The net investment in national saving certificates and bonds surpassed Tk 10,500 crore in just five months (July-November) 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 increased by 212.88 per cent to Tk 10,542.41 crore in the first five months of the FY15 from Tk 3,369.41 crore during the same period a financial year ago.
The net investment in NSCs earlier crossed its annual target in just four months as the figure stood at Tk 9,077.60 crore between July and October of the FY15 against the fiscal target of Tk 9,056 crore.
The savings instruments worth Tk 15,359.81 crore were sold through banks, national savings bureaus and post offices in the first five months of the FY15 whereas the sales of the NSCs in the same period of the FY14 were Tk 9,013.62 crore in worth.
The government is now monitoring closely the investment trend in the savings tools and it is likely to cut the rate of interest on NSCs in January to curb the upward trend if the existing trend continues in December, a DNS official told New Age on Wednesday.
He said that huge amount of net investment in the NSCs had already overburdened the government as it (the government) did not now need such amount of borrowing due to lower performance in implementation of the annual development programme.
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.
A Bangladesh Bank official said that 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 rates of their savings products due to increasing excess liquidity amid sluggish business in the country.
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 net investment in national savings certificates and bonds had hit a new record at Tk 11,707.31 crore in the FY14, according to the DNS data.
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.
-With New Age input
