Bank deposits grew in the third quarter of 2024 as many people were encouraged by rising interest rates to park their money at commercial lenders.

In the July-September period of the previous calendar year, bank deposits rose 7 percent year-on-year to Tk 18.25 lakh crore, with bank branches in rural areas registering higher deposit growth compared to their urban counterparts.

The significant hike in interest rates was a key driver behind the growth in bank deposits, said Syed Mahbubur Rahman, managing director and chief executive of Mutual Trust Bank PLC.

Besides, banks have carried out a lot of campaigns to attract depositors, he added while informing that they expect the uptrend of deposits to continue.

The weighted average interest rates on deposits rose to 5.88 percent in the July-September quarter last year from 4.55 percent during the same period of the previous year, according to data of the Bangladesh Bank.

But when comparing the April-June quarter, bank deposits declined by 0.73 percent year-on-year due to widespread unrest centring a mass movement that ousted the Awami League government on August 5.

Overall bank deposits stood at Tk 18.38 lakh crore by the end of last June.

Private commercial banks, including Islamic banks, constitute 68 percent of the total deposits at present.

However, the central bank data shows their deposits shrank 0.33 percent to Tk 12.58 lakh crore by the end of last September from Tk 12.62 lakh crore three months prior.

The crisis ridden Islamic banks recorded the steepest decline in deposits during the July-September period. Meanwhile, state banks closely followed even though both public and private banks saw deposit growth for about one year since the end of September 2023

On the other hand, loans and advances maintained an uptick for four quarters ending with the July-September period of 2024.

Loans and advances increased by 10 percent year-on-year to Tk 16.19 lakh crore by the end of September last year.

Between June and September of 2024, loans and advances to bank borrowers grew by 1.43 percent mainly in urban areas.

The former ICT state minister, Zunaid Ahmed Palak, had boasted in 2016 that sprawling IT park in Kaliakoir would employ up to a million people over 10 years

But eight years on and having spent about Tk 600 crore of public funds, the 355-acre Bangabandhu Hi-Tech City has managed to create employment for just 1,500 people. The industrial park remains largely desolate despite incentives like a seven-year tax holiday and duty-free facilities for raw material import.

This is not an isolated case. The Bangabandhu Hi-Tech Park in Sylhet was taken up in 2016 for Tk 324 crore with the ambitious goal of generating 50,000 jobs. Less than 100 people work there. Although long past the deadline, the park is yet to be fully operational.

Out of the 18 companies allotted spaces in the hi-tech park, less than five have started operations and several pulled out even before initiating their business activities.

Till date, Tk 1,473 crore was spent on three hi-tech parks, three software parks and four incubation centres by the Awami League government, which envisioned these establishments as ICT and business innovation hubs that would employ tens of thousands, generate billions of dollars and position Bangladesh as a leading digital nation.

But their returns have been negligible thanks to faulty planning, corruption, poor execution and a lack of supportive ecosystem, found an investigation by The Daily Star involving interviews with over a dozen individuals connected to these parks and an analysis of hundreds of pages of documents.

“Such projects in the name of development in general and with the rhetoric of Digital Bangladesh in particular under long years of authoritarian regime were converted as a licence for partisan political mileage, illicit income and unaccountable wastage of public money,” said Iftekharuzzaman, executive director of Transparency International Bangladesh.

Take the case of the Bangabandhu Hi-Tech Park in Rajshahi, which was constructed between July 2016 and June 2024 for Tk 335.5 crore.

At best 500 people are employed across seven investor entities accounting for an investment of Tk 3 crore, said park officials.

Due to petty issues such as rainwater seeping into the buildings, a lack of generator services and other infrastructural challenges, the largest company, Fleet Bangladesh, recently left the park’s incubation centre, said its founder Khairul Alam.

“They also promised tax breaks that have yet to be fulfilled,” he said.

