2018-08-08 10:51:57 BdST
‘No changes’ to yield rates of savings tools before next election
Finance Minister AMA Muhith has ruled out the possibility of reducing the yield rates of state-run savings instruments before the upcoming national elections.
"We are not making any changes to the existing yield rates of savings tools before the elections," the minister said.
The finance minister was talking to reporters on Tuesday after a meeting on savings certificates at his ministry at the Secretariat.
Senior officials of the finance ministry, Internal Resources Division (IRD) and Department of National Savings (DNS) were present at the meeting.
Mr Muhith, however, said the meeting has assigned a committee to assess the overall situation of the savings schemes and make their reports as to whether the rates of return can be rationalised.
The committee has also been instructed to make its recommendations about whether the number of existing savings tools can be reduced.
The committee has been given two months' time to submit its report to the ministry.
The finance ministry in consultation with the IRD will carry out the assessment.
The ministry convened the meeting in the backdrop of the government's recent move to bring down the lending and deposits rates in the banking sector to a single digit.
Recently the government undertook the move to bring down the deposit and lending rates to 6.0 per cent and 9.0 per cent respectively.
The minister said savings instruments are not only the investment tools but they also play a key role in respect of social safety net programmes.
When his attention was drawn, Mr Muhith said the state-run DNS is working on automation of savings tools, which is to be completed by January next.
Responding to a query as to whether the government has any plan to lessen the maximum investment limit for the investors under the state-run savings tools, he said it would work automatically once the entire system is automated.
"Although there remain certain investment ceilings under the savings tools, they (ceilings) do work accordingly," Mr Muhith added.
About the source of fund to be invested in savings tools, the finance minister said to check it the government has taken some steps so that beyond certain amounts all the transactions can take place through cheques issued by banks.
Meanwhile, officials of the DNS said the rates of return are currently higher on the savings instruments than that of bank deposits.
So the government is considering reviewing the rates.
Because of higher yield rates, the sales of savings schemes have increased significantly in recent years.
At the same time the amount of interest payment also rose extensively which compelled the government to consider reducing rates of return of the savings certificates, they said.
According to the DNS, the sales of state-owned savings certificates were Tk 787.84 billion in the July-June period of Fiscal Year (FY) 2017-18.
The sales of savings certificate was Tk 751.34 billion in the FY 2016-17.
Currently, a total of 11 savings instruments are operating under the DNS. Of those, four are savings certificates. The yield rates are varying up to 11.76 per cent on savings instruments.
About 20 million investors are in the sector at present.
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