Rush for NSCs makes govt worried
The net investment in national saving certificates and bonds surpassed its annual target in just four months (July-October) of this financial year 2014-15 as clients continued to invest heavily in the NSCs due to low bank deposit rates and sluggish business climate.
According to the Directorate of National Savings data released on Wednesday, the net investment in the savings instruments stood at Tk 9,077.60 crore in the first four months of the FY15 against the annual target of Tk 9,056 crore.
A DNS official told New Age on Wednesday that achieving annual target in just four months was a record in net investment in the NSCs.
The government has become worried as the net investment would increase more in the coming months of this financial year if the present investment trend continues.
The DNS data showed that the net investment in the national savings certificates and bonds increased by 236 per cent to Tk 9,077.60 crore in the July-October of the FY15 from Tk 2,698.88 crore during the same period of the FY14.
The savings instruments worth Tk 13,186.91 crore were sold through banks, national savings bureaus and post offices in the first four months of the FY15 whereas the sales of the NSCs in the four months of the FY14 were Tk 7,433.91 crore in worth.
The government is now monitoring closely the investment trend in the savings tools and it will be forced to take decision to curb the investment if the existing trend continues in November and December, the DNS official said.
‘Clients continued to make investment heavily in the savings certificates and bonds in the last and the ongoing financial years as the scheduled banks cut the interest rate of their savings products due to increasing excess liquidity amid sluggish business in the country,’ the official said.
The businesspeople are yet to start their business expansion in full swing by receiving loans from banks due to political uncertainty, he said.
He said banks were now reluctant to take deposits from the clients, so they cut the interest rates on their deposit products.
Banks are now giving maximum 8 per cent to 9 per cent rate of interest to the clients for the fixed deposit schemes while the interest rate on the government savings tools is between 12.59 per cent and 13.45 per cent.
The government may cut the rate of interest between 0.50 per cent and 1 per cent on all savings certificates and bonds to curb the net investment in the NSCs, the official said.
Besides, personal and joint investment limit on the NSCs will also be reduced, he said.
The government may take decision in this connection in January next year, he said.
The net investment in national savings certificates and bonds had hit a new record at Tk 11,707.31 crore in the FY14.
The previous highest of the net investment in the saving tools was Tk 11,590.64 crore posted in the FY10.
The DNS data showed that the net investment in savings instruments had increased by 1,414.84 per cent in the FY14 from Tk 772.84 crore in the FY13.
The DNS official said that the net investment in national savings certificates and bonds would rewrite record this financial year if the government did not cut the rate of interest on the NSCs soon.
A BB official told New Age that high net investment in the NSCs had become a burden for the government as it did not have much demand for loan from its savings tools right now as its development work was now maintaining a slower pace.
The government is now trying to avoid borrowing from the NSCs as it has already decreased its borrowing from the banking sector, he added.
-With New Age input