Over in Jashore, the Tk 253 crore Sheikh Hasina Software Technology Park managed to attract negligible investment.

Despite the abysmally low returns, Palak continued to tout the ventures as successful initiatives, creating the ground for authorising more than 80 such parks all over the country.

He named all the projects after the deposed prime minister Hasina and her family members to expedite approval and shield them from criticism and scrutiny, according to Bangladesh Hi-Tech Park Authority (BHTPA) officials involved with the proceedings.

“Tagging such projects with the names of family members of the fallen head of the government provided added impunity to the multidimensional wastage of mainly borrowed funds, which has also left a huge burden on the people,” said TIB chief Iftekharuzzaman, who also heads the interim government’s Anti-Corruption Reform Commission.

The parks have been renamed after the district concerned following the fall of the Hasina government on August 5.

At present, another dozen establishments are on the way that would cost about Tk 7,000 crore of public money.

The projects were often undertaken on a whim and almost always without concerted planning.

In similar areas, multiple overlapping projects were approved, including training centres and incubation centres established within hi-tech parks themselves.

For instance, a Tk 66 crore IT training and incubation centre project was initiated in 2019 in Singra, Natore—Palak’s constituency.

And yet, less than 30 kilometres away, or a half hour’s drive away in Natore Sadar is a similar project, which is now operational.

Still, another project worth over Tk 150 crore was approved in Singra. The project includes infrastructure such as a mini-stadium and a cineplex, reportedly intended for Palak’s political events, according to people aware of the proceedings.

Less than 50 miles from Natore Sadar, a Tk 355 crore hi-tech park is already under construction in Rajshahi.

In addition, there is a plan for another IT incubation centre within the Rajshahi Hi-Tech Park, and a separate project is under consideration in Charghat, Rajshahi.

Additional projects have been approved in Natore and Rajshahi’s surrounding districts, including Sirajganj, Chapainawabganj, Naogaon, Pabna and Bogura.

In Sylhet, where Tk 336 crore was spent on a hi-tech park, an additional IT park project was approved for over Tk 65 crore. In the same hi-tech park, another Tk 150 crore has been allocated for an IT park.

In Chattogram district, four overlapping establishments have been proposed — an IT park costing Tk 65 crore, another park for Tk 150 crore, a software technology park within the city and the Sheikh Kamal IT Business Incubator Centre at the Chittagong University of Engineering and Technology for Tk 117 crore.

The lack of transparency in the tender evaluation process led to significant corruption within the projects, according to BHTPA officials who spoke on the condition of anonymity.

For instance, an audit into BHTPA by the Office of the Comptroller and Auditor General highlighted six significant irregularities detailing a financial loss of Tk 50.58 crore in fiscals 2019-20 and 2020-21.

Those involved in project design, planning, budgeting, approval and implementation including relevant officials as well as political masterminds must be brought to justice to set examples for the future, Iftekharuzzaman said.

“Officials involved in these projects would face action if found guilty — we are proceeding slowly but surely, and no one will be spared,” Shish Haider Chowdhury, secretary to the ICT Division, told The Daily Frontline.

A committee has been formed to review these procurements.

He acknowledged that most of the projects were undertaken without proper planning.

The projects included large infrastructure in remote areas where there is no business case, he said.

“We are reducing several components of ongoing projects. For instance, if a building was initially planned for seven stories, but four stories are already completed, we are stopping it there. Even then, we remain uncertain if there will be a viable business case after trimming the projects,” Chowdhury added.

To lessen further loss, such projects should be frozen until objectively reassessed and appropriately redesigned to ensure value for money, Iftekharuzzaman said.

GSM Jafarullah, the managing director of BHTPA from August 1 last year, had his contractual appointment scrapped on September 3 by the interim government. His successor AKM Amirul Islam could not be reached for comment.

