Photo : Collected
During the financial year 2022–23, Bangladesh Bank (BB) faced a liquidity crisis in the banking system. To address this issue, the BB, or central bank, provided the government with the largest amount of loans.
This injection of funds into the economy led to an increase in the money supply in the money market, causing inflation. Despite this, the government's income from this sector surged by 265 percent. Additionally, the rise in the US Treasury bill interest rate contributed to increased income from foreign investment. These details are outlined in the annual report of Bangladesh Bank.
According to Bangladesh Bank's data, the central bank's total income for the fiscal year 2022–23 amounted to Tk 15,723 crore. Notably, a substantial portion of this income, Tk 15,076 crore, was derived solely from the interest charged on various sectors. Among these, the government contributed the highest amount of interest to the central bank, with a remarkable 265 percent increase in income from government loan interest compared to the previous fiscal year. Specifically, Tk 7,210 crore was earned exclusively from interest on loans provided to the government. Additional income, amounting to Tk 647 crore, came from commission, discount, and other sectors in foreign trade.
Comparing the financial years 2021–22 and 2022–23, the central bank's overall income witnessed a significant surge of 156 percent. In the previous fiscal year, the total income was Tk 6,131 crore, which rose to Tk 15,723 crore in the fiscal year 2022–23, marking an increase of Tk 9,592 crore. The net profit of Bangladesh Bank for this period amounted to Tk 10,748 crore. Notably, the government deposited Tk 10,652 crore of this net profit into the Treasury.
When asked about this, Bangladesh Bank's Executive Director and Spokesperson Mezbaul Haque told The Daily Messenger, "The Central Bank's income has increased from foreign and local currency-based financial assets. As a result, the net profit of Bangladesh Bank has increased. Out of the total net profit, we have already given Tk 10652 crore to the government.
According to the data of the central bank, the central bank has earned Tk 7047 crore from the interest on government bond bills in the financial year 2022–23. In the same period of the previous financial year, the income from this sector was Tk 1964 crore. That is, the income increased by 259 percent during the year. At the same time, the central bank has earned Tk 163 crore in interest by lending to various government institutions. In the same period of the previous financial year, the interest received from this sector was only Tk 11 crore. That is, central bank income in this sector has increased by 15 times.
When asked about this, a senior official of the central bank told The Daily Messenger, "The government took more loans than the target from the banking system to implement the budget last fiscal year. The majority of these loans have been taken from the central bank. Due to this, the interest income of the central bank from the loans given to the government has increased. Apart from this, the interest income of the central bank in foreign currencies has also increased due to the increase in the interest rate of US bonds due to various reasons."
In the fiscal year 2022–23, Bangladesh Bank gave a record amount of loans to the government. At that time, the government took a loan of Tk 122,980 crore from the banking sector, out of which Bangladesh Bank provided a loan of Tk 97,648 crore. At the same time, the central bank had to sell a record amount of dollars due to the foreign exchange crisis in the country.
Due to this, the foreign currency reserves decreased at an alarming rate, but there was a good income from the sale of dollars. According to Bangladesh Bank data, Bangladesh Bank sold $13.58 billion from reserves in the fiscal year 2022–23. Earlier, the central bank sold a maximum of $7.62 billion in the fiscal year 2021–22. Bangladesh Bank sold 6.5 billion dollars in the previous year.
Meanwhile, the central bank's income has also increased from foreign currency interest. Last fiscal year, the government's income from this sector was Tk 5934 crore. The previous fiscal year's income was Tk 2837 crore. That is, the central bank's income in this sector increased by 109 percent during the year. Income from interest on investments in US Treasury bills and notes is Tk 2042 crore. After that, the income from bank loan interest is Tk 1918 crore. Apart from this, the central bank has earned Tk 1974 crore from other sectors.
A top official told the Messenger about the income of the central bank, "Bangladesh Bank is a regulatory institution. Its job is not to make a profit. However, turning a profit as an autonomous organisation is a milestone. The main task of the central bank is to keep the country's economic sector in order, to keep import-export normal, and to keep price inflation and inflation under control. I think that Bangladesh Bank is doing this work correctly.
Messenger/Disha
