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VOL 23 NO 64 REGD NO DA 1589 | Dhaka, Thursday, January 14 2016
Posted : 14 Jan, 2016 16:45:35 AA-A+
Already 75pc borrowed from savings proceeds

In the first five months of 2015-16 FY, the government, to cover its budget deficit, has borrowed more than 75 percent of what it wanted to raise from the sale of saving certificates.

The budget for 2015-16 fiscal had set a target to borrow Tk 150 billion. By November 2015, the borrowings from sale proceeds of savings certificates stood at Tk 113.26 billion.

Analysts say speculations of a further cut in interest rates for saving schemes have propped up sales of saving certificates.

The rates were reviewed in May last year, but investors continued to put their money in purchasing the certificates.

“There are speculations that the interest rate might go down, as the finance minister has already hinted. That’s why those who have funds are investing in it before the rate goes down,” said economist Zaid Bakht.

A five-year term family saving scheme of Tk 100,000 now yields a monthly return of Tk 912, It fetched Tk 1,070 per month on a similar investment before.

But that did not discourage investments in the schemes offered by the Directorate of National Savings (DNS). The people still view it as the ‘safest investment.'

“A higher return than on bank deposits and a gloomy stock market led the people to opt for savings schemes,” said Bakht, a researcher at the Bangladesh Institute of Development Studies (BIDS).

Official figures show that savings scheme sales in April last year stood at Tk 42.97 billion.

After the rate cuts by almost 2 percent on May 23, it came down to Tk 39.07 billion.

Sales in November last year stood at Tk 43.20 billion.

According to DNS statistics, the net sales of saving certificates in the 2014-15 fiscal year was Tk 287.33 billion. The previous (2013-14) fiscal’s net sales stood at Tk 117.07 billion and in 2012-13, it was Tk 7.73 billion.

Net sales are calculated by deducting the liquidated amount of previously sold certificates from the total sales of savings certificates at a given time.

Savings certificate holders get the original amount and the accumulated interest over it during liquidation, according to

- biplab


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Already 75pc borrowed from savings proceeds | 24 News | The financial express