KARACHI: The government continued aggressive borrowing from the commercial banks and raised Rs360 billion through Treasury Bills auction on Wednesday.

In 2011-12 the government borrowed Rs696 billion from the commercial banks. This huge investment in the government papers kept banks short of cash and the State Bank had injected around Rs300 billion to keep them liquid.

The auction report indicated that most of the amount invested for the benchmark six months t-bills. The banks invested Rs192 billion in 6-month t-bills, Rs1152 billion for 12-month and Rs16 billion for three months to make the total investments of Rs360.3 billion.

The State Bank, in its report last week, said that the government had borrowed Rs54 billion from commercial banks in the first two weeks of the new fiscal FY-13.

The State Bank, both in its previous quarterly report and Monetary Policy, criticised the government for over depending on the banks for borrowing money and on the other hand, banks were also criticised for investing most into government papers at the cost of country’s economy which depends on its banks.

The State Bank reported that in the first two weeks of the current fiscal year, the private sector retired Rs73 billion, instead of borrowing.