Central Bank says non-bank private sector has the capacity to absorb over Rs.100 billion in net borrowing

Central Bank says non-bank private sector has the capacity to absorb over Rs.

100 billion in net borrowing but excessive borrowing will crowd out the private sector.



Central Bank says non-bank private sector has the capacity to absorb over Rs.100 billion in net borrowing but excessive borrowing will crowd out the private sector. The Central Bank carries out an annual survey of the non-bank private sector to help the government budgeting process.

The bank estimates Rs. 106 billion is available with non-bank private sector sources up from last year's Rs.

95 billion.

The non-bank private sector includes all funds other than money available with the Central Bank and commercial banks.

The main non-bank sources include state run pension funds and other private sector companies with a long-term investment horizon like insurance companies.

The increase in available funds will give the government more breathing space when planning next year's borrowing program.

Economists however say that borrowing from the non-bank sector crowds out money available for the private sector.

A net borrowing requirement of over Rs.

106 billion for next year would result in hig