Written by The Banking Post
July 19, 2025
Towards the end of FY2024–25, the Government of Bangladesh secured over $5 billion in foreign loans from multiple sources, including the IMF, World Bank, ADB, JICA, and AIIB. This external financing enabled the government to pay off a significant portion of its domestic debt, particularly to the banking sector, easing the burden on internal borrowing.
According to Bangladesh Bank data, as of June 30, the government’s total borrowing from the banking system stood at Tk 546,862 crore, down from Tk 552,973 crore the day before. This represents a sharp drop of Tk 6,111 crore in a single day.
In FY2024–25, the government’s net bank borrowing amounted to Tk 72,372 crore, which is Tk 26,628 crore less than the revised target and the lowest in the past four fiscal years.
Contrary to earlier concerns by economists that low revenue collection might force higher domestic borrowing, actual data shows otherwise. The National Board of Revenue (NBR) managed to collect Tk 368,177 crore in revenue—Tk 95,323 crore less than the target and Tk 14,385 crore lower than the previous year.
Bangladesh Bank Deputy Governor Dr. Habibur Rahman told the media that “increased inflow of foreign loans has allowed the government to adjust its domestic debt obligations.”
Initially, the FY2024–25 budget projected borrowing Tk 137,500 crore from the banking sector. However, the interim administration revised this to Tk 99,000 crore, later further reduced to Tk 90,000 crore under the guidance of Dr. Ahsan H. Mansur.
By the end of the fiscal year, the government had borrowed Tk 136,369 crore from commercial banks, bringing total outstanding loans in this segment to Tk 458,811 crore. Meanwhile, borrowing from Bangladesh Bank dropped to Tk 92,051 crore, down from previous highs, as total borrowing from the central bank was reduced to Tk 63,997 crore.
Additionally, the government’s reliance on national savings instruments declined, with borrowing from this segment falling by Tk 5,894 crore. However, borrowing from other domestic sources stood at Tk 48,322 crore, bringing the net increase in domestic borrowing to Tk 120,694 crore, with the total outstanding rising to Tk 687,475 crore.
For the current FY2025–26, the government has set a bank borrowing target of Tk 104,000 crore, reflecting a cautious fiscal approach despite persistent revenue shortfalls.
