The net investment in the national savings certificates and bonds crossed Tk 10,000 crore in the first 11 months of financial year 2013-14 as the clients invested heavily in the savings tools due to lower rate of interest in scheduled banks’ deposit products.
According to the Directorate of National Savings data, the net investment in the savings instruments was Tk 10,018.25 crore in July-May of the FY14 while it was Tk 735.19 crore in the same period of the FY13.
A DNS official told New Age on Thursday that the premature cashing by clients also declined in the period as the five-year savings tools, which were sold hugely in the FY10, would mature in the next financial year.
He said that previously clients had made huge premature cashing of their savings tools, but the trend (premature cashing) changed significantly this fiscal year.
The DNS data showed that sales of the national savings certificates and bonds increased by 1.26 per cent in the first 11 months of the FY14 compared with that in the same period of the FY13.
The savings instruments worth Tk 21,656.12 crore were sold through banks, national savings bureaus and post offices in July-May of the FY14 whereas the total sales of NSCs in the same period in the FY13 were worth Tk 21,384.59 crore.
The premature cashing of savings tools by clients declined by 43.64 per cent in July-May of the FY14 compared with that in the same period of the FY13.
Clients cashed prematurely savings instruments worth Tk 11,637.37 crore in the first 11 months of the FY14 while the figure was Tk 20,649.49 crore during the same period of the FY13.
The official said that the scheduled banks had recently cut the interest rate of their savings products due to the increasing trend in excess liquidity amid sluggish business.
The business people are yet to start their business expansion by receiving loans from the banks due to political uncertainty which pushed up the idle fund of the banks, he said.
The banks are now reluctant to take deposit from the clients, so they cut the interest rate on their deposit products, he said.
The banks are now giving maximum 11 per cent to 12 per cent rate of interest to the clients for the fixed deposit schemes while the interest rate on the savings tools is between 12.59 per cent and 13.45 per cent.
Against the backdrop, the clients have made investment heavily in the savings certificates and bonds this financial year, the DNS official said.
The official said that the net investment in the savings tools might cross Tk 11,000 crore in the FY14 if the trend of lower premature cashing continues in the last month of the outgoing financial year.
The government in the last financial year collected only Tk 772.84 crore or 10.44 per cent of its annual target of Tk 7,400 crore in investment in the national savings certificates and bonds.
For this reason, the government set a lower net investment target of Tk 4,971 crore for the FY14.
Another DNS official said that the net investment might plunge in the coming financial year if the clients cashed their investment prematurely like the recent fiscal years.
Besides, the banks will increase the rate of interest on their deposit products in the coming months when the businesspeople will go to banks to receive loans, he said.
-With New Age input