Badrul Ahsan :
The government is likely to bar institutional investors to invest in the national savings certificate (NSC) with a view to checking swelling investment in the tools without cutting the rate of interest, sources said.
The Directorate of National Savings (DNS) in a recent letter proposed the government to disallow institutional investment in the NSC.
The DNS also recommended lowering the individual investment ceiling on all tools except pensioner savings certificates. A client is now allowed to invest maximum Tk 30 lakh both in five-year Bangladesh sanchayapatra and three monthly profit bearing sanchayapatra, Tk 45 lakh in family savings certificates and Tk 50 lakh in pensioner sanchayapatra.
The DNS proposal also includes scraping the existing scope for joint investment in the savings tools to contain the investment in the tools.
“It has been decided in principle that the surge in investment in the government tools would be checked without cutting the rates of interest on the tools if the government accepts the proposals,” a DNS official told The New Nation.
The investment in the tools will decrease significantly if clients have to reveal sources of their invested fund in the deposit scripts of savings bonds and certificates, the proposal reads.
The DNS official said that a number people were now frequently investing their illegal income in savings tools to legalise their money.
The savings directorate also suggested that the government offer an increased interest rate to women, physically challenged people and aged persons against their investment in the tools to ensure their socio-economic protection.
The directorate, however, said that such investment limit should be set up to Tk 5 lakh.
The DNS official said that the majority of government agencies and corporate bodies had been keeping their provident and gratuity fund in the tools that played a vital role in the investment surge in the tools.
DNS Director General Bablu Kumar Saha told The New Nation that the directorate had submitted the proposals to the Finance Ministry after taking opinions from all stakeholders.
‘Since the proposals will ensure both the public and government interest, so we have placed the recommendations before the Finance Ministry,’ he said.
The DNS has prepared the proposals gathering the field-level experiences, he said, adding that the existing upward trend in investment would drop automatically once the ministry accepts the proposals.
According to the latest DNS data, the net investment in the tools increased by nearly 60 percent to Tk 49,669 crore in the July-June period of the last financial year (FY2016-17) compared with that of Tk 31,792 crore in the corresponding period of FY16.
People are now being forced to invest their money in the NSCs as the banks are offering hardly 7 per cent interest rate on their deposit products.
The rates the NSCs are offering range between 11.04 per cent and 11.76 per cent, a BB official said.
In the budget for FY17, the government had aimed to borrow Tk 19,610 crore from the NSCs, but it later revised the figure and set a borrowing target of Tk 45,000 crore.
The government is likely to bar institutional investors to invest in the national savings certificate (NSC) with a view to checking swelling investment in the tools without cutting the rate of interest, sources said.
The Directorate of National Savings (DNS) in a recent letter proposed the government to disallow institutional investment in the NSC.
The DNS also recommended lowering the individual investment ceiling on all tools except pensioner savings certificates. A client is now allowed to invest maximum Tk 30 lakh both in five-year Bangladesh sanchayapatra and three monthly profit bearing sanchayapatra, Tk 45 lakh in family savings certificates and Tk 50 lakh in pensioner sanchayapatra.
The DNS proposal also includes scraping the existing scope for joint investment in the savings tools to contain the investment in the tools.
“It has been decided in principle that the surge in investment in the government tools would be checked without cutting the rates of interest on the tools if the government accepts the proposals,” a DNS official told The New Nation.
The investment in the tools will decrease significantly if clients have to reveal sources of their invested fund in the deposit scripts of savings bonds and certificates, the proposal reads.
The DNS official said that a number people were now frequently investing their illegal income in savings tools to legalise their money.
The savings directorate also suggested that the government offer an increased interest rate to women, physically challenged people and aged persons against their investment in the tools to ensure their socio-economic protection.
The directorate, however, said that such investment limit should be set up to Tk 5 lakh.
The DNS official said that the majority of government agencies and corporate bodies had been keeping their provident and gratuity fund in the tools that played a vital role in the investment surge in the tools.
DNS Director General Bablu Kumar Saha told The New Nation that the directorate had submitted the proposals to the Finance Ministry after taking opinions from all stakeholders.
‘Since the proposals will ensure both the public and government interest, so we have placed the recommendations before the Finance Ministry,’ he said.
The DNS has prepared the proposals gathering the field-level experiences, he said, adding that the existing upward trend in investment would drop automatically once the ministry accepts the proposals.
According to the latest DNS data, the net investment in the tools increased by nearly 60 percent to Tk 49,669 crore in the July-June period of the last financial year (FY2016-17) compared with that of Tk 31,792 crore in the corresponding period of FY16.
People are now being forced to invest their money in the NSCs as the banks are offering hardly 7 per cent interest rate on their deposit products.
The rates the NSCs are offering range between 11.04 per cent and 11.76 per cent, a BB official said.
In the budget for FY17, the government had aimed to borrow Tk 19,610 crore from the NSCs, but it later revised the figure and set a borrowing target of Tk 45,000 crore.
