The government plans to borrow Tk 137,500 crore from banks to finance the deficit in the proposed budget for FY25.

The bank borrowing target is 11.82 percent lower than the revised target of Tk 155,935 crore for the outgoing fiscal year of 2023-24.

The government originally planned to borrow Tk 132,395 crore from banks in FY24 before revising the target upwards.

The overall budget deficit in FY25 is expected to stand at Tk 251,600 crore, which is 4.5 percent of the country's gross domestic product (GDP).

Of the total deficit financing, Tk 90,700 crore will come from foreign sources while Tk 160,900 crore will come from domestic sources.

Among domestic sources, the government also aims to borrow Tk 15,400 crore from sales of national savings schemes for FY25.

Industry insiders said that higher bank borrowing by the government would reduce the scope for the private sector to borrow.

The private sector is already suffering due to high interest rates on bank loans, they added.

Till May 29 of the ongoing fiscal year, the government's net bank borrowing stood at Tk 61,319 crore, which is far below the revised target, central bank data showed.

However, the government is likely to borrow more from the banking sector this month.