Bangladesh's international trade ecosystem continues to face bottlenecks that hinder its efficiency and reliability, according to a 2024 study.
Banks involved in trade facilitation have identified multiple operational challenges, notably the heavy dependence on physical documents (reported by 70 per cent of respondents) and a lack of automation (highlighted by 80 per cent), the study said.
Other significant challenges include price verification for letter of credit (LC) issuance, compromised reliability, and complex regulatory environments, with each receiving attention from 20 per cent to 30 per cent of respondents. Issues such as limited access to global trade finance networks and the volatile foreign exchange market also emerged as notable hurdles.
The findings were presented at a roundtable titled "Trade Eco-System in Bangladesh to Enhance the Operational Efficiency in Trade Services by Banks" at the BIBM auditorium in the capital on Thursday.
The Bangladesh Institute of Bank Management (BIBM) arranged the discussion. Dr Shah Md Ahsan Habib, professor (selection grade) at BIBM, presented the research findings at the function.
Md Shihab Uddin Khan, associate professor and director (research, development and consultancy) at BIBM, gave the welcome address.
While presenting the study, Habib emphasised the need for investment in technology to develop a better trade ecosystem in the country. He also highlighted the importance of awareness and capacity-building initiatives from stakeholders, such as banks, to support this effort.
Nurun Nahar, chairman of the BIBM executive committee and deputy governor at the Bangladesh Bank, delivered the inaugural speech.
The study also explored potential measures to establish an efficient trade ecosystem. Automation, flagged as a critical solution, was deemed essential by 80 per cent of stakeholders to ensure transparency.
Other recommendations include simplifying and harmonising tax codes (9 per cent) and creating incentives to promote professionalism in the trade sector.
As Bangladesh aims to boost its global trade competitiveness, stakeholders must focus on implementing automation, modernising compliance systems, and fostering cooperation across regulatory bodies, the study said.
The adoption of digital tools and clear policy guidelines could streamline processes, reduce trade-related delays, and empower financial institutions to serve exporters and importers more efficiently, it noted.
Discussants argued that addressing these challenges would not only boost confidence in Bangladesh's trade environment but also strengthen its position in global commerce.
Speaking at the discussion, Nahar said manual operations, operational errors, and capacity development are critical barriers to enhancing the efficiency, transparency, and accessibility of the trade and trade finance ecosystem."Capacity development ensures that stakeholders, such as businesses, financial institutions, and regulators, possess the necessary skills and knowledge to navigate the evolving tools and systems," she stated.
This integration of technology and capacity building helps bridge gaps in access to trade finance, enabling small and medium enterprises (SMEs) to engage in international trade, thus promoting economic growth and sustainable development, Nahar added.
Speaking as the principal discussant, Mohammad Ali, managing director and chief executive officer of Pubali Bank, said a central depository information system is essential for improving the trade ecosystem.
Currently, there is an imbalance within the system that needs to be addressed through better integration, he added.
Dr Md Akhtaruzzaman, director general of BIBM, chaired the function. Md Ali Hossain Prodhania, supernumerary professor at BIBM, and Mohammad Ziaul Hasan Molla, deputy managing director of Bank Asia, also spoke on the occasion.
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