The government’s dependence on treasury bills and bonds has increased sharply as lower-than-expected revenue collection and rising public expenditure continue to put pressure on the national economy. Economists have warned that relying heavily on borrowing to cover expenses may create further economic risks, especially amid ongoing inflationary pressures.
According to data from Bangladesh Bank, the government raised Tk 46,000 crore through treasury bills in April, marking a 39 percent increase from Tk 33,000 crore collected in March. Of the total amount borrowed in April, around Tk 32,800 crore was used to repay liabilities from previously issued treasury bills, leaving net new borrowing at Tk 13,200 crore.
The sharp rise in borrowing also pushed up interest rates on treasury bills during April. The interest rate on 91-day treasury bills increased from 9.88 percent to 10.17 percent by the end of the month. Rates on 182-day and 364-day treasury bills also climbed to 10.49 percent and 10.64 percent respectively.
Officials from the Finance Division said government spending usually accelerates in the final quarter of the fiscal year, naturally increasing the need for borrowing. The impact of this trend became visible in April through both higher borrowing volumes and rising interest rates.
Most of the government’s borrowing through treasury instruments has come from commercial banks. With treasury bills and bonds offering attractive returns and lower risk, banks are increasingly preferring to lend to the government instead of financing the private sector.
Central bank figures show that government borrowing from the banking sector rose to Tk 563,193 crore by January 2026, up from Tk 434,361 crore a year earlier. That represents an increase of Tk 128,832 crore, or nearly 30 percent growth. In contrast, private sector credit growth has slowed to around 6 percent.
Former senior secretary of the Finance Division Mahbub Ahmed said banks are benefiting the most from treasury bill and bond investments because they guarantee easy profits. He argued that banks should focus more on financing productive businesses and supporting private sector investment.
He also suggested that the government should encourage ordinary citizens to invest more in treasury bills and bonds rather than depending heavily on banks.
The government plans to borrow nearly Tk 149,000 crore from the banking sector during the April-June quarter of the current fiscal year through treasury bills and bonds. According to the schedule announced by Bangladesh Bank, Tk 110,000 crore will come from short-term treasury bills, while another Tk 39,000 crore will be raised through medium and long-term treasury bonds.
Meanwhile, revenue collection by the National Board of Revenue has fallen significantly short of targets. The government had set a revenue collection target of Tk 503,000 crore for the current fiscal year. However, during the first nine months, the shortfall reached nearly Tk 98,000 crore — the highest in the country’s history.
During the July-March period, the NBR collected Tk 287,862 crore against a target of Tk 385,852 crore. In March alone, revenue collection stood at Tk 33,522 crore against a target of over Tk 60,000 crore.
Centre for Policy Dialogue Executive Director Fahmida Khatun warned that excessive borrowing could intensify inflation and place additional pressure on the economy.
She advised the government to increase domestic revenue by expanding the tax base instead of placing more burden on existing taxpayers. She also stressed the importance of preventing tax evasion and implementing reforms within the National Board of Revenue to improve efficiency.
Economists say that while borrowing may help manage short-term budget deficits, long-term dependence on debt increases interest costs and creates wider economic vulnerabilities. They argue that boosting internal revenue collection remains the most sustainable solution for stabilizing the economy.
