Economy
Tk 15k Crore Govt Loan from Banks
Prior this year, the government refunded more than what it had borrowed from the banks. as of sudden, the government has raised borrowing from the banking sector. In the previous month, the government has taken a loan of Tk 13 thousand 481 crores from the banking sector.
According to the sources of Bangladesh Bank (BB), in late September, the government’s net debt from banks increased by 12 thousand 526 crores to 2 lakh 82 thousand 712 crores. A month ago at the end of August, the amount of this loan was 2 lakh 69 thousand 230 crores. That is, in one month the government took a loan from the bank of 13 thousand 418 crores.
But the government’s debt is now towards the central bank. Increased demand for loans from central banks rather than borrowing from commercial banks. In the 3 months of the current financial year, the government has taken a loan of Tk 16,833 crore from the central bank. At the same time, the government’s debt to commercial banks decreased by Tk 4,307 crore. As a result, the government’s net debt has increased by Tk 12,526 crore.
Regarding the increase in debt, the former caretaker government’s financial advisor economist AB Mirza Azizul Islam told that the government’s expenditure has increased. As the income is less than the expenditure, now they are borrowing from the bank to meet the demand for additional money. However, the amount of bank loans taken by the government in 3 months is not more than their target. So there is no reason to worry about this loan.
After reviewing the data of Bangladesh Bank, it was found that in the first 2 months of the current (2022-23) financial year, the government did not take debts from the banking sector but instead paid them. In the two months till last August, the government’s net debt from banks decreased by Tk 955 crore to Tk 2 lakh 69 thousand 230 crores. Although at the end of June, the amount was 2 lakh 70 thousand 185 crores.
The government is setting a target that the bank will take a bank loan of Tk 1 lakh 6 thousand 334 crore to meet the budget deficit of the current fiscal year 2022-23. This amount is 29 thousand 882 crores more than the target for the current financial year. In the budget of the previous financial year, the target was to borrow 76 thousand 452 crores from the banking system. It has set a target of taking a loan of 35 thousand crore takas from savings accounts in the current financial year.
According to the data of the National Savings Directorate, savings bonds worth Tk 14,538 crore have been deposited or sold in the first 2 months (July-August) of the current fiscal year 2022-23. Out of this, principal and profit have been paid to the tune of 14 thousand 136 crores. After paying the principal and profit of savings bonds, the government’s net debt in this sector stands at Tk 401 crore.
In the meantime, regardless the fall in foreign exchange reserves, the central bank increased dollar sales. Bangladesh Bank is selling dollars to banks at Tk 97. Last Thursday sold 13 million dollars to several banks. In total, the sales volume of the current financial year so far has stood at 4 billion dollars. Against this, as much as 38 thousand crore takas have come out of the market. Last financial year 762 million 17 million dollars were sold. Thus, as a result of the sale of dollars, the foreign exchange reserves, which rose above 48 billion dollars, fell to 36 billion dollars.
It is known that due to various reasons including the instability of the food and energy markets due to the impact of the Russia-Ukraine war, the government aimed more at cost reduction in the beginning. Hence, the 1st month of the financial year also saw good growth in revenue and foreign grants and loans increased. Due to the effect of these two, the government has taken fewer loans from the bank. But now some projects have started. Again, due to the effect of the Russia-Ukraine war, food and fuel prices have increased in the world market. As a result, the government has to spend more money on food and fuel imports than before. However, the rate at which the cost of money has increased, the income does not increase at that rate and the bank has to take a loan. So the government is leaning on bank loans.
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
Syeda Rizwana Hasan, the Adviser for Environment, Forests, and Climate Change, announced today that steps will be taken to restrict the use of polythene shopping bags to safeguard future generations.
Starting from October 1, polythene bags will be banned in shopping malls, followed by a ban in kitchen markets from November 1.
“Everyone must take responsibility and stop using polythene voluntarily. Action against polythene producers will begin from November 1,” Rizwana Hasan stated during a seminar.
The Department of Environment (DoE) organized the seminar to raise public awareness about alternatives to banned polythene bags.
Rizwana Hasan highlighted that the restriction on polythene will be executed in phases according to legal provisions, and discussions with shopping centers and store owners are ongoing to ensure a smooth transition.
She also announced plans to make the government secretariat a plastic-free zone by December.
Other speakers at the seminar included Environment Secretary Dr. Farhina Ahmed, DoE Director General Dr. Abdul Hamid, Director Rajinara Begum, President of the Shop Owners Association Muhammad Helal Uddin, and Md. Arifur Rahman Bhuiyan, Assistant Professor of Environmental Science at BUP. They discussed the harmful effects of polythene and the need for alternative products.
Earlier, Rizwana Hasan inaugurated a fair showcasing eco-friendly alternatives to polythene bags and visited 24 stalls. The fair featured products from government and private entrepreneurs, including reusable bags, jute bags, paper bags, and items made from bamboo and cane.
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