Govt plans municipal bonds to finance development projects
The government aims to build a modern, strong and sustainable financial system through structural reforms in both the banking sector and capital markets.
The government plans to establish a framework for issuing municipal bonds to finance local and urban government infrastructure development projects in the upcoming FY2026-27 budget.
The government is committed to building a modern, strong and sustainable financial system through structural reforms in both the banking sector and capital markets, according to the budget proposal to be unveiled by Finance Minister Amir Khosru Mahmud Chowdhury in parliament this afternoon (11 June).
The key initiatives include promoting the conversion of debt-based investments into equity investments, with the long-term objective of transitioning from a debt-driven economy to an investment- and FDI-led growth model.
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According to the budget document, the government plans to develop the bond market and alternative financing mechanisms to reduce excessive dependence on bank financing for long-term investments.
It also aims to expand corporate bond markets, mutual funds, green bonds, Sukuk and other long-term investment instruments; create alternative long-term financing sources through the expansion of the corporate bond market; and establish a framework for issuing municipal bonds to finance local government and urban infrastructure development projects, says the budget document.
The reform agenda aims to restore confidence in the financial sector, strengthen banking governance, protect depositors, deepen capital markets and diversify financing sources.
Collectively, these measures are intended to support sustainable economic growth, attract greater domestic and foreign investment and build a more resilient financial system for Bangladesh.
