Govt bank debt tops Tk 6 lakh crore

Staff Reporter :

The government’s outstanding debt in the banking system has surpassed Tk 6 lakh crore for the first time, driven by a sharp increase in borrowing over the past two months despite an initial repayment trend earlier in the fiscal year.

During the first four months of the current fiscal year, the government had in fact repaid Tk 503 crore more to the banking system than it borrowed.

However, this position shifted markedly in November and December as borrowing accelerated.

From the beginning of the fiscal year to 4 January, the government borrowed approximately Tk 60,000 crore from banks, pushing total bank debt to a new record.

To finance the budget deficit, the government sets annual borrowing targets from both the banking system and national savings instruments.

For the current fiscal year, the target for bank borrowing has been set at Tk 1.04 lakh crore,
while Tk 12,500 crore is expected to be raised through savings certificates.

In the previous fiscal year, the original budget set a bank borrowing target of Tk 1.37 lakh crore, later revised down to Tk 99,000 crore.

Actual borrowing, however, reached only Tk 72,372 crore. Meanwhile, against a savings certificate borrowing target of Tk 15,400 crore, outstanding liabilities from this source fell by Tk 6,063 crore. The trend has reversed this year.

Available data show that government debt from savings certificates rose by Tk 2,369 crore during the July–October period, reaching Tk 3,40,868 crore.

According to Bangladesh Bank data, as of 4 January the government’s total debt within the banking system stood at Tk 6,10,661 crore.

Of this, Tk 1,22,429 crore was owed to Bangladesh Bank, up from Tk 98,424 crore at the end of June — an increase of Tk 24,060 crore.

Borrowing from commercial banks also rose significantly to Tk 4,88,232 crore, an increase of Tk 35,751 crore since June.

An analysis of the debt figures indicates that borrowing has accelerated notably in recent months.

By October, total government bank debt had fallen to Tk 5,50,502 crore. However, it rose by Tk 45,239 crore to Tk 5,96,144 crore by 12 December and has continued to increase since then.

A Bangladesh Bank official told the media that the government injected Tk 20,000 crore in capital into the newly formed Sammilit Islami Bank, created through the merger of five banks in early December.

The official also noted that revenue collection has fallen short of expectations, while government expenditure has risen.

Growing operational and development costs, he said, have prompted greater reliance on bank borrowing in recent months.