Savings tools witness negative sales growth

Net sales of state-sponsored savings instruments witnessed negative growth of over Tk 60.63 billion year on year, in the first six months of this fiscal as higher-paying encashment outbids investment.
The substantial negative growth in net sales of national savings deposits, known as NSDs, continued to expand in December, compared to November, suggesting a confidence deficit in these tools used for government borrowings.
Several factors contributed to this slide, including mounting inflationary pressure, financial crises, reduced profitability in banks, and challenging investment condition.
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 in the July-December period of the last 2022-23 fiscal saw negative growth of more than Tk 31.06 billion, according to the Bangladesh Bank's data.
Such negative growth also stood at Tk 22.04 billion last December whereas it was Tk 15.53 billion in November, marking a 41.95-percent substantial decline in the month, the data reveals.
This means the rate of encashment is higher than the volume of sales during the period.
The total outstanding exceeded Tk 3.61 trillion from July to December this fiscal year, while it was over Tk 3.60 trillion during the same period in the previous fiscal year, as indicated by the central bank's data.
On the other hand, overall outstanding crossed Tk 3.65 trillion from July to October in the present fiscal year, while it stood at more than Tk 3.63 trillion during the same period in the previous fiscal year.
Talking to the FE, Professor Dr Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), highlighted that individuals are presently disinclined towards investing in savings instruments due to the erosion of purchasing power, elevated inflation rates and the prevailing economic conditions.
He noted a growing trend of dissaving among the populace, attributing it to the lack of incentivisation.
Mr Rahman pointed out that the government is employing policy measures such as contractionary monetary policy to address the surge in inflation, which he believes could yield positive outcomes in the near future.
The government has set the net borrowing target from savings schemes for the current fiscal year at Tk 180 billion.
The government launched an online database 'the National Saving Certificates Online Management System' and also made e-TINs and national identity cards mandatory for savers in 2019.
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