Net sales of state-run saving instruments showed a negative growth of Tk 23.05 billion, year on year, in the first four months of the current fiscal as higher-paying encashment outbids investment, sources say.
The substantial negative growth in net sales of national instruments, known as NSAs, continued to expand in October compared to September, suggesting a confidence deficit in these tools used for government borrowing.
Several factors contributed to this slide, including mounting inflationary pressures, financial crises, reduced profitability in banks, and challenging investment conditions.
The net sales of savings certificates are calculated by deducting the amount repaid for previously sold certificates from the total.
The net sales of such instruments from July to October of the last fiscal year (2022-23) saw a negative growth of Tk 6.23 billion, according to Bangladesh Bank data.
Such negative growth also stood at Tk 10.40 billion this past October, up from Tk 1.47 billion in September, marking an 85.48-percent substantial decline in the month, the BB data revealed.
This means the rate of encashment is higher than the volume of sale during the period.
The total outstanding exceeded Tk 365.08 billion from July to October in the current fiscal year, while it was over Tk 363.37 billion during the same period in the previous fiscal year, as indicated by the BB data.
Overall outstanding amount was more than Tk 365.08 billion in October while it was over Tk 366.12 billion in September, the central bank reveals.
Dr Selim Raihan, professor, Department of Economics, the University of Dhaka, says recently-made government rules, some reluctance on part of government and inflationary pressure may have an impact in such significant negative growth in savings tools.
"Middle-income individuals and pension-recipients, who may not have the opportunity to invest in the capital market, are typically encouraged to consider saving tools as a secure investment option," he notes.
Professor Raihan, also executive director, South Asian Network on Economic Modelling (Sanem), suggests the government should keep the window more investment-friendly in greater interest of the people.
Currently, there are 11 government-owned saving tools on the market, four being savings certificates.
These include 5-year Bangladesh Sanchayapatra (with an 11.28-percent yield), 3-monthly Profit Bearing Sanchayapatra (11.04 per cent), Family Savings Certificate (11.52 per cent) and Pensioner Sanchayapatra (11.76-percent yield). These are the maximum yield rates after the certificates mature.
The government has set the net borrowing target from savings schemes for the current financial year at Tk 180 billion.
The government launched an online database named 'National Saving Certificates Online Management System' and also made eTINs and national identity card mandatory for savers in 2019.
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