THE government has slashed interest rates on postal savings by half as part of its efforts to reduce interest rates on bank loans and deposits, and promote investment in the private sector. The Internal Resources Division of the Ministry of Finance on Thursday issued a circular regarding this with immediate effect. The saving scheme was the first choice of retired people and the middle-class for getting High returns. The latest government’s decision will discourage them to save, eventually the saving tendency would be hampered, and the poor to middle-class people will feel financially insecure. The interest rate on one-year savings was reduced to 5 per cent from 10.20 per cent. For two-year schemes, interest rate was cut to 5.50 per cent from 10.70 per cent while it was slashed to 6 per cent from 11.28 per cent for three-year schemes. The depositors can withdraw profits from their postal savings after six months. In such case, interest rate would be 4 per cent for one-year schemes, 4.50 per cent for two-year schemes and 5 per cent for three-year schemes. Previously, the rates were 9 per cent, 9.50 per cent and 10 per cent respectively. The majority of banks have already implemented the decision to offer 6 percent interest rate on their Fixed Deposit Receipts (FDRs).
The banks are also expected to provide loans at 9 percent interest rate within a couple of months. Last year, private banks agreed to set single-digit interest rate on their deposit and loan schemes. On January 28 this year, the Association of Bankers, Bangladesh — a forum of managing directors of banks — decided to provide not more than 6 per cent interest on FDRs from February 1. On one hand, the banks are taking people’s money in exchange of only 6% interest and giving them loan on 9% interest rate on the other. What an injustice! Most of the banks are now facing severe fund crunch due to large amount of defaulted loans taken by big business houses. Billions of taka have already been drained out from the country. The government itself is running the State machinery taking loans from different sources.
Not a single source remains from where government is not taking money. The madness of the government for cash flow of money will surely take the economy on the verge of collapse.
