Net sales of savings instruments have dropped during the July–September period of the current fiscal year compared to the same period of the last fiscal year.
It indicates that people have encashed their savings tools more than investment in savings certificates.
In the first quarter of FY24, savers invested Tk 21,656 crore in savings certificates. At the same time, the government repaid Tk 22,921 crore. As a result, net sales stood at Tk 1,264 crore in negative after the first quarter.
In the same period of the last fiscal year, sales of national savings certificates stood at Tk 21,511 crore. The government repaid Tk 21,181 crore, and the government saw positive growth of Tk 331 crore.
Talking to The Business Post, Zahid Hussain, former lead economist of the World Bank Dhaka office said, “There are two reasons behind the negative growth. People lose their savings capacity due to high inflation in the country. They have to withdraw their money from the NSC, but they are not able to reinvest in it. As a result, negative growth has increased.”
He also said the government has imposed some conditions on NSC, especially requirement that savers must submit their tax return certificates.
Dhaka Bank Managing Director and CEO Emranul Haque said, “The interest rates on individual bonds are good. Our bank is selling bonds to the customers, and they will get 10.25 per cent to 10.35 per cent interest as well."
Bankers say the government has reduced borrowing from the NSC instead of increasing borrowing from scheduled banks and repaid the central bank as well.
Managing directors of several banks on condition of anonymity told The Business Post that the government has target to curb high inflation. As a result, the government is taking steps to reduce money supply in any way possible. This will help reduce inflation as the amount of money in people's hands decreases.
In other words, the government's current borrowing to meet the budget deficit is negative.
The government set a target of borrowing Tk1.32 lakh crore from the banking sector to meet the deficit in FY24.
