bdnews24.comThe government’s borrowing from the banking system has come down as the sales of savings certificates is on the rise.In the six and a half months of the ongoing fiscal, the government has borrowed Tk 34.58 billion from the banks, which was Tk 65 billion during the same time of the previous fiscal.According to the Directorate of National Savings (DNS), sales of savings certificates rose by almost 22 times in the first half of the fiscal compared with the same time over the previous one.Between July, 2013 and Jan 16, 2014, net sales of savings certificates were Tk 38.57 billion, which was only Tk 1.77 billion during the same time of 2012-13 fiscal.The net sales are calculated by deducting the liquidated amount of previously sold certificates from the total sales of saving certificates at a given time. Savings certificates holders get the original amount and the accumulated interest over it during liquidation.Savings certificates are seen as a ‘risk-free investment’ now as the banks have cut interest on deposits and the stock markets have been sluggish for long, according to former central bank chief Mohammed Farashuddin.”Development works were rather slow in the run-up to the national election. That’s why the government’s expenditure was less. The government did not need to borrow much from the banks as its demands were met by the sales of savings certificates,” he explained, speaking to bdnews24.com.The latest figures from the Implementation, Monitoring and Evaluation Department (IMED) of the Planning Commission says 20 percent of the Annual Development Programme (ADP) of the 2013-14 budget have been implemented in the five months (Jul-Nov) of the fiscal, about 5 percent less during the same time of the previous fiscal.”Banks have been consistently cutting interest on deposits. The share market is still bearish. That’s what led people to invest in savings certificates seeing it ‘safe’,” said Farashuddin.He finds the trend positive. “The government can fund its development projects from this sector. The last two to three years’ heavy reliance on banking systems will not repeat.”The last fiscal’s (2012-13) budget had set the borrowing at Tk 74 billion from savings certificates to bridge the deficit, which was later scaled down to Tk 19.73 billion as the sales did not go as was anticipated.However, that target could not be achieved – the net sales in 2012-13 fiscal were Tk 7.72 billion. It was at Tk 4.79 billion in 2011-12.The budget for 2013-14 has set earmarked the borrowing at Tk 339.64 billion from internal sources. Tk 259.93 billion of which will come from the banking system and the Tk 4.97 billion from savings certificates.Almost 80 percent of the targeted sales of savings certificate in the current fiscal’s budget have been achieved in the first half.The DNS issues six types of saving certificates. The top selling scheme is the Family Savings Certificate accounting for 80 percent of the sales followed by Pensioners’ Savings Certificates with 15 percent and the rest comprised of the other schemes.Among the DNS’s savings schemes, the Family Savings Certificate offers the highest interest rate at about 13 percent.According to Farashuddin, the prime investors in the DNS savings schemes come from the mid-income and the lower-mid income groups. “That’s why the sales of saving certificates have surged.”The Family Savings Scheme was introduced during the 1996-2001 term of the Awami League but during the following regime of the BNP-Jamaat alliance the DNS stopped offering it.It was re-introduced during the last regime of the Awami League.The government had targeted to borrow Tk 230 billion from the banking system for the 2012-13 fiscal, which later was revised up to Tk 285 billion.