The sale of government issued savings certificate increased by 25% during the fiscal year 2015-2016.
According to figures by the Directorate of National Savings (DNS), sales in the fiscal that ended on Jun 30 stood at Tk 530.11 billion.
The jump in sales is increasing government’s debt.
“The attractive rates are leading to more sales but that is adding to the government’s burden,” said Finance Minister AMA Muhith.
According to analysts, people are interested in the saving instruments for the perception that they are relatively less risky.
“All other avenues of investment for general people are almost shut. Banks are giving seven to eight percent interest on deposits. The capital market is also sluggish,” said BIDS researcher Zaid Bakht.
To reduce sales, the government revised the interest rates Directorate of National Savings (DNS) and decreased the rates by 2% on average.
After the rate cut, a five-year term family savings scheme of Tk 100,000 now yields a monthly return of Tk 912. Earlier the same investment used to fetch Tk 1,070 per month.