Saturday, November 25, 2017

Savings certificate sales grow 40% to hit record Tk 751 billion in FY2017

  • Abdur Rahim Harmachi, Chief Economics Correspondent, bdnews24.com
    Published: 2017-07-31 02:11:54 BdST

bdnews24

Bangladeshis bought a record Tk 751 billion worth of savings certificates in 2016-17 fiscal year, 40 percent more than previous year's Tk 537 billion.

Director General of National Savings Directorate Bablu Kumar Saha told bdnews24.com on Sunday the sale of the certificates saw a spurt following the announcement on reducing interest rates in current 2017-18 fiscal year.  

People flocked to the banks to buy savings certificates by the end of last fiscal year after Finance Minister AMA Muhith's announcement on a cut in the interest rates.

Bonds and saving certificates are forms of debt and the government will have to repay a certain amount of interest with the principal amount.

The government had originally planned to borrow around Tk 200 billion from the savings certificates last fiscal year, but the growing number of certificate sales prompted it to borrow more.

 

The target was revised to Tk 450 billion later.

In the new fiscal, the government targets to borrow Tk 301.5 billion from the savings certificates as the sector has witnessed a higher deposit than in previous times.

In Bangladesh, economists say the disparity between the interest in bank deposit and savings certificate has encouraged a large number of people to buy savings certificates.

The deposit interests in banks now vary between four percent to six percent while the certificate interest rates are in double digits – 11 percent to 12 percent.