The interim government is repaying loans it had taken from Bangladesh Bank (BB) borrowing from commercial banks.
In the first six months of fiscal of 2024-25, the interim government repaid Tk 54,500 crore in loan taken from BB by borrowing Tk 69,000 crore from commercial banks.
As a result, the government's net loan from commercial banks stood at Tk 14,600 crore.
Suring the corresponding period of the last fiscal year, the government's net bank loan was in the negative territory at Tk 3,286 crore.
A BB official said that the government's demand for bank loans has decreased for three reasons. First: development activities have been stopped, Second: loan assistance is coming from foreign sources, Third: more loans are being obtained by selling savings certificates. Apart from this, the overall revenue collection is normal. However, he said that the government's borrowing will increase in future.
The government has completely stopped borrowing by printing money to control high inflation. As a result, the government has become dependent on borrowing from commercial banks. However, economists always advised the government to take as little loan as possible from commercial banks.
Because this deprives the private sector of needed loans. Moreover, many banks have been suffering from liquidity crisis for a long time. This has made it difficult for entrepreneurs to get bank loans, which they say is not good for the economy.
According to a BB report, the government's loan balance in commercial banks was Tk 3,18,441 crore at the end of June 2023. This increased to Tk 3,87,497 crore by the end of December. As a result, the loan from commercial banks in the first six months of the current fiscal year stood at Tk 69,056 crore out of which the interim government repaid Tk 56,000 crore in last two months of fiscal 2023-24.
According to BB report, the government's loan balance from BB at the end of June 2024 was Tk 1,56,048 crore, as of December 2024, the loan decreased to Tk 1,01,634 crore, after it repaid Tk 54,413 crore to the central bank.
Generally, the loan taken by the government from the central bank is considered as printing money. As a result, the balance of this amount of money printed in the six months in question has also decreased. In the first six months of the last fiscal year, the government repaid to the central bank Tk 32,663 crore.
Data review shows that at the end of December 2024 the governments net borrowing from banks stood at Tk 4,89,132 crore. In June 2024, the government's net borrowing stood at Tk 4,74,490 crore.
As a result, the government's net bank loan stood at Tk 14,642 crore in the first six months of the current fiscal year. The net loan balance in the first four months till October was Tk 16,695 crore.
The government has set a target of borrowing Tk 1,37,500 crore from the banking system in the current fiscal year. The target was Tk 1,32,395 crore in the original budget of the last fiscal year. The target was increased to Tk 1,55,935 crore in the revised budget. However, the government took net loan of Tk 94,282 crore.
