Govt borrowed double than target of 6-month thru’ Saving Certificates

Rabiul Alam: The government has borrowed Tk 20,487.12 crore from the National Savings Certificates during last six months of the current Fiscal Year (FY), which is Tk 487 crore higher than the target of the year for the FY 2020-21.
Earlier, in FY 2019-20, the government borrowed only Tk 5,433 crore from national saving certificate schemes.
The government fixed the target of selling the saving certificate of Tk 20,000 crore to meet the budget deficit in FY-2020-21. But within six months, the sale of saving certificate has exceeded the target.
Prominent economist and Executive Director of Policy Research Institute (PRI) Ahsan H Mansur told The Daily Industry that, at present, deposit interest rate has been decreased significantly. This is why, depositors are showing interest to invest in saving certificate treating it as most secured investment window.
He said, “10 to 12 percent interest could get, if anyone keep money in banks. But presently, it has reduced to only 5 percent. In saving certificate, around 10 to 12 percent interest is still available. The sale of saving certificate is likely to reach at Tk 20,000 crore per month, if limitation was not imposed.
Ahsan H Monsur further said that, the main cause of increasing investment in savings certificates is remittance sent by expatriates. Expatriates chose investment in savings certificates as a safe means of investment.
According to the upgraded data given by Department of National Savings, ‘family saving certificate’ of around Tk 10,455.30 crore was sold in the first six months of the year.
Profit based savings certificates have been sold at Tk 2,508.22 croer in three months interim period. Five years tenure based saving certificates have been sold at Tk 1,932.20 crore. Besides, pensioner savings certificates have been sold for Tk 1,814.90 crore.
Sources said, savings certificates of Tk 54,976 crore were sold in the first half (from July to December). Among them, original liabilities were repaid at Tk 34,489 crore and profit paid at Tk 10,232 crore respectively.
Although targets of collecting Tk 27,000 crore was set in FY2019-20, but saving certificates of Tk 67,127.75 crore were sold till June 30.
In FY 2018-19, the government has borrowed double than the targets at Tk 49,939 crore. In FY 2017-18, against the targets of Tk 40,000, it was sold at Tk 46,530 crore. The government got Tk 52,417 crore from saving certificates in FY 2017-28.
To reduce the pressure of selling savings certificates, the government increases source tax to 10 percent from 5 percent and having tax identification number (TIN) was mandatory to purchase the saving certificates worth at more than Tk 1 lakh.