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Special Correspondent: The government’s domestic borrowing pattern has shifted sharply in the first 10 months of FY2025-26, with bank borrowing more than doubling from a year earlier as inflows from national savings certificates and other non-bank sources slowed dramatically.
According to the Bangladesh Bank’s Monthly Report on Government Domestic Borrowing: April 2026, the government’s net domestic borrowing reached Tk 105,374 crore during the July-April period, equivalent to 84.3 percent of the full-year target of Tk 125,000 crore.
During the same period of the previous fiscal year, net domestic borrowing stood at Tk 81,842 crore, indicating an increase of nearly Tk 23,500 crore year-on-year.
The budget for FY2025-26 projected Tk 104,000 crore in borrowing from the banking system and Tk 21,000 crore from non-bank sources. However, actual borrowing has diverged significantly from those projections.
Net borrowing from the banking sector reached Tk 104,606 crore in the first 10 months of the fiscal year, already exceeding the annual target. In the corresponding period of FY2024-25, bank borrowing stood at Tk 50,787 crore, meaning the government’s reliance on banks has more than doubled within a year.
Bangladesh Bank attributed the sharp rise mainly to increased financing through the issuance of treasury bills and treasury bonds.
In contrast, borrowing from non-bank sources almost came to a standstill. Net borrowing from the sector amounted to only Tk 768 crore, compared with Tk 31,055 crore in the same period of the previous fiscal year.
The central bank said the weak performance was primarily due to declining net receipts from national savings certificates.
During the July-April period, the government raised Tk 75,820 crore through sales of savings certificates but repaid Tk 76,250 crore in principal upon maturity, resulting in a net repayment of Tk 429 crore. In the same period of the previous fiscal year, net repayments had reached Tk 7,431 crore.
The April data also reflected the changing borrowing pattern. During the month, the government borrowed Tk 25,436 crore from banks but repaid Tk 30,323 crore, resulting in net repayment of Tk 4,888 crore. Meanwhile, it recorded Tk 1,371 crore in net borrowing from non-bank sources.
The report also highlighted developments in Shariah-based government financing instruments.
Net outstanding investment in the Bangladesh Government Islamic Investment Bond (BGIIB) increased by Tk 6,611 crore during the July-April period, while the outstanding amount of the Bangladesh Government Investment Sukuk (BGIS) rose to Tk 36,500 crore by the end of April, indicating the government’s growing emphasis on Islamic financing instruments.
According to the Bangladesh Bank, the government’s domestic borrowing structure has undergone a significant shift during the current fiscal year. While increased issuance of treasury bills and treasury bonds has driven a sharp rise in bank borrowing, collections from non-bank sources, particularly national savings certificates, have weakened considerably, making the banking sector the government’s primary source of domestic financing.
