiple brokerage firms and Beneficiary Owner (BO) accounts, often within their network, to create a false impression of high demand. This strategic manipulation, involving coordinated transactions and "howlas" (series of trades to drive prices up), misled general investors, creating an illusion of a thriving market even when the broader market was in decline.

 

Data from the BSEC's enforcement reports shows that entities linked to Abul Khayer, such as Eshaal Communication Ltd. and Monarch Mart Ltd., were actively involved as counterparties in significant share transactions of Crystal Insurance, sometimes executing hundreds of "howlas" to influence the price. These actions directly violate securities laws, designed to ensure fair and transparent trading practices.

 

ACC's Intervention: A Broader Investigation

 

Adding another layer of scrutiny to Abul Khayer's activities is the recent case filed by the Anti-Corruption Commission (ACC). On June 17, 2025, the ACC filed a case against Abul Khayer, his wife Kazi Sadia Hasan, and 13 others, including former national cricket captain Shakib Al Hasan, for allegedly embezzling Tk 256 crore from the stock market through fraud. A travel ban has also been imposed on all 15 accused.

 

The ACC's investigation alleges that Abul Khayer, with the assistance of his wife, layered and transferred illicit funds amounting to Tk 21.14 crore, earned as "capital gains" from these manipulations, across various channels to conceal their origins. Furthermore, the ACC's case statement details suspicious transactions totaling Tk 542.31 crore through 17 bank accounts linked to Abul Khayer. This paints a grim picture of a systematic and large-scale financial irregularity that extends beyond mere share manipulation, venturing into the realm of money laundering and illicit enrichment.

 

The inclusion of a high-profile figure like Shakib Al Hasan in the ACC's case underscores the gravity and potential reach of these alleged market manipulations. The case alleges that Shakib invested in companies, including Crystal Insurance, whose shares were being manipulated by Abul Khayer, thereby becoming complicit in the scheme and allegedly embezzling Tk 2.95 crore as illegally realized capital gains.

 

Implications for Crystal Insurance and Market Confidence

 

While Crystal Insurance Company Limited itself has reported positive financial performance, with a net income of Tk 24.76 crore in 2024 and a 12% cash dividend, the repeated association with share manipulation schemes, particularly involving key figures like Abul Khayer, casts a shadow on its market perception. Although the company's fundamentals may be sound, the negative publicity and regulatory actions stemming from these manipulations can erode investor confidence and affect its share price stability.

 

The consistent enforcement actions by the BSEC and the ACC's active involvement signal a stronger commitment from regulatory bodies to crack down on market manipulation and illicit financial activities. These developments are crucial for maintaining the integrity of Bangladesh's capital market and protecting the interests of general investors who are often the ultimate victims of such schemes. The ongoing investigations and punitive measures against individuals like Abul Khayer are vital steps towards fostering a more transparent, disciplined, and trustworthy investment environment in Bangladesh.

Bangladesh on Alert: New COVID-19 Variants Emerge, Health Measures Reinforced

 

Recent developments in Bangladesh indicate a slight increase in COVID-19 cases, driven by the emergence of new Omicron subvariants. While health authorities state there is no major cause for immediate alarm, increased vigilance and adherence to health guidelines are being emphasized.

 

The International Centre for Diarrhoeal Disease Research, Bangladesh (icddr,b) has identified two new SARS-CoV-2 Omicron subvariants, XFG and XFC, within the country. These subvariants are descendants of the highly transmissible JN.1 lineage. They were initially detected at Chattogram Medical College Hospital in April 2025. Data from icddr,b's surveillance sites across nine districts, including Kishoregonj, Rajshahi, and Chattogram, show a rise in positivity rates, reaching approximately 7% of tested patients in May 2025, an increase from near-zero rates earlier in the year.

 

As of early June 2025, Bangladesh has reported a relatively low number of daily COVID-19 cases. For instance, on June 8, 2025, three new cases were reported, bringing the total caseload to 2,021,742, with no new fatalities recorded. However, a slight upward trend in daily cases has been observed since May.

 

A new COVID-19 variant, NB.1.8.1, is also reportedly spreading in neighboring India and other countries. The World Health Organization (WHO) has designated NB.1.8.1 as a "variant under monitoring" due to its high transmission rate, though it does not appear to cause more severe disease than previous strains. The Directorate General of Health Services (DGHS) in Bangladesh has issued an alert, advising citizens to avoid non-essential travel to India and other affected countries and to enhance health screening and surveillance at all entry points.

 

Despite adequate vaccine stocks, public interest in COVID-19 vaccination has significantly decreased. The government is reportedly considering restarting vaccination efforts, particularly targeting elderly and immunocompromised individuals. Health experts and organizations like icddr,b continue to stress the importance of basic precautions, including:

Vaccination: Especially for vulnerable populations.

Mask-wearing: In crowded or enclosed spaces.

Physical distancing.

Hand hygiene: Regular washing or sanitizing of hands.

Self-isolation: Staying home if feeling unwell.

Enhanced surveillance measures, including thermal screening at airports and land ports, are being implemented to prevent the entry and spread of new variants. The DGHS has also provided instructions for suspected cases, advising home isolation for mild symptoms and hospital care if symptoms worsen.

Stability and Growth: Unpacking the Recent Trends of the DSE's Five Most Influential Companies

An analysis of the Dhaka Stock Exchange (DSE) over the last ten trading days reveals a mixed but generally positive performance among its top-tier stocks. The premier bourse of the nation saw its leading shares navigate through fluctuating market sentiments, with some demonstrating robust growth while others maintained stability. Based on a composite evaluation of market capitalization and trading volume, the top five companies currently dominating the DSE are Grameenphone Ltd. (GP), Square Pharmaceuticals PLC. (SQURPHARMA), BRAC Bank PLC. (BRACBANK), British American Tobacco Bangladesh Company Limited (BATBC), and Robi Axiata PLC. (ROBI).

Here is a comparative analysis of their performance from May 27, 2025, to June 7, 2025:

The Top 5 DSE Shares at a Glance:

Grameenphone Ltd. (GP): The telecommunications giant has shown consistent trading activity, with its share price exhibiting minor fluctuations. Over the past ten days, GP's stock has demonstrated resilience, maintaining its position as a heavyweight in the market.

Square Pharmaceuticals PLC. (SQURPHARMA): As a leading pharmaceutical company, Square Pharma has remained a stable performer. The stock has seen steady investor interest, reflecting the defensive nature of the pharmaceutical sector.

BRAC Bank PLC. (BRACBANK): BRAC Bank has been a notable gainer in the recent trading sessions. The bank's stock has experienced a significant uptick in both price and volume, indicating strong investor confidence.

British American Tobacco Bangladesh Company Limited (BATBC): BATBC, a multinational stronghold, has displayed its characteristic stability. The share price has seen modest gains, reinforcing its reputation as a safe-haven stock for many investors.

Robi Axiata PLC. (ROBI): The second-largest telecom operator in the country, Robi Axiata, has also been in the spotlight with active trading. The stock has shown upward momentum, attracting considerable investor attention.

 

The overall market sentiment on the DSE during this period has been cautiously optimistic. The performance of these top 5 companies, particularly the surge in BRAC Bank's stock, has contributed positively to the market indices. Investors appear to be favoring fundamentally strong companies with good governance and consistent dividend history. The telecommunications and banking sectors have been particularly active, while the pharmaceutical sector has provided a sense of stability to the market. As the fiscal year-end approaches, market participants will be closely monitoring the corporate declarations and macroeconomic indicators to guide their investment decisions.