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To finance the rollout of a revised national pay scale for civil servants alongside mounting utility obligations, the government has set a target to borrow Tk 60,300 crore from the domestic banking system in October 2026, marking the highest monthly borrowing figure of the current fiscal year.
The administrative plan involves disbursing revised salaries alongside accumulated arrears directly within October's regular payroll cycle. Officials familiar with public finance noted that borrowing and debt servicing remain routine tools to bridge budget deficits, with a substantial portion of newly raised funds earmarked for refinancing maturing debt, meeting operational outlays, and managing sharp escalations in power and energy costs.
A senior official at Bangladesh Bank explained that public spending pressures have intensified due to the implementation of the new pay scale, elevated power generation expenditures, subdued tax revenue growth, and foreign debt repayments outpacing new external loan disbursements. Domestic borrowing operations are primarily conducted through scheduled central bank auctions, where treasury bills are auctioned on Sundays and treasury bonds on Tuesdays, allowing commercial banks to deploy surplus liquidity. Last Sunday, the government raised Tk 10,000 crore against short-term bills, followed by Tk 5,800 crore via bonds on Tuesday. Because next Tuesday coincides with a public holiday, an auction will be pulled forward to Monday to raise another Tk 4,000 crore. Over the remainder of October, the government plans to borrow an additional Tk 35,000 crore through treasury bills and Tk 9,500 crore via bonds. Looking ahead, authorities project borrowing targets of Tk 53,800 crore for November and Tk 38,200 crore for December. Through similar auction windows, the government previously raised Tk 56,000 crore in July, Tk 50,000 crore in August, and Tk 41,500 crore in September.
According to central bank statistics, the government's net bank borrowing during the first two months (July–August) of FY 2026–27 stood at Tk 12,872 crore, bringing the cumulative outstanding bank debt balance to Tk 6,98,348 crore. Within this portfolio, the state repaid Tk 3,729 crore more to Bangladesh Bank than it borrowed, bringing the central bank's exposure down to Tk 90,323 crore. Over the same two-month period, net borrowing from commercial banks expanded by Tk 16,601 crore, pushing outstanding commercial bank debt to Tk 6,08,026 crore by the close of August. For FY 2026–27, the government has set an annual net bank borrowing target of Tk 1,12,000 crore, compared to the previous fiscal year when actual bank borrowing climbed to Tk 1,34,571 crore against an initial target of Tk 1,18,000 crore.
