In the first three months of the current fiscal year, the Bangladesh government nearly doubled its borrowing from commercial banks, increasing it to Tk47,209 crore from Tk24,474 crore last year, a 93% rise. This spike is primarily due to lower revenue collection and attractive high interest rates on treasury bills and bonds, as demand for private sector loans declines.
The government has also repaid Tk42,794 crore to the central bank, compared to Tk30,378 crore last year, though net borrowing from the banking sector has decreased. Former World Bank economist Zahid Hussain cautioned that the government is exceeding fixed borrowing limits and called for aligning policy rates with treasury bill rates to prevent banks from exploiting central bank funds. He stressed the need for reforms in revenue collection and expenditure management to reduce dependence on bank borrowing.