The government plans to borrow Tk 603 billion from the banking system in October to finance the implementation of a new pay structure for government employees, including the payment of arrears. This is the highest monthly borrowing target set so far in the 2026–27 fiscal year.

According to a report by The Daily Ittefaq published on October 9, the government needs additional funds to meet its increased expenditure. However, a substantial portion of the borrowing will be used to repay and adjust existing loans, as well as cover other expenses.

Officials concerned said borrowing and repayment are regular components of government financing to manage the budget deficit. Meanwhile, daily expenditure and rising electricity and energy costs amid global uncertainties have increased the government’s financial burden.

A Bangladesh Bank official said the government was preparing to pay salaries and arrears under the new pay scale. At the same time, expenditure on electricity and energy had increased, revenue collection was falling short of expectations, and foreign debt repayments exceeded disbursements. These factors have increased the government’s need for additional borrowing in October.

Government Borrowing Through Treasury Bills and Bonds

The government generally borrows from commercial banks by issuing treasury bills and bonds through auctions conducted by Bangladesh Bank. Commercial banks use their excess liquidity to purchase these government securities.

According to the report, the government borrowed Tk 100 billion through various treasury bills last Sunday and another Tk 58 billion through bonds on Tuesday. As the following Tuesday is a public holiday, an auction is scheduled for Monday instead, with a borrowing target of Tk 40 billion.

For October, the government plans to raise an additional Tk 350 billion through treasury bills and Tk 95 billion through bonds.

The government has also set substantial borrowing targets for the coming months. It plans to borrow Tk 538 billion through bills and bonds in November and Tk 382 billion in December.

In the preceding months, the government borrowed Tk 560 billion through auctions in July, Tk 500 billion in August and Tk 415 billion in September.

Government’s Borrowing from the Banking System Rises

According to Bangladesh Bank data, the government borrowed a net Tk 128.72 billion from the banking system during the first two months of the 2026–27 fiscal year. This brought the total outstanding government debt from the banking system to Tk 6,983.48 billion.

During the same period, the government repaid Tk 37.29 billion more than it borrowed from Bangladesh Bank, reducing its outstanding debt to the central bank to Tk 903.23 billion.

In contrast, government borrowing from commercial banks increased by Tk 166.01 billion, reaching Tk 6,080.26 billion at the end of August.

For the 2026–27 fiscal year, the government has set a target of borrowing Tk 1.12 trillion from the banking system. In the previous fiscal year, the borrowing target was Tk 1.18 trillion, but the government ultimately borrowed Tk 1.34571 trillion.

Source: The Daily Ittefaq, October 9, 2026.