Savings certificates sale rises by 183% in Jul-Oct
Sales increased by Tk10,121 crore to Tk15,642 crore

The government is close to reaching the fiscal target of selling savings certificates as in the first four months (July-October) it has already sold the instruments worth Tk15,000 crore.
The FY21 budget had targeted to make Tk20,000 crore from the sale of savings certificates.
The information has been revealed on Thursday in a weekly – Selected Economic Indicators – published by the central bank.
In July-October of the last financial year, the net sale of savings instruments was Tk5,521 crore. During the same period of this fiscal, the sale increased by Tk10,121 crore to Tk15,642 crore.
That means sales have increased almost 3 times or 183%.
Economists say the upward sale trajectory in the first four months suggests that the sale may exceed Tk20,000 crore when the November figure will be available.
Policy Research Institute (PRI) Executive Director Ahsan H Mansur told The Business Standard that the sale of savings certificates is on the rise as interest rates on bank deposits have come down and there are no other options left for savings for commoners.
He added that earlier the difference between the interest rates on savings tools and bank deposits was about 4% which has now exceeded 7%.
This is why there has been an increase in the sale of savings tools.
The sharp decline in the government reliance on bank loans for budget implementation is one of the main reasons behind the rise in sale, added Mansur.
During the July-October period of FY21, the government took a bank loan of only Tk163 crore, which was about Tk33,000 crore in the same period last fiscal.
In this context, Ahsan Mansur said if the government takes a loan from a bank, it has to pay 3%-4% interest, but when it comes to savings tools, 11.5% interest has to be paid on average.
This will increase the expenditure incurred on interest in the current financial year, he said, adding that this will put pressure on the budget as well.
Despite the hike in the sale, many are reluctant to purchase saving tools due to the introduction of an online system and mandatory tax identification number, according to bankers.
Abu Naser Bakhtiar, former managing director of Agrani Bank, said it would not be right to discourage investors from buying the savings tools.
He suggests that the investment limit should be increased for small investors instead of giving opportunities to big savers.
He said at present individual savings investment is capped at Tk50 lakh while jointly it is Tk1 crore.
Although the sale of savings certificates has risen, the tendency to redeem them is also scaling up.
An analysis from the central bank has shown that the tendency to encash the investment certificates has increased every month from July to September.
In July, savings instruments worth Tk5,000 crore were redeemed which rose to Tk5,105 crore in August and Tk6,000 crore in September.
Due to the decline in income in the wake of pandemic, many are cashing out their savings tools.
Commenting on this, Ahsan Mansur said, "However, many people are going for redemption, considering that they have to file an income tax return since TIN number has been made mandatory."