The government sold savings instruments worth Tk 5420 crore in January, the highest in a single month, recovering the deficits it faced over December's Tk 31,000 crore sale.
With the sharp rise, the savings instruments sales in the first seven months of the current fiscal year amounted to Tk28,894 crore, which is Tk 9,258 crore more than the target. The government has set a loan target of Tk 19,610crore from savings instruments from this financial year.
According to National Savings Directorate, the sales amounted to Tk4402cr in November while the figure was Tk3584cr in September. The sales volume in July, the first month of the fiscal year, and August was Tk3498cr and Tk 4297 respectively.
Loan from savings instrument kept increasing from the outset of the FY 2016-17. This is happening mainly due to higher interest rates in banks, making the customers more interested in savings instruments.
Currently, commercial banks on average pay 6-7% interest against a certain amount of principal, which is much lesser than that of savings instruments. Considering the situation, customers find it more profitable to invest in savings instrument.
The scheduled bank loans for the government stood at Tk98,409 at the end of December, whereas the amount was Tk10008648.50 crore after June. It implies that the bank loan had a sharp fall of Tk10238crore in the six-month span. The net loan over the same period became Tk3303.
When contacted, Dr Saleh Uddin Ahmed, former central bank governor, said savings instrument is a big medium of investment.
"It is more profitable to invest in savings instrument than in any other schemes. Therefore, sales of savings instruments are higher. Low and fixed income people make their ends meet by investing for savings instrument since they find it much safer," he said.
Currently, the interest rate on five-year family savings certificates is 11.52 percent and this figure for pensioners' five-year ones is 11.76 percent. The rate of interest on five-year Bangladesh savings instruments is now 11.28 percent while it stands at11.04 and 11.28 percent for three-monthly profit-bearing and the three-year post office savings certificates respectively.