Net sales of savings instruments grew by eight times in July, the first month of the current fiscal year, compared to the same month in the previous FY.
According to the Department of National Savings (NSD) data, total sales of savings certificates during the month of July this year were Tk 7,860.60 crore. At the same time, net sales amounted to Tk 3,249 crore as the government paid Tk 4,610.79 crore as principal.
On the other hand, total sales were worth Tk 71,843 crore in the same month of last fiscal year. During the same time, the government paid Tk 6,625 crore as principal while its net sales were Tk 393 crore.
To meet the budget deficit, the government borrows directly from savings certificates. However, the high-interest rate also increases the government’s interest expenses.
To discourage excessive purchases since the last fiscal year, the government has made the submission of tax certificates mandatory and reduced the purchase limit.
Executive Director of Policy Research Institute of Bangladesh Ahsan H. Mansur told The Business Post that banks are offering less interest on deposits. But NSD offers more interest than deposits. Though inflation hit the country, people tried to invest in savings certificates.
According to the budget documents, the government will borrow Tk 1,55,395 crore from domestic sources, including Tk 18,000 crore from savings tools, in FY24. The government set target to borrow Tk 20,000 crore from savings tools in FY23.
