Abu Sazzad :
Net investment in National Savings Certificates (NSC) and bonds increased by 192.76 per cent in the last eight months (July to February) of the current fiscal (FY) 2014-15 from last fiscal.
According to the latest data released by Bangladesh Bank, the net investment in the savings instruments and bonds during the first eight months of the current fiscal stands at Tk 18,283.16 crore against Tk 6,245.61 crore during the corresponding period of the last fiscal.
Talking to The New Nation, M Mahfuzur Rahman, Executive Director of Bangladesh Bank (BB) said, the government offers higher interest for bond for which the purchase of bonds increased in the last few months.
Md Nurul Islam, a Deputy Director of Bangladesh Bank (BB), said currently banks are offering interest rates on term deposits ranging between 8 to 10 percent. On the other hand, the rate of interest is 13.19 percent on five-year Bangladesh savings instruments,
12.59 percent on three-monthly profit-bearing savings certificates, 13.19 percent on pensioners’ savings instruments and 13.45 percent on family savings certificates, he said.
Under the circumstances, the net investment in the savings instruments jumped in the first eight months of the current fiscal, also added the Deputy Director.
Talking to the reporter, economist M Mamunur Rashid said, investors want security and higher profits against their investment and government savings instruments are offering higher profits.
Simultaneously, country’s capital market is failing to return higher profits to investors than the government saving instrument, for which government bonds investment is increasing and getting more popular in recent times, he also said.
Besides, the banking sector is now enjoying enough liquidity as their loan disbursement in the industrial sector declined significantly in the last few months, he added. “This is an irony that investors are choosing to invest in government bonds”, he said. Actually, the government sells various savings instruments mainly to finance deficit in the national budget.
“The huge rising of sale of national saving certificates and bonds would facilitate the government to meet their budget deficit; simultaneously it will reduce the private sector growth, which is not a good sign for attaining a sustainable economy”, also said the economist.
Commercial bank’s loan disbursement to the industrial sector declined over the last couple of months due to political unrest of the country and for these reasons some banks have cut interest rates on their savings products, said Saiful Islam Patwary, Manager of First Security Islami Bank, Dilkusha Branch and added that investors are reluctant to withdraw their investment from government bonds. “Instead of encashment of the bond after maturity, the general investors are further continuing their investment in national savings bonds”, Saiful Islam also said. Higher investment in national savings bonds might be increased in the near future if the political unrest is not stopped immediately, he also added.
The government mainly sells the savings instruments through various institutions including National Savings Directorate, Post Offices, Bangladesh Bank and Commercial Banks. “An increased number of customers are buying savings certificates from commercial banks mainly due to higher profits,” Mesbah Uddin, a senior official of Bangladesh Commerce Bank.
An individual can invest up to Tk 30 lakh in five-year term certificates and three-month profit-bearing certificates. An investment of Tk 1 lakh on three-month profit-bearing savings certificates pays out Tk 3,000 in profit excluding all taxes every three months, Mesbah said. An adult female can purchase up to Tk 45 lakh in savings instruments under Paribar Sanchayapatra, and earn Tk 1,070 as net profit each month for each Tk 1 lakh, Mesbah also said.
Net investment in National Savings Certificates (NSC) and bonds increased by 192.76 per cent in the last eight months (July to February) of the current fiscal (FY) 2014-15 from last fiscal.
According to the latest data released by Bangladesh Bank, the net investment in the savings instruments and bonds during the first eight months of the current fiscal stands at Tk 18,283.16 crore against Tk 6,245.61 crore during the corresponding period of the last fiscal.
Talking to The New Nation, M Mahfuzur Rahman, Executive Director of Bangladesh Bank (BB) said, the government offers higher interest for bond for which the purchase of bonds increased in the last few months.
Md Nurul Islam, a Deputy Director of Bangladesh Bank (BB), said currently banks are offering interest rates on term deposits ranging between 8 to 10 percent. On the other hand, the rate of interest is 13.19 percent on five-year Bangladesh savings instruments,
12.59 percent on three-monthly profit-bearing savings certificates, 13.19 percent on pensioners’ savings instruments and 13.45 percent on family savings certificates, he said.
Under the circumstances, the net investment in the savings instruments jumped in the first eight months of the current fiscal, also added the Deputy Director.
Talking to the reporter, economist M Mamunur Rashid said, investors want security and higher profits against their investment and government savings instruments are offering higher profits.
Simultaneously, country’s capital market is failing to return higher profits to investors than the government saving instrument, for which government bonds investment is increasing and getting more popular in recent times, he also said.
Besides, the banking sector is now enjoying enough liquidity as their loan disbursement in the industrial sector declined significantly in the last few months, he added. “This is an irony that investors are choosing to invest in government bonds”, he said. Actually, the government sells various savings instruments mainly to finance deficit in the national budget.
“The huge rising of sale of national saving certificates and bonds would facilitate the government to meet their budget deficit; simultaneously it will reduce the private sector growth, which is not a good sign for attaining a sustainable economy”, also said the economist.
Commercial bank’s loan disbursement to the industrial sector declined over the last couple of months due to political unrest of the country and for these reasons some banks have cut interest rates on their savings products, said Saiful Islam Patwary, Manager of First Security Islami Bank, Dilkusha Branch and added that investors are reluctant to withdraw their investment from government bonds. “Instead of encashment of the bond after maturity, the general investors are further continuing their investment in national savings bonds”, Saiful Islam also said. Higher investment in national savings bonds might be increased in the near future if the political unrest is not stopped immediately, he also added.
The government mainly sells the savings instruments through various institutions including National Savings Directorate, Post Offices, Bangladesh Bank and Commercial Banks. “An increased number of customers are buying savings certificates from commercial banks mainly due to higher profits,” Mesbah Uddin, a senior official of Bangladesh Commerce Bank.
An individual can invest up to Tk 30 lakh in five-year term certificates and three-month profit-bearing certificates. An investment of Tk 1 lakh on three-month profit-bearing savings certificates pays out Tk 3,000 in profit excluding all taxes every three months, Mesbah said. An adult female can purchase up to Tk 45 lakh in savings instruments under Paribar Sanchayapatra, and earn Tk 1,070 as net profit each month for each Tk 1 lakh, Mesbah also said.
