Staff Reporter :
The net sales of National Savings Certificates (NSCs) were worth Tk 1,08,070 crore and the government paid Tk 88,155 crore as interest against the amount in the immediate past fiscal year (2021-22).
As a result, the net borrowing has stood at Tk 19,915.75 crore or 62.23 per cent of the target, which was Tk 32,000 crore during the July-June period of the fiscal year, according to official data.
The data also showed that the net sales of the NSCs were worth Tk 10,712 crore in June alone of the fiscal year and Tk 8,962 crore has been paid against the amount. As a result, the net borrowing stood at Tk 1,749.63 crore during June.
According to the new law, income tax return certificate is required for investing more than five lakh taka in the NSCs and there is also a provision of imprisonment and fine for undeclared savings certificate.
The government has imposed such conditions to discourage investment in the NSCs. As a result, the savings certificate sales and government borrowings have declined significantly.
The sales of NSCs were significantly high in the fiscal year 2020-2021 and the surge prompted the government to slap budgetary restrictions. Poor interest rates against bank deposits were another reason for the significant surge in NSC sales in the fiscal year.
But demand for liquidity in banks dropped sharply after the outbreak of the Covid-19 pandemic that prompted banks to lower interest rate of deposits. Even some banks offered as low as 2 per cent interest against deposits.
So, many of the savers found interest rates on savings instruments lucrative since the NSCs offered as high as 12 per cent against its different products.
To keep the fund flow in the banking sector normal and to support individual depositors and pensioners, the central bank linked deposit rate of certain categories, including term deposit of individuals and pension-related funds, with the rate of inflation in August, 2021, which contributed to reducing fund injection in NSCs.
Under the instruction, the BB said that the interest rates against deposits of individuals, pension funds of the government entities or private entities and term deposits of any amount meant for the payment of post-retirement benefits must not be lower than the inflation rate.
The sales of NSCs in Fiscal year 2020-21 rose to Tk 41,959.5 crore, more than double the
government’s initial budgetary target for the particular year. In fiscal year 2019-20, the net sales of NSCs were Tk 15,139 crore.
Initially, the government’s NSC sales target for FY21 was Tk 20,000 crore, which was later revised upward to Tk 30,302 crore.
