SAVING CERTIFICATES

No cut in interest rate before general election

Staff Correspondent | Published: 00:50, Aug 08,2018 | Updated: 01:06, Aug 08,2018

 
 

Finance minister AMA Muhith on Tuesday ruled out any change in interest rate of the savings certificates before the next general elections likely to be held in December.
‘Whatever changes may come in the interest rate of savings certificates it will come into force after the next general elections,’ he told reporters after a review meeting on the national savings certificates at the ministry.
He said that the meeting decided to form a committee with officials of finance division, internal resources division and department of savings.
The committee would recommend in two months on rationalisation of the interest rate and types of saving certificates run by different government bodies, he added.
Muhith noted that the interest rates of saving certificates and other savings instruments became a bit wide.
The meeting was arranged ahead of proposed implementation of the ‘gentleman agreement’ between the government and the banks owners for bringing down the interest rate of lending at 9 per cent and savings at six per cent from Thursday.
Replying to a query whether the meeting’s decisions would hamper the implementation of the agreement, Muhith replied in negative.
He expressed optimism that the bankers would keep the commitment.  
The meeting was attended, among others, by comptroller and auditor general Muslim Chowdhury, Bangladesh Bank governor Fazle Kabir, National Board of Revenue chairman Mosharraf Hossain Bhuiyan, Financial Institutions Division Secretary Eunusur Rahman, acting finance division secretary Abdur Rauf Talukder and department of savings director general Shamsunnahar Begum.
Officials attending the meeting said that cutting interest rate of the savings certificates could be a boomerang for the government ahead of the national elections.
They said that sale of savings certificates was growing in absence of suitable investment opportunities.
The net sales of savings certificates stood at Tk 46,758 crore against the annual upward revised target of Tk 44,000 crore in the financial year 2017-18 as buying spree of savings certificates continued for past several years amid shrinking benefits in others savings instruments.
Muhith said that the current liability of the government for the savings certificates reached Tk 2.5 lakh crore.
The amount is huge as it accounts 22 per cent of the money supply, he said.  
Department of saving director general Shamsunnahar Begum said that automation of keeping records of savings certificates would complete in January 2019.

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