bdnews24.com :
The government has cut interest rates on all saving certificates by up to two percent, claiming the schemes added to the government’s debt burden.
“Savings certificate sale spiked abnormally due to high interest rates,” Finance Minister AMA Muhith said on Sunday to justify the move.
“If this continues, investment in this sector would keep increasing government debts in the future. That is why we have decided to review it.”
He added interests on all types of saving certificates had been cut by 1-2 percent on an average.
For example, the five-year Bangladesh Savings Certificate interest rate has been reduced from 13.26 percent to 11.19.
The minister said interest rates had been increased in the past to encourage savings but the move had drawn too many investors, forcing a cutback.
The interests on five-year family savings certificates was 13.45 percent, pensioners certificate 13.19 percent, Bangladesh Savings Certificate 13.19 percent, three-year savings certificates with tri-monthly returns 12.59 percent, postal savings and bank certificates’ 13.24 percent.
Although the schemes are mainly aimed at helping middle and lower-class earners, the central bank’s chief economist, Biru Paksha Paul, said the rich were mostly taking its advantage because of high interest rates.
In the first eight months of the fiscal, family saving certificates saw neat sales of Tk 88.68 billion and tri-monthly ones Tk 54.89 billion. Five-year Bangladesh Savings Certificate sale was worth Tk 19.7 billion, postal certificates Tk 14.04 billion and wage earners development bond Tk 2.59 billion.
Total sales were Tk 265.33 billion, of which the government paid back Tk 82.50 billion in capital and interest.
It means it still has Tk 182.83 billion debt from the sector – 200 percent more than the same time last year.
The amount of debt incurred in the first eight months is also twice the amount targeted by the government from this sector to address budget deficits for the whole fiscal.
The government has cut interest rates on all saving certificates by up to two percent, claiming the schemes added to the government’s debt burden.
“Savings certificate sale spiked abnormally due to high interest rates,” Finance Minister AMA Muhith said on Sunday to justify the move.
“If this continues, investment in this sector would keep increasing government debts in the future. That is why we have decided to review it.”
He added interests on all types of saving certificates had been cut by 1-2 percent on an average.
For example, the five-year Bangladesh Savings Certificate interest rate has been reduced from 13.26 percent to 11.19.
The minister said interest rates had been increased in the past to encourage savings but the move had drawn too many investors, forcing a cutback.
The interests on five-year family savings certificates was 13.45 percent, pensioners certificate 13.19 percent, Bangladesh Savings Certificate 13.19 percent, three-year savings certificates with tri-monthly returns 12.59 percent, postal savings and bank certificates’ 13.24 percent.
Although the schemes are mainly aimed at helping middle and lower-class earners, the central bank’s chief economist, Biru Paksha Paul, said the rich were mostly taking its advantage because of high interest rates.
In the first eight months of the fiscal, family saving certificates saw neat sales of Tk 88.68 billion and tri-monthly ones Tk 54.89 billion. Five-year Bangladesh Savings Certificate sale was worth Tk 19.7 billion, postal certificates Tk 14.04 billion and wage earners development bond Tk 2.59 billion.
Total sales were Tk 265.33 billion, of which the government paid back Tk 82.50 billion in capital and interest.
It means it still has Tk 182.83 billion debt from the sector – 200 percent more than the same time last year.
The amount of debt incurred in the first eight months is also twice the amount targeted by the government from this sector to address budget deficits for the whole fiscal.
