Economy in ‘Painful’ Investment Phase, Says Khosru

Finance Minister Amir Khosru Mahmud Chowdhury on Tuesday described the country’s current investment climate as “painful”, citing prolonged domestic and global economic challenges as well as deep-rooted problems in the banking sector.

Speaking at the inauguration ceremony of Bangladesh Startup Investment Company (BSIC) in Dhaka, the finance minister said the government is committed to restoring confidence in the financial sector through reforms, stronger regulation and improved transparency.

“We are passing through a painful period for investment. Everyone is aware of the major difficulties that have emerged in the banking sector,” he said.

The newly launched BSIC has been formed with investments from 39 commercial banks to support technology-driven startups and entrepreneurs across the country. The initiative is aimed at strengthening Bangladesh’s startup ecosystem and expanding access to financing for innovative businesses.

Amir Khosru said the government is working closely with international financial institutions, including JPMorgan Chase, World Bank and International Finance Corporation, to address weaknesses in the banking sector and broader economy.

He stressed that the government would ensure there is no political interference in banking and investment decisions.

“We have a political commitment to solve these problems together. The transparency we want to establish in the financial sector will also be reflected in this investment initiative,” he said.

The finance minister also announced that the government is preparing major reforms for the country’s capital market to improve investor confidence and strengthen regulatory oversight.

“We are moving towards comprehensive reforms in the capital market. Serious regulatory measures will be introduced on a large scale,” he added.

Referring to the BNP’s economic agenda, Amir Khosru said BSIC’s objectives align with the party’s “Creative Economy” programme, which seeks to generate employment opportunities, particularly in rural areas.

He said the initiative could play an important role in creating jobs for nearly 10 million people through entrepreneurship and innovation-based economic activities.

Bangladesh Bank Governor Mostaqur Rahman said the country’s next phase of financial sector development requires institutions capable of ensuring innovation, discipline, accountability and transparency.

“BSIC is an important initiative to channel domestic capital into productive and technology-based entrepreneurship,” he said.

The governor also emphasised the need to ensure that the benefits of investment and economic growth reach marginalised communities.

“If marginalised people do not receive these benefits, a large section of society will remain excluded from development,” he warned.

Mostaqur Rahman acknowledged that an earlier Tk 5 billion startup fund created by the central bank had failed to achieve its intended goals. However, he expressed optimism that the new initiative would perform better because it has been established jointly with commercial banks.

BSIC is beginning operations with an initial fund of Tk 4.5 billion, with plans to increase the amount to Tk 7 billion by the end of the year.

The initiative was led by the Association of Bankers Bangladesh (ABB) in collaboration with Bangladesh Bank.

ABB Chairman and The City Bank Managing Director Mashrur Arefin has been appointed the first chairman of BSIC.

Other board members include Syed Mahbubur Rahman of Mutual Trust Bank, Shawkat Ali Khan of Sonali Bank, Mohammad Ali of Pubali Bank and Hasan O Rashid of Eastern Bank PLC.

Under the structure of the new company, shareholder banks will gradually increase their investments by contributing 1 per cent of their annual net profits each year, creating a long-term funding base for Bangladesh’s startup and innovation sector.