The Chinese company has had business transactions worth $500 million with different entities in the country over the last few years

The National Board of Revenue (NBR) has launched an investigation into ZTE Bangladesh – a subsidiary of the Chinese ZTE Corporation that has many business operations in different sectors of the country – to see if the company is involved in tax evasion.

As part of the investigation, the revenue board has already sent separate letters to different entities with whom it has its business deals.

With the aim of protecting the property safety of Bangladesh and upholding local laws and regulations, the revenue authority has launched the probe as the company’s operation is deemed to have an intention of tax evasion, a revenue official said.

The senior official of the NBR, who wished not to be named, confirmed to daily Frontline about the news of sending several letters to entities that are doing business with the ZTE. “We will check bank transactions of all related parties,” he said.

The ZTE Corporation is a Chinese major international provider of advanced telecommunications systems, mobile devices and enterprise technology solutions to consumers, operators, companies and public sector customers.

Listed on the stock exchanges of Hong Kong and Shenzhen, ZTE sells its products and services in more than 160 countries.

According to the Shenzhen Stock Exchange, the total revenue of the ZTE Corporation in 2019 was 9,073 crore Chinese Yuan.

Currently, it has both equipment and service contracts with the public and private ICT and Telecom and the power sector in Bangladesh.

According to the office of the Deputy Commissioner of Taxes, the company has had business transactions worth $500 million with different entities in the country over the last few years.

A senior NBR official told The Business Standard, obviously, the proportion of onshore service is high and is signed and delivered by the local Bangladeshi company, and the revenue and taxes should be attributed to the registered local company.

If the turnkey contract is actually signed by a Chinese incorporated company, the contractor will definitely arrange personal and technical teams to support the service implementation, he added.

The Chinese ZTE Corporation is operating businesses in Bangladesh through its subsidiary, he mentioned, adding that in this case the company can evade tax in two ways — transfer pricing and making transactions with related parties from China.

The NBR is investigating whether the company is involved with such practices.

The country’s first national data centre (NDC), which is located in the Kaliakoir hi-tech park, about 60 kilometres away from the centre of Dhaka, also has been constructed by this Chinese Tech Company.

Among private sector ZTE has a large business operation with Robi, is the second largest mobile operator of Bangladesh. Robi takes network expansion equipment and telecom services from ZTE.

However, Robi did not disclose the information on how many projects it has engaged the Chinese tech company and the volume of the projects’ cost and whether it incorporates the TAX in the bills.

Approached for its statement on this issue, Robi told The Business Standard, “Our relationship with our partner organisations form the core of our business strength. Just like any sensible company, we are not comfortable to divulge such information that will undermine our competitive edge in the market.”

The National Board of Revenue also issued a letter to the state-owned Teletalk Company Limited.

When contacted, Targhibul Islam, deputy general manager at Teletalk could not say in how many projects currently it has engaged the ZTE Corporation and whether it is incorporating tax in the bills or not.

The Bangladesh Telecommunications Company Ltd (BTCL) and Power Grid Company of Bangladesh (PGCB) are the major service receivers of the ZTE Corporation.

The NBR also sent separate letters to both the organisations to send related information concerning ZTE.

The revenue authority said it has decided to investigate the value of transactions between foreign firms and their associated enterprises and find out trade-based money laundering through misuse of the transfer pricing system.

In this regard, NBR has formed an investigation team for the ZTE and other multinational companies (MNCs) operating in Bangladesh.

An official said MNCs may engage in under-invoicing or over-invoicing practices while transferring prices to its associated companies located in other countries for purchasing goods and services to either reduce the level of payable duties and other taxes or siphon off money from the importing country.

The Business Standard contacted ZTE Bangladesh for its statement on the issue. However, the company has sought time to make an official statement.

Nonetheless, officials of the company unofficially told TBS that the company is filing tax returns to the NBR on a regular basis and doing business following the laws of the country.

Terming the serving of letters by the NBR a regular activity of the revenue board, they also said that they are cooperating with the NBR in the investigation process.