Net sales of savings tools post negative growth in June

The net sales of state-run savings instruments in June showed a negative growth of Tk 33.81 billion over the matching period of the last year due to the prevailing higher rate of encashment than the investment.
The substantial negative growth in net sales of national instruments, known as NSAs, also continued to expand in June of this year compared to May, suggesting a decrease in confidence in these tools during this period.
The net sales of such instruments in May dropped by Tk 30.94 billion, according to the Bangladesh Bank (BB) data.
The net sales of such instruments in FY 24 saw a negative growth of Tk 211.24 billion, according to BB data.
This means, the rate of encashment is higher than the volume of sale during the period.
Several factors contributed to this decline, including mounting inflationary pressures, financial crises, reduced profitability in banks, and challenging investment conditions.
The net sale of savings certificates is calculated by deducting the amount repaid for previously sold certificates from the total sales.
Outstanding amount of saving instruments also showed a decline during the last fiscal year.
The total outstanding exceeded Tk 3.46 trillion in FY 24, whereas it was over Tk 3.60 trillion during the same period in the previous fiscal year, as indicated by the BB data.
Currently, there are 11 government-owned savings tools on the market, four being savings certificates.
These include 'Five-year Bangladesh Sanchayapatra' (with an 11.28-per cent yield), 'Three-monthly Profit-bearing Sanchayapatra' (11.04 per cent), 'Family Savings Certificate' (11.52 per cent) and 'Pensioner Sanchayapatra' (11.76 per cent).
These are the maximum yield rates after savings certificates mature.
The government has set the net borrowing target from savings schemes for the last financial year at Tk 180 billion.
In 2019, the government launched an online system, the National Saving Certificates Online Management System, to manage these savings instruments. Electronic Tax Identification Numbers (eTINs) and national identity cards became mandatory for savers.
Professor Dr Mustafizur Rahman, a senior member at the Centre for Policy Dialogue (CPD), attributed the decline in savings to current economic conditions, including high inflation and economic uncertainty, which make people less interested in saving.
Dr Rahman highlighted that due to high inflation and economic uncertainty, people are less motivated to save money, and instead, they are turning to other types of investments and borrowing options.

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