Savings instrument database from Feb | The Daily Star
12:00 AM, November 29, 2018 / LAST MODIFIED: 12:06 AM, November 29, 2018

Savings instrument database from Feb

Interest rate to remain the same for now

The much-awaited database of national savings certificate holders, which is expected to check the current misuse of the high-yielding savings tools, is expected to take off from February next year.

Finance Minister AMA Muhith in his budget speech for fiscal 2017-18 had announced the roll-out of the database during the fiscal year.

But in a meeting of the fiscal coordination council on Tuesday it was decided that the database will be introduced on a pilot basis from February, after almost two years.

The database will be linked with those of the NID and TIN, meaning a person wanting to purchase savings instruments will have to mention his/her income and other relevant information in the form.

If it is implemented as intended, none can purchase savings instrument beyond his/her ceiling.

The rate of interest on savings certificates is about 12 percent, in contrast to 6 to 7 percent interest offered by banks on their deposit products.

The high yield has persuaded many to park all their funds in savings instruments, denying banks of deposits.

On many instances, the amount is in excess of their allowed limit, so they purchase the instruments in others' names to get away from the limitation.

“This will stop once the database comes,” said a finance ministry official, adding that savings instruments bought before the introduction of the database will be spared.

The overwhelming demand for savings instrument means the government's interest payment burden is rising every year and it is diverting it from taking on low-cost funds from the banking sector.

The allocation for interest payment in this year's budget is Tk 48,377 crore.

Last fiscal year, the government's borrowing target from savings instruments was Tk 30,150 crore, but it ended up borrowing Tk 46,530 crore.

The target for this fiscal year is Tk 26,197 crore, but in the first three months the government has already borrowed Tk 13,412 crore.

The database is expected to dampen the buying pressure of savings instruments.

Also at the meeting, which was chaired by Muhith, it was decided that the interest rate on savings instrument will not be lowered, despite calls from economists and the finance division.

“The meeting decided not to lower the rate of interest for now considering the savers are from the low-income group,” said the finance ministry official.

At the meeting it was mentioned that the huge sales of savings instrument are not creating any problem in the financial market seeing that the banks are sitting on huge excess liquidity and the call money market is also stable.

Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Grameenphone:
Type START <space> BR and send SMS it to 22222

Robi:
Type START <space> BR and send SMS it to 2222


Banglalink:
Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News

Top