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Cash transactions cost govt Tk 93,300cr in annual revenue

Published : Wednesday, 21 October, 2026 at 11:29 AM

Observer Online Report

Collected Photo

The government is losing an estimated Tk 93,300 crore in potential annual tax revenue due to cash-based transactions, while the overall economic cost of cash usage reaches Tk 1.70 lakh crore, or 3.24 per cent of GDP, according to a Bangladesh Bank study.

The study, titled 'The Cost of Cash Study in Bangladesh: A Comparative Analysis of Cash and Digital Payment', estimated that cash transactions cost the economy Tk 77,000 crore annually, excluding potential revenue losses. By contrast, digital payments cost around Tk 5,964 crore a year, or 0.11 per cent of GDP.

Commercial banks incur the largest share of cash-related costs at Tk 36,800 crore annually, followed by consumers at Tk 28,000 crore. Small businesses and microfinance institutions spend Tk 6,200 crore and Tk 5,600 crore, respectively, on cash handling, transportation, security and related expenses.

The study estimated Bangladesh's informal economy at 27.2 per cent of GDP, noting that cash transactions are difficult to trace, allowing some income and business activities to remain outside the tax net.

Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said the central bank was promoting Bangla QR, aiming to bring at least 50 per cent of transactions under cashless systems by 2028.

However, digital payments face barriers, including transaction fees, merchant costs, settlement delays and limited interoperability. The study estimated annual digital payment-related revenue at Tk 2,311 crore against total costs of Tk 5,964 crore.

Syed Mahbubur Rahman, former chairman of the Association of Bankers, Bangladesh, said reducing cash dependence could improve transaction transparency and help curb corruption and untaxed economic activity.

Fahmida Khatun, distinguished fellow at the Centre for Policy Dialogue, said weak public confidence in banks could be encouraging people to keep cash outside the banking system.

Bangladesh Bank data show that issued currency notes totalled Tk 3,70,269 crore at the end of June, with Tk 3,36,375 crore outside the banking system. The study recommended expanding affordable digital payments, improving financial literacy and linking transaction records with tax administration. It also cited a government target of achieving a fully cashless economy by 2031.

-AH

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Editor : Iqbal Sobhan Chowdhury

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