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Bank borrowing on decline, says Kibria

By Staff Correspondent
Finance Minister SAMS Kibria yesterday said there Is nothing to be worried about government borrowing from the banking system as it Is showing a declining trend.
In the last financial year (1999-2000). the borrowing stood at Tk 2765 crore as oT June 25. he said.
Refuting the allegation that borrowing from banks is the major weakness of the government. Kibria said. "A certain quarter tried to artificially create confusion among people by making it an issue."
Kibria was speaking at a post-budget discussion meeting with reporters of national dailies at the Finance Ministry conference room here.
The Finance Minister gave detailed figures of net annual government borrowing from the banking system In the last 10 years and their percentage of die total budget and the GDP. He also gave amounts borrowed from commercial banks and their percentage of total deposit.
Kibria said that the immediate past government also borrowed from the banking system. It had borrowed more from the central bank, "which is risky as it triggers inflation."
In 1995-96. the then BNP the government borrowed Tk 1782 crore from Bangladesh Bank The amount was Tk 868 crore in the last financial year (1999-2000). Government borrowing from commercial banks stood
at Tk 1897 crore as of June 25. he said.
"Creating a balance between governments earnings and expenditures Is a dream of any finance minister. But, sometimes one has to spend more then the earnings by borrowing from the banking system to properly run the economy." Kibria said.
The minister said the government is borrowing Jess than it was projected in the budget He said the amount will not exceed Tk 3000 crore in fiscal 1999-2000. However, in the revised budget (for 1999-2000) the Finance Minister projected the government borrowing at Tk 3934
Dispelling the concern that the private sec tor is not getting bank credits due to heavy government borrowing’ he said, as of June 14. excess liquidity in the banks stood at Tk 3313.29 crore.
Commercial banks sanctioned Tk 8508 crore loans to the private sector in the first eight months of the last financial year, and the amount will exceed Tk 10.000 crore in 12 months, he said.
Of the amount, Tk 7350.22 crore was sanctioned as working capital and the rest Tk 1 157.98 as term loan, he said.
"We are trying to create a situation where the private sector can get more bank credit by slashing lending rate for some thrust sectors and creating equity fund”.
Three years back, that quarter' tried to create an artificial liquidity crisis'. he said
Critic ising Le ader of (he Opposition Khaleda Zia lor her remarks that the government made the country a market of Indian goods by destroying local industries. Kibria said, "In fact it is the BNP government which framed discriminatory duty structures in favour of India and gave special privilege to Indian products."
Quoting from the gazette notification issued in April 1995. the Finance Minister said, at that time, tariff on Indian products were fixed at a rate lower than those on products from other countries, specially Japan and European countries.
It is the present government which has created a gap between duty on raw materials and finished products to expedite the' growth of local industries," Kibria said.
Finance Secretary' Dr Akbar All Khan. Bangladesh Bank Governor Dr Mohammad Farashuddin. NBR (National Board of Revenue) Chairman Abdul Muyeed Chowdhury and senior officials of the ministry were present.