Dhaka, Bangladesh (BBN) – The government has withdrawn the facility of automatic reinvestment of US dollar bond and premium bond, although their rates of interest unchanged, officials said on Saturday.
“We’ve taken the latest move aiming to ease pressure on internal debt servicing of the government,” a senior finance ministry official said, adding that the move will help make the investors aware of their investments in the bonds.
Under the amended rules, the principal amount of the bonds may be repatriated abroad in foreign exchange or may be credited to the foreign currency account, generally known as FC account.
Earlier, on maturity, in the event of failure of the holders to encash the bonds, the principal amount of the bonds used to be treated as re-invested for a maximum period of three years.
The finance ministry has issued a notification in this connection recently and asked the authorities concerned to follow the amended rules for reinvestment of the principal amount of the bonds.
Both the bonds will mature for payment after three years from the date of issue.
The bondholder will be entitled to draw interest on half-yearly basis at a fixed rate of 6.5 per cent per annum in US dollar.
The bondholder will be entitled to draw interest on a half-yearly basis at 7.5 per cent fixed rate per annum in Bangladesh Taka (BDT) at the USD/BDT exchange rate, according to the existing rules.
Meanwhile, the central bank of Bangladesh has issued a circular in this connection and asked its all branch offices and the commercial banks to follow the amended rules of the government approved savings instruments.
BBN/SS/SI/AD-01Aug.10-10:26 am (BST)