Govt plans to borrow Tk 1.12t from banks to offset revenue shortfall

The government plans to borrow Tk 1.12 trillion from the banking system to meet the revenue shortfall in the coming financial year of 2026-2027.

Out of its total domestic borrowing of Tk 1.27 trillion, Tk 1.12 trillion would be sourced from the banking system in FY'27.

In the current fiscal year (FY) 2025-26, the amount was Tk 1.18 trillion.

"That is, we have proposed to reduce borrowing from the banking system by Tk 60 billion in the upcoming fiscal year," the finance minister said while placing the proposed budget on Thursday.

"Due to excessive borrowing during the fascist regime, the country's debt servicing and interest payment costs have risen substantially," he said.

Although the proposed bank borrowing target is Tk 60 billion less than the revised target of Tk 1.18 trillion in this FY '26, it is basically Tk 80 billion higher from the initial target of Tk 1.04 trillion in this current fiscal.

Seeking anonymity, a Bangladesh Bank (BB) official said the government revised the bank borrowing target to Tk 1.18 billion in this outgoing fiscal but the target had already been exceeded by a huge margin with the bank borrowing figure crossing Tk 1.25 trillion until May 24, 2026.

During the same period of time in the previous fiscal (FY '25), the government had borrowed only Tk 572 billion, the central banker said.

"The way the fiscal pressure is growing, the government bank borrowing dependency will rise significantly this time for sure. And it may create a crowding out effect in the coming days," he said.

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