The government is considering selling savings instruments to institutional buyers only by savings directorate offices instead of banks and post offices with intent to check intrusion of illicit funds.
As part of automation to curb misuse of the facility, a senior finance ministry official said, the sale of certificates to institutional investors only by the directorate is under consideration.
Government, private sector and autonomous bodies are allowed to invest their provident funds in buying 'Five-year Bangladesh Sanchayapatra' of the Directorate of National Savings (DNS) as institutional investors.
There is no upper or lower limit for recognised provident funds in buying the designated savings certificate, meaning they can buy as much as they need.
According to DNS officials, the banks and post offices, which sell savings tools, do not conduct due diligence properly.
Thus, possibilities are there that unauthorised persons or companies may take the advantage and make investment in savings instruments, they said.
"While making payments we found that in many cases they didn't collect required documents while selling savings tools," DNS director Shah Alam told the FE.
The institutional investors buy savings tools in large amounts. So, any relaxation in checking documents properly can cause severe trouble, he said.
"So, we've sought permission from finance ministry to keep the authority of selling savings tools to institutional investors within our offices."
The directorate has 11 offices in Dhaka city and one office in each district across the country from where savings certificates are sold.
Banks and post offices sell savings instruments as commission agents of the directorate.
"They get commission against the sale of instruments. Thus, instead of putting concentration on taking proper documents, they focus on raising sale and attaining commission," said Mr Alam.
Investment in bank and financial institutions' savings schemes can yield up to 6.0-per cent interest and that of the DNS can bring as high as 12-per cent interest.
It made the investment in schemes of the savings directorate lucrative for people and institutions.
However, the government in 2020 found that the sale of savings tools went up unusually and feared the investment of unauthorised or undeclared money.
Later, the government automated the selling of savings tools and made submission of taxpayer's identification number mandatory for buying the instruments.
This has helped check the buying of savings tools with undeclared money, officials said.
The government set a net borrowing target of Tk 200 billion by selling savings tools this fiscal year.
However, the net borrowing till February 2021 reached Tk 293 billion.
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