Government borrowing from the banking sector has jumped 17% during the first three months of the 2021-22 fiscal year (FY) compared to the same period last fiscal as the Covid-19 situation gradually improves.
Government borrowing from the banking sector stood at Tk1,76,386 crore at the beginning of September while at month-end the amount rose to Tk2,06,513 crore, according to information from the Bangladesh Bank.
Besides, the government borrowed Tk14,121 crore from banks in the first three months of the current fiscal and it repaid loans amounting to Tk9,524 crore to the central bank. The net loan for this FY now stands at Tk4,597 crore, which is around 6% of the government's target.
Bangladesh Bank Spokesperson and Executive Director Sirajul Islam said, "It is a positive sign for the economy that the government has paid back loans from the banking sector to cover its deficit."
He also said that the government is taking fewer loans and stepped up their loan repayment as the overall economy is good.
The deficit in the budget of the current 2021-22 fiscal year was estimated at Tk 2,14,681 crore, which amounts to 6.2% of the GDP. The Banking Sector is the main source for the government in meeting the budget deficit. The government planned to take loans of Tk76,452 crore from the banking sector this fiscal.
In July, the first month of the new financial year, net sales of savings certificates went down by about 54%.
Net sales of savings certificates in July were Tk2104 crore which only a month before in June was Tk4,573 crore, according to Bangladesh Bank information.
Total deposits in the first month of the current financial year amounted toTk5,365 crore, 38.37% less than a year ago in July of the last financial year.