Govt borrowing thru\\\' savings tools up by 15 times last fiscal

Arafat Ara | Published: August 05, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

The government's net borrowing through sale of savings instruments rose by more than 15 times in the last fiscal year over the previous fiscal mainly because of lower encashment of the savings tools, said officials.
Besides, reduction of deposit rates by commercial banks also helped raise the overall investment under the state-run savings instruments, they said.
The Department of National Savings (DNS) data showed that the net sale of savings certificates and investment bonds stood at Tk 117.07 billion during the 2013-14 fiscal year (FY) against Tk 7.72 billion in the FY 2012-13.
The net borrowing was also much higher than that of fiscal target fixed by the finance ministry at Tk 49.71 billion for the FY 2013-14.
The encashment by the savers was lower in the last FY as investment under most of the five-year savings certificates didn't matured during the said period, the DNS officials said adding which helped increase the net sale.
As per DNS data the gross sale was Tk 243.09 billion against the encashment of Tk 126.02 billion in the June- July period of FY 2013-14.
On the other hand, the sale of different savings tools was also good as banks reduced rates of interest on their deposits.
Presently, some banks are offering only about 7.0 to 8.0 per cent interest on their fixed deposits. But the DNS is offering up to 13.45 per cent interest which encouraged the savers to deposit in the savings tools.
The family savings certificate was the most selling product in the last FY following its high yield rates. The net sale of the family savings certificate was Tk 73.63 billion in the FY 2013-14.
Auto reinvestment facility for some savings instrument is another cause for such development, they added.
They also said the sale will increase further in the current FY 2014-15 as the savers are now more attracted towards the government's savings schemes as their interest rates are higher than that of banks' savings schemes.
The finance ministry has fixed the net borrowing target from the state-owned savings tools at Tk 90.56 billion for the fiscal year 2014-15.
The government's net borrowing was only Tk 4.78 billion in the FY 2011-12.