Staff Reporter :
The amount of government’s borrowing from the banks stood at Tk 11,029 crore as on July 20. However, the government borrowed Tk 9,473 crore in nine days only from first July of the current fiscal 2015-16 with a view to meeting its day-to-day expenditures, according to the Bangladesh Bank (BB) data.
The government has set a target to borrow Tk 38,000 crore from the banking sector. A sum of Tk 1,14,000 crore was lying idle as on December 31, 2014.
Excess borrowing by the government will do some extent reduce their volume of idle funds. At the same time, it will help improve deposit rates from the present sorry state benefitting the general depositors, said Allah Malik Kazemi, Change Management Adviser of BB.
“If the government’s borrowing target for current fiscal year is achieved, it would be a blessing for the banks”, he said.
Actually, banks are now more willing to invest in treasury bills and bonds than lending to private sector after the bitter experience of Hall-Mark and BASIC Bank credit scam.
The government did not borrow huge amount from the banking sector in the outgoing fiscal year as the selling of National Savings Certificates increased even beyond the target of the outgoing fiscal year. The interest rates that ranged between 12 per cent and 14 per cent
on saving instruments have recently been slashed down between 11 per cent and 13 per cent. Still the rate is higher than the deposit rates.
As a result, neither the selling of savings instruments nor the government borrowings during the current fiscal would be a pressure on the banking sector, said Bishnu Pada Saha, General Manager of Debt Management Department of Bangladesh Bank.
Mutual Trust Bank Managing Director Anis A Khan said, borrowing by the government may be increased in the upcoming days because of implementing mega projects like Padma Bridge and Deep Sea Port at Sonadia.
The amount of government’s borrowing from the banks stood at Tk 11,029 crore as on July 20. However, the government borrowed Tk 9,473 crore in nine days only from first July of the current fiscal 2015-16 with a view to meeting its day-to-day expenditures, according to the Bangladesh Bank (BB) data.
The government has set a target to borrow Tk 38,000 crore from the banking sector. A sum of Tk 1,14,000 crore was lying idle as on December 31, 2014.
Excess borrowing by the government will do some extent reduce their volume of idle funds. At the same time, it will help improve deposit rates from the present sorry state benefitting the general depositors, said Allah Malik Kazemi, Change Management Adviser of BB.
“If the government’s borrowing target for current fiscal year is achieved, it would be a blessing for the banks”, he said.
Actually, banks are now more willing to invest in treasury bills and bonds than lending to private sector after the bitter experience of Hall-Mark and BASIC Bank credit scam.
The government did not borrow huge amount from the banking sector in the outgoing fiscal year as the selling of National Savings Certificates increased even beyond the target of the outgoing fiscal year. The interest rates that ranged between 12 per cent and 14 per cent
on saving instruments have recently been slashed down between 11 per cent and 13 per cent. Still the rate is higher than the deposit rates.
As a result, neither the selling of savings instruments nor the government borrowings during the current fiscal would be a pressure on the banking sector, said Bishnu Pada Saha, General Manager of Debt Management Department of Bangladesh Bank.
Mutual Trust Bank Managing Director Anis A Khan said, borrowing by the government may be increased in the upcoming days because of implementing mega projects like Padma Bridge and Deep Sea Port at Sonadia.
