Dhaka, Bangladesh (BBN)- The net sales of national savings certificates dropped by more than 9.00 per cent in April over the previous month following introduction of online management system for such instruments.
The net sales of national savings certificates (NSCs) came down to BDT 37.41 billion in April 2019 from BDT 41.31 billion a month ago, according to the Department of National Savings (DNS) latest statistics.
It was BDT 33.54 billion in April 2018.
The declining trend of NSCs sales may continue in the coming months, senior bankers and officials said.
Many savers now face difficult to purchase the savings schemes mainly due to introduction of the online management system for NSCs, they added.
Under the government’s latest moves, both interest and principal amount of the NSCs will be transferred to the beneficiaries across the country using digital payment system from July 01 this year.
The government has already set up an online database under the Public Expenditure Management Strengthening Programme to see whether or not the savings opportunity is being abused by exceeding the investment limit or making fictitious investments.
Under the programme, the savers will be required to submit copy of their national identity cards, bank account numbers, mobile numbers, and tax identification numbers (TINs) while purchasing the NSCs and bonds.
Those who have already invested in the savings certificates and bonds will need to submit these to draw profit or encash matured ones.
Besides, the savers will be required to make payment in cheque for certificates worth above BDT 50,000.
Four savings certificates - five-year Bangladesh Sanchayapatra, three-monthly Profit Bearing Sanchayapatra, Family Savings Certificate and Pensioner Sanchayapatra – have been popular among the savers, as they receive more than 11 per cent annualised profit.
On the other hand, the net sales of NSCs grew by 8.51 per cent to BDT 434.74 billion during the July-April period of the fiscal year (FY) 2018-19 from BDT 400.63 billion in the same period of the FY ‘18.
The government’s outstanding savings certificates sales rose to BDT 2,812.41 billion at the end of April from BDT 2312.99 billion in the same period previous year.
Meanwhile, finance minister AHM Mustafa Kamal in the national budget for the FY 2019-20 proposed to increase source tax on the yield of NSCs to 10 per cent from the existing level of 5.0 per cent.
The sales of NSCs may fall further if the proposed sources tax will be implemented, they added.
However, the government has already projected lower target of borrowing from non-banking sources, particularly national savings schemes, to meet its budget deficit partly.
By selling savings instruments, the government is set to borrow BDT 270 billion in the FY’20 from BDT 450 billion in the revised budget of FY’19, according to the proposed budget.
The original target of such borrowing was BDT 261.97 billion for the FY’19.
BBN/SSR/AD