Govt borrowed Tk 92,288cr from banks so far in FY23
Staff Reporter :
The government’s borrowing from banks is amounted to Tk 92,288 crore in first eleven months of the current financial year of 2022-23, according to the Bangladesh Bank data.
The target for borrowing from the banking system for the fiscal year 2022-23 has been set at Tk 1,06,334 crore referring government already spent 86.8 percent of its target.
In last two months government borrowed Tk 18, 698 crore from the commercial banks which was Tk 1,980 crore in the July-March period and after the July-May period it stood at Tk 20,678 crore in FY23.
The government borrowed Tk13, 015 crore from banks in May alone, which is significantly higher compared to just Tk7, 663 crore borrowed in the previous 10 months combined, as per data from central bank.
At the end of May in the current fiscal year, its borrowing from the central bank stood at Tk71,610 crore, compared to Tk2,146 crore at the same time last fiscal year.
In the previous month, the government repaid Tk2,783 crore to the Bangladesh Bank.
Experts said that the government’s bank borrowing kept rising due to limited options to cover high expenditures relative to its low income as the revenue collection from July to April achieved only 67 percent of its target.
The government borrowed heavily from the central bank through devolvement which was not good thinking, they added.
They raised concerns about the government’s heavy borrowing from the central bank and warned that the trend might contribute to inflationary pressure by driving up consumer prices.
However, The BB sold more $12 billion to the banks directly between July and April, which withdrew an equivalent amount of local currency from the banking system.
The government’s revenue collection target for the fiscal 2022-23 was Tk3.70 lakh crore. In the first 10 months (July- April), the revenue collection stood at Tk2.50 lakh crore.
Meanwhile, The total outstanding loans of the government from the commercial banks soared to Tk 2,34,997 crore at the end of May from Tk 2,16,300 crore in March 2023, according to the BB data.
The government’s total outstanding borrowing from the bank sector increased to Tk 3.66 lakh crore on May 31, 2023, which was Tk 2.14 lakh crore on June 30, 2022.
More significantly, government’s dependence on banks to meet deficit finance will continue further in next fiscal year.
It eyeing to borrow Tk 1.36 lakh crore from banking sector for financing the budget deficit in the financial year of 2023-24 which is nearly Tk 30 thousand crore more than the current fiscal year.
