The net investment in the national savings certificates and bonds hit a new record at Tk 13,135.49 crore in the first six months of the current financial year 2014-15 as clients invested heavily in the savings tools due to low rates of interest on deposit products of the scheduled banks.
Rising access liquidity amid sluggish business situation in the country has forced the banks to lower rates on their deposit products, Bangladesh Bank sources said.
The previous highest of the net investment in the saving tools was Tk 11,707.31 crore in the FY14, but the net investment figure of the first half of the FY15 broke the record.
According to the Directorate of National Savings data released on Sunday, the net investment in the savings instruments increased by 240.50 per cent to Tk 13,135.49 crore in the July-December period of the FY15 from Tk 3,857.68 crore during the same period a financial year ago.
The net investment in the NSCs crossed its annual target in just four months in this fiscal year as the figure stood at Tk 9,077.60 crore in October against the fiscal year’s target of Tk 9,056 crore.
The savings instruments worth Tk 19,370.99 crore were sold through banks, national savings bureaus and post offices between July and December of the FY15 whereas the sales of the NSCs in the same period of the FY14 were Tk 10,458.89 crore.
A DNS official told New Age on Sunday that the government had been monitoring closely the investment trend in the savings tools for the last few months and it had taken decision to cut the rate of interest on the NSCs to curb the upward trend.
The government, however, is yet to implement the decision.
The official said the government had already been overburdened with the huge amount of net investment in the NSCs as it (the government) did not now need such amount of borrowing due to low 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 on their savings products due to increasing excess liquidity amid sluggish business in the country.
The businesspeople are now maintaining a ‘wait and see’ approach to expansion plan of their business 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 7 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.
Before the FY14, the highest net investment in the saving tools was Tk 11,590.64 crore posted in the FY10.
The DNS official said that the net investment in national savings certificates and bonds would increase more in the coming months if the government did not cut the rate of interest in the quickest possible time.
Source: New Age