The government will input all data about investors in savings tools in a central-database repository for modernising management of its borrowing instruments as a sustainable source of deficit financing.
Officials said the inputting will begin in July in the next financial year, and on completion of the database building, the savers will get updates on the principal and yields thereon automatically.
To this end, they said, the initial preparation starts next month (April).
"We will begin preparation to create a database of the existing savings tools under the Directorate of National Savings (DNS)," Joint Secretary and programme director of finance ministry Md. Habibur Rahman told the FE.
"We are scrutinising various issues in this connection, a high official of the finance ministry said.
Under the move, a self-sufficient central database of clients or investors in national savings certificates will be created linking with the National Identity Card under the DNS.
Updated information about investment will be uploaded after preparing the database and collecting information about investments in the high-yielding savings instruments.
Besides, guidelines will be formulated by the DNS to put overall information of investors on the proposed database.
Currently, the DNS is under the Internal Resources Division (IRD) according to allocation of business. On the other hand, the Finance Division handles the administrative activities on loan affairs. For this, the DNS takes care of short-term reform activities to implement the modernization of the national savings tools.
"Overall management of DNS should be brought under automation. A separate component is likely to be incorporated into the framework of Strengthening Public Expenditure Management operated by the Finance Division," a high official of the finance ministry said.
The main objective of the national saving schemes is to motivate people to save money and collect scattered small savings and mitigate national budget deficit by collecting money through the designated tools.
The tools are also devised as a source of incomes for country's particular sections of people, like women, senior citizens, Bangladeshis working abroad and the physically handicapped.
It is playing an important role by reducing aid-dependence, monetary inflation and so.
When asked, a senior official of the Finance Division said: "We have taken short-, medium-and long-term plans to modernise country's existing savings tools. Firstly, a database would be created linking it with investors' National Identity Card."
He adds: "We want to identify who are investing in the tools. Then the government will be able to understand whether the people enjoying higher interest are rich or poor."
The official noted that sometimes people cross investment ceiling by buying savings tools from different outlets. "We want to control this practice by preparing database and linking it with their national identity numbers."
Currently, savings certificates are sold through the central bank, commercial banks, post offices and the Department of National Savings (DNS).
In the last fiscal year, savings certificates worth over Tk750 billion were sold. The total investment came to Tk 336 billion in the first five months of the current fiscal year (2017-18), according to DNS data, already shooting over the year's mark.
The government has set its net borrowing target at Tk 301.50 billion through sales of savings certificates for the current fiscal year (FY) 2017-18.
There are 17000 outlets of Bangladesh Bank (BB) and Bangladesh post office as well as DNS outlets to sell savings certificates across the country.
There are no specific data on the saving-tool investors from the DNS. Some tools are popular to the investors. These are: 5-year Sanchaya-patra, three-monthly Sancha-yapatra, Pensioner Sanchaya-patra, Poribar Sanchayapatra, Postal Savings and so.
Executive Director of the Policy Research Institute of Bangladesh (PRI) Ahsan H. Mansur sees policy and administrative challenges involving the government borrowing tools. Policy challenges are more fundamental but administrative challenges are important, the policy analyst told the FE.
"The database of savings tools is good for management and also depositors if it is implemented. That is not the solution to main problem. Main problem is policy-related," he added.
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