Mohammed Badrul Ahsan :
The net investment in the savings instruments increased by 79.40 percent in the July-November period of FY17 thanks to the low bank deposit rates in banks and sluggish business activities in the country, sources said.
According to official data, the net investment in the national savings certificates (NSCs) and bonds surpassed Tk 20,319.53 crore in just five months of the fiscal.
The government aimed to borrow Tk 19,610 crore from the NSCs in FY17, but its borrowing through the tools crossed the annual target between July and November as clients continued to invest heavily in the instruments due.
Directorate of National Savings data shoes that the net investment in the savings instruments in July-November period of FY16 was Tk 11,325.86 crore.
However, money market experts said that a number of banks massively cut the rate of interest on their deposit products that had forced the clients to invest in the NSCs, he said.
Banks were forced to cut the rates of interest on deposit products due to a decreased loan disbursement in the private sector amid sluggish business, he added.
The maximum interest rate on NSCs is around 12 per cent while the bank rate on fixed deposit schemes is between 5 per cent and 6 per cent.
The monthly net investment in the national savings certificates and bonds also hit its all-time high at Tk 4,402.85 crore in November.
The DNS data showed that before November, the monthly highest net investment in the NSCs was Tk 4,297.20 crore in August this year.
Meanwhile, the significant rise if saving certificates has given the government a respite of borrowing from the banking sector.
Central Bank data shows that the government’s net borrowing from the banking sector turned negative in the first half of this financial year because of a surge in the net investment by clients in the national savings certificates and bonds.
According to the latest Bangladesh Bank data, the government made no net borrowing from the banking sources in the July-December period of the FY 2016-17 but made a net repayment of Tk 10,238.62 crore in the period.
Moreover, the government had also made a net repayment of Tk 3,576.64 crore in the first half of the FY 2015-16 against its previous borrowing from the banking sector.
The BB data showed that the government repaid Tk 10,123.80 crore and Tk 114.82 crore to the central bank and scheduled banks respectively in six months of FY17 against its previous loans, making the government’s overall bank borrowing negative of Tk 10,238.62 crore.
The government requires no big amount of borrowing from the banking sector right now, but its demand for loans might increase in the second half of FY17 as the government might be forced to borrow from the banking sector to implement a number of mega projects.
The net investment in the savings instruments increased by 79.40 percent in the July-November period of FY17 thanks to the low bank deposit rates in banks and sluggish business activities in the country, sources said.
According to official data, the net investment in the national savings certificates (NSCs) and bonds surpassed Tk 20,319.53 crore in just five months of the fiscal.
The government aimed to borrow Tk 19,610 crore from the NSCs in FY17, but its borrowing through the tools crossed the annual target between July and November as clients continued to invest heavily in the instruments due.
Directorate of National Savings data shoes that the net investment in the savings instruments in July-November period of FY16 was Tk 11,325.86 crore.
However, money market experts said that a number of banks massively cut the rate of interest on their deposit products that had forced the clients to invest in the NSCs, he said.
Banks were forced to cut the rates of interest on deposit products due to a decreased loan disbursement in the private sector amid sluggish business, he added.
The maximum interest rate on NSCs is around 12 per cent while the bank rate on fixed deposit schemes is between 5 per cent and 6 per cent.
The monthly net investment in the national savings certificates and bonds also hit its all-time high at Tk 4,402.85 crore in November.
The DNS data showed that before November, the monthly highest net investment in the NSCs was Tk 4,297.20 crore in August this year.
Meanwhile, the significant rise if saving certificates has given the government a respite of borrowing from the banking sector.
Central Bank data shows that the government’s net borrowing from the banking sector turned negative in the first half of this financial year because of a surge in the net investment by clients in the national savings certificates and bonds.
According to the latest Bangladesh Bank data, the government made no net borrowing from the banking sources in the July-December period of the FY 2016-17 but made a net repayment of Tk 10,238.62 crore in the period.
Moreover, the government had also made a net repayment of Tk 3,576.64 crore in the first half of the FY 2015-16 against its previous borrowing from the banking sector.
The BB data showed that the government repaid Tk 10,123.80 crore and Tk 114.82 crore to the central bank and scheduled banks respectively in six months of FY17 against its previous loans, making the government’s overall bank borrowing negative of Tk 10,238.62 crore.
The government requires no big amount of borrowing from the banking sector right now, but its demand for loans might increase in the second half of FY17 as the government might be forced to borrow from the banking sector to implement a number of mega projects.
