The net sales of national savings certificates fell by 47 per cent in the first five months of the current fiscal year that bankers attributed to yield rates cuts and strict rules and regulations for savers.
In the July-November period, the net sales of the state-owned savings instruments were Tk 10,025.74 crore, down from Tk 19,044.9 crore at the same period of last FY, data from the National Savings Directorate show.
Central bank officials said that the government recently reduced the yield rates on savings instruments, which may be the main reason behind the drastic fall in sales.
Up to 2 per cent yields were slashed on almost all savings schemes on September 21 last year. However, investments below Tk 15 lakh in the savings schemes will enjoy the previous interest rates.
According to a circular issued by the Internal Resources Division of the finance ministry, the new interest rates would be applicable to individual and institutional investors for new investments of over Tk 15 lakh.
The officials added that savings tools sales might fall further in the upcoming months due to the government’s latest move.
Former Bangladesh Bank governor Salehuddin Ahmed told The Business Post that the cuts in yield rates and strict rules and regulations for savers were the main reasons behind the drastic fall in sales.
In the FY 2019-20 budget, the government imposed a 5 per cent tax at source on the interest income from NSCs worth up to Tk 5 lakh. It also levied a 10 per cent tax at source for investment in schemes above Tk 5 lakh.
According to the government’s new rules, those investing in savings instruments need to submit their electronic taxpayer’s identification number (e-TIN) and national identity number. If the amount is more than Tk 1 lakh, they must pay the money through a bank cheque.
Salehuddin said that some savers may have diverted their funds from savings tools to the stock market, which impacted the sales.
The government fixed a target of borrowing Tk 32,000 crore against the savings instruments for the FY 2021-22.
