13 July 2024

No reason to worry over bank borrowing targets: Ali

Business Eye Report

Published: 23:14, 7 June 2024

No reason to worry over bank borrowing targets: Ali

Finance Minister Abul Hassan Mahmood Ali today said that there is no reason to worry over the target for bank borrowings in the proposed budget for the next fiscal year (FY25).

“The borrowings from banks are a standard procedure, and all the countries even the developed ones borrow more from the banks. So, there is nothing to worry about,” he said.

The Finance Minister was replying to a barrage of questions at a post-budget press conference at the Osmani Memorial Auditorium in the capital this afternoon after placing a Taka 7,97,000 crore budget for FY25 at Jatiya Sangsad yesterday.

The government has set a target of Taka 1,37,500 crore borrowings from the banks in the proposed budget.

Echoing with the Finance Minister, Prime Minister’s Economic Affairs Adviser Dr Mashiur Rahman said that the government’s bank borrowing is a regular phenomenon, and if the banks do not lend loans, their business would squeeze.

“Stopping the lending of banks couldn’t be an operation of a well-thought out government or couldn’t be acceptable,” he added.

Mashiur said that the trend of Non-Performing Loans (NPLs) has increased over time due to various reasons, while it is the pledge of the government to reduce the NPLs as it is also included in the election manifesto.

He said if the operations of the banks are deterred, it also has an impact on economic activities. “It’s very much necessary to strike a balance between the economic activities and proper operations of banks. Otherwise, there can be an ominous impact on the economy,”

Finance Division Secretary Dr Md Khairuzzaman Mozumder said that due to the country’s LDC graduation, foreign loans would be gradually dried out, resulting in a greater need for bank borrowings.

He said if there is a shortfall in revenues by the NBR, the government will automatically have to go for bank borrowings. “Besides, there is no relation between liquidity crises in banks and this,”

Answering a question, Mozumder said that manpower in the income tax department of the NBR has already increased while the process is at the final stage of increasing manpower in the customs department.