In an effort to reduce government borrowing from banks, the central bank instructed executives of all scheduled banks and their branches to motivate people to invest more in national saving instruments. Different types of savings certificate are known as key instruments for government to mobilise funds for deficit financing.

But people, according to sources, have seemingly turned away from investing in this once 'most safe' option.
Even an increase in interest has failed to woo the clients.

As a result, the government's target of raising Tk 60 billion through sales of savings certificates to finance the budget deficit for the current fiscal now seems to be a 'distant dream'.

Amidst this situation, Bangladesh Bank issued a circular recently expressing its resentment, as sales of savings instruments did not pick up despite increase of interest rates. “Despite adopting various steps including increase in interest rates, sales of the national savings instruments still remain very sluggish,” said the directive urging officials to cooperate as well as encourage the clients to invest in various scheme of national savings instruments.

Alongside a fall in the sales of savings instruments in recent times, the savers are learnt to be encashing their savings instruments and depositing the money with banks as they offer higher interests.

“It is learnt that officials of concerned departments are not cooperating rather discouraging people in various ways not to invest in savings instruments,” said the directive issued by Debt Management Department of Bangladesh Bank. It urged officials to help people to participate in nation development activities by involving themselves with national saving schemes.

The recent statistics of saving certificate sales in the first eight months of this fiscal show the income from savings certificates is in the red, which means there was apparently no sale of savings instruments during this period. The earnings from certificate sales have exceeded the amount paid to the clients as interests.

Sources in financial sector informed that huge amount of money of the people are stuck in the capital market. When the market was doing well, people had put money there through selling their savings certificates. The government is now offering more than 13 per cent interest on those certificates.

"However, after the capital market crash, no one is selling shares at a loss and they are waiting for an opportune moment to recover their investments,” said an analyst.

The Independent/ Bangladesh/ 22-May-2012