Sales of national savings certificates dropped in September thanks to the recent capping on profits of the savings tolls by the government.
The net sales of the savings tools declined by more than 22% in September to Tk2,825 crore compared to Tk3,629 crore in August.
The August sales saw 72% rise compared to July, the first month of the 2021-22 fiscal year.
For the current year, the government has set Tk32,000 crore target for the savings certificates sales. Of the amount, the government has already sold Tk8,556 crore savings tools in the first three months — which is around 26% of the annual target.
In August this year, the government fixed a 5% minimum interest ceiling for bank deposits while the premium earlier was 2%-4%. As the banks had been offering low interests, people rushed for the national savings certificates.
To rein in the rush for the savings tool, the government capped interests for savings certificates. However, the premium for investment less than Tk15 lakh remains unchanged.
In addition to bank loans, the government also borrows from savings certificates to meet the budget deficit. The certificates offer lucrative interests considering the social safety of people belonging to the limited income bracket.
Usually, the government borrows from foreign and domestic sources to meet the budget deficit. The target for borrowing from the domestic sector in the current financial year is around 1.12 lakh crore. Of this, the government will borrow Tk76,452 crore from banks while Tk32,000 crore will be borrowed from national savings certificates.
Government bank borrowing has gone up by 12.20% during the first two months of the 2021-22 fiscal year compared to the corresponding period last year, following the gradual improvement of Covid-19 situation across the country.