Public borrowing from the banking sector jumped 17% in the first three months of fiscal year 2021-2022 compared to the same period of the previous fiscal year as the Covid-19 situation gradually improves.
Government borrowing from the banking sector stood at Tk 1,76,386 crore at the start of September while at the end of the month the amount stood at Tk 2,06,513, according to information from the Bangladesh Bank. .
In addition, the government borrowed 14,121 crore Tk from banks during the first three months of the current fiscal year and repaid loans amounting to 9,524 crore Tk to the central bank. The net loan for this fiscal year now stands at Tk 4,597 crore, or about 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 repaid banking sector loans to cover its deficit.
He also said the government is taking fewer loans and has stepped up loan repayments because the overall economy is good.
The budget deficit for the current 2021-22 fiscal year has been estimated at Tk 2,14,681 crore, which represents 6.2% of GDP. The banking sector is the government’s main source of filling the budget deficit. The government planned to take loans of Tk 76,452 crore to the banking sector during this fiscal year.
In July, the first month of the new fiscal year, net sales of cash certificates fell by around 54%.
Net sales of savings certificates in July stood at Tk 2,104 crore, up from Tk 4,573 crore just a month earlier, according to reports from the Bangladesh Bank.
Total deposits in the first month of the current fiscal year stood at Tk 5,365 crore, 38.37% lower than a year ago in July of the previous fiscal year.