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POSTAL SAVINGS SCHEME

Govt could review interest cut decision, says Kamal

Staff Correspondent | Published: 22:12, Feb 19,2020

 
 

AHM Mustafa Kamal

Finance minister AHM Mustafa Kamal on Wednesday said that they would consider whether the interest rate of postal savings scheme could be reviewed.

‘Let’s see what can be done,’ he said while commenting on the government decision of halving the interest rates of the postal savings schemes last week.

Making the submission of taxpayer’s identification number with big amount of postal savings could be an option, he said as he was talking to reporters after meetings of the cabinet committee on economic affairs and the cabinet committee on national purchases at secretariat in the capital.

On February 13, the Internal Resources Division of the finance ministry in a gazette notification reduced the interest rate for the first year and second year of the deposit at 5 per cent and 5.5 per cent from previous 10.20 per cent and 10.70 per cent respectively.

The interest rate on savings in ordinary accounts of post office has also been reduced to 5 per cent from 7.5 per cent, which sparked criticisms that the government was blocking popular investment destination of middle and lower-middle income groups.

The IRD also reduced the interest rates on the schemes to 4 per cent, 4.5 per cent and 5 per cent for each period of six months or over from the previous 9 per cent, 9.5 per cent and 10 per cent respectively.

Mustafa Kamal, however, said that the decision was taken to facilitate the implementation of the single-digit interest rate in the country’s banking sector.

He noted that investors rushed to the post offices after the government tightened the rules of the national savings schemes.

According to the National Savings Directorate, the net investment in post office was around Tk 8,000 crore in the last fiscal year 2018-2019.

To avert confusion, the finance ministry even gave a clarification on Sunday that the government slashed the interest rates on the savings with the post office, not on the saving certificates run by the Directorate of National Savings.

Post office officials said that the overall investment in the post office savings instruments might drop to one-third due the interest rate cut.

People are allowed to invest a maximum of Tk 30 lakh in a single account and Tk 60 lakh in a joint account in the post office savings products.

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