The government borrowing from the commercial banks increased to Tk 20,453.30 crore in the first 10 months and 26 days of the current fiscal year as the government started borrowing heavily at the last stage of its tenure to meet up its budgetary allocation, said officials of Bangladesh Bank.
\nAccording to the latest BB data released on Thursday, the government borrowing from the scheduled banks stood at Tk 20,453.30 crore as of May 26, 2013, but the overall government borrowing from the banking source stood at Tk 12,406.30 crore in the period.
\nThe government borrowed Tk 3,060.21 crore in 21 days of this month from the commercial banks as the borrowing figure was Tk 17,393.09 crore on May 5, 2013.
\nA BB official told New Age on Thursday that the government borrowing might increase significantly in June \u2014 the last month of this fiscal year.
\nThe government is now trying to complete its budgetary pledges by taking loan from the banks, he said.
\nMoreover, 2013 is the final year of the current government\u2019s tenure, so it will try to fulfil its election commitments at any cost to attract the voters, he said.
\nUnder the circumstances, the government borrowing from the banking source will increase significantly in remaining months of the government\u2019s tenure, he said.
\nAnother BB official said the commercial banks would face difficulties in the coming days due to the government borrowing.
\nThe country\u2019s banking sector is now enjoying a balanced liquidity situation due to a lower credit demand from the private sector, he said.
\nThe businesspeople has recently adopted a \u2018wait and see\u2019 approach due to the recent spates of political violence, he said.
\nThe banks will face a liquidity crisis when the political situation eases, he said.
\nThe BB data showed that the scheduled banks invested Tk 22,455.50 crore in the government securities from July 1, 2012 to May 26, 2013 of which Tk 11,712.94 crore was invested in Treasury bills and Tk 10,742.56 crore in Treasury bonds.
\nThe credit growth in the private sector declined to below 13 per cent in March on year-on-year basis for the first time since the financial year 2009-10 due mainly to recent political unrest, said the BB official.
\nThe credit growth in the private sector slumped to 12.72 per cent in March this year compared with that of 19.45 per cent in the corresponding month of 2012.
\nThe operating and net profit of the banks may decrease this year as the loan disbursement to the client is one of the pivotal businesses for any bank, the official said.
\nThe government\u2019s bank borrowing is yet to reach an intolerable level as the government has set a target of taking Tk 23,000 crore in loan from the banking system in the budget for the FY 2012-13, another BB official said.
\nA lower inflow of foreign loan and grant this fiscal year will also impact on the increased trend in government borrowing, he said.<\/p>\n

-With New Age<\/span> input<\/p>\n","protected":false},"excerpt":{"rendered":"

The government borrowing from the commercial banks increased to Tk 20,453.30 crore in the first 10 months and 26 days of the current fiscal year as the government started borrowing heavily at the last stage of its tenure to meet up its budgetary allocation, said officials of Bangladesh Bank. According to the latest BB data … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[4],"tags":[1986,1987,11553],"yoast_head":"\n