Published: 12:09 AM, 04 October 2026
Remittances Fall to $2.77 Billion in September Deepening Economic Pangs
Bangladesh received about $2.77 billion in workers' remittances in September 2026, marking the lowest monthly inflow in 11 months and raising fresh concerns about the country's external-sector resilience amid mounting economic and institutional pressures.
The September figure was down from roughly $2.97 billion in August, although it remained about 3 percent higher than the amount received in September 2025. Despite the monthly slowdown, remittances for the first quarter of fiscal year 2026-27 totaled approximately $8.59 billion, up 13.3 percent from a year earlier.
The latest decline comes as Bangladesh faces a combination of domestic banking-sector weaknesses, deteriorating business confidence and concerns over law and order. While there is no official evidence establishing a single cause for the September slowdown, economists and business leaders have repeatedly pointed to domestic uncertainty as an important factor affecting economic activity and confidence.
A major concern is the condition of the banking sector. Bangladesh Bank has acknowledged that liquidity conditions remain highly uneven, with financially sound institutions holding substantial funds while banks affected by financial distress face acute shortages. The central bank's latest review of Islamic banking also identified significant liquidity pressure linked to weakened asset quality and limited Shariah-compliant short-term liquidity-management instruments.
The problems have been particularly visible among Shariah-based banks. Several institutions have faced governance problems, liquidity shortages and deposit withdrawals. In June, Islami Bank Bangladesh experienced a sharp increase in withdrawals, with deposits falling by Tk 4,240 crore within seven days amid protests surrounding the appointment of a new chairman. The bank subsequently sought Tk 10,000 crore in emergency liquidity support from Bangladesh Bank.
Five financially troubled Shariah-based banks have also been merged into Sammilito Islami Bank, reflecting the severity of problems accumulated in parts of the Islamic banking sector. Bangladesh Bank has provided liquidity assistance while introducing measures to allow depositors greater access to their funds.
The banking turmoil has broader implications because remittances are closely connected to the formal banking system. Expatriate Bangladeshis depend on banks and authorized financial channels to transfer their earnings home. Any perception that banks are unable to safeguard deposits or provide reliable access to funds can weaken confidence in formal financial channels.
The erosion of confidence is not confined to banks. Bangladesh's broader business environment is also facing considerable pressure. Business leaders have repeatedly called for improvements in law and order, simpler regulatory procedures and lower costs of doing business. At a Dhaka Chamber of Commerce and Industry event, entrepreneurs identified administrative complexity, regulatory ambiguities, limited access to finance and law-and-order problems as major obstacles to business expansion and investment.
Extortion has emerged as another major concern. Business leaders have warned that extortion and weak law enforcement are increasing the cost of doing business and discouraging investment. A police intelligence report cited by an influential daily English newspaper identified around 1,200 alleged extortionists operating in Dhaka, while reports from traders described regular payments demanded to continue operating businesses.
For businesses and investors, uncertainty can also arise from allegations of political retaliation, false police cases, political tagging and other forms of pressure. Such allegations, when they occur, can make entrepreneurs more reluctant to invest new capital or expand operations. The broader concern is that uncertainty over personal and business security can raise the perceived risk of investing in Bangladesh.
These pressures are occurring against the backdrop of an already fragile economic environment. The World Bank has described Bangladesh's banking sector as stressed and private investment as subdued, while warning that persistent inflation, weak revenue mobilization and geopolitical tensions are complicating the country's economic recovery.
For expatriate Bangladeshis, the decision to send money home is influenced by a range of factors, including employment conditions abroad, exchange rates, household needs, global economic developments and the convenience of formal transfer channels. The Middle East conflict and higher living costs have also been cited as factors that could affect remittance flows.
Consequently, it would be premature to attribute September's decline solely to Bangladesh's domestic political or banking environment. Nevertheless, the combination of banking-sector instability, concerns over law and order, extortion, regulatory difficulties and allegations of political pressure represents a significant challenge to confidence.
Bangladesh's remittance performance remains relatively strong on a year-to-date basis. But the September slowdown underscores the importance of restoring confidence in financial institutions, strengthening the rule of law, reducing the cost and complexity of doing business, and ensuring that expatriate Bangladeshis can send their hard-earned money through secure and reliable channels.
For an economy heavily dependent on workers' remittances to support foreign-exchange liquidity and household incomes, maintaining confidence among both domestic depositors and millions of Bangladeshis working overseas will remain critical in the months ahead.
Dr. Hossain Zillur Rahman has said that regaining people's confidence on the country's financial system and banking sector is indispensable right now. Otherwise it would be tough to convince expatriate Bangladeshis to remit their earnings to their home country.
Professor Anu Muhammad has said that devastated law and order situation and frequently happening crimes seriously daunt people's eagerness to invest their money under lawless circumstances. Extortion, political retaliation, attacks on women, rise of bigotry etcetera have turned economic prospects into gloomy circumferences, Anu Muhammad stated.
Former Chairman of National Board of Revenue (NBR) Badiur Rahman told reporters that more than 4 million people have become jobless during last two years. He also underlined the fact that thousands of factories including readymade garments (RMG) were laid off during last two years. These are very alarming signs, he commented.
